- Euro Zone retail PMI: 49.9 vs. 50.1 previous
- Euro Zone Sentix investor confidence: 20.7 vs. 18.5 expected, 17.4 previous
Forex price action was relatively subdued and choppy today. However, there was some action, since the euro got slammed by sellers when Juppe announced that he was not running for the French presidency.
Allain Juppe will not run – As I noted in last Friday’s morning London session recap and in the latest Top Forex Market movers of the week, the euro got a bullish boost last Friday, thanks to poll results showing that the anti-EU Le Pen may be eliminated during the first round of the French elections if Alain Juppe replaces embattled Fillon.
Unfortunately (for euro bulls), Alain Juppe announced earlier today that:
“I confirm, once and for all, that I will not be a candidate in the election for the presidency of the republic.”
Commodities retreat, but precious metals resist – Commodities got routed during Monday’s morning London session. Precious metals were a clear exception though.
Based metals fell pretty hard.
- Copper was down by 1.28% to $2.662 per pound
- Zinc was down by 1.93% to $2,731.75 per dry metric ton
Oil benchmarks also took hits.
- U.S. crude oil was down by 0.58% to $53.02 per barrel
- Brent crude oil was down by 0.57% to $55.58 per barrel
Precious metals got some buyers, however.
- Gold was up by 0.49% to $1,232.55 per troy ounce
- Silver was up by 0.81% to $17.883 per troy ounce
Commodities were likely suffering from the Greenback’s strength, which makes commodities relatively more expensive. And for reference, the U.S. dollar index was up by 0.24% to 101.59 for the day when the session ended.
Aside from Greenback strength taking its toll, market analysts also pinned the weakness of base metals on worries over lower demand from China. Oil, meanwhile, also took a hit from worries over Chinese demand, as well as doubts that Russia is complying with its obligation to the OPEC oil cut deal, market analysts say.
As for precious metals, they were able to go against the flow likely because of safe-haven flows. Europe got hit by a bout of risk aversion after all.
Gloomy mood to start the week – Europe is starting the week on a downbeat note, with the major European equity indices in the red.
- The pan-European FTSEurofirst 300 was down by 0.43% to 1,474.55
- Germany’s DAX was down by 0.44% to 11,975.00
- The blue-chip Euro Stoxx 50 was down by 0.33% to 3,391.50
U.S. equity futures also suffered.
- S&P 500 futures were down by 0.25% to 2,375.25
- Nasdaq futures were down by 0.17% to 5,362.62
Market analysts say that the main source of the feelings of gloom and doom in Europe is Deutsche Bank. As for specifics, the troubled Deutsche Bank, Germany’s largest bank, announced earlier today that it plans to boost its finances by selling 8 billion euro worth of new shares. This is after suffering losses last year and getting slapped with a $7.2 billion fine by the U.S. DOJ, due to the bank’s improper sale of mortgage-backed securities.
Mining and energy companies were also major losers, so the commodities rout likely soured overall risk sentiment as well.
Major Market Movers:
EUR – The euro actually had a good start, likely because of the risk-off vibes in Europe. However, it later got swamped by sellers when Juppe announced that he has no plans to run in the race for the French presidency.
EUR/USD was down by 11 pips (-0.10%) to 1.0588 after climbing 42 pips (+0.40%) to 1.0640 earlier, EUR/AUD was down by 45 pips (-0.32%) to 1.3937 after climbing 34 pips (+0.24%) to 1.4015 earlier, EUR/CAD was down by 33 pips (-0.23%) to 1.4176 after climbing 30 pips (+0.21%) to 1.4239 earlier
AUD – Despite crumbling commodity prices and the risk-off vibes, the Aussie emerged as the best-performing currency of the session. There was no clear reason for this wonky price action. However, it’s possible that we’re seeing some preemptive moves ahead of the RBA’s monetary policy statement. By the way, Forex Gump has a write-up on that, so read it here, if you haven’t already.
AUD/USD was up by 17 pips (+0.22%) to 0.7596, AUD/CHF was up by 21 pips (+0.28%) to 0.7669, AUD/NZD was up by 21 pips (+0.20%) to 1.0817
- 3:00 pm GMT: U.S. factory orders (1.0% expected, 1.3% previous)
- 8:00 pm GMT: Minneapolis Fed President Neel Kashkari will speak
- 10:30 pm GMT: AIG’s Australian construction index
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!