- Swiss jobless rate: steady at 3.4% as expected
- French manufacturing production m/m: 0.0% vs. -0.1% expected, 2.2% previous
- French industrial production m/m: 0.1% vs. 0.0% expected, 1.7% previous
- Italian industrial production m/m: 0.2% vs. 0.5% expected, -0.5% previous
- NFIB small business index: 96.1 vs. 96.4 expected, 96.1 previous
- RBNZ financial stability report later
Price action during today’s morning London forex session was rather choppy due to a lack of top-tier items. Euro and yen pairs were clearly an exception, though.
Risk aversion during the session – Today’s morning London session was another risk-off trading session, with the pan-European FTSEurofirst 300 down by 0.22% to 1,479.00 during the forex session (that kinda rhymes, by the way). US equity futures were in the red as well, with the S&P 500 futures down by 0.25% to 2,067.75 and NASDAQ futures down by 0.48% to 4,630.25.
Disappointing French production readings – French industrial production was better-than-expected at 0.1%, but it was a severe slowdown when compared to the previous month’s reading, which was upgraded from 1.6% to 1.7%. In terms of specifics, the manufacturing sector stagnated after growing by 2.2% previously due mainly to a 1.5% decline in the manufacture of transport equipment (+6.8% previous) and a 0.2% decline in the production of food and beverages.
RBNZ’s financial stability report weighs in? – Forex Gump already touched on this a bit in his Jobs Matchup for the U.S. and New Zealand, but for the forex newbies out there, the financial stability report gives forex traders an insight into what RBNZ officials think about New Zealand’s economy. It even sometimes hints at the future direction of monetary policy, and you can get it here when it finally comes out.
Major Currency Movers:
JPY – The prevailing risk-off sentiment probably convinced forex traders to flee en masse to the safe-haven currencies, with the Japanese yen being clearly the safe-haven of choice for most forex traders since the yen managed to win out against its fellow safe-havens.
USD/JPY was down by 14 pips (-0.12%) to 123.20, GBP/JPY was down by 49 pips (-0.40%) to 122.51, AUD/JPY was down by 22 pips (-0.26%) to 86.81
EUR – Euro pairs began sinking across the board at the start of the forex session, probably because of the disappointing production readings from France since France is a major player in the euro zone economy (second only to Germany), so a possible slowdown in France could signal further economic slowdown in the entire euro zone (and convince the ECB to introduce more easing measures).
EUR/USD was down by 45 pips (-0.42%) to 1.0712, EUR/JPY was down by 79 pips (-0.60%) to 131.90, EUR/AUD was down by 60 pips (-0.39%) to 1.5177
NZD – Most Kiwi pairs were able to edge higher during the course of the session. There were no catalysts that could account for the Kiwi’s price action during the forex session, however, but it could have been due to forex traders opening preemptive positions and/or Kiwi bears unwinding their shorts ahead of the RBNZ’s financial stability report for later (and the press conference that comes with it).
NZD/USD was up by 15 pips (+0.23%) to 0.6543, NZD/JPY was up by 11 pips (+0.14%) to 80.57, NZD/CAD was up by 18 pips (+0.22%) to 0.8682
- US import price index (-0.1% expected, -0.1% previous) at 1:30 pm GMT
- US wholesale inventories (0.0% expected, 0.1% previous) at 3:00 pm GMT
- BOC Senior Deputy Governor Carolyn Wilkin has a speech at 5:00 pm GMT
- BOE Deputy Governor Jon Cunliffe scheduled to speak in Geneva at 5:30 pm GMT
- RBNZ financial stability report at 8:00 pm GMT
- RBNZ press conference on the financial stability report at 8:05 pm GMT
Bonnie and Clyde, peanut butter and jelly, Kanye West and Kanye West. Some things just go well together.
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