London Session Recap – January 6, 2014

  • Individual European Services PMI data mixed; Broad Composite and Services PMI inline at 52.1 and 51.0 respectively.
  • EU Sentix Investor Confidence better-than-expected at 11.9 vs. 9.7 forecast, 8.0 previous.
  • UK Services PMI weaker-than-expected at 58.8 vs. 60.5 forecast, 60.0 previous.
  • Mixed Canadian data: Raw materials price index at -4.1% vs. -1.8% forecast, Industrial product price index +0.1% vs. -0.2% forecast.

The significant news release for the London trading session was the European and U.K. Services PMI data.  In Europe, we saw contraction of the services sector in France (47.8, a six-month low) and Italy (47.9, second straight month of contraction).  But we saw a sharp rise in Spain as their index read at 54.2 vs. the 51.7 forecast.  Coupled with the positive read from the Sentix Indicator, the euro found a bit of buying support against the Greenback with EUR/USD rallying around 30 pips in the morning London session.

And despite a weak read from the U.K. Services PMI number, sterling has rallied as well, indicating broad risk taking in the currency markets.  GBP/USD is above its London open price 1.6358 by around 50 pips.

An hour ago, we got mixed industrial data from Canada.  It was probably the large surprise in the raw material prices index that produce a bit of broad weakness in the Canadian dollar, but no significant moves.

Later today, we have US factory orders and the ISM manufacturing survey at 3:00 pm GMT (10:00 am ET).   The former is expected to come in at -0.9%, while the ISM number is expected to come in above last months read of 53.9 at 54.6.

See also:

Asian Session Recap

U.S. Session Recap

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