Article Highlights

  • French final HICP m/m: unrevised at 0.3% as expected
  • French final HICP y/y: unrevised at -0.1% as expected
  • Italian final HICP m/m: unrevised at -0.2% as expected
  • Italian final HICP y/y: unrevised at -0.4% as expected
  • Euro Zone employment change q/q: 0.3% vs. 0.2% expected, 0.3% previous
  • Euro Zone employment change y/y: 1.2% vs. 1.1% expected, 1.1% previous
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There were no top-tier reports during today’s morning London forex session, so forex traders turned once more to market sentiment and commodities for direction.

Major Events:

Commodities continue to crumbleCommodities were broadly in the red during the morning London session, thanks to a relatively stronger U.S. dollar and a profit-taking ahead of the FOMC statement tomorrow, according to market analysts.

The base metal copper was down by 0.92% to $2.219 per pound during the session while oil benchmarks were deep in negative territory, with U.S. crude oil down by 2.47% to $36.26 per barrel and Brent blend crude down by 2.43% to $38.57 per barrel during the morning London session.

Even precious metals that usually serve as safe-havens were not immune from the slide, with gold down by 0.86% to $1,234.40 per troy ounce during the session.

Skittish risk sentiment – There was a noticeable lack of risk taking during today’s morning London session, and market analysts were blaming the BOJ’s rather downbeat outlook and sliding commodity prices for the gloomy atmosphere.

The pan-European FTSEurofirst 300 was down by 1.03% to 1,342.52 while the DAX was down by 0.53% to 9,937.80. It also looks like risk aversion will spill over into the upcoming U.S. session since U.S. equity futures were moderately in the red, with the S&P 500 futures down by 0.53% to 1,998.65 and Nasdaq futures down by 0.41% to 4,340.10 during the morning London session.

Major Currency Movers:

Comdolls – Sliding commodities and the prevalence of risk aversion easily crushed demand for the higher-yielding comdolls (AUD, NZD, CAD), with the Loonie being the weakest among the three, likely because of the strong down move in oil prices during morning London session.

AUD/USD was down by 28 pips (-0.38%) to 0.7462, AUD/NZD was down by 26 pips (-0.24%) to 1.1222

NZD/USD was down by 10 pips (-0.14%) to 0.6648, NZD/JPY was down by 41 pips (-0.57%) to 75.05

NZD/CAD was up by 39 pips (+0.45%) to 0.8892, AUD/CAD was up by 20 pips (+0.21%) to 0.9979

Safe-havens – The safe-haven currencies (USD, CHF, JPY) got some love from forex traders due to the risk-off sentiment during the session. Among the safe-havens, the yen emerged as the one currency to rule them all, probably because European forex traders were also pricing-in the BOJ’s earlier decision to refrain from easing further.

USD/CAD was up by 77 pips (+0.58%) to 1.3374, USD/CHF was up by 9 pips (+0.09%) to 0.9882

USD/JPY was down by 46 pips (-0.14%) to 112.90, CHF/JPY was down by 48 pips (-0.43%) to 114.35

AUD/CHF was down by 26 pips (-0.35%) to 0.7368, GBP/CHF was down by 108 pips (-0.77%) to 1.3982

GBP – The pound was the weakest currency during the morning London session. Aside from the lack of risk-taking that was likely detrimental to the higher-yielding pound, Brexit fears were likely weighing down on the pound as well since many media outlets kept mentioning a poll by the Daily Telegraph, which showed that Brexit supporters had an advantage because they were more likely to show up and vote.

GBP/USD was down by 114 pips (-0.80%) to 1.4159, GBP/JPY was down by 174 pips (-1.08%) to 160.08, GBP/CAD was down by 41 pips (-0.22%) to 1.8937

Watch Out For:

  • 1:30 pm GMT: Headline (-0.2% expected, 0.2% previous) and core (-0.2% expected, 0.1% previous) readings for U.S. retail sales
  • 1:30 pm GMT: Headline (-0.2% expected, 0.1% previous) and core (0.1% expected, 0.4% previous) readings for U.S. PPI
  • 1:30 pm GMT: U.S. Empire State manufacturing index (-10.50 expected, -16.64 previous)
  • 3:00 pm GMT: U.S business inventories (0.0% expected, 0.1% previous)
  • 3:00 pm GMT: NAHB U.S. builders survey (59 expected, 58 previous)
  • New Zealand’s current account (-$2.88B expected, -$4.75B previous)
  • Dairy auction currently underway

See also:

Asian Session Forex Recap

U.S. Session Forex Recap

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