London Session Forex Recap – June 3, 2016

  • French final services PMI: 51.6 vs. unchanged at 51.8 expected
  • German final services PMI: unchanged at 55.2 as expected
  • Euro Zone final services PMI: 53.3 vs. unchanged at 53.1 expected
  • Euro Zone final composite PMi: 53.1 vs. unchanged at 52.9 expected
  • U.K. services PMI: 53.3 vs. 53.1 expected, 53.1 previous
  • Euro Zone retail trade y/y: 1.4% vs. 2.1% expected, 1.8% previous
  • NFP report coming up

The forex front was calmer than usual during today’s morning London session, probably because forex traders were hunkering down for the upcoming NFP report. There was some directional movement from the Kiwi, though.

Major Events/Reports:

NFP Friday! – Today is another NFP Friday, so volatility was naturally a bit more subdued than usual and most currency pairs ended up trading sideways, as forex traders hunkered down for the upcoming NFP report. Still, there were a few currencies that were slowly but clearly on the move, which I’ll be pointing out later.

Oh, if you’re planning to trade the NFP report, make sure to gear up by reading up on Forex Gump’s Forex Preview for the May NFP report.

U.K. services PMI beats consensusMarkit’s U.K. services PMI for the May period came in at 53.3, beating expectations that it would hold steady at 53.1. However, commentary from Markit noted that the growth of new businesses slowed down to a very disappointing 41-month low, which is one of the reasons why employment growth slowed to a 33-month low. The slower growth in new businesses was quite naturally blamed by the respondents on uncertainty ahead of the Brexit referendum.

Most commodities in the greenCommodities staged another broad-based rally during today’s morning London session, with the precious metals gold and silver respectively up by 0.12% to $1,214.05 per troy ounce and 0.50% to $16.105 per troy ounce during the session. Meanwhile, the base metal copper was up by 2.13% to $2.114 per pound. Oil benchmarks weren’t doing too well, though, since U.S. crude oil was down by 0.39% to $48.98 per barrel while Brent blend crude oil was down by 0.36% to $49.86 per barrel.

Another risk-on session in Europe – Most European equity indices were able to end the morning London session with moderate gains. As examples, the pan-European FTSEurofirst 300 was up by 0.60% to 1,359.08, the blue-chip Euro Stoxx 50 was up by 0.46% to 3,051.00, and the DAX was up by 0.64% to 10,273.50.

Market analysts attributed the risk-on vibes to the broad-based commodities rally since the shares of European mining companies were leading the way higher.

Major Currency Movers:

NZD – The Kiwi’s price action was kinda choppy, but it was clear across all Kiwi pairs that the Kiwi was in demand. There weren’t any direct catalysts for the Kiwi during the morning London session, but it’s possible that the risk-on environment encouraged some forex traders to load up on the higher-yielding Kiwi.

NZD/USD was up by 15 pips (+0.23%) to 0.6844, NZD/CAD was up by 17 pips (+0.20%) to 0.8960, NZD/JPY was up by 23 pips (+0.31%) to 74.51

Watch Out For:

  • 12:30 pm GMT: Canadian merchandise trade (-$2.50B expected, -$3.41B previous)
  • 12:30 pm GMT: Canadian labor productivity (0.4% expected, 0.1% previous)
  • 12:30 pm GMT: U.S. trade balance (-$41.0B expected, -$40.4B previous)
  • 12:30 pm GMT: U.S. jobless rate (4.9% expected, 5.0% previous)
  • 12:30 pm GMT: U.S. non-farm payrolls (163K expected, 160K previous)
  • 12:30 pm GMT: U.S. average hourly earnings (0.2% expected, 0.3% previous)
  • 1:45 pm GMT: Markit’s final U.S. services PMI (unchanged at 51.2 expected)
  • 2:00 pm GMT: U.S. factory orders (1.9% expected, 1.1% previous)
  • 2:00 pm GMT: U.S. ISM non-manufacturing PMI (55.3 expected, 55.7 previous)
  • 4:30 pm GMT: Federal Reserve Governor Lael Brainard is scheduled to speak

See also:

Asian Session Forex Recap

U.S. Session Forex Recap

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