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The tight trading conditions from the earlier Asian session persisted into today’s morning London session, probably because traders are waiting for top-tier U.S. data to be released. There were some movements, though, since the euro found broad-based demand while the Loonie was broadly lower.

  • German preliminary GDP q/q: 0.6% as expected vs. 0.4% previous
  • German final HICP m/m: 0.0% as expected, same as previous
  • French preliminary non-farm payrolls q/q: 0.3% vs. 0.2% expected, 0.4% previous
  • Euro Zone industrial production m/m: -0.1% vs. 0.3% expected, -0.1% previous
  • U.S. CPI and retail sales reports coming up

Major Events/Reports:

Commodities extend gains, but oil fell back

Commodities added to their wins from the earlier Asian session. Oil was a clear exception, though, since oil benchmarks retreated.

Precious metals advanced further.

  • Gold was up by 0.35% to $1,228.50 per troy ounce
  • Silver was up by 0.68% to $16.376 per troy ounce

Base metals were still mixed, but still mostly in positive territory.

  • Copper was up by 0.28% to $2.515 per pound
  • Nickel was up by 0.73% to $9,365.00 per dry metric ton

As mentioned earlier, oil benchmarks gave back some of their gains.

  • U.S. WTI crude oil was down by 0.21% to $47.73 per barrel
  • Brent crude oil was down by 0.14% to $50.70 per barrel

Risk appetite returns

The risk-off vibes from the earlier Asian initially weighed down on European equity indices. However, risk-taking ultimately prevailed, sending European equity indices higher.

  • The pan-European FTSEurofirst 300 was up by 0.08% to 1,551.27
  • Germany’s DAX was up by 0.21% to 12,737.75
  • The blue-chip Euro Stoxx 50 was up by 0.18% to 3,627.50

Market analysts say that risk appetite returned in Europe because of strong earnings reports for European companies and deal-making activity by European companies, which lifted overall risk sentiment.

European stocks see record weekly inflows

According to a Reuters report, which cited analysis done by Citi and EPFR Global, weekly capital flows in favor of European equities soared to a record high of $6.1 billion during the week ending on May 10. And this was due to strong corporate earnings reports and easing political uncertainty in continental Europe, especially after Macron’s victory.

Major Market Mover(s):

EUR

Some euro pairs are actually range-bound for the day. Still, the euro did manage to end up as the best-performing currency of the session. No clear reason why since economic reports were only low-tier and mixed to boot. However, it’s possible that the euro’s rise was just due to technicals, although it’s also possible that the Reuters report about record weekly inflows into European equities may have given the euro a boost.

EUR/USD was up by 11 pips (+0.10%) to 1.0870, EUR/CHF was up by 10 pips (+0.10%) to 1.0961, EUR/CAD was up by 49 pips (+0.33%) to 1.4921

CAD

The Loonie was the worst-performing currency. Like the euro, however, some Loonie pairs were actually range-bound for the day. Anyhow, there was no direct catalyst for the Loonie, so retreating oil prices likely weighed down on the Loonie.

USD/CAD was up by 30 pips (+0.22%) to 1.3726, NZD/CAD was up by 32 pips (+0.34%) to 0.9394, AUD/CAD was up by 26 pips (+0.26%) to 1.0129

Watch Out For:

  • 12:30 pm GMT: Headline (0.3% expected, -0.3% previous) and core (0.2% expected, -0.1% previous) readings for U.S. CPI
  • 12:30 pm GMT: Headline (0.6% expected, -0.2% previous) and core (0.5% expected, 0.0% previous) readings for U.S. retail sales
  • 1:00 pm GMT: Chicago Fed President Charles Evans has a speech
  • 2:00 pm GMT: University of Michigan’s preliminary consumer sentiment (no change from 97.0 expected)
  • 2:00 pm GMT: U.S. business inventories (0.1% expected, 0.3% previous)
  • 4:30 pm GMT: Philadelphia Fed President Patrick Harker will speak