Article Highlights

  • German Import Price Index weaker-than-expected y/y: -2.3% vs. -2.2%
  • U.K. GDP (1st Est.) y/y inline with expectations at 2.8%, above previous 1.9%
  • U.S. Durable Goods weaker-than-expected.  Core m/m: -1.6% vs. 0.5% forecast
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The U.S. dollar rallied against the majors throughout the London session, rising against both the euro (+0.43%) and the British pound (+0.40%) through morning session trading.  This was probably due to a continued pullback from the extreme risk behavior from last week, and slightly disappointing numbers from Germany and the U.K.

German import prices disappointed, not only coming in below forecasts but also below the December read of 0.1%.  In the U.K., the preliminary GDP number came inline with expectations (quarterly read at 0.7%), but the quarterly read came in below the previous read of 0.8%.  Despite being a solid number, this is slightly disappointing to sterling bulls as this may signal that the rate of growth improvements may be taking a breather here.

U.S. durable goods orders just came in weaker-than-expected, with the headline number coming in at -4.3% vs. the 1.8% forecast number.  This is a big miss and we saw a broad sell off reaction in the Greenback on the news. USD dipped 49 pips (-0.47%) against the Japanese yen on the news, and we saw a retracement of its strength against the euro and sterling as well.

We have the S&P Case-Shiller Home Price Index and U.S. consumer confidence numbers coming soon to close out the London session.  Both are expected to be slightly above December numbers.  Risk sentiment will continue to be a forex influence as well, so pay attention to how the U.S. equity markets trade, which may take cue from the positive trading in Europe (FTSE 100 index up +0.25%) and mixed Asia trade today.

See also:

Asian Session Recap

U.S. Session Recap

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