- German Factory Orders (sa) m/m: 1.9% vs. 0.7% expected, -0.8% previous
- German Factory Orders (nsa) m/m: 1.7% vs. 0.2% expected, 0.7% previous
- Swiss CPI m/m: 0.3% vs. 0.2% expected, 0.3% previous
- Swiss CPI y/y: -0.4% vs. -0.6% expected, -0.9% previous
- U.K. Halifax House Price Index m/m: -0.8% vs. -0.3% expected, 2.2% previous
- European Sentix Indicator: 6.2 vs. 6 expected, 5.7 previous
Price action in FX was mixed during the morning London session, kicked off by Swiss inflation data & rounded out by elevated Sterling & yen volatility.
Swiss inflation better-than-expected – It looks inflation conditions in Switzerland are not as bad as anticipated as we got a monthly increase of 0.3%. It was better than the 0.2% m/m expectation, but don’t jump for joy for the Swiss economy just yet as the yearly read was at -0.4%, showing that Switzerland still has a ways to go before prices stabilize.
But on the bright side, the yearly -0.4% is better than the previous y/y read of -0.9%, which may mean that the journey to positive inflation by 2017 is still on track, and likely to hold off the Swiss National Bank from any currency intervention moves for now.
U.K. Housing data disappoints –The Halifax Housing Price Index read for April came out today, showing a month-over-month dip in house prices by -0.8%, both below expectations and the March read. We can find a bit of sunshine in the annual change–rising by +9.2%–but this was also below expectations (+9.6%) and the previous annualized read at 10.1%.
Greece seeks debt relief – Back in the spotlight are Greece’s debt issues as the Greek Parliament issues new tax and pension reforms today, hopefully to help sway European finance minsters to provide additional financial aid and/or debt relief.
Major Currency Movers:
CHF – The moderately positive consumer inflation data brought on the bulk of the bullish Swiss franc move just ahead of the London session open, eventually calming down and leaving the franc at elevated levels heading into the U.S. trading session:
NZD/CHF was down by 40 pips (-0.59%) to 0.6602, EUR/CHF was down by 37 pips (-0.33%) to 1.1048, AUD/CHF was down by 49 pips (-0.72%) to 0.7108
GBP – Despite the dip in housing prices, British pound bulls managed to find some legs by rallying after the data release and after bouncing off session lows, with enough bullish sentiment to gain against the franc after its positive CPI read.
GBP/CHF bounced from 1.3943 to a session high around 1.4034 before falling to current levels around 1.4000. GBP/AUD was up 106 pips (+0.54%) to 1.9682, and GBP/JPY is up 166 pips (+1.08%) to 156.14
JPY – The Japanese yen is the final major mover of the London session, giving back it’s initial gains quickly, without a major catalyst to explain the move. It’s possibly due to broad risk-on moves in the equity and oil markets, but whatever it may be, yen bears took control quickly after the bullish Asia moves to put yen pairs up on session so far.
USD/JPY is up 117 pips (+1.10%) to 108.28, EUR/JPY is up 1.26% (+1.04%) to 123.38, and CHF/JPY is the big winner of the day as the pair rallies 154 pips (+1.4%) to currenlty trade around 111.64
- 1:15 pm GMT: Canadian Housing Starts: 194K expected vs. 204.3K previous
- 11:45 pm GMT: New Zealand Retail Card Spending m/m 0.5% vs. 0.1% previous
Bonnie and Clyde, peanut butter and jelly, Kanye West and Kanye West. Some things just go well together.
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