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Today’s early European session was another steady session, with many currency pairs trading sideways. Aussie and the Kiwi pairs were an exception, though, since both the Aussie and the Kiwi got dumped at the start of the session. Other than those two, the pound is also noteworthy, since it was range-bound for the most part but got buyers near the end.

  • Italy on Liberation Day holiday today
  • U.K. public sector net borrowing: £4.4B vs. £2.6B expected, -£0.7B previous

Major Events/Reports:

Commodities rise, but precious metals fall (again) – Today’s price action in the commodities market was a repeat of yesterday’s morning London session, since commodities broadly extended their gains, but precious metals got slapped lower yet again.

Oil benchmarks were in the green (again).

  • U.S. crude oil was up by 0.16% to $49.31 per barrel
  • Brent crude oil was up by 0.23% to $52.25 per barrel

Meanwhile, base metals were mixed but mostly in positive territory (again).

  • Copper was up by 0.62% to $2.581 per pound
  • Zinc was up by 0.27% to $2,604.50 per dry metric ton

As for precious metals, they were the exception since they got a good hammering (again).

  • Gold was down by 0.44% to $1,271.82 per troy ounce
  • Silver was down by 0.32% to $17.874 per troy ounce

Market analysts still blame the weakness of precious metals on reduced safe-haven demand because of the persistent risk-on vibes.

Meanwhile, demand for base metals are still being attributed by market analysts to the general risk-on vibes.

As for oil, market analysts acknowledge the soft rise in oil prices, but can’t really pinpoint a catalyst. The U.S. dollar index was down slightly by 0.04% to 98.87 for the day by the time the session ended, though. And that probably gave a little boost to demand for oil and most other commodities for that matter.

Another round of risk-taking – Risk appetite was still the dominant sentiment in today’s European session. Compared to yesterday’s European session, however, risk-taking was noticeably more subdued.

  • The pan-European FTSEurofirst 300 was up by 0.32% to 1,521.98
  • Germany’s DAX was up by 0.10% to 12,467.00
  • The blue-chip Euro Stoxx 50 was up by 0.39% to 3,588.50

U.S. equity futures were also in positive territory, hinting that the risk-on mood may continue into the U.S. session.

  • S&P 500 futures were up by 0.19% to 2,374.50
  • Nasdaq futures were up by 0.22% to 5,516.12

Market analysts are still attributing the overall risk-on vibes to relief over the outcome of the French Presidential elections and cautious optimism ahead of Trump tax plans.

However, some market analysts also point to positive earnings reports for European companies as the main reason for optimism in Europe.

Major Market Mover(s):

GBP – Price action on the pound was mixed and a bit choppy, with many pound pairs range-bound for most of the session. However, pound pairs got boost near the end of the session, which made the pound the king of pips (or queen if you like) during the session. There was no apparent catalyst for the late bullish boost, though.

GBP/USD was up by 15 pips (+0.12%) to 1.2823, GBP/AUD was up by 81 pips (+0.48%) to 1.7020, GBP/NZD was up by 78 pips (+0.43%) to 1.8411

AUD & NZD – Despite the overall appetite for risk and commodities rally, the Aussie and the Kiwi, which are both higher-yielding comdolls, got an early bearish kick. There was no clear reason for this bearish move and most market analysts are just ignoring this wonky price action.

However, both the Aussie and the Kiwi have been broadly weaker since Trump slapped a tariff on Canadian lumber earlier. Perhaps market players are worried that Trump would do the same to Australia and New Zealand or they’re just worried about Trump’s apparently willingness to use trade as a weapon? Trump did supposedly want to slap an import tax on dairy and other Canadian commodities, which may have made Kiwi and Aussie bulls nervous as well.

Anyhow, price action on most Kiwi and Aussie pairs steadied after that, and some pairs even tried to claw their way higher, likely because of bullish pressure from the risk-on mood and rising commodities.

AUD/USD was down by 26 pips (-0.35%) to 0.7533, AUD/CHF was down by 29 pips (-0.39%) to 0.7491, AUD/CAD was down by 20 pips (-0.19%) to 1.0224

NZD/USD was down by 20 pips (-0.29%) to 0.6965, NZD/CAD was down by 13 pips (-0.13%) to 0.9451, NZD/CHF was down by 23 pips (-0.33%) to 0.6925

Watch Out For:

  • 1:00 pm GMT: U.S. HPI (0.1% expected, 0.0% previous)
  • 1:00 pm GMT: S&P/CS HPI Composite (5.77% expected, 5.73% previous)
  • 2:00 pm GMT: CB’s U.S. consumer confidence index (122.5 expected, 125.6 previous)
  • 2:00 pm GMT: U.S. new home sales (590K expected, 592K previous)
  • 2:00 pm GMT: Richmond manufacturing index (18 expected, 22 previous)