Article Highlights

  • German Import Price Index y/y: -1.8% vs. -1.9% forecast, -2.6% previous
  • German Import Price Index m/m: 0.1% vs. 0.0% forecast, -0.2% previous
  • German GFK Consumer Sentiment: 9.7 vs. 10 forecast/previous
  • French INSEE Consumer Confidence: 98 vs. 98 forecast, 97 previous
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Better-than-expected German trade data, continued negative oil sentiment and corporate earnings news sparked wonky price action in the FX markets.

Major Events/Reports:

Another round of German data – While the German Import Price Index data did show a continued decline of import prices in September on an annual basis, it was better than forecast and ticked higher on a monthly basis, contributing to the recent positive Euro area sentiment sparked by this week’s PMI reports earlier. We did see a dip in German consumer confidence from Gfk, falling below 10 for the first time since June.  This doesn’t look to be enough to weigh on the positive euro sentiment as it rose through the morning London session.

Risk-off sentiment around the world – Positive vibes are no where to be found in the financial markets, and with a lack of major economic data, we can likely pin the negative sentiment on geopolitical risk (Russia seen as making aggressive moves in Europe & Syria), recent negative corporate earnings news from the U.S. (Apple fails to inspire confidence with their earnings), and a continued slide in oil after the possibility of Russia not joining OPEC on commitment to cut production.

Whatever the case may be, we’re seeing a broad risk sell off in equities and commodities across the globe, including the European equity markets:

  • The pan-European FTSEurofirst 300 was down by 0.80% to 1,343.70
  • The blue-chip Euro Stoxx 50 was down by 0.82% to 3,062.10
  • The U.K.’s FTSE 100 was down 0.98% to 6,948.68
  • The DAX was down by 1.04% to 10,645.56

As well as the U.S. futures:

  • S&P 500 futures was down by 0.40% to 2,129.25
  • Nasdaq futures was down by 0.52% to 4,860.75

Oil slides lower as well:

  • U.S. WTI crude oil was down by 1.56% to $49.18 per barrel.
  • Brent blend crude oil was down by 1.61% to $49.93 per barrel.

Major Market Movers:

GBP – With no direct catalyst, buyers rushed in at the open of the morning London session to help Sterling recover from Asia session weakness:

GBP/USD was up 22 pips (+0.19%) to 1.2208, GBP/JPY was up 31 pips (+0.25%) to 127.31, GBP/CAD was up 52 pips (+0.32%) to 1.6321

EUR – The positive sentiment continues for the euro thanks to this week’s PMI data and possibly today’s better-than-expected German data:

EUR/USD was up 33 pips (+0.31%) to 1.0921, EUR/JPY was up 49 pips (+0.44%) to 113.96, EUR/GBP was up 17 pips (+0.20%) to .8947

AUD – The Aussie gave back some of its gains from it’s positive CPI data, but it continues to beat its peers across the board:

AUD/USD was up 28 pips (+0.37%) to .7672, AUD/NZD was up 45 pips (+0.43%) to 1.0714, AUD/JPY was up 39 pips (+0.49%) to 80.06

Watch Out For:

  • 12:30 pm GMT: U.S. Advance Goods Trade Balance (-$60.5B forecast, -$59.2B previous)
  • 12:45 pm GMT: U.S. Markit Services PMI Flash (52.5 forecast, 52.3 previous)
  • 13:00 pm GMT: U.S. New Home Sales (600K forecast, 610K previous)
  • 21:45 pm GMT: New Zealand Trade Balance (-NZ$1.15B forecast, -NZ$1.27B previous)

See also:

Asian Session Forex Recap

U.S. Session Recap

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