Early spikes before news time

I've been looking over previous news releases of ADP Nonfarm Employment Change in preparation for todays announcement.

In a few charts it seems like the biggest move comes in the candle immediately BEFORE the news time (ie at xx:14 for news at xx:15).

I was wondering what this could be:

 

1. a slight time anomaly with the Alpari data I'm using
2. a widening of the spread just before the news
3. the broker flushing the triggers and stops of straddlers
4. something else

Any thoughts from experienced news traders will be very welcome.

Below is an example from April 07. The purple line is the actual news time.

its the big banks pulling their liquidity out prior to the announcement. this is what causes the mahority of the price spikes before and up to about 10 min after the announcements

OK - I see.

It only seems to happen sometimes and not others - is it (to the best of your knowledge) predictable in any way?

The liquidity is pulled whenever the banks/liquidity providers have a chance of loosing money. Step in there shoes, would you provide liquidity (or any other service for that matter ) if there was no upside for you? Espically if there was a potentially huge downside.... It makes more sense for banks to just pull out before theses announcements and control tere risk. Usually everyone is vback in within 10 - 15 min

Unfortunately, the spikes can be caused by a number of things, and are often too choppy to be predictable. 50% of the time, start the trend, the other 50% they either contain or go in the opposite direction of the trend.

I know spikes can be caused by many kinds of participant.
Let's talk about how banks could create spikes. Can anyone explain to me how banks cause spikes?

What do you mean by banks pulling liquidity? Increasing interbank spreads or they match all open orders from large-volume-customers at their banks without waiting for better prices?

Now, I have to make it clear in terms of before and after the news announcements.

I assume that, before the news announcements, banks may increase their spreads, people trade at more expensive prices causing somewhat small spikes, which could also be caused by large volume tradings at that time.

After the news announcements, big spikes occur because normal tradings(large institutions in my sense) with high spreads that are adjusted 1 or 2 seconds after the news announcements. In other words, spikes actually occur when people make trades at more expensive prices.

Am I correct?

[quote=funnyboy;1468072]I know spikes can be caused by many kinds of participant.
Let's talk about how banks could create spikes. Can anyone explain to me how banks cause spikes?

What do you mean by banks pulling liquidity? Increasing interbank spreads or they match all open orders from large-volume-customers at their banks without waiting for better prices?
[/quote=funnyboy;1468072]

Say I have a flu vaccine that I can sell for $1 now, but I know that in 10 min i might be able to sell the same vaccine for $5 because a group of docors in Africa are announcing the testing results from a village of people that just died, and it might be from the flu.

Does it make any sense for me to try and sell it now, or should I wait 10 min abnd try to get $5 for it. This is a similar question that banks have to ask themselvs before a news announcement. There is no reason for you to even offer the vaccine at the current $1 price now. If your smart you would wait and see what happens in 10 min, then set your price accordingally.....

This is what causes spreads to increase before news announcements, the vaccine simply is not offered for sale and $1, but you could buy it for $5 now if you would like.
Prices after the announcement( or the initial spike caused buy the announcemetn) reflect the value that people are willing to buy or sell the currency at....

I thought the big banks got to know the news WAY AHEAD of the public...

Pulling liquidity out of the markets??? That's what traders who don't know what to expect from the release are doing...I think big banks increase liquidity during economic announcements...

oh dear ...

HAHA!