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Price action became relatively more subdued during today’s morning London session. There was some action, though, since the euro extended its losses during session, with the Swiss franc following suit. Meanwhile, the risk-off vibes in Europe likely gave the safe-haven yen a boost.

  • Victory day holiday in France today
  • German factory orders m/m: 1.0% expected vs. 0.7% expected, 3.4% previous
  • Halifax U.K. HPI m/m: -0.1% vs. 0.1% expected, 0.0% previous
  • Sentix Euro Zone investor confidence: 27.5 vs. 25.3 expected, 23.9 previous

Major Events/Reports:

Commodities falter, but precious metals well-supported

Commodities were mixed at the start of the session, but it soon became clear that most were making their way into negative territory. Precious metals were clearly an exception, though.

Base metals led the downhill charge.

  • Copper was down by 1.68% to $2.486 per pound
  • Nickel was down by 0.76% to $9,092.50 per dry metric ton

Oil benchmarks erased their gains from earlier.

  • U.S. WTI crude oil was down by 0.37% to $46.05 per barrel
  • Brent crude oil was down by 0.45% to $48.88 per barrel

As noted earlier, precious metals were an exception since they opted to climb higher

  • Gold was up by 0.46% to $1,232.59 per troy ounce
  • Silver was up by 0.75% to $16.396 per troy ounce

The U.S. dollar index was up by 0.40% to 98.81 for the day when the session ended. And that may have made commodities less attractive to buy. After all, globally-traded commodities that are priced in U.S. dollars become relatively more expensive if the Greenback is stronger.

However, some market analysts also pointed to China’s poor trade data for the slide in base metals. Other market analysts, meanwhile, say that oil was in retreat because of renewed worries over U.S. oil output.

As for precious metals, they likely swam against the red tide because of safe-haven demand, given the risk-off vibes in Europe. After all, precious metals are considered traditional safe-havens.

Risk aversion in Europe

The “feel good” vibes from Macron’s victory sent most Asian equity indices higher earlier. And apparently, Macron’s victory also initially gave European equities a boost. However, it soon became clear that risk aversion was the dominant sentiment in Europe, as European equity indices began to slip into the red one after the other.

  • The pan-European FTSEurofirst 300 was down by 0.23% to 1,545.78
  • Germany’s DAX was down by 0.24% to 12,686.25
  • The blue-chip Euro Stoxx 50 was down by 0.42% to 3,639.50

U.S. equity futures also felt the weight of the downbeat mood in Europe.

  • S&P 500 futures were down by 0.07% to 2,396.00
  • Nasdaq futures were down by 0.05% to 5,645.25

The European equities retreat was blamed by market analysts on profit-taking, given that Macron’s victory was already priced-in by the market since at least last week.

Major Market Mover(s):

EUR & CHF

The euro extended its losses during the morning London session while the Swissy, which was already showing signs of weakness during the Asian session, finally gave way to bearish pressure and joined the euro in sliding lower.

There were no apparent catalysts, but another round of profit-taking may have been the reason for the two, given that the two currencies were the main beneficiaries of Macron’s win during the first round of the French presidential elections.

And in the case of the Swissy, it’s also possible that the SNB was sneakily weakening the Swissy again.

EUR/USD was down by 45 pips (-0.42%) to 1.0938, EUR/AUD was down by 47 pips (-0.32%) to 1.4785, EUR/NZD was down by 57 pips (-0.36%) to 1.5793

USD/CHF was up by 40 pips (+0.40%) to 0.9941, AUD/CHF was up by 22 pips (+0.31%) to 0.7354, NZD/CHF was up by 23 pips (+0.35%) to 0.6885

JPY

The yen was the one currency to rule them all (during this session at least). And yen bulls can probably thank the risk-off vibes during the session for that.

USD/JPY was down by 12 pips (-0.10%) to 112.60, EUR/JPY was down by 63 pips (-0.51%) to 123.18, CHF/JPY was down by 55 pips (-0.49%) to 113.26

Watch Out For:

  • 12:15 pm GMT: Canadian housing starts (220K expected, 253K previous)
  • 2:00 pm GMT: U.S. labor market conditions index (0.4% previous)
  • 11:00 pm GMT: BRC U.K. retail sales monitor (-1.0% previous)