UK Service PMI - Rumors of Lower Figure prove true, still rebound

This morning on March 5th 2012 at 9:28 GMT (4:28 EST) the PMI figures for UK Services was released. This is the largest sector of the UK economy and as a forward indicator it is an important number to determine GDP for Q1 2012. Recently the Retail Sales numbers have been better and last month this data surprised the market and came out much higher at 56.0 above the 53.3 expected. Expectations were set at 55.0 this month which were perhaps getting ahead of things as we keep being told this recovery will be slow and choppy.

The markets were risk off since the Sunday open. This was mainly due to Chinese Premier Wen saying that growth in China would be less than previously estimated, also an article by the German newspaper the Spiegel saying that Private Sector Involvement (PSI) in the Greek Bond Swap deal would be less that estimated meaning that a CDS might be triggered. This combined with weaker readings for PMI Services from most EuroZone countries other than Germany, kept things risk-off.

About 10-15 minutes before the release there was 'market talk' that the print would be lower than expected and this turned out to be true, however the GBPUSD was already at the lows of the day. This news was very good to trade but recently it has been about the pre-news move, a small spike on the release and then a reversal...Last months quite large deviation was different that this new norm. Today's lower deviation was not as big as last month's positive one, and in the broader context the number is still quite good compared to many other countries. The GBPUSD reversed off its lows.

Here are the figures:

UK PMI Services
Estimates- Median: 55.0 Average: 54.8 Low Estimate: 53.0 High Estimate: 57.0
Actual: 53.8 Prior: 56.00 No Revisions

Here is the 30 second chart of GBPUSD forex pair which shows how despite the weak release the pair reversed higher:

Here is a 5 minute chart of the GBPUSD forex pair which shows the move in price leading into the release. Sometimes many market participants are just waiting for the news to pass before taking trades.

This 1 minute chart of the GBJPY chart shows the pair doing very little, a slight up bias perhaps. The Yen crosses have been reversing major downtrends recently but have given back some of those strong upmoves since the week opened for trading.

On this 1 minute chart of GBPCHF we can see that the British Pound did weaken further. Sometimes using these cross pairs can counteract the general market influences of Risk On/Off=US Dollar Weak/Strong dynamic which affects the majors.

Likewise against the Euro the Pound did eventually weaken some more by moving up in euro strength/pound weakness.

This 1 minute chart of GBPAUD shows how tricky it can be trying to choose the correct cross. Everyone loves the Australian Dollar because it has a great yield-High interest rate, but in a general risk-off environment which is not specifically focused on the EuroZone Debt Crisis, but more because of a China Slowdown or last week's Beranke Comments, the Australian Dollar can actually get hit harder than the Eurusd. Still after a few minutes the GBPAUD did dip some more on Aussie strength/pound weakness.

Just to make the point, here on the 1 minute chart of the GBPCAD we see the Pound would just not weaken against the Canadian Dollar despite the bad news.

Finally a 1 minute chart of the FTSE Future Contract to show how it also moved off its lows after the news.

UK BOE Meeting Minutes & Vote Count - more dovish than expect big move lower

Today February 22nd 2012 at 9:30 the BOE meeting minutes from their last Interest Rate Announcement on February 9th 2012. They also gave their decision on the Asset Purchase Facility or APF and it was raised by 50 Billion to 325 Billion. There were about 15 of the 50 analyst estimates calling for a 75 billion hike in the APF to 350 billion, while 35 out of 50 called for just 50 billion extra. In the end the BOE just did the 50 billion.

Today there was expectation that Posen, the ultradove on the MPC would vote for the full 75 billion, but that there would be 1 member who voted for no additional QE. As it turned out there were 2 members who voted for hiking APF by 75 billion, as MPC member Miles joined Posen in the dovish camp, and all the other remaining members voted for the 50 billion. Thus there were no members who voted for no additional stimulus. So this was more dovish than expected and the British Pound Forex pairs all fell in Pound weakness.

