- German factory orders m/m: 1.8% vs. 1.2% expected, -0.7% previous
- German factory orders y/y: -1.4% vs. -2.5% expected, -0.7% previous
- Swiss CPI m/m: -0.1% vs. 0.0% expected, 0.1% previous
- Swiss CPI y/y: -1.4% vs. -1.3% expected, -1.4% previous
- Euro Zone retail PMI: 48.5 vs. 51.3 previous
- Today is NFP Friday!
- Canada’s jobs report also on tap
With the final NFP report before the FOMC statement looming ever closer, volatility dried up for most currency pairs during today’s morning London forex session. Pound and Loonie pairs were noticeably immune, however.
Oil price rally – Oil prices were in the green during the forex session, with the Brent crude oil up by 1.65% to $44.56 per barrel and U.S. crude up by 1.52% to $41.70 per barrel. Most analysts were pointing to traders unwinding some of their shorts as OPEC officials sit down for a huddle in Vienna, with most analysts expecting no cutback in oil production.
Jittery risk sentiment – Risk aversion was the name of the game during the morning European session, with the Pan-European FTSEurofirst 300 down by 0.33% to 1,457.86 and the DAX down by 0.57% to 10,728.00. Some market analysts attributed the risk-off sentiment to disappointed investors who think that the ECB did not do enough. Of course, it’s also possible that investors were just getting out of their positions ahead of the NFP report.
NFP Friday! – Volatility usually gets sapped ahead of the NFP report, and today was no exception. Most currency pairs were peacefully trading sideways during the course of the forex session. Nevertheless, there were a couple of currencies that were violating the pre-NFP peace, as stated earlier and noted below.
Major Currency Movers:
CAD – Loonie pairs were pretty strong during the forex session. And it’s probably safe to say that the Loonie’s strength was mostly due to the oil rally during the forex session since there were no other catalysts unless you count preemptive positioning ahead of Canada’s jobs report.
USD/CAD was down by 28 pips (-0.21%) to 1.3336, NZD/CAD was down by 35 pips (-0.40%) to 0.8909, AUD/CAD was down by 34 pips (-0.35%) to 0.9757
GBP – The pound’s forex price action was rather mysterious since it was gaining strength without any direct catalyst. True, EUR/GBP was down 11 pips (-0.16%) to 0.7194, but I don’t think it was counter-currency action, or euro weakness in this case, since most other euro pairs were actually pretty stable.
I don’t think risk sentiment had anything to do with demand for the pound as well since the risk-off sentiment would have made forex traders wary of loading up on the high-yielding pound. Other market analysts are also “hush hush” on the pound’s strength during the forex session. Well, whatever the case may truly be, the pound was certainly kicking butt and taking names during the session.
GBP/USD was up by 38 pips (+0.25%) to 1.5123, GBP/JPY was up by 68 pips (+0.37%) to 185.89, GBP/NZD was up by 101 pips (+0.45%) to 2.2637
- 1:30 pm GMT: Canadian trade balance (-1.70B expected, -1.73B previous)
- 1:30 pm GMT: U.S. trade balance (-40.50B expected, -40.81B previous)
- 1:30 pm GMT: U.S. NFP report (200K expected, 271K previous); gear up by reading up on Forex Gump’s Forex Trading Guide for the NFP report
- 1:30 pm GMT: U.S. jobless rate expected to hold steady at 5.0%
- 1:30 pm GMT: U.S. average hourly earnings (0.2% expected, 0.4% previous)
- 1:30 pm GMT: Canadian jobless rate expected to remain unchanged at 7.0%; Check out Forex Gump’s Forex Trading Guide for this event
- 1:30 pm GMT: Canadian net change in employment (-10.0K expected, 44.4K previous)
- 3:00 pm Ivey PMI for Canada (53.0 expected, 53.1 previous)
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