Article Highlights

  • Big positive surprise from U.K. unemployment data; Unemployment Rate better-than-expected at 6.9% vs. 7.1% forecast, 7.2% previous
  • U.K. Claimant Count Change slightly off at -30.4K vs. -30K forecast, but better than previous at -37K
  • European inflation data lower than expected: HICP m/m 0.9% vs. 1.0% forecast, 0.3% previous; y/y inline with forecast and previous at 0.5%
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All eyes were on Sterling as the U.K. surprisingly printed a big drop in the unemployment rate from 7.2% to 6.9%. This of course sparks the debate for policy tightening by the BOE, but whether or not we will see that from the MPC remains to be seen.  For now, forex traders pushed the pound much higher on the session:

GBP/USD is up 71 pips (+0.43%) to 1.6794, GBP/JPY is up by 133 pips (+0.79%) to 171.79, and GBP/NZD, up 188 pips (+0.97%) to 1.9533.  GBP/NZD was the biggest moving pair on the session thanks to the weaker than expected CPI data from New Zealand early in the Wednesday Asia session.  We continue to see Kiwi weakness against many of its major counterparts, most notably AUD/NZD (up 70 pips or +0.65% to 1.0884).

Coming up in the Wednesday afternoon London session, we’ve got mostly tier two economic data from the U.S. starting at 1:30 pm GMT with monthly housing numbers, followed by capacity utilization and industrial production data at 2:15 pm GMT.

The big event of the session though is the Bank of Canada‘s decision on monetary policy at 3:00 pm GMT (check our our trading guide here).  Expectations are for the interest rate to remain at 1.00%, but the potential catalyst to watch out for is their forward guidance on rates.  The market expects commentary on inflation remaining low, so anything outside of that will most likely ignite short-term volatility for the Loonie.

And finally, Federal Reserve Chair Janet Yellen will be giving another speech today to the Economic Club of New York at 5:25 pm GMT.  Again, this is not normally a market mover, but as always, it’s good to be aware and prepared for whenever the head of the Federal Reserve speaks.  Stay frosty.

See also:

Asian Session Recap

U.S. Session Recap

Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. Some things just go well together.

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