Here are the charts. First the 30 second GBPUSD pair:

next the GBPJPY pair 30 second chart...the yen has been weak but this still fell:

and finally the GBPCHF pair 30 second chart:

UK Retail Sales - Much Higher good spike higher into resistance

This morning of February 17th at 9:30 GMT (4:30 EST) the monthly Retail Sales figures were released from the UK. They were much higher than expected by a good amount and there was a nice rally.

Here is the data:


UK Retail Sales Ex Auto Fuel(MoM)
Estimates- Median: -0.3% Average: -0.4% Range: -0.9% to 0.0%
Actual: +1.2% Prior: +0.6% No Revision

UK Retail Sales Ex Auto Fuel(YoY)
Estimates- Median: -0.1% Average: 0.0% Range: -0.6% to +0.6%
Actual: +1.9% Prior: +1.7% Revised: +1.4%

UK Retail Sales w/Auto Fuel(MoM)
Estimates- Median: -0.3% Average: -0.3% Range: -0.9% to +1.1%
Actual: +0.9% Prior: +0.6% No Revision

UK Retail Sales w/Auto Fuel(YoY)
Estimates- Median: +0.5% Average: +0.5% Range: 0.0% to +1.9%
Actual: +2.0% Prior: +2.6% Revised: +2.5%

UK Claimant Count Change - Small Deviation

This Wednesday morning of February 15th 2012 at 9:30 GMT (4:30 EST) the Jobless Figures and Unemployment Rate were released from the UK. This figure has been tough to trade as the moves are often quite quick and can then reverse fast. Often there is a leak or rumor and the move starts before the release, only for profit taking on the release to occur which then reverses the direction of the initial spike after the release. The EURUSD has started selling off its 1.3320 highs from last week as apparently the deal on the next Greek bailout was done, but now there are more delays which seem more serious. These delays have been going on for weeks, and many are starting to say that Greece should just be allowed to default. So far most of the selling has been going on during the US session with small retracements occuring during the European morning.
Anyway that gives some backdrop to when the news was released. The BOE inflation report was due 1 hour after this data came out.

Here is the data:

UK Claimant Count Rate
Estimates- Median: +5.0% Average: +5.0% Range: +5.0% to +5.1%
Actual: +5.0% Prior: +5.0% No Revision

UK Jobless Claims Change
Estimates- Median: +3.0k Average: +3.1k Range: -5.0k to +10.0k
Actual: +6.9k Prior: +1.2k Revised: +1.9k

UK Average Weekly Earnings 3M/YoY
Estimates- Median: +1.9% Average: +1.8% Range: +1.7% to +2.0%
Actual: +2.0% Prior: +1.9% Revised: +2.0%

UK Weekly Earnings exBonus 3M/YoY
Estimates- Median: +1.9% Average: +1.9% Range: +1.6% to +2.0%
Actual: +2.0% Prior: +1.9% No Revision

UK ILO Unemployment Rate (3mths)
Estimates- Median: +8.4% Average: +8.4% Range: +8.4% to +8.5%
Actual: +8.4% Prior: +8.4% No Revision

As the deviation was small on the main Change figure and flat on the Rate figure the British pound mostly just chopped around....here is the 1 minute chart of the GBPUSD forex pair. The release was at 9:30 GMT as the chart is in GMT time...at 10:30 is when BOE's King started the BOE Inflation Report and there was press conference and Q&A that went on for about 1 hour:

Here is the 1 minute chart of GBPJPy from the same time

UK BOE Interest Rates and Asset Purchase Target - BOE adds 50 Billion Quantitative Easing

This Thursday February 9th at 12:00 noon GMT (7:00 EST) the BOE announced their monthly decisions on Interest Rates and Asset Purchase Facility (APF). All Analysts of course predicted that the Bank of England (BOE) would stay on hold and leave interest rates where they are at 0.5%. However there was an interesting split between analysts surveyed by Bloomberg on the amount of extra QE they would add to the APF. Out of 50 analysts, 15 expected the BOE to add an additional 75 Billion to the APF to bring the total to 350 billion, 34 expected the BOE to only add 50 billion for a total of 325 billion, and 1 analysts expected them not to add anything. The estimates had come down since CPI appears to be confirming that inflation is finally turning around.

