London Session Forex Recap – Feb. 25, 2016

  • German GFK consumer sentiment: 9.5 vs. 9.3 expected, 9.4 previous
  • German final HICP m/m: -1.0% vs. 0.6% expected, -0.9% previous
  • Swiss industrial production y/y: -4.5% vs. -2.7% previous
  • Euro Zone M3 money supply: 5% vs. 4.7% expected, 4.7% previous
  • 2nd estimate U.K. Q4 GDP q/q: unrevised at 0.5% as expected
  • 2nd estimate U.K. Q4 GDP y/y: unrevised at 1.9% as expected
  • U.K. preliminary business investment: -2.1% vs 0.6% expected, 2.2% previous
  • Euro Zone final HICP y/y: revised lower to 0.3% vs. steady at 0.4% expected
  • Euro Zone final core HICP y/y: unrevised at 1.0% as expected

Market sentiment was still the name of the game during today’s morning London forex session, and the dominant sentiment was risk appetite, so the safe-havens got beaten by the higher-yielding currencies, particularly the comdolls.

Major Events:

Oil clawing its way higher – After dipping during the earlier Asian session, oil benchmarks began grinding higher during the morning London trading session.

U.S. crude oil was still down by 0.19% to $32.09 per barrel for the day, but it’s off intraday lows at $31.45 per barrel. Brent crude oil was also still down by 0.52% to $34.23 per barrel for the day, but it’s likewise off intraday lows at $33.55 per barrel.

There weren’t any apparent catalysts for the turnaround in oil prices during the morning London session, but reports were floating around earlier that Russian Energy Minister Alexander Novak said that Russia doesn’t “plan to increase production in 2016, which means forecasted output in 2016 will equal 2015 level.” I’m not sure if that’s the actual catalysts or we’re just seeing some bargain buying, however.

Risk-on! (for now) – Risk appetite was the name of the game during the morning London session, with the Pan-European FTSEurofirst 300 up by 1.64% to 1,279.73 and the DAX up by 1.35% to 9,292.00. U.S. equity futures were also holding onto their gains, with the S&P 500 futures up by 0.30% to 1,936.12 and the Nasdaq futures up by 0.29% to 4,220.50 during the morning London session. Gold, meanwhile, was leaking red and was down by 0.22% to $1,236.60 per troy ounce. Recovering oil prices may have contributed to risk-on sentiment, but market analysts were also pointing to solid corporate earnings for European companies, namely Lloyds and Seadrill.

Major Currency Movers:

Comdolls – The comdolls (AUD, NZD, CAD) were really tearing it up during the morning London forex session, thanks to the prevailing risk-on sentiment. Between the three, the Loonie was emerged the victor and was the strongest currency during the session, probably because Loonie pairs got a boost from recovering oil prices.

NZD/CAD was down by 24 pips (-0.27%) to 0.9110, AUD/CAD was down by 25 pips (-0.25%) to 0.9816, EUR/CAD was down by 73 pips (-0.48%) to 1.5029

AUD/USD was up by 26 pips (+0.35%) to 0.7208, AUD/JPY was up by 47 pips (+0.59%) to 81.05, EUR/AUD was down by 36 pips (-0.24%) to 1.5307

NZD/USD was up by 21 pips (+0.31%) to 0.6689, NZD/CHF was up by 27 pips (+0.41%) to 0.6628, EUR/NZD was down by 34 pips (-0.31%) to 1.6493

Safe-havens – The safe-haven currencies (USD, JPY, CHF) got a severe beating during the morning London forex session, especially from the safe-havens. However, the Greenback had the distinction of being the stronger of the three while the yen was the ultimate loser, probably because of another attempt at jaw-boning, this time from Japanese Economy Minister Nobuteru Ishihara.

USD/JPY was up by 28 pips (+0.25%) to 112.44, USD/CHF was up by 9 pips (+0.09%) to 0.9909, EUR/USD was up by 13 pips (+0.12%) to 1.1035

CHF/JPY was up by 18 pips (+0.16%) to 113.47, EUR/JPY was up by 43 pips (+0.35%) to 124.07, GBP/JPY was up by 104 pips (+0.67%) to 157.22

EUR/CHF was up by 20 pips (+0.19%) to 1.0934, GBP/CHF was up by 66 pips (+0.48%) to 1.3850, AUD/CHF was up by 31 pips (+0.44%) to 0.7143

Watch Out For:

  • 1:30 pm GMT: Canadian corporate profits (-5.4% previous)
  • 1:30 pm GMT: U.S. initial jobless claims (270K expected, 262K previous)
  • 1:30 pm GMT: U.S. durable goods orders (2.7% expected, -5.0% previous)
  • 1:30 pm GMT: U.S. core durable goods orders (0.3% expected, -1.0% previous)
  • 2:00 pm GMT: FHFA U.S. HPI (0.5% expected, 0.5% previous)
  • 9:45 pm GMT: New Zealand’s trade balance (-271M NZD expected, -53M NZD previous)

See also:

Asian Session Forex Recap

U.S. Session Forex Recap

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