Article Highlights

  • U.K. GDP (1st. Est.) q/q slightly lower-than-expected but positive: 0.8% vs. 0.9% forecast, 0.7% previous
  • European sentiment data mixed: Economic sentiment 102.0 vs. 102.9 forecast; Consumer sentiment -8.6 vs. -8.7 forecast; Industrial sentiment -3.6 vs. -3.1 forecast
  • ECB President Mario Draghi says that quantitative easing is unlikely to happen for now
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The Japanese yen and the comdolls were on the move once again as risk aversion sentiment fades.  This may be due to a combination of factors: subsiding fears on the Ukraine-Russia situation, sanctions on Russia are seen as not having a devastating effect, and signs of a global recovery in major economies.  Yen pairs are mostly up on the session as forex traders lighten up on safe havens and load back up on risk assets like the commodity dollars:

USD/JPY is up 23 pips (+0.23%) to 102.71, AUD/JPY is up 32 pips (+0.34%) to 95.17, and the big mover of the session looks like CAD/JPY, up 70 pips (+0.75%) to 93.57.

We also saw short-term volatility spike up thanks to a much anticipated U.K. preliminary GDP number, which came in a tick below expectations but above the previous read. Because of recent positive data, this was a surprise to forex traders, which explains the whipsaw reaction in the British Pound.  Overall, sterling is mixed on the session:

GBP/USD is up only 4 pips (+0.03%) to 1.6808, GBP/JPY is up 45 pips (+0.26%) to 172.64, and GBP/CAD is down  74 pips (-0.40%) to 1.8455

The Tuesday London/U.S. session is light on data with only two on tap worth watching: S&P Case-Shiller Home Price index at 2:00 pm GMT (13.0 forecast vs. 13.24 previous) and U.S. Consumer Confidence index at 3:00 pm GMT (83.2 forecast vs. 82.3 previous).  Both do have the potential to move markets, but unless we see an outsized surprise on the actual data, volatility will most likely stay within normal ranges.  This is due to the fact that today starts the FOMC’s two day meeting on U.S. monetary policy, so unless we see a big catalyst on the session, currency traders may tread lightly or remain on the sidelines ahead of the big event tomorrow.

See also:

Asian Session Recap

U.S. Session Recap

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