Last time the BOE raised the APF was on October 6th 2011 and the GBPUSD British Pound Sterling versus US Dollar Forex Pair dropped about 2 and a quarter cents from 1.5485 to 1.5270. However several hours after hovering and consolidating near those new lows, the pair lifted up and began an amazing rally which lasted until October 27th and brought the pair back up to 1.6150. The EURUSD, AUDUSD and other pairs bottomed out on October 4th and started their way back up. This was all in the midst of lots of negative sentiment..

Here is the 10 second chart of GBPUSD on the reaction. The BOE only hike 50 Billion instead of 75 Billion, so after a tiny dip the pair rallied:

There was always the risk that they could do the full 75 Billion, this would have been more bearish, as it was on October 6th 2011. As we can see from this chart the 1 minute chart of the 2.5 hours between the Trade Balance & Industrial Production at 9:30 GMT to the Interest Rates and Asset Purchase Target at 12:00. Adding any QE is bearish for a Currency and the initial reaction should be down, but longer term the QE can stimulate the economy and help support GDP which is bullish. Of course for this release, it was pretty much priced in that the BOE would do some QE.

This is the 10 second chart of GBPCHF & EURGBP

and the 30 second chart of the GBPCHF to show more of the move:

and the 30 second chart of the GBPJPY and EURGBP:

It was a choppy day, up and down, up and down...little resolution one way or the other...

UK Industrial Production & Trade Balance - Better Data leads to brief rally

This Thrusday morning, February 9th 2012 at 9:30 GMT (4:30 EST) the Industrial Production and Manufacturing Production figures were released from the UK. This release also coincided with the release of the Trade Balance figures. Most of the data was good with the exception of one of the Year-on-Year figures. However the UK Interest rates were due about 2 and a half hours after this release so many were cautious as the BOE was expected to raise the APF. More in that in the next post.

Here is the data:


UK Industrial Production (MoM)
Estimates- Median: +0.2% Average: +0.2% Range: -0.3% to +0.4%
Actual: +0.5% Prior: -0.6% Revised: -0.5%

UK Industrial Production (YoY)
Estimates- Median: -3.1% Average: -3.1% Range: -3.6% to -2.8%
Actual: -3.3% Prior: -3.1% Revised: -3.6%

UK Manufacturing Production (MoM)
Estimates- Median: +0.2% Average: +0.2% Range: -0.8% to +0.5%
Actual: +1.0% Prior: -0.2% Revised: -0.1%

UK Mnaufacturing Production (YoY)
Estimates- Median: +0.3% Average: +0.3% Range: -0.7% to +0.6%
Actual: +0.8% Prior: -0.6% Revised: -1.0%

UK Visible Trade Balance GBP/Mn
Estimates- Median: -£8600 Average: -£8606 Range: -£9000 to -£8000
Actual: -£7111 Prior: -£8644 Revised: -£8908

UK Trade Balance Non EU GBP/Mn
Estimates- Median: -£5000 Average: -£5047 Range: -£5300 to -£4900
Actual: -£3748 Prior: -£5021 Revised: -£5037

UK Total Trade Balance (GBP/Mln)
Estimates- Median: -£2700 Average: -£3172 Range: -£9230 to -£2000
Actual: -£1109 Prior: -£2566 Revised: -£2830

Here is the 10 second chart of the GBPUSD:

Also included are the 30 second charts of GBPJPY, GBPCHF & EURGBP

UK Services PMI - Good Deviation higher but delayed spike

This Friday morning of February 3rd 2012 at 9:28 GMT (4:28 EST) the Services PMI figures were released out of the UK. This figure is a forward looking indicator for the UK economy because it measures the Purchasing Manager Index, and if the companies are buying more that usually means that they expect to sell more to the customers. Anyway these figures were quite bad in Q4 2011 getting quite close to the 50 level. The 50 level is key because below it signifies contraction and anything above it is considered growth. The PMI is for the Services sector which is the largest sector in the UK and so is quite important. There were prints below 50 in PMI for manufacturing last year but Services just managed to avoid it.

