London Session Forex Recap – Apr. 10, 2015

  • Swiss Unemployment Rate: inline with 3.2% forecast/previous
  • French Industrial Production y/y: 0.6% vs. 0.5% forecast/previous
  • French Manufacturing Production y/y: -0.8% vs. -0.3% forecast, -0.7% previous
  • U.K. Industrial Production y/y: 0.1% vs. 0.3% forecast, 1.2% previous
  • U.K. Manufacturing Production y/y: 1.1% vs.1.3% forecast, 1.7% previous
  • U.K. Construction Output y/y: -1.3% vs. 1.9% forecast

Forex traders went into bull mode on the Japanese yen thanks to surprise commentary from a Bank of Japan (BOJ) member on potential monetary policy easing. Bank of Japan Deputy Governor Hiroshi Nakaso stated earlier in a Reuters interview during the London trading session that the underlying trend of inflation dynamics are steadily improving, and if that doesn’t change, “additional monetary easing is unnecessary.”

This logically had currency traders lightening up on short yen positions through out the session, and with momentum still in the bulls favor going into the U.S. trading session:

USD/JPY is down 17 pips (-0.14%) to 120.38, AUD/JPY is down 51 pips (-0.55%) to 92.21, and CAD/JPY is down 54 pips (-0.57%) to 95.28

The British pound was taken to the woodshed after the U.K. posted all-around weak manufacturing and industrial production numbers. Expectations were for a turn around into big positive gains, but we saw the numbers come in below expectations, including the construction output data:

GBP/USD is down 103 pips (-0.70%) to 1.4606, GBP/JPY is down 151 pips (-0.85%) to 175.84, and GBP/CHF is down 37 pips (-0.25%) to 1.4339

The forex calendar for the Friday afternoon London/morning U.S. session is ripe for a potential explosion in volatility with Canadian jobs data coming up.

The calendar start flowing at 1:15 pm GMT with the Canadian housing starts number, forecasted to tick higher to 175K vs. 156.3K previous.  There are likely to be no major effects from this data point with the big Canadian event coming at 1:30 pm GMT: monthly Canadian jobs data.  The unemployment rate is forecasted to tick higher to 6.9% vs. 6.8% previous, and for 0K forecast in net jobs vs. -1K previous. The Canadian dollar does spike in volatility on this data so be sure to be ready for quick moves and possible slippage in Loonie pairs.

The rest of the U.S. calendar looks like non-market movers, but it is good to be aware that we’ve got the U.S. import price index at 1:30 pm GMT, the U.K. NIESR GDP est. at 3:00 pm GMT, and the U.S. monthly government budget data at 7:00 pm GMT. Again, likely non-market movers, especially with Canadian jobs and the surprise move in the Japanese yen looking to be the main focus going into the weekend. Stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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