Article Highlights

  • German PPI m/m: 2.4% vs. 0.3% expected, 0.4% previous
  • German PPI y/y: 0.7% vs. 2.0% expected, 1.0% previous
  • CBI’s U.K. industrial trends: 8 vs. steady at 5 expected
  • Presidents’ Day holiday in the U.S.A. today
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Not much lined up on the docket for today’s morning London session and the U.S. will be having a bank holiday later (plus it’s a Monday), so price action was rather limited. Pound pairs were on the move, though, since the pound got bid higher across the board during the course of the session.

Major Events/Reports:

Commodities rally but precious metals retreat – Commodities staged a broad-based rally during the session. However, precious metals were clearly an exception, since they went in the opposite direction.

Oil benchmarks were on the rise.

  • U.S. crude oil was up by 0.60% to $54.10 per barrel
  • Brent crude oil was up by 0.82% to $56.27 per barrel

Base metals, meanwhile, were mostly on the up and up.

  • Copper was up by 0.63% to $2.724 per pound
  • Nickel was up by 0.38% to $11,110.00 per dry metric ton

Precious metals were down, as mentioned earlier.

  • Gold was down by 0.17% to $1,237.00 per troy ounce
  • Silver was down by 0.33% to $17.970 per troy ounce

The broad-based commodities rally was likely due to the Greenback’s recent retreat. And for reference, the U.S. dollar index was already down by 0.03% to 100.86 for the day when the session ended. It was in positive territory earlier.

Other than that, market analysts also attributed the higher oil prices to optimism on the oil market, thanks to signs of compliance with the OPEC oil cut deal. Some base metals, meanwhile, got a boost from supply-related updates.

As for the slide in precious metals, that was likely due to lower demand because of the risk-on vibes during the session. After all, precious metals are considered as traditional safe-havens.

Optimistic start in Europe – Risk appetite made a comeback yesterday, but was promptly chased off today. As a result, the European equity indices were in the red again.

  • The pan-European FTSEurofirst 300 was up by 0.10% to 1,461.70
  • The blue chip Euro Stoxx 50 was up by 0.11% to 3,306.50
  • Germany’s DAX was also up by 0.48% to 11,813.75

Market analysts said that the modest risk-on vibes in Europe was due to optimistic speculation with regard to possible merger between Deutsche Telekom’s T-Mobile US and Softbank’s sprint. This apparently gave telecoms a boost, which then improves overall risk sentiment. The energy sector was also a major winner, though, so the rise in oil prices today also likely helped improve sentiment.

Le Pen advances (again) – Last Friday, anti-EU Front National’s Marine Le Pen closed the gap between her and top rival Emmanuel Macron, with poll results for the second round of the French presidential elections showing 60-40 in favor of Macron. According to the latest poll by opinionway, however, Le Pen continues to take ground from Macron, with 58-42 in favor of Macron.

Major Market Movers:

GBP – The pound jumped higher across the board when the morning London session rolled around. The pound then began grinding its way higher against after the initial jump. There were no apparent catalysts for this jump or the subsequent demand. However, some market analysts attributed this to euro weakness and Brexit-related optimism as the House of Lords begin to scrutinize the Brexit Bill this week.

GBP/USD was up by 28 pips (+0.23%) to 1.2458, GBP/JPY was up by 33 pips (+0.24%) to 140.96, GBP/NZD was up by 43 pips (+0.25%) to 1/7348

CHF – Most Swissy pairs were essentially range-bound during the session (and for the day for that matter). However, the Swissy did end the session on a lower note against its peers, likely because of the risk-on vibes.

USD/CHF was up by 12 pips (+0.13%) to 1.0042, EUR/CHF was up by 9 pips (+0.08%) to 1.0655, GBP/CHF was up by 43 pips (+0.34%) to 1.2509

Watch Out For:

  • 1:30 pm GMT: Canadian wholesale sales (0.4% expected, 0.2% previous)
  • 3:00 pm GMT: Euro Zone consumer confidence (steady at -5 expected)
  • Presidents’ Day holiday in the U.S.A. today

See also:

Asian Session Recap 
Last Week’s Top Forex Movers

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