Last year this was probably the best economic news indicator to trade. It is quite simple for news trading as there is only 1 number and its revision, unlike other news which comes with Core and Headline, Month-on-Month, Year-on-year and so on. However in the past 3-4 releases there has been a move heading into the release, then despite what in the past have been good sized deviations capable of moving the British Pound pairs alot of pips has just seen a small 10-15 spike extension of the pre-news move, followed by a complete reversal below the pre-release price. This is dangerous as it can trap any traders who may have had some slippage or experience delay in getting their orders filled by their brokers. The pre-news move is often difficult to distinguish because it occurs in tandem with moves in other key major pairs such as the EURUSD, so whether it is a rumor or leak of a bullish UK data release or just general risk appetite or aversion is not distinguisable. Just when it nearly became reliable enough to fade the spike reversal on this number, today there was a tiny whipsaw but a few minute later the GBPUSD pair did rally. It is important to remember that although the news comes out at 28 minutes past the hour, some do not see the data until half past. This actually is when the pair did start to rally. It was a good sized positive deviation so it did do what it was suppose to do even with the move up heading into the release.

Here the figures:
UK PMI Services
Estimates- Average: 53.3 Average: 53.3 Range: 52.0 to 55.0
Actual: 56.0 Prior: 54.0 No Revision

First the 30 second chart of the GBPUSD pair, the release is marked with the red arrow:

next is the 5 minute chart which shows the run up in the GBPUSD heading into the news. The pair had another move higher and then started to top out. There was the US Non-Farm Payrole later in the day, so it was unlikely for the markets to move alot one way or the other before this:

Also here is the 30 second chart of the GBPJPY, it also moved up after 2 minutes like the GBPUSD:

For total coverage 30 second charts for GBPCHF, GBPAUD, GBPCAD, GBPNZD and EURGBP. Some moved with the news trading deviation, others did not so well. Spreads on some of these pairs can be a problem. Some have less liquidity than the major pairs, however some have less 'attention' which can help depending on your trading platform.

UK Manufacturing PMI - Higher than expected but little reaction

This morning of Wednesday 1st February 2011 at 9:30 GMT (4:30 EST) the PMI Manufacturing Numbers were released for the UK. This economic indicator was causing a nice price reaction in the British Pound last year, but in the Autumn the moves started to occur based on a rumor or leak before the news. Then when the data came out the GBPUSD forex pair would actually reverse against the direction of the deviation. So we have been widening out our deviations for this one and also paying close attention to any moves occurring before the news and any rumors. Today's number came out higher and puts the UK back above the critical 50 mark. In the past this deviation would have been enough for us to trade but we have widened it out so we let this one go. Amazingly there was little reaction to this at all, it does seem as though this one has lost focus for now.

Here is the data:

UK PMI Manufacturing
Estimates- Median: 50.0 Average: 49.9 Range: 47.6 to 52.5
Actual: 52.1 Prior: 49.6 Revised: 49.7

First is the 10 second chart of the GBPUSD forex pair which shows how little reaction there was:

Also a 1 minute chart which shows how the GBPUSD forex pair had run up to its highs for the session leading into the release, however this was seen for the other major pairs as well so was not really an indication of a rumor. However despite the good print the GBPUSD did reverse down 35-40 pips after the news as has been the pattern the past 4 months or so:

UK GDP and MPC Meeting Minutes Vote Count - Lower deviation on GDP but no votes for raising APF leads to GBPUSD rally after sell-the-rumor move into the release.

This morning at 9:30 GMT (4:30 EST) the Preliminary GDP figures for Q4 2011 were released out of the UK. This came along-side the vote count of the MPC's January meeting, which complicated things a bit. There had been much talk of lower GDP figures for Q4 from various think tanks and the Chancellor of the Exchequer himself George Osborne. The GBPUSD forex pair had been near its highs for the week around 1.5615 as the European Session began, so no hint of selling this rumor of a lower print on GDP until about 15 minutes after the 8am London open, finally cable started to move down. Sometimes rumor lead moves can start the day before, but in this case it was just an hour or so before. Cable sold off 70 pips into the release and when the GDP did come out lower there was a slight further tick down for a lower low.

