Article Highlights

  • U.K. Nationwide house prices: 0.1% vs. 0.5% forecast/previous;
  • German Import Price Index m/m: -0.3% vs. -0.2% forecast, -0.7% previous
  • French Consumer Spending m/m: -0.7% vs. -0.1% forecast, 0.1% previous
  • French PPI m/m: 0.2% vs 0.1% previous
  • U.K Index of Services q/q: 0.7% vs 0.8% forecast, 0.9% previous
  • U.K GDP (2nd Est) q/q inline with 0.5% forecast/previous
  • European Consumer Sentiment Index: -3.2 vs. 2.1 forecast, -2 previous
  • European Business Climate Index: 0.36 vs. 0.45 forecasat, 0.44 previous
  • European Economic Sentiment Index: 106.1 vs. 105.9 forecast, 106.1 previous
  • German GFK Consumer Sentiment Index: 9.3 vs. 9.2 forecast, 9.4 previous
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Mostly quiet price action in the London forex session with exception to a quick move in the Swissy and a slight bias towards risk aversion.

Major Events:

Risk aversion flows. Risk-off sentiment during Asia sparked by China’s weak industrial profits data (-4.6% vs. -0.1% previous) continued to spill over into European trading, which likely grew as forex traders were hit with a slew of weak data from Europe and the U.K.  There were a few positive highlights in the data including European economic sentiment, but it was mainly a disappointment for the bulls.

Another story that’s mostly out of the spotlight these days but still a potential contributor to risk sentiment is Greece, posting a weaker-than-expected quarterly GDP number at -0.9% vs. 0.5% previous.  Again, not a major market mover these days, but it can’t certainly help today’s bearish sentiment on the euro.

Mysterious move in the Swiss franc.  The franc dropped quickly during the morning London session without any major catalysts at the time of the move. It’s now speculated that forex traders are pre-empting a potential move by the Swiss National Bank, who may take intervention moves to weaken its currency IF the European Central Bank takes on additional monetary policy easing moves next week.  An easing move by the ECB would put pressure on EUR/CHF, thus strengthening the Swiss franc and hurting its export economies.

Major Currency Movers:

CHF – Swissy pairs were quiet all session with exception to the quick 20 minutes sell off on the SNB speculation above. EUR/CHF started the session around 1.0875, only to pop  up as high as 1.0926 before settling back to around 1.0900 to be up +0.4% on the Friday session.

USD/CHF is up 71 pips (+0.70%) to 1.0307 with 1.0328 as session high,
GBP/CHF is up 21 pips (+0.23%) to 1.5512 with 1.5531 as session high,
CHF/JPY is down 68 pips (-0.58%) to 119.00 with 118.81 as session low

EUR – Despite data and sentiment turning sour on the euro during London, it looks like euro pairs are mostly still in the Green for the final trading session after bullish move during the Asia session:

EUR/AUD is up 19 pips (+0.12%) to 1.4700 with 1.4759 as session high
EUR/NZD is up 60 pips (+0.37%) to 1.6198 with 1.6238 as session high
EUR/GBP is up 7 pips (+0.11%) to .7031 with .7049 as session high

USD & JPY – Both gained broadly on the session with risk aversion flows back in the spotlight, with the Greenback as the leading gainer in mostly quiet forex price action:

GBP/JPY is down 43 pips (-0.24%) to 184.65 with 185.31 as session high
EUR/USD is down 34 pips (-0.32%) to 1.0575 with 1.0637 as session high
USD/JPY is up 14  pips (+0.12%) to 122.70 with 122.30 as session low

Watch Out For:

A very light session ahead with no data from the U.S. and U.S. traders still mostly out for the holiday, but we did get Canadian data that should provide a small boost in a mostly thin trading market.

  • 1:30 pm GMT Canadian Raw Materials Price Index: 0.4 vs. 0.3 forecast, 3.0 previous
  • 1:30 pm GMT Canadian Industrial Product Price Index: -0.5 vs.  -0.1 forecast, -0.3 previous

See also:

Asia Session Recap

U.S. Session Recap

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