UK CPI, jobs and GDP all land at 07:00. Is that a Frankfurt trade or a London trade?

[Fairman]

UK CPI, jobs and GDP all land at 07:00. Is that a Frankfurt trade or a London trade?

UK CPI, the labour market report and monthly GDP are all released by the ONS at 07:00 UK time. That's an hour before the London Stock Exchange opens at 08:00. In European terms it's the moment Frankfurt starts its day at 08:00 CET, because 07:00 in the UK and 08:00 in central Europe stay locked together through every clock change. The big London dealing desks are staffed well before that, so sterling liquidity isn't thin at 07:00, but it isn't the full London session either.

For GBPUSD, US participation is asleep in that window: 07:00 in London is 02:00 in New York. That ought to make the pound's reaction cleaner than it is at 13:30 when US data lands on top of everything else, but I'd like to hear whether that matches what people see on their platforms.

Questions for anyone who trades it. Do you take the 07:00 print, or wait for the 08:00 open and the first M15 candle? What spread and stop size do you see on cable at 06:59 and 07:01? And does EURGBP give you a better view of a UK only number?

[FXS HongKong Scalper]

In my view it is mostly a London trade, because the largest sterling dealers are in London and are active by 07:00. But liquidity is lower than at 08:00, so spreads can be wider and moves sharper. For traders in Asia it lands at 15:00 Hong Kong in winter, during the Asian afternoon, which means Asian desks are also active. Checking the spread on GBPUSD a few minutes before the release, and waiting a minute or two after, avoids the worst fills.

[Fairman]

EURGBP is the natural place to look when a number is UK only, because the euro leg is quiet at that hour and the move reflects sterling more directly than GBPUSD does. The costs differ, though. EURGBP spreads tend to be wider than cable at most brokers, and the pip value is in pounds: £10 per pip on one lot, about $12.70 when GBPUSD is at 1.27. That changes sizing. With $100 at risk and a 6 pip stop, you'd trade about 1.3 lots on EURGBP against 1.67 on GBPUSD. Wider spread plus smaller size can leave the trade less attractive than it first looks.

[Amanhasnoname]

I've traded the 07:00 UK releases on cable for a couple of years from Europe, and for me it behaves like neither session fully. The initial spike is real London money, but the follow through often stalls until the equity open at 08:00, when the second wave of orders arrives and quite often reverses half of the first move.

On my broker the spread at 06:59 is usually around 1.5 to 2 pips, against a normal 0.3 or so, and it can jump to 4 for a few seconds on a surprise CPI. I don't trade the print itself any more. I wait for the first M5 candle to close and then use its high or low as my reference, with a stop of around 10 pips, which is wider than I'd like but survives the noise.

EURGBP has been useful mostly as a filter. If the cross moves cleanly with the pound, I trust the GBPUSD move more. If EURGBP barely shifts while cable jumps, the move is usually dollar driven and tends to fade by the open.

[Fairman]

The CPI release carries headline, core (excluding energy, food, alcohol and tobacco) and services inflation in one table. The Bank of England has put a lot of attention on services CPI and on regular pay growth, which comes in the labour market release. So the first price move may be a reaction to the headline, and a second may follow from the component the MPC cares more about. Writing down all three figures against their forecasts before 07:00 tells you the story in advance: headline beat with a services miss, or the reverse, or all three lined up. The reaction in the second minute can depend on which of these cases applies.

[Fairman]

Pending orders are one more hazard in this window. Orders sitting just above an Asian range high as 07:00 approaches get triggered by the first spike, you're in at the worst price, and then the number reverses. Buy stops trigger on the ask, so if the spread goes from 1 pip to 4 for a few seconds, a buy stop 3 pips above the chart high can fire on a quote that never looked like a break on the bid chart, and fill worse than its price. Cancelling pending orders at 06:55 costs a few missed entries and avoids that particular trap, which is a tradeoff you can settle before the day starts.

[Fairman]

A small log would settle a lot of opinion. On the next UK release, record bid and ask for GBPUSD and EURGBP at 06:59:50, 07:00:00, 07:00:10, 07:01:00 and 07:05:00. Write down the spread at each point, and how many pips the mid price moved from 06:59:50. Ten releases gives you something to compare against 13:30 US releases and to answer the question in the title with your own broker's numbers. Different brokers will give different spreads, so it would be useful to see a few of them side by side. If you do record it, post the table here with the broker type, raw or standard.