London Session Forex Recap – June 30, 2015

  • Swiss KOF Leading Indicator: 89.7 actual v.s. 93.7 expected, 92.7 previous
  • German Retail Sales m/m: 0.5% actual v.s. 0.0% expected, 1.3% previous
  • German Unemployment Change: -1K actual v.s. -5K expected, -5K previous
  • German Jobless Rate: unchanged at 6.4% as expected
  • Euro Zone HICP: 0.2% as expected v.s. 0.3% previous
  • Euro Zone Core HICP: 0.8% as expected v.s. 0.9% previous
  • U.K. Final GDP q/q: 0.4% as expected v.s. 0.3% previous
  • U.K. Current Account: -26.5B actual v.s. -23.7B expected, -28.9b previous

Despite the prevailing Greek drama and a slew of data, most currency pairs were imprisoned in tight ranges during the morning London forex session. There were a few currency pairs that had some volatility but they failed to establish a clear and definite direction, with some currency pairs ending the session flat. The only exception to this was the Kiwi since it was weak across the board.

There weren’t really any catalysts that could have caused the Kiwi’s weakness, but practically all Kiwi pairs showed a sudden surge of weakness at the start of the forex session before finding support or slowly grinding lower. This probably means that the European market was merely pricing-in the Asian session’s very dismal reading for the ANZ business confidence (-2.3 actual v.s. 15.7 previous). Remember, the RBNZ cut rates recently and disappointing readings like the aforementioned only contribute to the argument for even more rate cuts.

NZD/USD is down by 45 pips (-0.66%) to 0.6754, NZD/CAD is down by 65 pips (-0.77%) to 0.8366, NZD/CHF is down by 59 pips (-0.94%) to 0.6273

As for other currencies of note, we have the euro since it failed to react to a barrage of data, news, and rumors.

The euro started weak, thanks to a slew of German data that posted mostly poor readings and a round of bond-buying that drove German 10-year bond yields down by 1.62% to 0.789%. After the initial dive, the euro suddenly found some buyers. It’s possible that euro bulls who were hoping for a last-minute deal were loading up on the euro since both Greece and its creditors were still open to a deal. Also, there were reports (from unnamed “sources”) that European Commission President Jean-Claude Juncker made a last-minute offer to Greece.

In other “news,” the rumor mills have been churning out reports since last week that Greece would not pay its IMF loan. Today, Finance Minister Yanis Varoufakis apparently confirmed that the rumors were indeed true. Strangely enough, the euro barely reacted.

EUR/USD is up by 21 pips (+0.19%) to 1.1184 with 1.1133 as session low, EUR/JPY is up by 29 pips (+0.23%) to 136.92 with 135.87 as session low, EUR/GBP is up by 5 pips (+0.07%) to 0.7113 with 0.7081 as session low

The forex calendar for the upcoming afternoon London/morning U.S. session only has a few items lined up for release but they’re mostly hard-hitting, so watch out.

First, at 1:30 pm GMT, forex traders will get the reading for Canada’s GDP (0.1% expected, -0.2% previous). It is expected to show an expansion, so get ready if the actual readings are way off expectations.

Next, at 2:00 pm GMT, we’ll get the S&P Case-Shiller home price index (5.50% expected, 5.04% previous). This is a leading indicator for the housing market, but it rarely moves the market. Still, good to know.

After that, at 2:45 pm GMT, we’ll get Chicago PMI (50.0 expected, 46.2 previous). This is a survey of about 200 purchasing managers in Chicago and is used to gauge the overall health of businesses in that area. Do note that it is expected to improve, so expect some buyers for the Greenback if the actual reading is within or beats expectations.

Finally, at 3:00 pm GMT, the U.S. CB consumer confidence (97.4 expected, 95.4 previous) will be released. Consumer confidence is very important to the economy since it is directly linked to consumer spending. The consensus is that this indicator will show an increase, so Greenback bears should be careful, especially if the actual reading exceeds expectations.

Stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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