London Session Forex Recap – Nov. 8, 2016

  • Swiss jobless rate: unchanged at 3.3% as expected
  • German industrial production m/m: -1.8% vs. -0.4% expected, 3.0% previous
  • German trade balance: €21.3B vs. €23.4B expected, €21.6B previous
  • French trade balance: -€4.8B vs. -€4.1B expected, -€4.2B previous
  • U.K. manufacturing production m/m: 0.6% vs. 0.5% expected, 0.2% previous
  • U.K. manufacturing production y/y: 0.2% vs. -0.1% expected, 0.5% previous
  • U.K. industrial production m/m: -0.4% vs. 0.1% expected, -0.4% previous
  • U.K. industrial production y/y: 0.3% vs. 0.8% expected, 0.7% previous
  • U.S. presidential elections today

Trading conditions were a bit tight during the morning London session, probably because traders were hunkering down for one of the most controversial and polarizing (yet entertaining) presidential elections in U.S. history. Having said that, the Greenback was getting some

Major Events/Reports:

U.K. industrial production falters – According to a report released by the ONS, industrial output in the U.K. fell by 0.4% month-on-month during September. This is the same rate of contraction as in the previous month, as well as a miss from the expected 0.1% expansion.

The largest drag came from the 3.8% slump from the mining and quarrying industries. However, this was slightly offset by the bigger-than-expected increase reported by the manufacturing sector (0.6% vs. 0.5% expected, 0.2% previous).

Year-on-year, industrial production only increased by 0.3%. This is a disappointment because industrial production was expected to increase by 0.8%, which is a faster pace compared to the 0.7% expansion printed by the previous month.

Signs of skittishness – European equity indices were sending mixed signals during today’s morning London session, but were mostly in the red.

  • The pan-European FTSEurofirst 300 was down by 0.03% to 1,317.94
  • Germany’s DAX was down by 0.06% to 10,452.00
  • The U.K.’s FTSE 100 was up by 0.03% to 6,809.00

U.S. equity futures, meanwhile, were slightly dipping in negative territory.

  • S&P 500 futures were down by 0.12% to 2,126.50
  • Nasdaq futures were down by 0.09% to 4,771.39

Another sign of skittishness was the fact that precious metals, which are considered traditional safe-havens, were in the green.

  • Gold was up by 0.14% to $1,281.15 per troy ounce
  • Silver was up by 0.30% to $18.205 per troy ounce

It’s probably safe to say that the skittish risk sentiment during the session was due to uncertainty over the U.S. presidential elections.

Oil’s roller coaster ride – Oil benchmarks were already in the red when the morning London session rolled around. However, they later got pushed into positive territory after Iranian oil minister Bijan Zanganeh’s comment that Iran is “optimistic” on the proposed OPEC deal. Unfortunately, oil benchmarks got pulled back lower again by the end of the session. Market analysts couldn’t pinpoint the reason for oil’s later slide, though.

  • U.S. crude oil down by 0.58% to $44.63 per barrel
  • Brent crude oil down by 0.43% to $45.95 per barrel

Major Market Movers:

USD – The Greenback got some buyers across the board during the morning London session. Maybe traders are expecting a Clinton victory? After all, the mainstream media announced earlier that Clinton is leading in all the latest polls before the actual elections.

USD/JPY was up by 32 pips (+0.31%) to 104.75, USD/CHF was up by 21 pips (+0.22%) to 0.9765, USD/CAD was up by 6 pips (+0.05%) to 1.3368

GBP – Most pound pairs were trading sideways, especially if you also consider the price action from the earlier session. However, all pound pairs ended the morning session on a lower note, possibly because of disappointment over the U.K.’s poor industrial production numbers.

GBP/USD was down by 39 pips (-0.32%) to 1.2387, GBP/CAD was down by 44 pips (-0.27%) to 1.6560, GBP/AUD was down by 20 pips (-0.13%) to 1.6093

Watch Out For:

  • 1:15 pm GMT: Canadian housing starts (195K expected, 219K previous)
  • 1:30 pm GMT: Canadian building permits (-5.6% expected, 10.4% previous)
  • 3:00 pm GMT: NIESR U.K. GDP (0.4% previous)
  • 3:00 pm GMT: JOLTS U.S. jobs openings (5.67M expected, 5.44M previous)
  • 4:20 pm GMT: BOC Deputy Governor Lawrence Schembri has a speech
  • 5:00 pm GMT: BOE Chief Economist Andy Haldane scheduled to speak
  • U.S. presidential elections today

See also:

Asian Session Forex Recap

U.S. Session Recap

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