Article Highlights

  • U.K. Nationwide HPI m/m: 0.2% vs. 0.4% expected, 0.8% previous
  • German jobless rate: steady at 6.2% as expected
  • German unemployment change: -16K vs. 1K expected, -2K previous
  • Spanish flash HICP m/m: 0.4% vs. 0.8% expected, 2.0% previous
  • Spanish flash HICP y/y: -1.2% vs. -1.0% expected, -1.0% previous
  • Euro Zone consumer sentiment: unchanged at -9.3 as expected
  • Euro Zone economic sentiment: 103.9 vs. 103.4 expected, 103.0 previous
  • Euro Zone business climate index: 0.13 vs. 0.14 expected, 0.12 previous
  • Euro Zone industrial sentiment: -3.7 vs. -4.0 expected, -4.2 previous
  • German flash HICP m/m: -0.3% vs. -0.2% expected, 0.8% previous
  • German flash HICP y/y: -0.1% vs. 0.1% expected, 0.1% previous
  • U.S. Q1 2016 advanced GDP estimate coming up
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Lots of economic reports for the Euro Zone during today’s morning London session, but the euro’s forex price action was mixed, probably because forex traders were being influenced more by market sentiment than anything else.

Major Events/Reports:

Oil grinds lower – Oil benchmarks were still in the red near the end of the morning London session, with U.S. crude oil down by 0.38% to $45.16 per barrel and Brent crude oil down by 0.15% to $46.86 per barrel.

There weren’t any major catalyst for oil during the morning London session, so market analysts mainly attributed oil’s slide since the earlier Asian session to profit-taking after oil benchmarks soared to new 2016 highs, thanks to a weakened U.S. dollar in the aftermath of yesterday’s FOMC statement.

Risk aversion domination – Today’s morning London session was clearly a risk-off trading session since European equities were bleeding out, with the pan-European FTSEurofirst 300 down by 1.21% to 1,354.16 and the DAX down by 1.08% to 10,188.50.

U.S. equity futures were also slapped lower, with the S&P 500 futures down by 0.63% to 2,077.50 and Nasdaq futures down by 0.40% to 4,406.12 during the session. The safe-haven gold, meanwhile, was pushed 0.53% higher to $1,257.05 per troy ounce during the course of the session.

Market analysts were pointing mainly to risk sentiment spillover from the Asian session, although lower oil prices were possibly weighing down on sentiment as well.

Major Currency Movers:

CAD – The higher-yielding comdolls (CAD, NZD, AUD) were all feeling some bearish pressure because of the prevailing risk-off sentiment during the morning London session, but the Loonie was noticeably weak since it lost out to its fellow comdolls to end up as the weakest currency during the session. There weren’t any direct catalysts for the Loonie during the session, but it’s probably safe to say that the Loonie got double-slapped by the risk-off sentiment and falling oil prices.

USD/CAD was up by 46 pips (+0.37%) to 1.2593, EUR/CAD was up by 56 pips (+0.40%) to 1.4288, NZD/CAD was up by 16 pips (+0.18%) to 0.8762

Safe-havens – The safe-haven currencies (USD, CHF, JPY) were feeling the love from forex traders during the morning London session, thanks to safe-haven flows courtesy of the risk-off environment during the session. The safe-haven currencies were easily winning out against almost everything else, but were trading mostly sideways against each other, although the Swissy was able to edge out its fellow safe-havens by the end of the session. The weakest safe-haven, meanwhile, was the U.S. dollar, probably because forex traders didn’t want to be too exposed when the Q1 2016 U.S. GDP report is released. Oh, Forex Gump has a Forex Trading Guide for that event, if you’re interested (read it here).

AUD/USD was down by 40 pips (-0.52%) to 0.7607, GBP/USD was down by 17 pips (-0.12%) to 1.4551, NZD/USD was down by 14 pips (-0.21%) to 0.6856

USD/CHF was down by 12 pips (-0.13%) to 0.9670, EUR/CHF was down by 10 pips (-0.09%) to 1.0972, CAD/CHF was down by 36 pips (-0.48%) to 0.7678

USD/JPY was down by 11 pips (-0.11%) to 108.05, CAD/JPY was down by 32 pips (-0.38%) to 85.87, AUD/JPY was down by 42 pips (-0.52%) to 82.29

Watch Out For:

  • 12:30 pm GMT: Q1 2016 advanced U.S. GDP estimate (0.7% expected, 1.4% previous)
  • 12:30 pm GMT: U.S. core PCE price index (1.9% expected, 1.3% previous)
  • 12:30 pm GMT: U.S. GDP price index (0.5% expected, 0.9% previous)
  • 12:30 pm GMT: U.S. initial jobless claims (259K expected, 247K previous)
  • 10:45 pm GMT: New Zealand’s building permits (10.8% previous)
  • 11:05 pm GMT: GFK U.K. consumer confidence (-1 expected, 0 previous)

See also:

Asian Session Forex Recap

U.S. Session Forex Recap

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