Article Highlights

  • Spanish flash CPI y/y: 0.3% vs. 0.1% expected, -0.1% previous
  • German unemployment change: 1k vs. -5K expected, -6K previous
  • BOE net consumer credit: £1.57B vs. £1.40B expected, £1.19B previous
  • BOE mortgage approvals: 60.06K vs. 60.20K expected, 60.93K previous
  • Euro Zone consumer sentiment: unchanged at -8.2 as expected
  • Euro Zone economic sentiment: 104.9 vs. 103.5 expected, 103.5 previous
  • German HICP m/m: 0.0% as expected vs. -0.1% previous
  • German HICP y/y: 0.5% expected as expected vs. 0.3% previous
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There were signs that risk aversion was returning during the morning London session, as faith in OPEC’s plan to cut production appeared to waver. As such, the safe-havens were in demand while the comdolls got dumped.

Major Events/Reports:

Oil deal euphoria over? – After spiking higher during yesterday’s U.S. session, oil benchmarks gave back some of their gains during today’s late Asian and morning London sessions.

  • U.S. WTI crude oil was down by 0.13% to $46.99 per barrel
  • Brent blend crude oil was down by 0.44% to $49.04 per barrel

Market analysts blamed the dip in oil prices to the market’s wavering faith in OPEC’s plan to cut production. And if you missed out on what this plan is all about, then go ahead and check out Forex Gump’s write-up here.

The gist of it, though, is that OPEC’s plan to cut production won’t be decided upon and implemented until the November 30 OPEC meeting at the earliest. The said meeting is still two months away, and the OPEC members are free to pump out as many barrels as they can manage during all that time.

Risk aversion returning? – Almost all European equity indices opened by gapping higher. However, almost all European equity indices also spent the morning London session by slowly giving back their gains.

  • The pan-European FTSEurofirst 300 was up by 0.92% to 1,360.77, with 1,363.31 as session high
  • The blue-chip Euro Stoxx 50 was up by 0.90% to 3,017.50 with 3,033.50 as session high
  • The U.K.’s FTSE 100 was up 1.11% to 6,926.30 with 6.935.30 as session high
  • The DAX was up by 0.85% to 10,527.00 with 10,576.00 as session high

European equity indices were able to resist the returning risk aversion, but U.S. equity futures already succumbed.

  • S&P 500 futures were down by 0.06% to 2,162.00
  • Nasdaq futures were down by 0.13% to 4,861.88

Market analysts were attributing the early jump in European equities to strong demand for energy shares, thanks to the OPEC oil deal. The signs of returning risk aversion was therefore likely due to the dip in oil prices during the session.

Major Market Movers:

CHF & JPY – Risk aversion appeared to be making a comeback, so the safe-havens were in demand, particularly the Swissy and the yen. And between the two of them, it was the Swissy that got more love. Heck, the Swissy even ended up as the best-performing currency of the session.

USD/CHF was down by 22 pips (-0.23%) to 0.9694, EUR/CHF was down by 21 pips (-0.19%) to 1.0880, NZD/CHF was down by 26 pips (-0.38%) to 0.7042

USD/JPY was down by 15 pips (-0.15%) to 101.46, NZD/JPY was down by 17 pips (-0.23%) to 73.71, AUD/JPY was down by 18 pips (-0.14%) to 132.07

NZD – The returning risk-off vibes dampened demand for all the comdolls (NZD, AUD, CAD). Interestingly enough, the Kiwi got the worst of it, rather than the Loonie.

NZD/USD was down by 12 pips (-0.15%) to 0.7264, NZD/CAD was down by 30 pips (-0.32%) to 0.9502, EUR/NZD was up by 30 pips (+0.20%) to 1.5446

Watch Out For:

  • 12:30 pm GMT: U.S. initial jobless claims (260K expected, 252K previous)
  • 12:30 pm GMT: U.S. goods trade balance (-$62.2B expected, -$58.8B previous)
  • 12:30 pm GMT: Final Q2 U.S. GDP (revision from 1.1% to 1.3% expected)
  • 1:00 pm GMT: BOE MPC Member Kristin Forbes will have a talk at the ECB
  • 2:00 pm GMT: U.S. Fed Governor Jerome Powell will give a speech
  • 2:00 pm GMT: U.S. pending home sales (-0.1% expected, 1.3% previous)
  • 8:00 pm GMT: U.S. Fed Head Janet Yellen is scheduled to speak
  • 9:45 pm GMT: New Zealand’s building permits (-10.5% previous)

See also:

Asian Session Forex Recap

U.S. Session Forex Recap

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