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Market Session Recaps

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London Session

Tue, Jul 22 2008, 13:32 GMT
by Forex.com Research Desk

FOREX.com

The buck saw some sideways trading in the London session as the lack of anything to bite on seems to have the market focused on stocks once again.  Indeed, just as the session came to a close we saw a US bank report much worse than expected earnings and the buck come under pressure.  Earnings have been the thing to watch in the last week or so and we expect they will continue to be a factor as US stocks continue to look for direction.  That direction this morning is lower, with stock futures pointing to a -1% decline at the open.

Europe was light on activity with two ECB speakers the only highlights overnight.  The tone continued to be hawkish with Bini Smaghi saying that the current interest rate is not ''exactly restrictive'' -- in other words, not too high.  Liebscher followed this up by noting that the ECB must prevent ''worrying'' inflation.  So while the ECB's stance is that they have ''no bias'', they are clearly ready to act if inflation becomes unmoored.  EUR/USD was a touch lower in the session, opening near 1.5920 and closing around the 1.5910 mark.

USD/JPY was lower as unsteady European stock markets likely led to some paring of carry trades.  Stocks in Europe were down about -2% last we checked and this coupled with the expected poor open in US stocks is helping to put pressure on JPY crosses.  USD/JPY opened London trading near 106.50 and was sitting near 106.40 at the close.  A poor US earnings report sent the pair as low as 106.05 in early NY trading.  Stay tuned for some major earnings releases after the US stock market close.
 

Upcoming Economic Data Releases (NY Session):

• 7/22  12:10 GMT  US Paulson Speaks in NYon U.S. Economy, Markets
• 7/22  12:30 GMT  CA Retail Sales MoM MAY                               0.60%        0.50%
• 7/22  12:30 GMT  CA Retail Sales Less Autos MoM MAY             1.10%         0.60%
• 7/22  12:30 GMT  US Fed's Plosser Speaks in PA on U.S. Economy 
• 7/22  14:00 GMT  US Richmond Fed Manufact. Index JUL               -12             -10
• 7/22  14:00 GMT  US House Price Index MoM MAY                      -0.80%          - -
• 7/22  21:00 GMT  US ABC Consumer Confidence 20-Jul                  -41             -41

Published on  Tue, Jul 22 2008, 13:33 GMT