UK CPI and the seven o'clock lurch

[Fairman]

UK CPI and the seven o'clock lurch

UK inflation figures arrive at 7am London time. That's before the main London session is in full swing. Liquidity is moderate, and the number lands in a market with only partial staffing.

GBPUSD and the sterling crosses move sharply. A 30 to 50 pip swing in a couple of minutes is common. Spreads widen to 3 or 4 pips, then compress.

Because the release comes so early, it lands in the middle of the hour when the Asian traders are packing up and the European ones are arriving. Different participants hold different positions, and the clash adds to the volatility.

Scalpers who trade the London open and don't check the calendar get the worst of it. The UK CPI date, once a month, deserves a mark on the chart.

For the pair, the central question is how the number affects Bank of England expectations. A strong figure that the market had already priced in can produce a muted response.

In the half hour after UK CPI, what does GBPUSD do on the platform here?