The London session was spent reversing some of the overnight moves as better than expected economic data across the pond outweighed the poor reports. The German trade balance beat forecasts and came in at 8.7B in February from 7.0B the prior month.
French business sentiment, meanwhile, improved to 73 in March from a previous 71 read. The disappointment came in German factory orders which tanked -3.5% in February on the heels of an already dismal -6.7% result. This took the annual run-rate to -38.2% and the worst since records began in 1992.

EUR/USD recovered 70 pips towards the 1.3230/40 zone ahead of the NY open. Back below 1.32 should see a pit stop near 1.3170 next. Upside barrier lurks at the 1.33 mark as well. EUR/GBP also reflected strength in the common currency as the pair rose 35 points to 0.90 support. Daily trendline support now at 0.8960 contained the overnight weakness and we look for this to be an important level in the short-term.

The yen crosses were bid after taking a beating in the earlier session. USD/JPY added 40 pips to right around the 100 mark while EUR/JPY rose a more aggressive 125 points towards the 132.40/50 area. US corporate earnings disappointed this morning and this should weigh on stocks early on. Look for weakness in equities in NY to leave the yen crosses with a heavy tone.

Upcoming Economic Data Releases (NY Session) prior expected

  • 4/8 12:15 GMT CA Housing Starts MAR 134.7K 130.0K

  • 4/8 14:00 GMT US Wholesale Inventories FEB -0.90% -0.70%

  • 4/8 14:30 GMT US DOE U.S. Crude Oil Inventories 3-Apr 2844K 1500K

  • 4/8 14:30 GMT US DOE U.S. Gasoline Inventories 3-Apr 2225K -1400K

  • 4/8 18:00 GMT US Fed Releases Minutes from FOMC Meeting