London Session Forex Recap – Feb. 5, 2016

  • German factory orders m/m: -0.7% vs. -0.5% expected, 1.5% previous
  • German factory orders y/y: -2.7% vs. -1.4% expected, 2.1% previous
  • French trade balance: -€3.94B vs. -€4.40B expected, -€4.53B previous
  • Swiss foreign currency reserves: CHF 575B vs. CHF 560B previous
  • U.S. NFP report and Canada’s jobs report coming up

It was mostly calm in the forex front as the the market hunkered down for the upcoming NFP report. Most currency pairs were milling about in tight ranges, but there was some noticeable demand for the Swissy and the Kiwi.

Major Events:

NFP Friday! – Today is another NFP Friday, so volatility naturally dried up as forex traders sat on their hands ahead of the NFP report. Most currency pairs, especially Greenback pairs, were peacefully trading sideways in relatively tight ranges during the forex session. Still, there were a few currencies that were clearly on the move, which I highlighted below. Oh, if you’re planning to trade the NFP report and you need to get up to speed, then you can read Forex Gump’s Forex Trading Guide for the NFP report here.

Steady risk sentiment – Risk-taking was modest during the morning London trading session, with the DAX up by 0.05% to 9,397.00 and the pan-European FTSEurofirst 300 up by 0.25% to 1,296.72. U.S. equity futures are also slightly glowing green, with the S&P 500 futures up by 0.17% to 1,911.00 and the Nasdaq futures up by 0.23% to 4,165.25. The steady risk sentiment was apparently due to steady oil prices during the session, with U.S. crude oil up by 0.52% to $31.96 per barrel and Brent crude oil up by 0.35% to $34.67 per barrel during the forex session.

Major Currency Movers:

NZD – Today’s morning London session was a risk-on one, so demand for the higher-yielding currencies, namely the comdolls (NZD, AUD, CAD), is to be expected. However, only the Kiwi was getting some buyers. This was probably because European forex trades were not to keen to load up on the Aussie because of Australia’s disappointing retail sales from earlier. Meanwhile, demand for the Loonie was lacking, probably because Canada has top-tier report coming up.

NZD/USD was up by 25 pips (+0.36%) to 0.6721, NZD/JPY was up by 27 pips (+0.34%) to 78.50, NZD/CAD was up by 38 pips (+0.42%) to 0.9237

CHF – The Swissy was getting some buyers despite the modest amounts of risk appetite during the forex session. There were no clear catalysts for the Swissy demand, but it’s possible that some market players who were uncertain on how the markets will react to the NFP report were buying up the safe-haven Swissy.

USD/CHF was down by 21 pips (-0.21%) to 0.9918, EUR/CHF was down by 23 pips (-0.20%) to 1.1106, CAD/CHF was down by 18 pips (-0.25%) to 0.7217

Watch Out For:

  • 1:30 pm GMT: U.S. non-farm payrolls (190K expected vs. 292K previous)
  • 1:30 pm GMT: U.S. jobless rate (expected to hold steady at 5.0%)
  • 1:30 pm GMT: U.S. average hourly earnings (0.3% expected vs. 0.0% previous)
  • 1:30 pm GMT: Canadian jobless rate (7.1% expected, 7.1% previous)
  • 1:30 pm GMT: Canadian net change in employment (6.0K expected, 22.8K previous)
  • 1:30 pm GMT: U.S. trade balance (-$43.20B expected, -$42.37B previous)
  • 1:30 pm GMT: Canadian trade balance (-2.20B CAD expected, -1.99B CAD previous)
  • 3:00 pm GMT: Canada’s Ivey PMI (50.3 expected, 49.9 previous)
  • 8:00 pm GMT: U.S. consumer credit ($16.00B expected, $13.95B previous)

See also:

Asian Session Forex Recap

U.S. Session Forex Recap

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