London Session Forex Recap – Nov. 4, 2016

  • Euro Zone final services PMI: 52.8 vs. no change from 53.5 expected
  • Euro Zone final composite PMI: 53.3 vs. no change from 53.7 expected
  • Euro Zone PPI m/m: 0.1% vs. 0.0% expected, -0.2% previous
  • Euro Zone PPI y/y: -1.5% vs. -1.7% expected, -2.1% previous
  • U.S. NFP report and trade data coming up
  • Canadian jobs report and trade report also coming up

Today’s another NFP Friday and there wasn’t much on the calendar, so price action was relatively tight. The yen and the Swissy got some buyers, though, likely because of the risk-off mood.

Major Events/Reports:

NFP Friday! – Today is another NFP Friday! And as is usually the case, both directional movement and volatility became relatively more subdued for many pairs, as forex traders hunkered down ahead of the NFP report.

By the way, if you’re planning to trade the October NFP report and need to get up to speed on what happened last time and what’s expected this time, then make sure read up on Forex Gump’s Forex Preview here. It also includes a quick review and preview for the Canadian jobs report.

Risk appetite retreats – After a brief stay yesterday, risk appetite got booted out of the door and risk aversion took its place, at least in the European equities market.

  • The pan-European FTSEurofirst 300 was down by 0.93% to 1,294.50
  • The blue-chip Euro Stoxx 50 was down by 0.91% to 2,948.00
  • Germany’s DAX was down by 0.80% to 10,243.00
  • The U.K.’s FTSE 100 was down by 1.30% to 6,702.50

U.S. equity futures were barely changed, but dipping slightly in the red.

  • S&P 500 futures were down by 0.05% to 2,082.50
  • Nasdaq futures were down by 0.07% to 4,671.00

Some market analysts attributed the returning risk-off vibes to slumping pharmaceuticals due to calls for a price fixing probe. Other market analysts, meanwhile, pointed to continuing political uncertainty mainly brought about by the looming U.S. presidential elections (and the higher possibility of a Trump victory).

Major Market Movers:

JPY & CHF – Most currency pairs were trading sideways or had rather choppy price action. That was not the case for Swissy and yen pairs, however, since both the Swissy and the yen were in demand. There weren’t any catalysts for the two safe-haven currencies, but there was some risk aversion during the session, which likely sent some safe-haven flows.

USD/JPY was down by 38 pips (-0.37%) to 102.95, EUR/JPY was down by 39 pips (-0.35%) to 114.31, CAD/JPY was down by 31 pips (-0.42%) to 76.75

USD/CHF was down by 36 pips (-0.38%) to 0.9712, EUR/CHF was down by 37 pips (-0.34%) to 1.0785, CAD/CHF was down by 30 pips (-0.42%) to 0.7242

Watch Out For:

  • 12:30 pm GMT: U.S. non-farm payrolls (173K expected, 156K previous)
  • 12:30 pm GMT: U.S. jobless rate (4.9% expected, 5.0% previous)
  • 12:30 pm GMT: U.S. average hourly earnings (0.3% expected, 0.2% previous)
  • 12:30 pm GMT: U.S. trade balance (-$38.0B expected, -$40.7B previous)
  • 12:30 pm GMT: Canada’s net change in employment (-15K expected, 67.2K previous)
  • 12:30 pm GMT: Canada’s jobless rate (steady at 7.0% expected)
  • 12:30 pm GMT: Canada’s trade balance (-$1.70B expected, -$1.94B previous)
  • 2:00 pm GMT: Ivey’s Canadian PMI (56.0 expected, 58.4 previous)
  • 2:45 pm GMT: BOE MPC Member Kristin Forbes will deliver a speech
  • 8:00 pm GMT: Federal Reserve Governor Stanley Fischer has a speech

See also:

Asian Session Forex Recap

U.S. Session Recap

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