However the MPC Meeting Minutes Vote Count for the January Interest Rate Decision was released at the same time. Many are expecting the BOE to raise the APF (Asset Purchase Facility - the BOE'f name for QE or Quantitative Easing) even more as soon as February. However when the vote count came in unanimously at 9-0 against raising APF, this was bullish, even the arch-Dove Posen did not vote for it, although he has been talking about it. Raising APF is usually bearish for the GBPUSD because basically the bank is printing money, thus creating a larger supply of it and more supply means that its value is lower. However longer term raising APF can be bullish as it will stimulate the economy. When the BOE raised the APF on October 6th by 75 Billion, GBPUSD sold off quite hard to 1.5270, but then turned around and rallied non-stop thru-out October to 1.6165 on October 27th....anyway here are the Figures:

UK GDP (QoQ)
EStimates- Median: -0.1% Average: -0.1% Range: -0.7% to +0.2%
Actual: -0.2% Prior: +0.6% No Revision
UK GBP (YoY)
EStimates- Median: +0.8% Average: +0.8% Range: +0.2% to +1.1%
Actual: +0.8% Prior: +0.5% No Revision

Bank of England MPC Vote Count :
Unanimous to hold Rates Steady 0.5%
Unanimous to hold APF STeady at 275B


Here is the 5 second chart of the GBPUSD, you can see how initially price action was whippy and indecisive:

Here is the 1 minute chart of GBPUSD which shows the pair resolving higher after this intial wiggle (whippy on 5 second is a wiggle on the 1 minute), back to the 1.5600 round figure:

This 5 minute chart of GBPUSD shows the sell-off on the pair leading into the news starting from 8:15 GMT. This came off the 38% fibonacci retracement of the October 6th low of 1.5270 to the October 27th high of 1.6165 @ 1.5613:

This Daily Chart shows the fibonacci better:

UK Retail Sales - Mixed with lower revisions to previous month

This morning at 9:30 GMT (4:30 EST) the Retail Sales numbers for the UK were released. The expectations were up from last month and it is reporting for the Christmas period which is to be expected. The figures were mixed with the Ex Auto Fuel MoM 0.1 lower but the w/AutoFuel YoY coming in +0.2m, there were however some big downward revisions to the previous month, and the GBPUSD forex pair did sell off, which continued the trend since the 8:00 GMT (2:00 EST) European Cash Equity Open, when GBPUSD hit the big mid-century level of 1.5500 and sold off. This 5 minute chart shows this, but also shows the bounce after the news into the US open:

Note this is the high from Tuesday last week, before the pair got sold off on a rumor of a bad Industrial Production figure released on thrusday and followed the EURUSD down on Friday the 13th on the Ratings Downgrades by Standard & Poor's. Here is a 1 hour chart showing this:

Here are the figures:
UK Retail Sales Ex AutoFuel MoM
Estimates- Median: +0.7% Average: +0.6% Range: +0.2% to +1.3%
Actual: +0.6% Prior: -0.7% Revised: -0.8%

UK Retail Sales w/ AutoFuel MoM
Estimates- Median: +0.6% Average: +0.6% Range: 0.0% to +1.0%
Actual: +0.6% Prior: -0.4% Revised: -0.5%

UK Retail Sales Ex AutoFuel YoY
Estimates- Median: +1.7% Average: +1.7% Range: +1.2% to +2.3%
Actual: +1.7% Prior: +0.5% Revised: 0.0%

UK Retail Sales w/ AutoFuel YoY
Estimates- Median: +2.4% Average: +2.4% Range: +1.8% to +3.5%
Actual: +2.6% Prior: +0.7% Revised: +0.4%

and here is the 10 second chart of the Pound STerling versus US Dollar forex trading pair, GBPUSD:

UK Jobless Claims Change & Claimant Count Rate - Lower than Expected by a little bit

This morning of January 18th 2012 at 9:30 GMT (4:30 EST) the Claimant Count Change or Jobless Claims Change (not sure if they changed the name of this report) came out. Basically it is the employment data for the UK. We have seen this figure cause only a brief move and then reverse in November and December, and also in November there appeared to be some leak of the data, or at least a rumor that brought strong flow of buying of Pound Sterling before the official release by a UK clearer on the bid, moving the GBPUSD forex pair up 50-60 pips heading into the release. So we were on the look-out for any strong flows in cable today, but were looking for at least a deviation of +/- 15k above or below the expected number of 7k to take a trade. The Pound did appear to be weakening into the release, so we did widen out our sell trigger and tighten the buy trigger, but still the deviation was not enough. A lower number is better because it means lower number of unemployed and the GBPUSD (Pound Sterling versus US Dollar Forex Pair) will usually rally.

