Article Highlights

  • GFK’s German consumer sentiment: 10.0 vs. 10.1 expected, 10.2 previous
  • Germany’s final Q4 GDP q/q: unchanged at 0.4% as expected
  • Germany’s final Q4 GDP y/y: unchanged at 1.7% as expected
  • French INSEE manufacturing confidence: 107 vs. steady at 106 expected
  • Italian retail sales m/m: -0.5% vs. 0.2% expected, -0.7% previous
  • Italian retail sales y/y: -0.2% vs. 0.8% expected, 0.8% previous
  • U.K. CBI realized sales: 9 vs. 5 expected, -8 previous
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Price action was rather choppy during the session, with many pairs milling about in tight ranges. The Greenback did get kicked broadly lower late into the session, though. The safe-haven yen, meanwhile, was well-supported throughout the session.

Major Events/Reports:

Commodities rally, base metals retreat – Commodities staged a broad-based rally during the morning London session. Base metals got left behind (and were even going in the opposite direction), though.

Oil benchmarks led the commodities charge.

  • U.S. crude oil was up by 1.51% to $54.40 per barrel
  • Brent crude oil was up by 1.54% to $56.70 per barrel

Precious metals, meanwhile, were also in demand.

  • Gold was up by 0.76% to $1,242.65 per troy ounce
  • Silver was up by 0.41% to $18.023 per troy ounce

As for base metals, they felt no love.

  • Copper was down by 0.70% to $2.714 per pound
  • Nickel was down by 0.58% to $10,670.00 per dry metric ton

The Greenback’s weakness very likely stoked demand for commodities. And for reference, the U.S. dollar index down by 0.17% to 101.14 for the day. Oil was really surging, though. And that was attributed by market analysts to speculation that the U.S. Energy Information Administration’s (EIA) official oil inventory numbers will print a drop later.

As for the broad-based slide in base metals, that was blamed by market analysts on demand worries from China after Chen Zhenggao, China’s housing minister, said earlier that China has “the ability and methods to stabilize the [property] market.”

Skittish session in Europe – European equity indices were flat but mostly up earlier. However, most European equity indices were printing mild losses by the end of the morning London session.

  • The pan-European FTSEurofirst 300 was down by 0.06% to 1,471.86
  • The blue chip Euro Stoxx 50 was down by 0.02% to 3,339.50
  • Germany’s DAX was was still up by 0.11% to 11,988.00

Market analysts pointed to positive reports for Barclays, which gave banking shares a boost for the early risk appetite. As for the later risk aversion, that was likely due to the slide in base metals, since mining shares were one of the main losers.

There were also reports that mentioned political uncertainty with regard to the French elections. And perhaps political uncertainty may have been a reason for the skittishness as well.

Mnuchin speaks – U.S. Treasury Secretary Steven Mnuchin was interviewed by CNBC earlier, and he said that a tax plan would be presented soon, with a tax overhaul hopefully by August. The said tax plan would involve “significant” tax reform and is “mostly focused on the middle class.” However, Mnuchin also said that it’s “too early” to give details of the tax plan.

Other than that, he also said that a “3% growth is very achievable, could be late 2018 before we see 3% growth.” Overall, nothing really new from what he told the Wall Street Journal yesterday, though.

Major Market Movers:

USD – Greenback pairs were dormant for most of the session. However, signs of Greenback demand began to show when Mnuchin was being interviewed by CNBC. The Greenback later got dumped across the board, though, likely because market players were disappointed that Mnuchin failed to provide any details of Trump’s highly-anticipated tax plans.

GBP/USD was up by 42 pips (+0.35%) to 1.2494, AUD/USD was up by 28 pips (+0.37%) to 0.7722, EUR/USD was up by 15 pips (+0.14%) to 1.0568

JPY – The downbeat vibes very likely fueled demand for the safe-haven yen, since it closed the session on a high note across the board.

USD/JPY was down by 45 pips (-0.40%) to 112.78, EUR/JPY was down by 32 pips (-0.28%) to 119.19, NZD/JPY was down by 23 pips (-0.29%) to 81.44

Watch Out For:

  • 1:30 pm GMT: Canadian quarterly corporate profits (14.0% previous)
  • 1:30 pm GMT: U.S. initial jobless claims (240K expected, 239K previous)
  • 2:00 pm GMT: FHFA U.S. HPI (0.4% expected, 0.5% previous)
  • 4:00 pm GMT: U.S. crude oil inventories (3.4M expected, 9.5M previous)
  • 6:00 pm GMT: Dallas Fed President Robert Kaplan has a speech
  • 10:30 pm GMT: RBA Governor Philip Lowe will testify before the Standing Committee on Economics

See also:

Asian Session Recap 
U.S. Session Recap

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