- Italy on Liberation Day holiday today
- German IFO business climate: 106.6 vs. 107.0 expected, 106.7 previous
- German IFO current conditions: 113.2 vs. 113.8 expected, 113.8 previous
- U.K. CBI industrial trends: -11 vs. -17 expected, -14 previous
Volatility and directional movement were in short supply during the morning London forex session, with most currency pairs bound in tight ranges. It wasn’t a complete snooze fest, however, since the pound, the Swissy, and the Greenback were clearly on the move.
Oil continues to tumble – Oil benchmarks extended their losses during the morning London session, with U.S. crude oil down by 1.12% to $43.24 per barrel and Brent blend crude oil down by 0.83% to $44.70 per barrel.
Market analysts blamed the slide in oil prices on profit-taking ahead of expectations that first quarter earnings of oil companies are gonna be bad, not to mention a week filled with top-tier central bank events.
Modest risk aversion – This week’s European trading session is starting off on a gloomy note, as the risk-off sentiment from the Asian session spilled-over into Monday’s morning London session, with the pan-European FTSEurofirst 300 down by 0.28% to 1,368.11 and the DAX down by 0.76% to 10,295.00 while safe-haven flows pushed gold 0.34% higher to $1,234.15 per troy ounce during the morning London session. U.S. equity futures are also hinting that the risk-off sentiment may spillover further into the U.S. session, with the S&P 500 futures down by 0.20% to 2,081.75 and the Nasdaq futures down by 0.25% to 4,454.62 during the morning London session.
Market analysts attributed the persistent risk aversion to profit-taking ahead of this week’s major central bank events, namely the FOMC statement and the BOJ’s monetary policy decision, with rumors that the BOJ may cut the negative rates even deeper for the latter event.
Major Currency Movers:
CHF – Trading conditions may have been tight, but the prevailing risk-off sentiment during the morning London session still sent enough forex traders scurrying to the safe-haven Swissy, so much so that the Swissy was clearly on the move. The Swissy wasn’t the best performing currency of the session, though.
NZD/CHF was down by 16 pips (-0.25%) to 0.6694, AUD/CHF was down by 15 pips (-0.20%) to 0.7523, CAD/CHF was down by 12 pips (-0.16%) to 0.7688
GBP – The pound was the one currency to rule them all during the morning London session. There weren’t any direct catalysts for pound strength, however, especially since pound pairs got a major volatility boost near the end of the session. Perhaps we’re just seeing technical breakouts in progress.
GBP/USD was up by 81 pips (+0.57%) to 1.4508, GBP/JPY was up by 63 pips (+0.39%) to 161.19, GBP/CHF was up by 44 pips (+0.31%) to 1.3136
USD – The Greenback is also considered a safe-haven currency, but European forex traders had little love for it since it lost out to all its forex rivals during the morning London session.
USD/CAD was down by 12 pips (-0.10%) to 1.2671, USD/JPY was down by 21 pips (-0.19%) to 111.07, USD/CHF was down by 24 pips (-0.25%) to 0.9743
- 2:00 pm GMT: Belgian NBB business climate (-4.0 expected, -4.2 previous)
- 3:00 pm GMT: U.S. new home sales (521K expected, 512K previous)
Bonnie and Clyde, peanut butter and jelly, Kanye West and Kanye West. Some things just go well together.
Head on to Big Pippin’s Daily Chart Art for some pip-locking technical weeks!