London Session Forex Recap – July 2, 2015

  • Spanish Unemployment Change: -94.7K actual v.s. -124.3K expected, -118.0K previous
  • U.K. Nationwide House Prices m/m: -0.2% actual v.s. 0.5% expected, 0.2% previous
  • U.K. Nationwide House Prices y/y: 3.3% actual v.s. 4.5% expected, 4.6% previous
  • U.K. Construction PMI: 58.1 actual v.s. 56.5 expected, 55.8 previous
  • Euro Zone PPI m/m: 0.0% actual v.s. 0.1% expected, -0.1% previous
  • Euro Zone PPI y/y: -2.0% actual v.s. -2.0% expected, -2.1% previous
  • U.S. jobs data coming up, including NFP

It’s another NFP day, fellow forex traders! As usual, most currency pairs were rather well-behaved ahead of the upcoming NFP report. The only misbehaving currency was the Aussie.

The Aussie extended its losses during today’s morning London forex session. There weren’t really any catalyst for the weakness, so it was probably just the European market pricing-in the dismal trade data from earlier.

AUD/USD is down by 32 pips (-0.42%) to 0.7601, AUD/JPY is down by 34 pips (-0.36%) to 93.86, AUD/NZD is down by 26 pips (-0.23%) to 1.1380

As for the other currencies, the Kiwi finally found some support after the selloff that occurred during the Asian session, with NZD/USD down by only 11 pips (-0.17%) to 0.6678 during the forex session.

The pound was noteworthy too because it jumped when the better-than-expected reading for construction PMI was released. Some pound pairs then began giving away their gains even though there weren’t really any major catalysts that could have explained the sudden weakness. Both equities and bonds were even in favor of a strong pound, with the FTSE 100 up by 0.19% to 6,621.30 and U.K. 10-year bond yields up by 2.61% to 2.161%.

GBP/USD is down by 6 pips (-0.04%) to 1.5593 with 1.5622 as session high, GBP/CAD is up by 46 pips (+0.24%) to 1.9684 with 1.9722 as session high, GBP/JPY is up by 3 pips (+0.02%) to 192.54 with 192.94 as session high

As for the euro, there weren’t any major updates on the Greek drama, so most pairs were contently milling about in tight ranges while other pairs were driven by counter-currency action. EUR/AUD, for example, is up by 56 pips (+0.39%) to 1.4562 due to the broadly weak Aussie. EUR/USD, meanwhile, was down by 4 pips (-0.04%) to -1.1070, essentially unchanged.

Another currency worth noting was the U.S. dollar since most dollar pairs were inching their way higher ahead of the NFP report. There weren’t any major event or data, so it was mostly likely just the usual pre-emptive positioning ahead of major data.

USD/JPY is up by 10 pips (+0.08%) to 123.49, USD/CAD is up by 34 pips (+0.27%) to 1.2621, USD/CHF is up by 37 pips (+0.39%) to 0.9490

You already know that the forex calendar for the upcoming afternoon London/morning U.S. session is going to be a heavy one, so let’s get right to it.

At 1:30 pm GMT, forex traders will get a data dump with the readings for the U.S. jobless rate (5.4% expected, 5.5% previous), non-farm payrolls (233K expected, 280K previous), jobless claims (270K expected, 271K previous), and average hourly earnings (0.2% expected, 0.3% previous).

Remember, yesterday’s ADP report showed a significant improvement (237K actual v.s. 203k previous) while the non-farm payrolls is expected to decline, so get ready if the actual reading follows the ADP report. And if you haven’t already, go check out Forex Gump’s trading guide on the NFP report. And do keep an eye on average hourly earnings since the Fed is keeping an eye on it too.

Next, at 3:00 pm GMT, we’ll get the U.S. factory orders (-0.5% expected, -0.4% previous). This is a leading indicator for production and it is expected to contract, so watch out if the actual reading is within expectations or worse.

Finally, at 4:10 pm GMT, forex traders will be treated to a central banker bonus round given that ECB President Mario Draghi Due is scheduled to speak in Milan. You know the drill: keep an ear out for any juicy updates, insights, or shifts in sentiment.

Stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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