- French preliminary HICP m/m: 0.1% vs. 0.4% expected, -0.3% previous
- French preliminary HICP y/y: 1.4% vs. 1.7% expected, 1.6% previous
- First estimate for France’s Q4 GDP q/q: 0.4% as expected, 0.2% previous
- Swiss KOF leading indicator: 107.2 vs. 102.1 expected, 102.0 previous
- Italian preliminary HICP m/m: 0.2% vs. -0.2% expected, -1.7% previous
- Italian preliminary HICP y/y: 1.6% vs. 1.2% expected, 1.0% previous
- The Donald will speak before Congress later
Today was another choppy and relatively subdued European session, probably because traders are waiting for what Trump has to say later. There was some risk aversion, though, which gave the safe-haven yen and Swissy a boost.
Commodities dip – Commodities were were mostly in the red during today’s morning London session.
Precious metals were in the red, despite the risk-off vibes.
- Gold was down by 0.29% to $1,255.10 per troy ounce
- Silver was down by 0.32% to $18.358 per troy ounce
Based metals were also in negative territory.
- Copper was down by 0.19% to $2.693 per pound
- Nickel was down by 0.72% to $10,957.50 per dry metric ton
Oil benchmarks, meanwhile, were also bleeding.
- U.S. crude oil was down by 0.24% to $53.92 per barrel
- Brent crude oil was down by 0.32% to $56.24 per barrel
With regard to metals, market analysts say that the dip was due to profit-taking ahead of Trump’s speech, as market players wait for hints on Trump’s fiscal stimulus plans. As for the dip in oil prices, market analysts blamed that on concerns that rising U.S. oil output will offset the positive effects of OPEC’s oil cut deal.
Another skittish European session – European equity indices started the session strong. However, we got a repeat performance of yesterday’s European session, since risk aversion returned and erased the gains from earlier.
- The pan-European FTSEurofirst 300 was down by 0.12% to 1,454.64
- The blue chip Euro Stoxx 50 was down by 0.20% to 3,305.50
- Germany’s DAX was down by 0.28% to 11,789.00
Market analysts attributed the earlier risk-on vibes to positive earnings results. As to why risk aversion returned later, that’s not very clear. Although skittishness ahead of Trump’s joint address to Congress was likely a factor.
The Donald speaks – U.S. President Donald Trump will be giving his joint address to the U.S. Congress later. However, we got an appetizer during the morning London session when a recorded interviewed was released by FOX news. Unfortunately, there wasn’t really anything new or market-moving in that interview, since Trump refrained from sharing the details of his tax plans. Although Trump did say that “money is going to come from a revved up economy,” referring to his planned military spending.
Hogg testifies – Charlotte Hogg testified before the Treasury Select Committee on her appointment as the BOE MPC’s new Deputy Governor for Markets and Banking. Most of the questions were about her credentials, as well as potential conflicts of interest, given that her brother is a director at Barclays.
However, there were also some interesting bits. With regard to her economic outlook, she did present some rather dovish feathers when she said that “households are beginning to face a squeeze on their incomes as the effect of the 18% depreciation of sterling since November 2015 feeds through.”
Hogg also added that the BOE’s forecasts assume “steadily slowing growth in consumption.” However, she personally can “envisage scenarios in which the reaction of consumption could be more sudden.” Other than that, she also said that the “future path of business investment is still unclear” after having fallen in the wake of the Brexit referendum. Hogg also implied that she’s ready to stand up to Carney, saying that: “I really do try and serve the objectives that I have been given and that means that if I agree I will agree but if I differ I will differ.”
Major Market Movers:
CHF & JPY – The risk-off vibes very likely sent safe-haven flows towards the yen and the Swissy, since the two were broadly higher against their peers.
USD/JPY was down by 11 pips (-0.10%) to 112.20, CAD/JPY was down by 23 pips (-0.27%) to 85.03, AUD/JPY was down by 13 pips (-0.16%) to 86.11
USD/CHF was down by 10 pips (-0.10%) to 1.0056, CAD/CHF was down by 20 pips (-0.27%) to 0.7621, EUR/CHF was down by 20 pips (-0.19%) to 1.0645
CAD – The Loonie lost ground across the board during today’s morning London session. Aside from the slide in oil prices, there wasn’t really anything going on for the Loonie, though.
USD/CAD was up by 24 pips (+0.18%) to 1.3195, EUR/CAD was up by 13 pips (+0.09%) to 1.3966, NZD/CAD was up by 36 pips (+0.39%) to 0.9501
- 1:30 pm GMT: Canada’s RMPI (1.2% expected, 6.5% previous) and IPPI (0.5% expected, 0.4% previous) readings will be released
- 1:30 pm GMT: Second reading for U.S. Q4 GDP growth (upgrade from 1.9% to 2.1% expected) and PCE price index (steady at 2.1% expected)
- 2:45 pm GMT: Chicago PMI (53.0 expected, 50.3 previous)
- 3:00 pm GMT: CB’s U.S. consumer confidence index (111.0 expected, 111.8 previous)
- 8:00 pm GMT: Philadelphia Fed President Patrick Harker has a speech
- 9:00 pm GMT: The Donald will speak before the U.S. Congress
- 10:30 pm GMT: AIG’s Australian manufacturing index (51.2 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!