Here is the data:



UK Jobless Claims Change
Estimates- Median: +7.0k Average: +6.7k Range: +0.4k to +11.0k
Actual: +1.2k Prior: +3.0k Revision: +0.2k

UK Claimant Count Rate
Estimates- Median: 5.0% Average: 5.0% Range: 4.9% to 5.1%
Actual: 5.0% Prior: 5.0% No Revision

UK ILO Unemployment Rate 3mnts
Estimates- Median: 8.3% Average: 8.3% Range: 8.2% to 8.4%
Actual: 8.4% Prior: 8.3% No Revision

UK Avg Weekly Earnings 3mnths
Estimates- Median: +2.0% Average: +1.9% Range: +1.7% to +2.1%
Actual: +1.9% Prior: +2.0% Revision: +2.1%

UK Weekly Earnings exBonus 3mths
Estimates- Median: +1.9% Average: +1.9% Range: +1.7% to +2.0%
Actual: +1.9% Prior: +1.8% No Revision

Here is a 30 second chart of the GBPUSD forex pair which shows the half hour leading into the news and the pair retraced some of the gains achieved earlier in the session. This was while EURUSD and AUDUSD were still at their highs for the day. Also the EURGBP was making new highs for the day at 0.8330 and GBPCHF was at its lows.

Nothing particularily fundamental was driving the rally in EURUSD, GBPUSD, AUDUSD etc into the 8am GMT European Cash Equity Open, other than talk of Russian & Mid-Eastern on the Bid but the Bank of India on the offer at the highs into the open, and then things did soon sold off after the top of the hour, with talk of a 2 notch downgrade for Italy from Fitch...clever Indians. But then Russian and Asian names came back in buying indeed a crazy old day, and this continued after the UK news, helping the GBPUSD rally as well as the EURUSD...first Fitch came back and clarified despite their earlier comment of a 2-notch downgrade Italy would not default but then more importantly the IMF would be getting more Money, which of course means more to bail out debt burdened countries. Is this good? Well the EURUSD liked it and regained its earlier highs.

Included below is a 5 minute chart of the GBPUSD with some important levels on it. As we can see where the thin Red arrow is where the UK Jobless Claims Change and Claimant Count Rate were released. The GBPUSD forex pair was sitting right on the 38% fibonacci of last week's 1.5500 to 1.5233 range. So it did move up off this, but it was a crazy day with lots of ups and downs, in fact during the european session the EURUSD was making an expanding triangle pattern but eventually the gains started to stick, even with the USA open (they have been selling the EURUSD on queue as soon as their session starts until it ends for weeks now). Also very interesting is after maybe 2 weeks of GBPUSD being the laggard, today it actually lead the gains, reaching new highs before the AUDUSD or EURUSD and having shallower pullbacks.

UK Industrial Production - Sell the Rumor buy the news?

Today Thrusday January 12th at 9:30 GMT (4:30 EST) the Industrial Production figures came out from the UK along with the Manufacturing Production numbers. The GBPUSD has sold off since yesterday's slightly weaker trade balance figures, although the lower deviation on these were not enough to cause such a sell off. Yesterday market talk was of US names on the offer on cable. Although the EURUSD did also sell off, and USDCAD did rally a bit too, Aussies losses were quite moderate, but the GBPUSD really did take a beating.

