Article Highlights

  • German Services PMI: 53 actual v.s. 52.9 expected, 52.9 previous
  • French Services PMI: 52.8 actual v.s. 51.6 expected, 51.6 previous
  • Euro Zone Services PMI: 53.8 actual v.s. 53.3 expected, 53.3 previous
  • Euro Zone Jobless Rate: 11.1% actual v.s. 11.2% expected, 11.2% previous
  • Euro Zone Retail Trade m/m: 0.7% actual v.s. 0.6% expected, -0.6% previous
  • U.K. Nationwide House Prices m/m: 0.3 actual v.s. 0.4 expected, 1.0 previous
  • U.K. Services PMI: 56.5 actual v.s. 59.2 expected, 59.5 previous
  • ECB Refinancing Rate: maintained at 0.05%
  • ECB press conference coming up
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The morning London session was relatively quite, with most currency pairs milling around in tight ranges. The only exceptions to the subdued volatility were the pound and the Greenback, with the pound taking a dive due to bad data and the Greenback grinding higher ahead of U.S. data later.

Pound pairs began inching lower when nationwide house prices slowed in May, raising questions about the health of the housing sector. But the catalyst for the massive spike downwards was probably the very disappointing read for services PMI, which is the biggest monthly drop since August 2011, naturally igniting concerns about the U.K. recovery.

GBP/USD is down by 85 pips (-0.55%) to 1.5269, GBP/JPY is down by 41 pips (-0.21%) to 189.92, EUR/GBP is up by 14 pips (+0.19%) to 0.7282

As for the Greenback, there weren’t really any direct catalysts to account for the slight strength during the forex session, so it was most likely just Greenback shorts taking profit ahead of a very heavy forex calendar for the upcoming U.S. session.

USD/CAD is up by 56 pips (+0.45%) to 1.2450, USD/JPY is up by 46 pips (+0.37%) to 124.42, USD/CHF is up by 29 pips (+0.31%) to 0.9368

As for other currencies worth mentioning, the euro was pretty well behaved for most of the forex session, quietly ranging despite lots of better-than-expected readings for various economic data. There were some updates on Greece, such as Greece not being able to pay its debt to the IMF without a deal, but such “news” are not really new to most. The euro was probably subdued for most of the session as forex traders were sitting on their hands ahead of the real potential fireworks–the ECB press conference.

EUR/USD is down by 48 pips (-0.43%) to 1.1117, EUR/AUD is down by 4 pips (-0.03%) to 1.4305, EUR/JPY is down by 7 pips (-0.05%) to 138.34

Whew! Looks like upcoming afternoon London/morning U.S. session is really packing the heat, with a forex calendar jam-packed with heavy-hitting data. Let’s get right to it, shall we?

At 1:15 pm GMT, forex traders can expect to start the session to start with a bang (or not), as U.S. ADP employment survey (200K expected, 169K previous) is expected to post a significant increase over the previous read. This item acts as a leading indicator for the government’s non-farm payrolls report since ADP is a major payroll services provider to over 610,000 business.

Next, at 1:30 pm GMT, forex traders will get data blitzed with the release of Canadian (-2.15B expected, -3.02B previous) and U.S. (-44.00B expected, -51.44B previous) trade balance reports. Both countries are expected to show a slight decrease in their respective trade deficits, so forex traders should watch out–especially if the actual reads are worse than expected. Remember, both economies contracted and Canada has admitted to being somewhat dependent on a U.S. recovery.

Also at 1:30 pm GMT is the ECB press conference. Forex traders should watch out for this one. Make sure to listen for any change in sentiment as well as updates on Greece.

Moving forward, U.S. ISM non-manufacturing PMI (57.0 expected, 57.8 previous) is coming out at 3:00 pm GMT. This indicator is expected to slide down, but it would still be in the above the 50 level, which indicates industry expansion, making a market reaction is hard to gauge.

Finally, at 3:30 pm GMT, U.S. crude oil inventories (-1.9m expected, -2.8M previous) will be released. Just as a reminder, this indicator usually affects the Loonie since the Canada is a major producer/exporter of oil.

And for the bonus round, Federal Reserve Bank of Chicago President Charles Evans is set to speak at the Chicago Banking Symposium at around 7:15 pm GMT. You know the drill: keep an ear out for any updates on future monetary policy. Stay frosty!