- U.K. inflation data mixed; headline CPI m/m inline with 0.2% forecast, below 0.5% previous
- German ZEW Economic Sentiment: 43.2 vs. 45.0 forecast, 46.6 previous
- German ZEW Current Conditions: 59.5 vs. 51.5 forecast 51.3
While we did get tier one data from Europe, all of the action was in Sterling as traders anticipated and priced in a lower U.K. CPI inflation number ahead of the event. The British pound was hit with sell orders from the start of the London open, only to reverse right at the release of the U.K. CPI data (aka “buy-the-rumor, sell-the-news”). On the session, sterling is near or up on the Tuesday session opening prices, but the momentum seems to be fading.
GBP/USD is down 3 pips (-0.02%) to 1.6723, GBP/JPY is up by 2 pips (+0.01%) to 170.32, and the big mover of the day so far is GBP/AUD, up 65 pips (+0.37%) to 1.7810 thanks to the RBA meeting minutes, which commented on the rising currency’s negative effects on growth.
Coming up in the Tuesday afternoon London session, we’ve got a small batch of U.S. data to potentially rouse volatility once again. It’s a mix that includes the Empire State Survey at 1:30 pm GMT and NAHB Builders survey at 2:00 pm GMT, but the most notable of the group is the U.S. CPI data (also at 1:30 pm GMT), with the monthly read forecasted to come inline with the previous read at 0.1%.
Fed Chair Janet Yellen is also giving a speech at the Financial Markets conference at 1:45 pm GMT. Speeches aren’t usually market movers, but anytime the head of a major central bank speaks, we should all be prepared for any surprises. Stay frosty forex friends!
Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. Some things just go well together.
Head on to Big Pippin’s Daily Chart Art for some pip-locking technical setups!