Here the figures:

UK Industrial Production m/m
Estimates: Median -0.1% Average 0.0% Range -0.4% to +0.5%
Actual: -0.7% Prior: -0.7% Revision: -1.0%
UK Industrial Production y/y
Estimates: Median -2.2% Average -2.2% Range -2.5% to -1.7%
Actual: -3.1% Prior: -1.7% Revision: -2.0%
UK Manufacturing Production m/m
Estimates: Median -0.2% Average -0.1% Range -0.4% to +0.2%
Actual: -0.2% Prior: -0.7% Revision: -0.9%
UK Manufacturing Production y/y
Estimates: Median -0.5% Average Range -0.7% to +0.5%
Actual: Prior: +0.3%

It was basically some big names, would perhaps conference called and arranged to assault the Pound into the Industrial Production figures, which analysts estimates were already pretty low. Although there could have been some sort of leak, alot of these big names have the resources to do their own detail research to find this sort of thing out. For example the original Tiger Hedge fund actually sent someone to Brazil to count the number of Coffee bushes growing before they shorted the Coffee Futures...if a Hedge fund can do that then certainly they can get some good intel on uk industrial production.

The deviation was moderately lower, about a -0.6% below expectations, however there was also a revision to the previous month of -0.3%, so altogether that is quite significant. However there was only a 15 pip pop down and it soon retraced.

About 20 minutes late after there was a Spanish Bond Auction which was very successful, then 10 minutes later European Industrial Production which was a lower:

Eurozone Industrial Production nsa m/m (Nov)
Estimates: Median -0.3% Average -0.3% Range -1.0% to +0.7%
Actual: -0.1% Prior -0.1% Revised -0.3%
Eurozone Industrial Production wda Y/Y (Nov)
Estimates: Median +0.2 Average +0.2% Range -0.4% to +1.0%
Actual: -0.3% Prior +1.3% Revised +1.0%

Then 10 minutes after that there was an Italian Bond Auction which like the Spanish was incredible good...yeilds have come down very sharply and bid-to-cover was much lower.

Basically the market forgot about the Industrial Production figures and risky assets rallied accross the board.

Here is the 10 second chart of the GBPUSD :

Here is 10 minute chart that shows the move starting from after yesterday's Trade Balance into today's Industrial Production figures:

UK Services PMI - Good sized deviation reverses after quick blip in risk-off market

The 3rd PMI figures in the series after Construction and Manufacturing and the largest sector of the UK economy. The past 3 months have been the same with this number with a move occurring before the release based on a rumor, or a leak, leading to a quick blip and then reversal. In these cases you can widen out the triggers and tighten one side if there appears to be a rumor lead move into the release time. The market was selling off based on problems with the European Banking sector specifically Italy's Unicredit got haulted limit down and Deutsche Bank was down after a rumor it was raising capital. The fears in the banking sector hit the Forex pairs with the Euro leading the way but the Pound and Aussie following close behind. About a half hour before the release the GBPUSD pair did manage to bounce about 25 pips or so off one of our key support levels of 1.5560 and rally up until 1.5585 as the news came out. It then did a pop of 10 pips and reversed right back down to quickly take out those scalp buyers and hitting 1.5550 which then came back up a bit. A +2.5 deviation on this really should have been enough to make the pound rally a bit more and in the context of risk-off parameters sparking the sell-off it was not so clear if the the sell-off or the bounce was the rumor-based lead-up into the release. Basically this makes 3 months of this and triggers have gone from +/-1.1 to +/-2.5 but this now gets slated to the watch list although 3 months ago these PMI figures were really blockbuster and making some good moves. This still could be down a bit to low volume.

Anyhow here are the figures:

UK PMI Services MoM
Estimates: Median 51.5 Average 51.4 Range 50.0 to 52.2 (51-52 most)
Actual: 54.0 Prior: 52.1 No Revisions

Here are some charts, first is the 10 second chart which shows the intial 10 pip blip and the subsequent scene of the crime as the former 1.5560 lows are tagge and then bounce right back to the former scene of the crime at 1.5580

Next is a 1 minute chart which shows the double bottom off 1.5560 that occurred in the half hour leading into the release and why this 18 minutes of price action was difficult to distinguish as a rumor lead rally into a positive number to sell into as broad-based market risk aversion reaffirmed its grasp on downward price action:

UK GDP Final Q3 2011 - Surprise +0.6 when all analysts expect +0.5

This Thrusday morning December 22nd 2011 at 9:30 GMT and 4:30 EST the final reading for GDP was released from the United Kingdom.

