Article Highlights

  • German WPI m/m: 0.8% vs. 0.3% expected, 1.2% previous
  • SNB sight deposits: CHF 539,000M vs. CHF 535,194M previous
  • Trump and Trudeau will meet and have a joint presser later
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Today’s morning London session was rather quiet for the most part. The only currencies that were really on the move were the pound and the Kiwi, with the pound getting bid higher while the Kiwi got slapped lower.

Major Events/Reports:

An upbeat start in Europe – Looks like Europe is starting the week with some optimism, since European equity indices were in the green.

  • The pan-European FTSEurofirst 300 was up by 0.57% to 1,457.10
  • The blue chip Euro Stoxx 50 was up by 0.85% to 3,299.50
  • Germany’s DAX was also up by 0.90% to 11,772.50
  • The U.K.’s FTSE 100 was up by 0.15% to 7,269.50

U.S. equity futures also joined in on the merry-making and got a modest lift.

  • S&P 500 futures were up by 0.17% to 2,316.75
  • Nasdaq futures were up by 0.11% to 5,232.63

Market analysts attributed the risk-on vibes to risk sentiment spillover from the earlier session. In other words, optimism over Trump’s statement from last week is still fueling the risk-on vibes. For those who don’t know, Trump said last week that he will soon be announcing “something phenomenal in terms of tax“.

SNB sight deposits increase – The SNB issued its weekly press release on monetary policy data during the session, and it showed that total sight deposits increased from CHF 535,194 million to CHF 539,000 million during the week ending on February 10, which implies that the SNB was likely intervening in the forex market last week. I guess that helps to explain why the Swissy tanked on Thursday and Friday last week, as noted in last week’s Top Forex Movers of the Week.

Oh, for the newbies out there, sight deposits of domestic banks form part of the monetary base and are used by the SNB for financing currency purchases (*cough* currency manipulation *cough*).

Major Market Movers:

GBP – There were no direct catalysts but the pound steadily climbed higher anyway. Market analysts attributed the pound’s strength during the session either to speculation ahead of top-tier U.K. data this week, or continued optimism after last week’s events (or maybe both).

GBP/AUD was up by 22 pips (+0.14%) to 1.6330, GBP/CHF was up by 22 pips (+0.18%) to 1.2567, GBP/NZD was up by 89 pips (+0.52%) to 1.7432

USD – The Greenback’s price action was rather choppy during the session. However, it did end up as the second strongest currency after the pound. There were no direct catalysts for the Greenback, but it’s highly likely that optimism over Trump’s tax plans kept the Greenback supported.

USD/JPY was up by 19 pips (+0.18%) to 113.73, USD/CAD was up by 11 pips (+0.08%) to 1.3092, USD/CHF was up by 13 pips (+0.13%) to 1.0040

NZD – The Kiwi began weakening across the board right from the get-go. This is rather weird, given the prevalence of risk appetite, which should have spurred demand for the higher-yielding Kiwi. It’s possible that Kiwi bears are trying to resume the Kiwi’s decline after last week’s disappointing RBNZ statement. Although it’s also possible that U.S. dollar dynamics are back in play again. The Greenback was showing strength after all.

NZD/USD was down by 31 pips (-0.44%) to 0.7180, NZD/JPY was down by 23 pips (-0.28%) to 81.66, NZD/CHF was down by 23 pips (-0.32%) to 0.7208

Watch Out For:

  • 4:00 pm GMT: U.S. President Trump and Canadian PM Trudeau will meet
  • 7:00 pm GMT: Press conference with Trump and Trudeau
  • 9:45 pm GMT: New Zealand’s FPI (-0.8% previous)

See also:

Asian Session Recap 
Last Week’s Top Forex Movers

Bonnie and Clyde, peanut butter and jelly, Kanye West and Kanye West. Some things just go well together.

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