London Session Forex Recap – June 12, 2015

  • German WPI m/m: 0.5% actual v.s. 0.4% previous
  • Spanish CPI y/y: -0.2% actual v.s. -0.2% expected, -0.6% previous
  • Spanish HICP y/y: no change at -0.3% as expected
  • U.K. Construction Output m/m: -0.8% actual v.s. 01.% expected, 1.4% previous
  • Euro Zone Industrial Production m/m: 0.1% actual v.s.0.4% expected, -0.4% previous
  • U.S. PPI coming out later

Today’s morning London session continued the yawn fest from the earlier Asian session, with most currency pairs locked in tight ranges or showing some volatility but no general direction. The only major mover was the euro, which just couldn’t get a break during the forex session.

The euro was down amidst another round of bond buying, with German 10-year bond yields currently down by 0.78% to 0.892%. There were no major developments on the Greek drama during the forex session, but the media outlets released a barrage of pessimistic news, such as Greece taking a hardline approach and referring to the IMF’s pull-out from the talks as a “pressure tactic.” There was also the usual fear-mongering with regard to a potential Greek default.

In other, pessimistic news, a report came out that German Chancellor Angela Merkel was disappointed with the strong euro, lamenting that a strong euro “means that it is more difficult for (countries such as Spain and Portugal) to reap the benefits of reforms.” Overall, not exactly a forex session for euro bulls to spread their wings and fly, but we are seeing a bounce in the shared currency going into the U.S. session open.

EUR/USD is down by 43 pips (-0.39%) to 1.1199, EUR/JPY is down by 36 pips (-0.26%) to 138.25, EUR/CHF is down by 27 pips (-0.26%) to 1.0452

As for other currencies of note, there was the Aussie, which was mixed but mostly down for the forex session. There weren’t any direct catalysts to account for the overall weakness, though, so it’s most likely just forex traders closing out their positions for the week.

AUD/USD is down by 26 pips (-0.33%) to 0.7696, AUD/CAD is down by 30 pips (-0.32%) to 0.9465, AUD/CHF is down by 18 pips (-0.26%) to 0.7193

The Greenback was also noteworthy because it showed slight strength across the board during the course of the session. There were no major news or data, though, so it was probably just pre-emptive positioning ahead of the readings for headline and core U.S. PPI as well as the University of Michigan’s survey results.

USD/JPY is up by 24 pips (+0.20%) to 123.77, USD/CAD is up by 24 pips (+0.20%) to 123.77, USD/CHF is up by 12 pips (+0.12%) to 0.9350

There are only a few items lined up in today’s forex calendar for the upcoming afternoon London/morning U.S. session, but some of them are market-moving, so forex traders shouldn’t let their guard down.

Forex traders will start the session at 1:30 pm GMT with the readings for U.S. headline (0.4% expected, -0.4% previous) and core (0.1% expected, -0.2% previous) producer price index (PPI). Both act as leading indicators for CPI since the price of the goods sold by manufacturers is usually passed on to the final consumer.

Then, at 3:00 pm GMT, we’ll get a bunch of survey data from the University of Michigan: prelim UoM consumer sentiment (91.2 expected v.s. 90.7 previous), prelim UoM inflation expectations (2.8% previous), prelim consumer expectations (85.0 expected, 84.2 previous), and prelim current conditions (96.5 expected, 100.8 previous). Among all of them, the preliminary consumer sentiment has the greatest potential to move the markets since it acts as a leading indicator for consumer spending. But do note that all the survey results are expected to show an improvement, with the exception of current conditions, so watch out for any surprises.

Stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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