Article Highlights

  • French INSEE consumer confidence: 98 vs. 94 expected, 94 previous
  • Spanish retail sales y/y: 4.1% vs. 3.9% expected, 4.4% previous
  • Second estimate for Q1 U.S. GDP coming up
  • U.S. Fed head Janet Yellen will be speaking later
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There was nothing major on the docket, but there are top-tier U.S. events lined up for later, so volatility got sapped during today’s morning London session. Oil continued sliding, though, dragging the Loonie with it.

Major Events/Reports:

Oil retreats further – Oil benchmarks extended their losses during the morning London session, with U.S. crude oil down by 0.95% to $49.01 per barrel and Brent crude oil down by 1.35% to $48.92 per barrel. Market analysts couldn’t point to a clear catalyst for the intraday slide in oil prices, so perhaps the slide is just due to end of the trading week profit-taking.

Modest signs of risk-taking – Compared to yesterday’s morning London session, risk-taking was relatively more subdued, with the pan-European FTSEurofirst 300 up only by 0.10% to 1,370.92, the Euro Stoxx 50 up by 0.23% to 3,078.50, and the DAX up modestly by 0.19% to 10,292.00 by the end of the session. U.S. equity futures were also slightly up, with the S&P 500 futures index up by 0.12% to 2,092.25 and the Nasdaq futures index up by 0.19% to 4,500.75. Meanwhile, the safe-haven gold was down a bit by 0.10% to $1,219.15 per troy ounce.

The risk-on sentiment from the earlier session probably spilled-over onto to the morning London session, but top-tier events for later are probably keeping market players on their toes, capping gains in the process.

BOJ Harada speaks – BOJ Board Member Yutaka Harada said earlier during the session that Japan’s economy continues to recover moderately and that the BOJ monetary policy seems to be effective. However, he also cited certain risks to Japan’s economy, namely the risk that China’s economy will slow down further. He then said that If such risks materialize, it’s necessary to take additional monetary easing steps without hesitation.” Woah!

Focus on U.S. events? – Volatility and directional movement were both in short supply during the session, likely because the forex calendar during the session only had a couple of low-tier items, and also probably because forex traders are sitting on their hands ahead of top-tier U.S. events for later, namely the second estimate for Q1 GDP and Fed Chairperson Yellen’s speech. It wasn’t a complete snoozefest, though, since the yen and Loonie pairs were on the move, albeit at a grinding pace.

Major Currency Movers:

CAD – Another round of sliding oil prices weighed down on Loonie, causing the Loonie to weaken across the board.

USD/CAD was up by 35 pips (+0.27%) to 1.3043, NZD/CAD was up by 18 pips (+0.20%) to 0.8778, GBP/CAD was up by 39 pips (+0.20%) to 1.9105

JPY – The yen started out on a weak footing, likely because of the modest risk-on vibes during the morning London session. However, it began getting buyers across the board after that, even though there were no apparent catalysts. Yen pairs even just shrugged of BOJ Harada’s statements about further easing if risks to Japan’s economy materialize.

USD/JPY was down by 4 pips (-0.03%) to 109.65, AUD/JPY was down by 17 pips (-0.22%) to 79.05, CHF/JPY was down by 20 pips (-0.18%) to 110.65

Watch Out For:

  • 12:30 pm GMT: Second estimate for Q1 U.S. GDP (expected to be revised higher from 0.5% to 0.9%)
  • 12:30 pm GMT: Second estimate for Q1 core PCE price index (no revision from 2.1% expected)
  • 12:30 pm GMT: Second estimate for Q1 GDP price index (no revision from 0.7% expected)
  • 2:00 pm GMT: Final reading for the University of Michigan’s consumer sentiment index (slight downgrade from 95.8 to 95.4 expected)
  • 5:15 pm GMT: U.S. Fed Chairperson Janet Yellen has a speech

See also:

Asian Session Forex Recap

U.S. Session Forex Recap

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