Article Highlights

  • German PPI m/m: -0.7% vs. -0.4% forecast, 0.0% previous; y/y at -1.7% vs. -1.4% forecast, -0.9% previous
  • German ZEW Economic Sentiment: 48.4 vs. 40 forecast, 34.9 previous
  • European ZEW Economic Sentiment: 45.2 vs. 31.8 previous
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During the Asia session, slightly better-than-expected Chinese GDP (7.3% vs. 7.2% forecast) sparks risk-on sentiment in the global markets and a departure from safe haven currencies, which continued in the morning London session.  As usual, the Japanese yen was the big loser in this type of environment with most yen pairs in a straight shot higher on the session.

USD/JPY is up 111 pips (+0.95%) to 118.65, EUR/JPY is up 97 pips (+0.71%) to 137.48, and GBP/JPY is up 243 pips (+1.37%) to 180.03

While the Chinese data was better-than-expected, it was still the slowest pace of growth since 1990 and below the government’s 7.5% target. These points could be attributed to why we’re seeing slight weakness in the comdolls, which is broadly lower on the session:

AUD/USD is down 8 pips (-0.11%) to .8201, NZD/USD is down 56 pips (-0.72%) to .7715, and USD/CAD is up 64 pips (+0.54%) to 1.1999

The euro is seeing a bit of strength on the session, likely benefiting off of comdoll and yen weakness, but possibly on a reduction of short positioning ahead of the upcoming European Central Bank monetary policy statement on Thursday.  The markets are expecting the ECB to initiate a brand new quantitative easing program to combat deteriorating price stability in the eurozone.

EUR/GBP is up 48 pips (+0.63%) to .7678, EUR/CAD is up 62 pips (+0.45%) to 1.3911, and EUR/NZD is up 115 pips (+0.77%) to 1.5017

The forex calendar for the Tuesday afternoon London/morning U.S. session is light once again with only low tier Canadian data in the lineup.

At 1:30 pm GMT, we’ll get Canadian manufacturing sales data (-0.7% forecast vs. -0.6% previous) and wholesale sales data (0.1% previous).  Again, this is low tier data so it’s likely we won’t see a reaction, but it’s a good idea to keep an eye on the Loonie at this time.

Also of note is the global dairy trade data, tentatively scheduled for release sometime at the end of the U.S./Asia session open and New Zealand quarterly consumer price inflation data at 9:45 pm GMT. The global dairy trade data is important data to New Zealand whose largest export is dairy and the Kiwi has been very reactive to its release in the past. And of course, inflation has been the focus for central banks as of late so the CPI should be a strong market mover as well. Stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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