London Session Forex Recap – May 12, 2015

  • French BoF Business Sentiment Index: 98 vs. 98 forecast, 97 previous
  • U.K. Manufacturing Production m/m:  0.4% vs. 0.3% forecast, 0.4% previous
  • U.K. Industrial Production m/m: 0.5% vs. 0.1% previous

Volatility picked up across currencies, including the British pound after we saw positive manufacturing and industrial production numbers in the morning London forex session.

First up is the Aussie, continuing its Asia session rally in European trade, a move sparked by positive home loans data and comments from the Fitch ratings agency that Australia’s AAA credit rating is not at risk. AUD/USD gained another 30 plus pips since the London open to currently trade around sessions highs of .7985. AUD/JPY is probably the big winner of the day among Aussie pairs, trading around session highs of 95.77, or up 103 pips (+1.09%) on the day.

The Swiss franc is also seeing some love, but without any direct catalysts, it’s likely riding the coat tails of the euro, which is up on the session with exception to the Aussie and Swiss franc.  No major news or economic data from the euro zone this morning, so the bullish sentiment may be off of news that Greece makes the the latest IMF payment a day ahead of schedule on Monday night, and likely on positive comments from German Finance Minister Wolfgang Schaeuble that the debt talks with Greece have improved.

EUR/USD is up 85 pips (+0.76%) to 1.1239, EUR/JPY is up 96 pips (+0.72%) to 134.88, EUR/CHF is down 30 pips (-0.29%) to 1.0388, and USD/CHF is down 96 pips (-1.03%) to .9294

And the major economic data of note for the session is from the U.K., posting better-than-expected manufacturing and industrial production data–both month-to-month and annually–boosted by the improvements in the oil and gas sectors. This news certainly added to the recent bullish sentiment sparked by the end of uncertainty due to the U.K. elections, and was able to get the pound out of some Asia session losses to bring Sterling pairs back into the green for the session (with exception to the strong Swiss franc and Aussie):

GBP/USD is up 99 pips (+0.63%) to 1.5682, GBP/JPY is up 103 pips (+0.57%) to 188.16, and GBP/AUD is down 105 pips (-0.54%) to 1.9641

The forex calendar for the Tuesday afternoon London/morning U.S. session is light with mid-tier economic data points to hopefully get the Greenback moving on its own and keep Sterling price action moving.

At 3:00 pm GMT, we’ll get the JOLTS job openings index number (5.100 forecast vs. 5.133 previous) from the U.S. Bureau of Labor Statistics and the NIESR monthly GDP estimate (0.6% previous) for the U.K. Both are mid-tier events and cover important areas of their respective economies, but not closely followed, so they are unlikely to be market movers without big deviations from the forecast or previous numbers.

At 7:00 pm GMT, we’ll get the monthly U.S. government budget balance report, forecast to show a surplus of $151.5B vs. $106.9B previous.  This is a mid-tier report that’s not usually closely watched by forex traders, but one to be aware of as a big swing in government spending can be a leading indicator of U.S. health; if the surplus continues to improve, that can influence the government’s willingness to spend more on the country through new projects, which likely means new jobs and economic activity! Stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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