London Session Forex Recap – Nov. 9, 2016

  • French BOF business sentiment: steady at 99.0 as expected
  • U.K. goods trade balance: -£12.7B vs. -£11.3B expected, -£11.1B previous
  • Trump is going to be the 45th President of the United Stated of America
  • RBNZ rate decision and presser later

The global markets initially reeled from the news of Trump’s victory over Clinton, but there were signs that wounds were already being licked. The Greenback, for one, was able to recover some poise.

Major Events/Reports:

President Donald Trump – Practically all mainstream media outlets were in stunned disbelief, but with downcast faces, they were able to correctly announce that Trump is now clearly going to be the 45th President of the United States of America.

Not only that, media outlets also reported that Clinton already called Trump to congratulate him and concede defeat. This was apparently verified when President-elect Trump said the same thing during his victory speech.

Risk aversion aplenty – Trump’s victory became assured during the morning London session, so European equities naturally felt the brunt of the bearish onslaught.

  • The pan-European FTSEurofirst 300 was down by 0.95% to 1,310.02
  • The blue-chip Euro Stoxx 50 was down by 1.43% to 2,979.00
  • Germany’s DAX was down by 0.96% to 10,382.00
  • The U.K.’s FTSE 100 was down by 0.36% to 6,818.50

U.S. equity futures were also hit hard, which implies that the risk-off mood may persist into the U.S. session.

  • S&P 500 futures were down by 1.71% to 2,099.00
  • Nasdaq futures were down by 2.04% to 4,704.25

Precious metals, meanwhile, got a major boost, likely because of their status as traditional safe-havens.

  • Gold was up by 2.40% to $1,305.05 per troy ounce
  • Silver was up by 2.27% to $18.773 per troy ounce

ECB Nowotny speaks – ECB Governing Council member Ewald Nowotny had some things to say about Trump’s victory earlier. Specifically, Nowotny said that Trump’s victory “is not a good day for the world economy.” He also warned of “a period of uncertainty in the medium term” and that a Trump presidency could mean that the recovery in Europe may take a “menacing turn.” As such, the ECB is “prepared to intervene,” Nowotny said.

Major Market Movers:

USD – The Greenback was plunging hard across the board before the morning London session even opened, thanks to exit polls and actual voting results beginning to point to a Trump victory. And when a Trump victory became official during the session, the Greenback weakened some more before quickly finding support, probably because of profit-taking by the shorts, as well as lower uncertainty after news began to spread that Clinton conceded to Trump.

USD/JPY was up by 48 pips (+0.47%) to 103.78, USD/CHF was up by 65 pips (+0.67%) to 0.9783, USD/CAD was up by 67 pips (+0.51%) to 1.3435

EUR – After climbing hard during the U.S. and early Asian sessions, the euro started dipping during the later Asian session. The euro then extended its losses when the morning London session rolled around. Whether this was due to profit-taking after the rise earlier or a reaction to ECB Nowotny’s rhetoric is not yet very clear.

EUR/USD was down by 88 pips (-0.79%) to 1.1026, EUR/CHF was down by 16 pips (-0.15%) to 1.0788, EUR/GBP was down by 73 pips (-0.82%) to 0.8892

Watch Out For:

  • 3:00 pm GMT: U.S. final wholesale inventories (0.2% expected, same as previous)
  • 3:30 pm GMT: U.S. crude oil inventories (1.3M expected, 14.4M previous)
  • 6:00 pm GMT: BOE Chief Economist Andy Haldane has a speech
  • 8:00 pm GMT: RBNZ rate decision and statement (rate cut from 2.00% to 1.75% expected)
  • 9:00 pm GMT: RBNZ press conference

See also:

Asian Session Forex Recap

U.S. Session Recap

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