London Session Forex Recap – May 1, 2015

  • U.K. M4 Money Supply m/m: 0.3% vs. -0.2% previous
  • U.K. Manufacturing PMI: 51.9 vs. 54.6 forecast, 54.4 previous
  • U.K. Net Consumer Credit: £1.24B vs. £0.8B forecast, £0.7B previous
  • U.K. Mortgage Approvals: 61.3K vs. 62.5K forecast, 61.8K previous

Fortunately for us forex traders not on the Labor day holiday, volatility surprisingly picked up enough to make the morning London session worth hanging around for.

The economic highlights of the morning was data from the U.K., coming in mixed, but the focus was likely the manufacturing PMI data that came in below expectations and close to the 50.0 level that separates expansionary and contractionary conditions.  The survey data based on 600 companies highlighted sluggish growth and decrease in overseas orders.  Forex traders obviously took the news as a signal to sell as Sterling sell orders, not only on the news but ahead of data releases at 9:30 pm GMT after an bump higher at the session open:

GBP/USD is down 59 pips (-0.39%) to 1.5290, GBP/JPY is down 5 pips (-0.03%) to 183.19, and GBP/CHF is down 105 pips (-0.74%) to 1.4202

The euro surprisingly also presented trading opportunities during the holiday, rallying higher without direct catalysts right from the German/London opening hours. This may be a continuation of the bullish sentiment we’ve seen in the last couple of weeks on improving euro zone data, or possibly the lack of negative developments in the ongoing debt problems story in Greece. Whatever the case may be, the euro made a relatively bullish move on the session, likely with the help of the thin holiday markets:

EUR/USD is up 52 pips (+0.47%) to 1.1276, EUR/JPY is up 113 pips (+0.85%) to 135.11, and EUR/GBP is up 63 pips (+0.86%) to .7372

Since the U.S. doesn’t celebrate their Labor day holiday today, the forex calendar for the Friday afternoon London/morning U.S. session has a few U.S. data points to hopefully give us a couple more opportunities to take us into the weekend!

At 2:45 pm GMT, we’ll get the U.S. manufacturing PMI data with a forecast and previous read of 54.2.  This PMI read from Markit economics is not as closely followed as the manufacturing PMI read by the Institute for Supply Management (ISM), so it’s very unlikely we’ll get any significant pick up in volatility on this number.

At 3:00 pm GMT, we’ll get the rest of the U.S. data including construction spending (0.5% forecast vs. -0.1% previous), the University of Michigan Sentiment survey data (96 forecast vs. 95.9 previous), and the most notable of the session, the aforementioned ISM manufacturing PMI number.

The forecast for the ISM number is for a tick higher to 52.0 vs. 51.5 previous, hopefully signaling a bottom for the recent trend lower since hitting 59.0 back in October 2014.  Whatever the number may be, we will likely see a short-term pickup in volatility, and maybe even one last push in the Greenback before the market closes for the week.  Stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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