A small surprise on the Final GDP reading for the 3rd quarter 2011 for the UK. Every analyst surveyed by bloomberg expected the figure to remain flat at 0.5%. So this was positive but it was not enough to lift sentiment in the Pound Dollar forex pair. It is looking like GDP could fall as we go into 2012. There was also some Current Account data released at the same time which was quite a bit lower, this being bad for the Sterling Dollar (GBPUSD) forex pair.

Here are the figures:


UK GDP q/q - Final
Estimates: Median +0.5%, Average 0.5%, Range +0.5% to +0.5%
Actual: +0.6% Prior: +0.5% no revision
UK GDP y/y - Final (
Estimates: +0.5%, Average: +0.5%, Range +0.5% to +0.7%
Actual: +0.5% Prior: +0.5% no revision
UK Current Account
Estimates: Median -6.1B, Average -5.5B, Range -8.4B to -1.0B
Actual: -15.25B Prior: -2.0B Revised: -7.4B
UK Total Business Investment q/q
Estimates: Median -1.4%, Average -1.2%, Range -1.4% to -0.5%
Actual: +0.3% Prior: -1.4% no revision
UK Total Business Investment y/y
Estimates: Median +0.3%, Average +0.5%, Range +0.3% to +1.1%
Actual: +4.3% Prior: +0.3% No Revision

Here is the 10 second chart of the GBPUSD forex pair. There was a tiny 3 pip blip up and it sold off on the bad current account number:

Here is a 1 minute chart of the GBPUSD forex pair, which shows the action leading into the news and how after the intial sell off it did then rally back near the former highs for the european session around 1.5720:

UK Retail Sales - Lower but last months higher figures revised even higher

This morning at 9:30am london time (4:30am EST) the UK Retail Sales figures for November were released. Here the figures:
UK Retail Sales Ex Auto Fuel(MoM)
Estimates: Median -0.4% Average -0.3% Range -1.0% to +0.8%
Actual: -0.7% Prior: +0.6% Revised: +0.9%

UK Retail Sales w/Auto Fuel(YoY)
Estimates: Median +0.3% Average +0.3% Range -0.4% to +1.4%
Actual: +0.5% Prior: +0.9% Revised: +1.1%

UK Retail Sales Ex Auto Fuel(MoM)
Estimates: Median -0.3% Average -0.3% Range -0.9% to +0.5%
Actual: -0.4% Prior: +0.6% Revised: +1.0%

UK Retail Sales w/Auto Fuel(YoY)
Estimates: Median +0.4% Average +1.2% Range -0.3% to +1.2%
Actual: +0.7% Prior: +0.9% Revised: +1.1%

Although lower than expected this month, last month's numbers were higher than expected and this
month they were revised even higher. Retail Sales is usually quite a volitile indicator, 1 month up 1 month down. Here is the 10 second chart of the Price action...leading into the news the GBPUSD rallied from its Daily Central Pivot at 1.5470 and hit the big Century round figure of 1.5500 just before the news and had already bounced 15-20 pip before the data was released.

This is a 1 minute chart which shows all the bars from the 8am European Cash Equity open thru the 9:30 release, and the following hour or 2 after:

So far this week all the markets have been selling off and the US Dollar has strenghtened on this Risk aversion. Cable has held up better than other pairs as it has aquired a bit of a safe-haven status because the pound is outside europe and can print money and adjust interest rates, something Italy and Spain cannot do because they use the Euro. Volumes have been light due to Christmas holidays approaching so moves have exaccerbated. Yesterday rumors of a French downgrade from triple A rating was circulating which did not happen but it could, it was enough to keep things selling off. Rumors have been rampant as Marketmakers take advantage of thin liquidity to get traders on the wrong side. Tuesday had rumors of Iran blocking the straits of hormus which was totally false. Tuesday had merkel cap the size of the ESM and this reversed the oil lead rally and commence the sell-off, then the FOMC made comments that economic uncertainty persists which continued the move down...A small correction in europe on wednesday and then USA open and again continued to sell. So far today in europe up and down.