London Session Forex Recap – Mar. 27, 2015

  • German Import Price Index m/m: 1.4% vs. 0.5% forecast, -0.8% previous
  • U.K. Nationwide House Prices (sa) m/m: 0.1% vs. 0.2% forecast, -0.1% previous
  • French INSEE Consumer Confidence Index: 93 vs. 93 forecast, 92 previous

During a Bundesbank conference panel discussion, Bank of England Governor Mark Carney shook up the British pound, re-iterating that the BOE’s likely next move is for interest rates to go up, contradicting the BOE’s chief economist Haldane’s sentiment last week. Coupled with the downplay on low inflation by deputy Governor Ben Broadbent today, Sterling was quickly bid up on the session to bounce back from weak conditions over the last couple of days and remain up on the session:

GBP/USD is up 61 pips (+0.41%) to 1.4905, GBP/JPY is up 82 pips (+0.47%) to 177.75, and EUR/GBP is down 38 pips (-0.42%) to .7287

The U.S. dollar seems to be the only other broad based mover, higher across the board on the session (with exception to the strong pound). There doesn’t seem to be a direct catalyst, but it could be positioning ahead of a potential upside surprise to the upcoming GDP and inflation data coming in the U.S. session.  Whatever the case may be, the Greenback is giving back some of its Friday’s gains as U.S. forex traders slowly come online, but remaining mostly up on the session:

USD/JPY is up 8 pips (+0.08%) to 119.24, EUR/USD is down 30 pips (-0.28%) to 1.0851, and AUD/USD is down 32 pips (-0.41%) to .7794

Finally, the Aussie and Kiwi are both lower on the session, and with no direct catalysts that I can see, it’s likely the broad fall in risk sentiment we’ve been seeing this week, especially in the equity markets, as the likely driver for forex traders to give up their favorite high-yielders and make’em the losers across the board on the session:

AUD/JPY is down 34 pips (-0.36%) to 92.95, NZD/JPY is down 18 pips (-0.20%) to 90.31, and NZD/USD is down 15 pips (-0.19%) to .7575

The forex calendar for the last afternoon London/morning U.S. session of the week is lined up with a few but potentially heavy hitting economic events from the U.S.

At 12:30 pm GMT, we’ll get the third read on quarterly U.S. GDP data (forecasted to tick higher to 2.4% vs. the second read at 2.2%),  as well as the third read of the core Price Index data (1.1% forecast/previous).  Since this is third read, we usually don’t get a surprise from the second or preliminary reads, so they’re not usually market movers despite being the big measurements on economic growth and inflation. But with that GDP number possibly getting revised higher, we may get to see some action in the Greenback.

The final economic data point of the week comes in the form of the final University of Michigan Sentiment survey data at 2:00 pm GMT.  Again, the third reads aren’t usually closely watched or market movers, but with a forecast of a tick higher to 92 vs. 91.2 previous, we could get a really quick burst of volatility, if anything, for final positioning ahead of the weekend.

Finally, Fed Chair Janet Yellen is scheduled to speak today at 7:45 pm GMT, giving a speech titled, “The New Normal for Monetary Policy.” It’s unlikely that we’ll get any new insights from her speech, but as with any other time the most powerful woman in finance speaks, you’ve got to listen and be ready for anything. Stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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