Article Highlights

  • German final Q2 GDP q/q: unchanged at 0.4% as expected
  • German final Q2 GDP y/y: unchanged at 1.8% as expected
  • U.K. BBA mortgage approvals: 37.66K vs. 38.00K expected, 39.76K previous
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Risk-taking was the name of the game during the morning London session, so the higher-yielding currencies got a boost while the lower-yielders, particularly the euro and the Swissy, got whupped.

Major Events/Reports:

Oil slumps once more – Oil benchmarks slumped hard during the morning, and market analysts attributed that to renewed oversupply jitters after data from API showed an increase in U.S. oil inventories, contrary to what’s expected for the government’s official reading for later.

  • U.S. WTI crude oil was down by 2.16% to $47.06 per barrel
  • Brent blend crude oil was down by 1.34% to $49.24 per barrel

Risk sentiment recovers in Europe – European markets opened on a downbeat note, thanks to that disastrous Earthquake in Italy, which has unfortunately claimed 38 lives so far. However, risk sentiment steadily improved, and so most of the major European equity indices were able to erase their losses (and then some).

  • The pan-European FTSEurofirst 300 was up by 0.50% to 1,358.36
  • The blue-chip Euro Stoxx 50 was up by 0.71% to 3,015.00
  • The U.K.’s FTSE 100 was still down by 0.05% to 6,862.30, but off its lows
  • The DAX was up by 0.44% to 10,639.50

U.S. equity futures were also modestly back in the green after an earlier trip to negative territory:

  • The S&P 500 futures index was up by 0.05% to 2,186.25
  • The Nasdaq futures index was up by 0.06% to 4,819.75

Market analysts attributed the risk-taking during the session to positive reports for several companies. Although other analysts also pointed to easing concerns over the potential negative effects of the Brexit referendum.

Major Currency Movers:

GBP – The pound was the one currency to rule them all during the morning London session. There was no apparent catalyst for the bullish boost, though, since the only economic report for the U.K. during the session was a disappointment.

However, I did point out earlier that some market analysts were attributing the risk-on move to easing concern over the Brexit referendum, which also probably drove up demand for the pound. Basically, last week’s theme on the pound is still in play.

GBP/USD was up by 62 pips (+0.47%) to 1.3230, GBP/CAD was up by 69 pips (+0.41%) to 1.7107, GBP/CHF was up by 90 pips (+0.72%) to 1.2785

NZD – All the comdolls were getting across the board during the session, except for the Loonie which had a more mixed performance, likely because of the slide in oil prices. Anyhow, the Kiwi was the dominant comdoll (during this session at least) since it was able to beat its fellows comdolls to end up as the second-strongest currency after the pound.

NZD/USD was up by 33 pips (+0.46%) to 0.7316, NZD/CAD was up by 37 pips (+0.39%) to 0.9459, NZD/JPY was up by 28 pips (+0.39%) to 73.33

EUR & CHF – The euro and the Swissy really got the stuffing beaten out of ’em, thanks to the risk-on mood during the morning London session.

EUR/USD was down by 27 pips (-0.24%) to 1.1266, EUR/NZD was down by 104 pips (-0.67%) to 1.5399, EUR/GBP was down by 59 pips (-0.69%) to 0.8516

USD/CHF was up by 24 pips (+0.25%) to 0.9664, AUD/CHF was up by 45 pips (+0.62%) to 0.7368, NZD/CHF was up by 48 pips (+0.69%) to 0.7069

Watch Out For:

  • 1:00 pm GMT: U.S. FHFA HPI (0.3% expected, 0.2% previous)
  • 2:00 pm GMT: U.S. existing home sales (5.51M expected, 5.57M previous)
  • 2:30 pm GMT: U.S. crude oil inventories (-0.5M expected, -2.5M previous)

Asian Session Forex Recap

U.S. Session Forex Recap

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