- Swiss PPI m/m: 0.2% as expected vs. 0.1% previous
- Swiss PPI y/y: 0.0% vs. 0.1% expected, -0.6% previous
- Euro Zone current account: €36.1B vs. €29.3B expected €28.3B previous
- ECB maintains refinancing rate at 0.00%
- Marginal lending rate also maintained at at 0.25%
- Likewise, deposit rate also maintained at -0.40%
- ECB maintains monthly asset purchases of €80B until March 2017
- QE extension until December 2017 (or beyond) at €60B per month also maintained
- ECB press conference coming up; watch it live here
Price action was rather muted during today’s morning London, likely because traders are waiting for the ECB presser. It’s wasn’t a complete snooze fest, though, since there were some rather wonky directional movements from the Aussie and the Kiwi.
ECB monetary policy decision – The ECB decided to maintain its current monetary policy, so all rates were unchanged while monthly asset purchases will continue at €80 billion until March 2017. After that, asset purchases will continue at a monthly rate of €60 billion “until the end of December 2017, or beyond, if necessary.”
The ECB also said that it “continues to expect the key ECB interest rates to remain at present or lower levels for an extended period of time, and well past the horizon of the net asset purchases.”
Other than that, the ECB is also still giving the warning that:
“If the outlook becomes less favourable, or if financial conditions become inconsistent with further progress towards a sustained adjustment in the path of inflation, the Governing Council stands ready to increase the programme in terms of size and/or duration.”
Anyhow, the decision to hold steady was pretty much expected by the market, so forex traders are now waiting for what Draghi and company have to say in the upcoming ECB press conference. By the way, you can watch the ECB press conference live here.
Oil rises, other commodities fall – Oil switched places with the other commodities today, since oil was climbing higher while the other commodities fell, metals in particular.
Precious metals got dumped, despite the risk-off vibes.
- Gold was down by 0.78% to $1,202.65 per troy ounce
- Silver was down by 1.68% to $16.983 per troy ounce
Base metals, meanwhile, were broadly leaking red.
- Copper was down by 0.48% to $2.604 per pound
- Nickel was up by 0.39% to $10,132.50 per dry metric ton
As mentioned earlier, oil benchmarks were swimming against the red tide.
- U.S. crude oil was down by 1.19% to $51.69 per barrel
- Brent crude oil was down by 0.87% to $54.39 per barrel
Market analysts couldn’t pinpoint the reason for the broad-based slide in commodity prices, particularly that of metals. However, some market analysts pointed to yesterday’s Greenback rally, thanks to Fed Head Yellen’s hawkish statements. Other market analysts pointed to oversupply concerns for some metals, as well as profit-taking in general ahead of Trump’s inauguration.
The rise in oil prices, meanwhile, was being attributed by market analysts to a report from the International Energy Agency (IEA), saying that the oil market was supposedly already showing signs of tightening, even before the OPEC oil cut deal got implemented.
Skittish day in Europe – There were signs of risk aversion in Europe, since the major European equities were mostly in the red.
- The pan-European FTSEurofirst 300 down by 0.23% to 1,430.60
- The blue-chup Euro Stoxx 50 was down by 0.11% to 3,289.50
- Germany’s DAX was down by 0.10% to 11,588.50
- The U.K.’s FTSE 100 was down by 0.53% to 7,208.90
U.S. equity futures were somewhat flat, but were apparently getting weighed down by the jittery mood as well.
- S&P 500 futures were slightly down by 0.09% to 2,264.50
- Nasdaq futures were slightly down by 0.06% to 5,051.63
Market analysts blamed the jittery mood on negative reports for specific companies, worries ahead of the earnings season, and quite naturally, skittishness ahead of the ECB statement and presser.
Major Market Movers:
NZD & AUD – Despite the risk-off vibes and the broad-based slide in commodities, the higher-yielding Kiwi and Aussie both got some loving. There were no apparent catalysts for this wonky price action. However, if I were to venture an educated guess, I would say that the two are benefiting from U.S. dollar dynamics, given that both the Aussie and the Kiwi starting climbing roughly at the same as the Greenback started weakening against most of the other currencies.
NZD/USD was up by 37 pips (+0.53%) to 0.7180, NZD/JPY was up by 25 pips (+0.30%) to 82.25, NZD/CAD was up by 49 pips (+0.51%) to 0.9528
AUD/USD was up by 34 pips (+0.45%) to 0.7559, AUD/JPY was up by 20 pips (+0.24%) to 86.61, AUD/CHF was up by 25 pips (+0.33%) to 0.7600
GBP – The pound fought it out with the Kiwi and the Aussie, but got overwhelmed by the two comdolls. However, the pound was able to overpower the other currencies to end up as the third best-performing currency of the session. There were no apparent bullish drivers for the pound. However, it’s possible that we’re seeing some actual demand. After all, Theresa May’s Brexit speech did have some positive points.
GBP/USD was up by 42 pips (+0.34%) to 1.2321, GBP/JPY was up by 17 pips (+0.12%) to 141.17, GBP/CAD was up by 54 pips (+0.32%) to 1.6349
- 1:30 pm GMT: ECB press conference; watch it live here
- 1:30 pm GMT: U.S. housing starts (1.19M expected, 1.09M previous), building permits (1.22M expected, 1.20M previous), initial jobless claims (252K expected, 247K previous), and Philadelphia Fed survey (15.3 expected, 19.7 previous)
- 1:30 pm GMT: Canada’s manufacturing sales (1.0% expected, -0.8% previous) and foreign securities purchases ($10.23B expected, $15.75B previous)
- 4:00 pm GMT: U.S. crude oil inventories (0.1M expected, 4.1M 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!