Article Highlights

  • French final non-farm payrolls q/q: unchanged at 0.4% as expected
  • French BOF business sentiment: 104 vs. 102 expected, 101 previous
  • Swiss jobless rate: steady at 3.3% as expected
  • ECB maintains refinancing rate at 0.00%
  • Marginal lending rate maintained at at 0.25%
  • Likewise, deposit rate maintained at -0.40%
  • ECB maintains monthly asset purchases of €80B until end of month
  • QE extension until December 2017 (or beyond) at €60B per month also maintained
  • ECB reiterates that rates are “to remain at present or lower levels for an extended period of time”
  • ECB press conference coming up; watch it live here
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The euro was the top-performing currency during today’s morning London session. Although that may change, since market players are now waiting for the ECB’s presser. The Loonie, meanwhile, got dragged lower by another day of plunging oil prices.

Major Events/Reports:

ECB monetary policy decision – As expected, the ECB decided to maintain its current monetary policy, so all rates were unchanged while monthly asset purchases will continue at €80 billion until the end of the month. After that, asset purchases will continue at a monthly rate of €60 billion “until the end of December 2017, or beyond, if necessary.”

The ECB also said that it “continues to expect the key ECB interest rates to remain at present or lower levels for an extended period of time, and well past the horizon of the net asset purchases.”

Other than that, the ECB is also still giving the warning that:

“If the outlook becomes less favourable, or if financial conditions become inconsistent with further progress towards a sustained adjustment in the path of inflation, the Governing Council stands ready to increase the programme in terms of size and/or duration.”

Truth be told, the ECB’s March press statement is almost an exact copy of its January press statement. The only difference being that the phrase “until the end of March 2017” was changed to “until the end of this month.” That phrase, of course, refers to the ECB’s asset purchases at the monthly pace of €80 billion.

Anyhow, the decision to hold steady was pretty much expected by the market, so forex traders are now waiting for what Draghi and company have to say in the upcoming ECB press conference. By the way, you can watch the ECB press conference live here.

Commodities carnage – Commodities were broadly in retreat during the morning London session, with oil benchmarks leading the way.

Oil benchmarks plunged pretty hard today after plunging very hard yesterday.

  • U.S. WTI crude oil was down by 2.33% to $49.11 per barrel
  • Brent crude oil was down by 2.07% to $52.01 per barrel

The risk-off vibes didn’t give precious metals any support at all.

  • Gold was down by 0.41% to 1,204.45 per troy ounce
  • Silver was down by 0.67% to 17.182 per troy ounce

Base metals were also hit hard across the board.

  • Copper was down by 1.21% to $2.569 per pound
  • Nickel was down by 0.98% to $10,072.50 per dry metric ton

The Greenback had a mixed performance during the morning London session. And the U.S. dollar index was slightly down by 0.08% to 102.03 for the day when the session ended. However, market analysts blamed the broad-based slide in commodities, especially metals, on higher rate hike expectations and the Greenback’s jump when the ADP report was released yesterday.

Oil benchmarks were plunging extra hard, though, and market analysts are still blaming that on yesterday’s 8.2 million barrel surge in U.S. oil inventories, bringing U.S. oil stockpiles to a record high of 528.4 million. This was apparently taken as a sign that the oil glut is still alive and well.

Risk aversion persists in Europe – Another bout of risk aversion plagued European markets today, so the major European equity indices were in the red yet again.

  • The pan-European FTSEurofirst 300 was down by 0.38% to 1,463.55
  • Germany’s DAX was down by 0.22% to 11,941.50
  • The blue-chip Euro Stoxx 50 was down by 0.15% to 3,389.00

U.S. equity futures were also weighed down by all that risk aversion.

  • S&P 500 futures were down by 0.20% to 2,359.25
  • Nasdaq futures were down by 0.14% to 5,355.63

Market analysts noted that energy shares were the biggest drags, so another day of plunging oil prices is apparently to blame for the persistent risk-off vibes.

Major Market Movers:

CAD – Another day of plunging oil prices was very likely taking its toll on the Loonie. After all, the Loonie was not only the weakest currency of the session, it also happened to be the weakest currency of the day.

USD/CAD was up by 36 pips (+0.27%) to 1.2422, NZD/CAD was up by 48 pips (+0.51%) to 0.9347, AUD/CAD was up by 23 pips (+0.23%) to 1.0164

EUR – The risk-off vibes likely gave the lower-yielding euro an early boost. The euro’s price action later became mixed and choppy, though, probably because forex traders are now waiting for the ECB’s presser.

EUR/USD was up by 23 pips (+0.22%) to 1.0558, EUR/JPY was up by 35 pips (+0.30%) to 121.00, EUR/CAD was up by 70 pips (+0.50%) to 1.4278

Watch Out For:

  • 1:30 pm GMT: ECB press conference; watch it live here
  • 1:30 pm GMT: Canada’s NHPI (0.1% expected, same as previous) and capacity utilization rate (82.6% expected, 81.9% previous)
  • 1:30 pm GMT: Readings for U.S. initial jobless claims (239K expected, 223K previous) and import prices (0.1% expected, 0.4% previous)

See also:

Asian Session Recap 
U.S. Session Recap

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