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The pound probably got a boost from the latest U.K. election polls. Meanwhile, the returning risk-off vibes likely stoked demand for the yen. As a result, the pound and the yen battled for supremacy during the morning London session while the euro steadily bled out during course of the session.

Other currencies were showing a bit of movement as well. The Greenback, for example, got some soft demand, probably because of cautious optimism ahead of Trump’s tax plan announcement later. Meanwhile, the comdolls were probably weighed down by the commodities slide.

  • INSEE French consumer confidence: steady at 100 as expected
  • UBS Swiss consumption indicator: 1.50 vs. 1.45 previous
  • Credit Suisse economic expectations: 22.2 vs. 29.6 previous
  • Trump’s tax plan announcement later

Major Events/Reports:

U.K. election polling update – Two polls were released today (so far). The first poll was conducted by Ipsos Mori for the London Evening Standard and was released during the late Asian session before the morning London session even rolled around.

And according to Ipsos Mori’s latest poll results, the Conservative Party captured 49% of voting intentions. Meanwhile, support for the Labour Party waned.

Not only that, the Ipsos Mori poll also showed that Theresa May was viewed as the more capable person for the role of PM.

Moving on, the other poll, which was released during the session, was conducted by Panelbase. And the results of this poll also showed that 49% intend to vote for the Conservative Party. Labour, meanwhile, garnered 27% of voting intentions, which is 1% more compared to the Ipsos Mori poll.

Commodities fall, base metals shine – Commodities were broadly in retreat during the morning London session. Interestingly enough, base metals resisted the bearish tide and many were even printing some gains.

Oil benchmarks were in negative territory.

  • U.S. crude oil was down by 0.67% to $49.23 per barrel
  • Brent crude oil was down by 0.68% to $52.21 per barrel

Precious metals were also down, despite signs of returning risk aversion.

  • Gold was down by 0.13% to $1,265.60 per troy ounce
  • Silver was down by 0.15% to $17.632 per troy ounce

Base metals were mixed but mostly in the green (interestingly enough).

  • Copper was up by 0.15% to $2.594 per pound
  • Zinc was up by 0.78% to $2,625.25 per dry metric ton

The broad-based commodities slide was likely due to the Greenback’s recent rise. And for reference, the U.S. dollar index was up by 0.21% to 98.93 for the day when the session was about to end.

Demand for base metals is kinda weird, though, and market analysts couldn’t really pinpoint a fundamental catalyst. However, it’s possible that demand for base metals was being driven by speculation that Trump’s tax plan announcement wouldn’t disappoint.

Skittish risk sentiment in Europe – European bourses were initially in the green, but it soon became clear that risk aversion was gaining ground as European equity indices began turning red one after the other.

  • The pan-European FTSEurofirst 300 was flat at 1,520.30 after climbing to 1,521.63 earlier
  • Germany’s DAX was down by 0.10% to 12,455.00
  • The blue-chip Euro Stoxx 50 was down by 0.33% to 3,572.50

The earlier bout of risk appetite was attributed by market analysts to another round of positive earnings reports for European companies.

As for the skittishness later, that’s less clear, although profit-taking ahead of Trump’s highly-anticipated tax plan announcement is a very probable reason.

Major Market Mover(s):

JPY – The yen was in demand during the session, very likely because of safe-haven flows due to the returning risk-off vibes. In fact, the yen managed to edge out the pound and come out on top during the session.

USD/JPY was down by 10 pips (-0.10%) to 111.33, CAD/JPY was down by 15 pips (-0.18%) to 81.93, CHF/JPY was down by 15 pips (-0.14%) to 111.90

GBP – Price action was a bit rough, but the pound did end up as the second-strongest currency of the session, probably because of the latest batch of U.K. election polls that are giving the Conservative Party an even wider lead against Labour.

GBP/USD was up by 8 pips (+0.07%) to 1.2827, GBP/CAD was up by 26 pips (+0.15%) to 1.7430, GBP/AUD was up by 38 pips (+0.23%) to 1.7141

EUR – The euro started sliding right from the get-go. There was no clear catalyst, but profit-taking by euro longs is a possibility, especially with Trump’s tax plan announcement coming up.

EUR/USD was down by 31 pips (-0.29%) to 1.0893, EUR/JPY was down by 46 pips (-0.37%) to 121.29, EUR/CHF was down by 26 pips (-0.24%) to 1.0837

Watch Out For:

  • 12:30 pm GMT: Headline (0.0% expected, 2.2% previous) and core (-0.3% expected, 1.7% previous) readings for Canadian retail sales
  • 2:30 pm GMT: U.S. crude oil inventories (-1.1M expected, -1.0M previous)
  • 5:30 pm GMT: Trump expected to announce his tax plans