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The Aussie and the yen had a reversal of fortunes during the morning London session. Specifically, the Aussie, one of the two big losers of the Asian session, managed to stage a recovery. Meanwhile, the yen, which was the top dog of the previous session, ended up at the bottom.

As for the other currencies, the Greenback was showing signs of strength ahead of the NFP report.  The pound, the Loonie, and the Swissy were trading sideways and mixed, the euro was also mixed, and the Kiwi was actually the one currency to rule them all during the session.

  • SNB foreign currency reserves: CHF 696B vs. CHF 683B previous
  • Euro Zone retail PMI: 52.7 vs. 49.5 previous
  • NFP report coming up
  • Canada’s jobs report also on the lineup
  • Fed speakers later, including Fed Head Yellen herself

Major Events/Reports:

NFP Friday!

Today is another NFP Friday! As such, forex traders hunkered down ahead of the NFP report, resulting in subdued directional movement and volatility, which caused many currency pairs to trade sideways.

By the way, if you’re planning to trade the April NFP report and need to get up to speed on what happened last time and what’s expected this time, then make sure read up on Forex Gump’s Forex Preview here.

Commodities recover

After being gutted yesterday and then stomped some more during the earlier Asian session, commodities managed to stage a broad-based recovery during the morning London session.

Precious metals led the way, probably because of the risk-off vibes.

  • Gold was up by 0.49% to $1,234.79 per troy ounce
  • Silver was up by 0.46% to $16.378 per troy ounce

Base metals were mostly in the green.

  • Copper was up by 0.22% to $2.517 per pound
  • Zinc was up by 0.06% to $2,573.25 per dry metric ton

Oil benchmarks were mixed, with U.S. WTI slightly down.

  • U.S. WTI crude oil was down by 0.04% to $45.50 per barrel
  • Brent crude oil was up by 0.27% to $48.51 per barrel

The U.S. dollar index was actually up by 0.17% to 98.78 for the day when the session ended. We therefore can’t point to Greenback weakness.

Market analysts attributed the broad-based recovery mainly to bargain hunting and/or profit-taking by shorts since there wasn’t really any fundamental catalyst.

Risk aversion returns

Risk aversion made a comeback during today’s morning London session. And as a result, European equity indices ended up printing some losses. Okay, price action wasn’t really that great so “creeping back” is more accurate than “comeback”, but you get my drift.

  • The pan-European FTSEurofirst 300 was down by 0.12% to 1,537.03
  • Germany’s DAX was down by 0.25% to 12,616.50
  • The blue-chip Euro Stoxx 50 was down by 0.07% to 3,621.50

Aside from skittishness ahead of the NFP report, market analysts say some market players were likely taking some delicious profits off the table ahead in order to avoid weekend risk. After all, the second round of the French presidential elections is coming up this Sunday. By the way, Forex Gump has a piece on that top-tier event. You can read up on that here.

Major Market Mover(s):

AUD & NZD

Despite the skittish risk sentiment during the session, the Aussie was able to stage a recovery while the Kiwi ended up on top, very likely because of recovering commodity prices during the session.

AUD/JPY was up by 19 pips (+0.23%) to 83.07, AUD/CHF was up by 7 pips (+0.10%) to 0.7304, AUD/USD was up by 2 pips (+0.03%) to 0.7386

NZD/JPY was up by 24 pips (+0.32%) to 77.42, NZD/USD was up by 10 pips (+0.14%) to 0.6885 NZD/CHF was up by 13 pips (+0.20%) to 0.6809

JPY

The yen was the best-performing currency of the Asian session but ended up as the worst-performing currency of the morning London session. There were no apparent catalysts and risk aversion prevailed, so it’s possible that the yen’s weakness was due to profit-taking by yen bulls who jumped in earlier.

USD/JPY was up by 23 pips (+0.21%) to 112.45, EUR/JPY was up by 11 pips (+0.09%) to 123.21, GBP/JPY was up by 30 pips (+0.21%) to 145.49

Watch Out For:

  • 12:30 pm GMT: U.S. non-farm payrolls (190K expected, 98K previous), jobless rate (4.6% expected, 4.5% previous), average hourly earnings (0.3% expected, 0.2% previous)
  • 12:30 pm GMT: Canadian employment change (20.0K expected, 19.4K previous) and jobless rate (steady at 6.7% expected)
  • 2:00 pm GMT: Ivey’s Canadian PMI (62.3 expected, 61.1 previous)
  • 3:30 pm GMT: U.S. Fed Governor Stanley Fischer will speak
  • 5:30 pm GMT: U.S. Fed Head Janet Yellen has a speech
  • 5:30 pm GMT: Chicago Fed President Charles Evan is scheduled to speak
  • 7:00 pm GMT: U.S. consumer credit (15.0B expected, 15.2B previous)