- Italian industrial new orders m/m: -2.9% vs. 3.0% previous
- Italian industrial sales m/m: -3.5% vs. 2.5% previous
- BOC Governor Stephen Poloz will speak later
- Three voting FOMC members have speeches, including Fed Head Yellen herself
Not much on the docket for today’s morning London session. As such, price action on most pairs was rather choppy. The yen was an exception, however, since falling bond yields gave the yen a bullish boost, despite signs of risk-taking in the European equities market.
Scottish referendum debate resumes – Last week, the Scottish Parliament decided to delay the debate on whether or not to back another Scottish independence referendum. And the reason cited for the delay was the terrorist attack in London. Well, the debate is scheduled to resume today and a vote as also expected by today as well.
Optimism returns – After yesterday’s feelings of doom and gloom, signs of risk-taking began to return in Europe, since European equity indices were mostly in the green.
- The pan-European FTSEurofirst 300 was up by 0.27% to 1,483.06
- Germany’s DAX was up by 0.62% to 12,070.50
- The blue-chip Euro Stoxx 50 was up by 0.31% to 3,446.50
U.S. equity indices also got some support from the returning risk-on vibes.
- S&P 500 futures were up by 0.07% to 2,340.25
- Nasdaq futures were up by 0.13% to 5,386.12
Market analysts say that positive news for individual companies improved overall risk sentiment in the European equities market.
Bond yields drop – European equity indices may have been higher, but risk events this week likely sustained safe-haven demand for bonds, sending bond yields lower.
- French 10-year bond yield down by 3.78% tp 0.943%
- German 10-year bond yield down by 4.42% to 0.386%
- U.K. 10-year bond yield down by 3.27% to 1.214%
- U.S. 10-year bond yield down by 0.16% to 2.371%
- Japanese 10-year bond yield down by 4.92% to 0.058%
Major Market Mover(s):
JPY – Volatility and directional movement were both in short supply for most pairs during the morning London session. The yen was a clear exception, however, since it gained strength across the board and at decent volatility levels to boot.
Interestingly enough, risk appetite was the dominant sentiment in Europe. Bond yields did fall, though, and that was very likely taken as a signal by yen bulls to charge in.
USD/JPY was down by 28 pips (-0.26%) to 110.45, EUR/JPY was down by 31 pips (-0.26%) to 119.86, CHF/JPY was down by 25 pips (-0.23%) to 111.98
GBP – The pound had some two-way action during the session. It first gained strength during the early half of the session for no apparent reason. Although profit-taking by shorts ahead of Brexit D-Day is a possibility.
After that, the pound began getting sellers and closed out the session mostly lower. There were also no direct catalysts, but it’s possible that the pound got weighed down by the upcoming Scottish Parliamentary debate and vote on backing another Scottish referendum.
GBP/USD was up by 36 pips (+0.29%) to 1.2596 earlier but closed the session 6 pips lower (-0.05%) to 1.2553, GBP/JPY was up by 31 pips (+0.23%) to 139.39 earlier but closed the session 44 pips lower (-0.32%) to 138.63, GBP/NZD was up by 32 pips (+0.18%) to 1.7936 earlier but closed the session 27 pips lower (-0.16%) to 1.7876
- 12:30 pm GMT: U.S. goods trade balance (-$66.6 billion expected, -$68.6 billion previous)
- 12:30 pm GMT: U.S. wholesale inventories (-0.2% previous)
- 1:00 pm GMT: S&P/CS U.S. composite HPI (5.60% expected, 5.58% previous)
- 2:00 pm GMT: CB consumer confidence
- 2:10 pm GMT: BOC Governor Stephen Poloz has a speech
- 4:50 pm GMT: Fed Head Yellen is scheduled to speak
- 5:00 pm GMT: Dallas Fed President Robert Kaplan will speak
- 8:30 pm GMT: Fed Governor Jerome H. Powell will give a speech
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!