Article Highlights

  • French Services PMI: 52.4 vs. 52.8 forecast/previous
  • German Services PMI: 55.4 vs. 55.3 previous
  • European Services PMI: 54.2  vs. 54.3 forecast/previous
  • European Composite PMI: 54 vs. 54.1 previous
  • European Sentix Indicator: 20 vs. 18.6 previous
  • U.K. Services PMI: 58.9 vs. 57 forecast, 56.7 previous
  • European Sentix Indicator: 20 vs. 18.6 previous
  • European PPI m/m: 0.5% vs. -1.1% previous; y/y at -2.8% vs. -3.5% previous
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The euro is under the control of the bears in the morning London session, volatility sparked by mixed economic data releases including services PMI reads, a weaker Sentix investor survey number, and a better-than-previous read on producer price inflation. It’s tough to pinpoint the catalyst for a down move among such a wide array of economic data points, so I’ll assume it’s forex traders selling euros on a potential situation where Greece misses the next IMF payment due on Thursday.  Who knows, really?

Whatever the catalyst may be, the shared currency is broadly lower on the session but stabilizing ahead of the U.S. trade.  And because of its tight correlation and relationship with the euro zone, the Swiss franc is feeling the heat too on the session.

EUR/USD is down 48 pips (-0.43%) to 1.0872, EUR/JPY is down 19 pips (-0.15%) to 130.34, and USD/CHF is up 24 pips (+0.26%) to .9605

The British pound is also broadly higher on the session after posting a better-than-expected services PMI read, which is a pretty big deal for the U.K. since it makes up around 77% of its GDP. Sterling is seeing across the board with exception against the Aussie, holding its gains on the bullish reaction after the RBA held its cash rate 2.25%:

GBP/USD is up 30 pips (+0.21%) to 1.4903, GBP/JPY is up 90 pips (+0.51%) to 178.70, and EUR/GBP is down 39 pips (-054%) to .7293

The forex calendar for the Tuesday afternoon London/morning U.S. session is light with few mid-tier U.S. events in today’s line up.

At 3:00 pm GMT, we’ll get the IBD consumer optimism data for a read on the economy through the eyes of the retail consumer, and the JOLTS data for an update in the change in job vacancies in the U.S.  And at 8:00 pm GMT, we’ll get the monthly consumer credit read on U.S. consumer credit, forecasted to come in above last month’s 18-month low of $11.6B.  Again, mid-tier events aren’t likely market movers unless there is an unusually big difference between the actual and forecast/previous numbers, so be aware but understand that the probability we’ll see a spike in volatility off of these events are very low.

Unless we get a major catalyst from the U.S., the focus may likely switch to equity market sentiment and/or remain on the London session themes of weak euro and strong British pound.  Stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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