- French Trade Balance weaker-than-expected: -5.54B EUR vs. -5B EUR forecast, -5.58B EUR previous
- U.K. Industrial Production m/m improves: 0.5% vs. 0.2% forecast, 0.3% previous
- U.K. Manufacturing Production inline with 0.3% forecast/previous
- U.K. Trade Balance weaker: -10.19B GBP vs. -9.1B GBP, -9.41B GBP previous
Forex price action is mostly choppy, but the British Pound was the main directional mover for the morning London session thanks to news from the U.K. Not only did we get a better-than-expected read on industrial production, but also heard surprise comments from Bank of England Governor Mark Carney, setting expectations that a rate hike next spring is a possibility. Sterling rallied during morning trade, but seems to have hit selling pressure at the moment. After hitting highs on the session around 1.6155, GBP/USD is back to the Tuesday open and testing the 1.6100 handle.
Also of note for early European forex trade is weakness in the euro, slightly down on the session against most majors, possibly on a weak trade balance read from France:
EUR/USD is down 28 pips (-0.22%) to 1.2864, EUR/GBP is down 5 pips (-0.6%) to .8000, EUR/CAD is down 3 pips (-0.3%) to 1.4144
The forex calendar for the afternoon London/morning U.S. session is pretty light, but will hopefully get us out of this morning chop.
At 1:30 pm GMT, we’ll get housing starts data from Canada, which is forecast to come in at 195K vs. 200.1K previous. This number has been on an uptrend for 2014 with the last read as the peak, so a slight pullback may not be too concerning for Loonie bulls out there.
And at 3:00 pm GMT, we’ll get a couple of data points: NIESR GDP estimate for the U.K. (0.6% previous read) and U.S. JOLTS job openings data (4.67M previous). Both are mid-tier events that could hopefully spark some direction in both the Greenback and Sterling, so be sure to pay attention during this hour for hopefully new opportunities on this light trading session.
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