London Session Forex Recap – Apr. 6, 2016

  • German industrial production m/m: -0.5% vs. -1.8% expected, 2.3% previous
  • German industrial production y/y: 1.3% vs. 0.4% expected, 2.2% previous
  • Euro Zone retail PMI: 49.2 vs. 50.1 previous
  • U.K. housing equity withdrawal q/q: (-£9.5B vs. -£9.2B expected, -£9.7B previous)
  • Canada’s Ivey PMI coming up
  • FOMC meeting minutes will be released later

There were only low-tier items on the docket for today’s morning London forex session, but there was still plenty of volatility. Forex price action was kinda wonky, though.

Major Events/Reports:

Oil moves higher – Oil benchmarks were on the rise during the morning London session on speculation that the upcoming oil freeze meeting will yield positive results after Kuwaiti governor for OPEC Nawal Al-Fuzaia said yesterday that “positive indications an agreement will be reached,” according to market analysts.

U.S. crude oil was up by 2.87% to $36.92 per barrel while Brent crude oil was up by 2.35% to $38.76 per barrel during the morning London session.

Moderate appetite for risk – There was some risk-taking during the morning London session, with the Pan-European FTSEurofirst 300 up by 0.29% to 1,292.13 while the safe-haven gold was down by 0.49% to 1,223.60 during the session. The DAX was slightly down by 0.15% to 9,549.00, though, probably because of the drop in German industrial production.

U.S. equity futures were also slightly up, with the S&P 500 futures up by 0.16% to 2,042.00 and Nasdaq futures up by 0.15% to 4,476.38 during the morning London session. Market analysts attributed the slight risk-on sentiment to the oil price rally, which lifted energy stocks.

Major Currency Movers:

Safe-havens – Despite the risk-on sentiment during the morning London session, the safe-haven currencies (USD, JPY, CHF) just kept on grinding ever higher against their forex rivals, which is why I said price action was rather wonky.

Among them, the Greenback was the strongest (it barely edged out the yen, though) while the Swissy was the weakest. This wonky price action may have been due to preemptive positioning or squaring off of positions ahead of the FOMC meeting minutes later today.

USD/CAD was up by 25 pips (+0.20%) to 1.3166, USD/CHF was up by 16 pips (+0.16%) to 0.9601, USD/JPY was up by 3 pips (+0.03%) to 110.40

EUR/JPY was down by 8 pips (-0.06%) to 125.21, CHF/JPY was down by 17 pips (-0.15%) to 114.97, NZD/JPY was down by 38 pips (-0.51%) to 74.80

GBP/CHF was down by 86 pips (-0.64%) to 1.3461, NZD/CHF was down by 24 pips (-0.36%) to 0.6506, AUD/CHF was down by 17 pips (-0.24%) to 0.7234

GBP – The pound was bleeding out across the board throughout the morning London session. There weren’t any clear catalysts for the pound’s severe weakness, though, so we’ve got another currency with wonky price action.

GBP/USD was down by 117 pips (-0.83%) to 1.4019, GBP/JPY was down by 125 pips (-0.79%) to 154.79, GBP/CAD was down by 110 pips (-0.61%) to 1.8461

Watch Out For:

  • 3:00 pm GMT: Canada’s Ivey PMI (55.0 expected, 53.4 previous)
  • 3:30 pm GMT: U.S. crude oil inventories (3.1M expected, 2.3M previous)
  • 5:20 pm GMT: Cleveland Fed President Loretta Mester has a speech
  • 7:00 pm GMT: FOMC Meeting Minutes will be released
  • 11:30 pm GMT: St. Louis Fed President James Bullard is scheduled to speak

See also:

Asian Session Forex Recap

U.S. Session Forex Recap

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