London Session Forex Recap – Mar. 31, 2015

  • German Retail Sales m/m: -0.5% vs. -0.7% forecast, 2.3% previous
  • French PPI m/m: 0.7% vs. -1.0% previous
  • German Unemployment Rate: 6.4% vs. 6.5% forecast/previous
  • German Unemployment Change: -15K vs. -12K forecast, -20K previous
  • U.K. GDP (3rd Est) q/q: 0.6% vs. 0.5% forecast/previous
  • European Flash HICP y/y: -0.1% vs. -0.1% forecast, -0.3% previous; core at 0.6% vs. 0.7% forecast/previous

The euro is down in the dumps this morning despite better-than-expected German data, thanks to a returned focus to Greece’s debt problems.  Today, negotiations ended without a deal once again and Greece officials leaving Brussels, continuing the uncertainty for whether we’ll eventually see a Grexit or not. Outside of the developing Greek story, German data came in better than expected today, but it wasn’t enough to support the euro, which fell across the board against the majors and remains low going into U.S. trade:

EUR/USD is down 94 pips (-0.88%) to 1.0735, EUR/JPY is down 121 pips (-0.94%) to 128.80, EUR/GBP is down 49 pips (-0.68%) to .7262

The British pound is finding buyers against most of the majors, likely on the surprise revision higher on GDP. GBP/NZD is up 46 pips (+0.23%) to 1.9777, GBP/AUD is up 103 pips (+0.55%) to 1.9455, GBP/CAD is up 116 pips (+0.62%) to 1.8886

The only exception of Sterling’s strength is against the Greenback, which continues to dominate the majors, likely on a return to focus of the Fed likely raising rates in 2015, not when, and possibly in anticipation of another positive surprise in the upcoming U.S. NFP data.

USD/CHF is up 56 pips (+0.74%) to .9721, GBP/USD is down 12 pips (-0.10%) to 1.4792, AUD/USD is down 47 pips (-0.62%) to .7605

The forex calendar for the Tuesday afternoon London/morning U.S. session is as nearly active as the morning London session, which hopefully means more trading opportunities.

At 12:30 pm GMT, we’ll get a potential market mover for the Loonie with the monthly Canadian GDP number.   The forecast is a for a dip into negative territory at -0.2% vs. 0.3% previous.  It looks like forex traders have already started to price in a weak number since the morning London session, which does bring up the possibility of a “buy-the-rumor, sell-the-news” scenario for the Canadian dollar if it does come in weak.  Or it could be the further drop in oil today, this time sparked by Iran nuclear talks intensifying. Whatever the number, news and/or reaction may be, definitely expect a pick up in volatility in those Loonie pairs.

We’ll close out the Tuesday London session with U.S. data from various sectors, starting with the S&P Case-Shiller home price data (4.6% forecast vs. 4.46% previous) at 1:00 pm GMT.  Then at 1:45 pm GMT, we’ll get Chicago PMI (51.7 forecast vs. 45.8 previous) for an update read purchasing manager sentiment, and we’ll finish at 2:00 pm GMT with the Conference Board Inc. consumer confidence read (96.4 forecast/previous).  The likely market mover is the consumer confidence number as it can be a leading indicator of future consumer spending, the largest component of U.S. GDP. And since it disappoints more times than not in the past six months, be careful with those Greenback positions as we could see a turn quickly on this morning’s broad set of economic data.

See also:

Asia Session Recap

U.S. Session Recap

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