- German ZEW economic sentimetn: 19.5 vs. 14.8 expected, 12.8 previous
- Euro Zone ZEW economic sentiment: 26.3 vs. 25.0 expected, 25.6 previous
- The U.K.’s CPI m/m: 0.4% vs. 0.3% expected, 0.7% previous
- The U.K.’s CPI y/y: 2.3% as expected, same as previous
- U.K. PPI input m/m: 0.4% vs -0.5% expected, -0.1% previous
- U.K. PPI output m/m: 0.4% vs. 0.2% expected, 0.2% previous
- Euro Zone industrial production m/m: -0.3% vs. 0.1% expected, 0.3% previous
- Euro Zone industrial production y/y: 1.2% vs. 1.9% expected, 0.2% previous
The European currencies (EUR, GBP, & CHF) were fighting it out for the honor of being the one currency to rule them all during the morning London session. Meanwhile, the Kiwi quietly extended its losses.
Macron’s lead widens – Opinionway released the latest results of its daily poll for the French presidential elections earlier. And the latest numbers show that the anti-EU Le Pen only has a one-point lead against Macron in the first round of the elections. This is unchanged from yesterday’s poll results.
In the second rounf of the elections, however, voting intentions widened in favor of Macron. Macron now holds 63% while Le Pen has 37%. Yesterday, it stood at 62% for Macron and 38% for Le Pen.
U.K. CPI beats expectations – According to the U.K. Office for National Statistics (ONS), CPI increased by 0.4% month-on-month in March, which is a tick higher than consensus. Unfortunately, it is a slower reading compared to February’s +0.7%.
Year-on-year, CPI advanced by 2.3%, which is in-line with expectations and matches February’s reading. Also worth noting that the 2.3% rate of annual increase is the fastest since April 2009, which is great. In addition, the 2.3% increase exceeds the BOE’s forecast of 2.1%. Moreover, this marks the second straight month that CPI was above the BOE’s 2.0% inflation target.
According to the details of the CPI report, “Rising prices for food, alcohol and tobacco, clothing and footwear, miscellaneous goods and services were the main upward contributors” to the steady year-on-year reading.
Meanwhile, “transport, particularly air fares and, to a lesser extent, motor fuels” were the main drags.
Commodities recover, but oil sinks – In a reversal of fortune, commodities staged a broad-based recovery during today’s morning London session while oil took a tumble.
Precious metals got some buyers.
- Gold was up by 0.51% to $1,260.25 per troy ounce
- Silver was up by 0.13% to $17.938 per troy ounce
Base metals also felt some love.
- Copper was up by 0.12%% to $2.607 per pound
- Nickel was up by 0.22% to $10,112.50 per dry metric ton
Oil benchmarks, meanwhile, was leaking some red.
- U.S. crude oil was down by 0.08% to $53.04 per barrel
- Brent crude oil was down by 0.096% to $55.93 per barrel
The U.S. dollar index was down by 0.21% to 100.73 for the day when the session ended. And that may have enticed some bargain buyers to come out of the woods after yesterday’s commodities rout. After all, a weaker dollar means that globally-traded commodities, which are priced in U.S. dollars, become relatively cheaper.
Oil was on the defensive, though. And market analysts attributed that to profit-taking after yesterday’s oil rally and ahead of U.S. oil inventory data.
Risk aversion dominates, but sentiment improving – European equity indices opened in the red and then sank even deeper before finding support and clawing their way back up.
- The pan-European FTSEurofirst 300 was already up by 0.12% to 1,503.01 after being in the red earlier
- Germany’s DAX recouped was still down by 0.10% to 12,188.50 but off its session low at 12,145.50
- The blue-chip Euro Stoxx 50 was down by 0.22% to 3,477.50 but off its session low at 3,458.50
Market analysts blamed the overall risk aversion to the slump in banking and tech shares, thanks to negative news for both sectors. As for later signs of recovering risk sentiment, that was likely due to the commodities recovery, since mining shares were on the rise.
Major Market Mover(s):
EUR & CHF – The prevalence of risk aversion for most of the session very likely gave the lower-yielding euro and the safe-haven Swissy a boost.
The euro ended up being the one currency to rule them all, though, very likely because it got extra lift from easing jitters with regard to the French presidential elections. The Swissy, meanwhile, only came in at third place, since it got beaten back by the pound.
EUR/USD was up 27 by pips (+0.26%) to 1.0617, EUR/CHF was up 13 by pips (+0.12%) to 1.0692, EUR/NZD was up 50 by pips (+0.32%) to 1.5286
USD/CHF was down by 12 -pips (0.13%) to 1.0071, AUD/CHF was down by 5 pips (-0.06%) to 0.7562, CAD/CHF was down by 10 pips (-0.13%) to 0.7561
GBP – The pound started the session on a weak footing, probably because of jitters ahead of the U.K.’s CPI report.
No worries, though, since the U.K.’s CPI report came in better-than-expected, since the monthly reading managed to beat consensus while the annual reading exceeded the BOE’s own forecasts.
GBP/USD was up by 21 pips (+0.17%) to 1.2436, GBP/JPY was up by 30 pips (+0.22%) to 137.53, GBP/NZD was up by 41 pips (+0.23%) to 1.7907
NZD – The Kiwi extended its losses during the session and was the worst-performing currency of them all. Heck, the Kiwi is even on track to be the worst-performing currency of the day if this keep up.
There were no apparent catalysts, but it is likely that the risk-off vibes continued to weigh down on the higher-yielding Kiwi.
NZD/USD was down by 5 pips (-0.07%) to 0.6944, NZD/CAD was down by 6 pips (-0.07%) to 0.9248, NZD/CHF was down by 14 pips (-0.20%) to 0.6993
Watch Out For:
- 2:00 pm GMT: JOLTS U.S. jobs openings (5.59M expected, 5.63M previous)
- 5:45 pm GMT: Minneapolis Fed President Neel Kashkari will speak