Article Highlights

  • German flash manufacturing PMI: 58.3 vs. 56.6 expected, 56.8 previous
  • German flash services PMI: 55.6 vs. 54.5 expected, 54.4 previous
  • French flash manufacturing PMI: 53.4 vs. 52.4 expected, 52.2 previous
  • French flash services PMI: 58.5 vs. 56.2 expected, 56.4 previous
  • Euro Zone flash manufacturing PMI: 56.2 vs. 55.3 expected, 55.4 previous
  • Euro Zone flash services PMI: 56.5 vs. 55.4 expected, 55.5 previous
  • U.K. BBS mortgage approvals: 42.6K vs. 44.9K expected, 44.1K previous
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The safe-haven yen and Swissy, together with the lower-yielding euro, were fighting it out for the top spot during today’s morning London session, thanks to the risk-off vibes. The Greenback, meanwhile, was in retreat, likely because of jitters ahead of the vote on the U.S. healthcare bill.

Major Events/Reports:

Oil gets some buyers – Commodities were mixed for the session, but oil benchmarks got bid higher.

  • U.S. WTI crude oil was up by 0.67% to $48.02 per barrel
  • Brent crude oil was up by 0.55% to $50.84 per barrel

Oil’s rise was apparently due to reports that Saudi Arabia slashed its oil exports to the U.S. by 300,000 barrels per day. In addition, there were reports that despite the rise in U.S. oil rigs, U.S. oil output may not be as large yet, since a significant number of these oil rigs are apparently still unfinished.

Trump approves Keystone XL pipeline – There were rumors floating around earlier that Trump would finally give the Keystone XL pipeline the green light earlier. And as it turns out, those rumors were true since TransCanada has announced that it has been issued a Presidential Permit to start constructing the Keystone XL pipeline that will link Canadian oil to U.S. refineries.

The news didn’t see to have a lot of impact on the Loonie’s price action, however.

Risk aversion in Europe – There were signs of moderate risk-taking in Europe today, since European equities were in the green.

  • The pan-European FTSEurofirst 300 was down by 0.30 to 1,482.53
  • Germany’s DAX was down by 0.20% to 12,016.00
  • The blue-chip Euro Stoxx 50 was down by 0.45% to 3,436.00

Market analysts blamed the risk-off mood on jitters ahead of the vote on the U.S. healthcare bill later today after it was delayed yesterday.

Major Market Mover(s):

CHF, JPY, & EUR – The safe-haven yen and Swissy were in demand during the morning London session, apparently thanks to the risk-off mood ahead of the vote on the U.S. healthcare bill.

The lower-yielding euro, was also in demand, also likely because of the risk-off vibes. After all, the euro is a major funding currency so it kinda acts like a safe-haven, even though it’s technically not a safe-haven currency. Although it’s possible that the positive PMI readings during the session gave the euro a boost.

EUR/USD was up by 43 pips (+0.40%) to 1.0806, EUR/CAD was up by 42 pips (+0.30%) to 1.4431, EUR/NZD was up by 27 pips (+0.17%) to 1.5408

GBP/JPY was down by 22 pips (-0.16%) to 138.66, CAD/JPY was down by 18 pips (-0.21%) to 83.09, AUD/JPY was down by 30 pips (-0.36%) to 84.47

GBP/CHF was down by 30 pips (-0.24%) to 1.2390, AUD/CHF was down by 32 pips (-0.43%) to) to 0.7549, NZD/CHF was down by 10 pips (-0.15% 0.6954

USD – The Greenback was on the back foot for almost the entire London session. There were no apparent catalysts, but it’s highly likely that worries over the U.S. healthcare bill (aka Ryancare) were weighing down on the Greenback.

After all, the current narrative is that the vote on the U.S. healthcare bill is a test of Trump’s influence over his own party and Trump’s ability to push through his plans. And these plans happen to include his fiscal stimulus plans.

USD/JPY was down by 34 pips (-0.31%) to 110.98, USD/CAD was down by 14 pips (-0.11%) to 1.3354, USD/CHF was down by 38 pips (-0.39%) to 0.9917

Watch Out For:

  • 12:30 pm GMT: Canada’s CPI report will be released (0.2% expected for headline reading, 0.9% previous)
  • 12:30 pm GMT: Headline (1.1% expected, 2.0% previous) and core (0.5% expected, 0.0% previous) readings for U.S. durable goods orders
  • 1:45 pm GMT: Markit’s U.S. flash manufacturing PMI (54.9 expecte, 54.2 previous)
  • 1:45 pm GMT: Markit’s U.S. flash services PMI (53.9 expected, 53.8 previous)

See also:

Asian Session Recap 
U.S. Session Recap

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