- Swiss KOF leading indicator: 107.6 vs. 105.8 expected, 106.9 previous
- Euro Zone industrial sentiment: 1.2 vs. 1.4 expected, 1.3 previous
- Euro Zone consumer sentiment: unchanged at -5 as expected
- Consumer inflation expectation in the Euro Zone: 15.3 vs. 14.5 previous
- Selling price expectation in the Euro Zone: 9.8 vs. 9.0 previous
- Spanish HICP m/m: 1.1% vs. 1.5% expected, -0.3% previous
- Spanish HICP y/y: 2.1% vs. 2.7% expected, 3.0% previous
- German HICP y/y: 1.5% vs. 1.9% expected, 2.2% previous
- German HICP m/m: 0.1% vs. 0.5% expected, 0.7% previous
The pound was broadly in demand during the session while the euro retreated. Meanwhile, recovering iron ore prices gave the Aussie a bullish boost.
Commodities clobbered – Commodities staged a broad-based retreat during today’s morning London session.
Precious metals were in negative territory.
- Gold was up by 0.33% to $1,249.60 per troy ounce
- Silver was up by 0.38% to $18.182 per troy ounce
Base metals, meanwhile, were mixed, but mostly down.
- Copper was down by 0.32% to $2.669 per pound
- Nickel was down by 0.37% to $9,990.00 per dry metric ton
As for oil benchmarks, they were also leaking red.
- U.S. crude oil was down by 0.12% to $49.45 per barrel
- Brent crude oil was down by 0.30% to $52.38 per barrel
Commodities probably got hammered by the Greenback’s bounce, which I’ve been noting in the previous sessions. And for reference, the U.S. dollar index was up by 0.19% to 99.97 for the day when the session ended.
Oh, for the newbies out there, globally-traded commodities are usually prices in U.S. dollars.
A stronger Greenback therefore means that commodities become relatively more expensive, especially if you’re holding another currency that’s depreciating against the Greenback.
Market analysts had difficulty pinpointing the reason for iron ore’s strength, given the broad-based commodities slide and buildup in Chinese inventories.
However, some market analysts tried to pin iron ore’s strength on higher Chinese steel prices and signs that demand for high grade iron ore is still strong.
Major Market Mover(s):
GBP – The pound is still range-bound if you take yesterday’s price action. Nonetheless, the pound did get bid higher pretty much across the board during the session.
There were no apparent catalysts, though, but it’s possible that further short-covering gave the pound a lift ahead of the white paper for the so-called “Great Repeal Bill.”
GBP/USD was up by 37 pips (+0.30%) to 1.2465, GBP/NZD was up by 60 pips (+0.34%) to 1.7765, GBP/JPY was up by 49 pips (+0.36%) to 138.55
EUR – The euro plunged immediately after the morning London session rolled around. After that, most euro pairs spent the rest of the session by milling about in tight ranges.The euro has been ignoring economic reports for the past few months, but some market analysts say that the weaker Spanish inflation readings weakened expectations that the ECB may be tightening soon, pulling the rug from under the euro.
EUR/USD was down by 24 pips (-0.23%) to 1.0736, EUR/CHF was down by 25 pips (-0.24%) to 1.0697, EUR/GBP was down by 44 pips (-0.51%) to 0.8613
AUD – The Aussie gave the pound a run for its money, but ultimately had to settle for second place. Risk sentiment in Europe was mixed, and European equities were essentially flat.
Also, commodities were in retreat. But as I noted earlier, iron ore was a clear exception. And since iron ore is Australia’s main commodity export, the recovery in iron ore price very likely gave the Aussie a boost.
AUD/USD was up by 17 pips (+0.23%) to 0.7673, AUD/NZD was up by 31 pips (+0.28%) to 1.0938, AUD/JPY was up by 26 pips (+0.31%) to 85.30
- 12:30 pm GMT: U.S. final Q4 GDP reading (upgrade to 2.0% from 1.9% expected)
- 12:30 pm GMT: U.S. initial jobless claims (244K expected, 261K previous)
- 2:30 pm GMT: Canadian RMPI (0.8% expected, 1.7% previous) and IPPI (0.4% expected, same as previous)
- 3:00 pm GMT: Dallas Fed President Robert Kaplan will speak