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Price action during today’s morning London session was rather wonky since the Aussie and the Kiwi outperformed despite the risk-off vibes and the commodities rout. The pound’s price action was a bit wonky as well, given that it got slapped broadly lower, even though there were no direct catalysts.

  • GFK German consumer climate: 10.4 vs. unchanged at 10.2 expected
  • BOC rate decision and statement later
  • FOMC meetings minutes will be released later

Major Events/Reports

Commodities clobbered some more, but oil recovers

Commodities got another beat-down during today’s morning London session. However, oil benchmarks were able to resist and even managed to post some modest gains.

Base metals got no love.

  • Copper was down by 0.89% to $2.573 per pound
  • Nickel was down by 1.98% to $9,157.50 per dry metric ton

Precious metals got hit again, despite the risk-off vibes.

  • Gold was down by 0.28% to $1,251.95 per troy ounce
  • Silver was down by 0.31% to $17.086 per troy ounce

Oil benchmarks went against the bearish flow by printing gains.

  • U.S. WTI crude oil was up by 0.08% to $51.51 per barrel
  • Brent crude oil was up by 0.22% to $54.27 per barrel

Market analysts blamed today’s commodities rout, base metals especially, on Moody’s China downgrade.

As for oil’s recovery, that was attributed to officials statements from Kuwait and Algeria that are supportive of extending OPEC’s oil cut deal by nine months.

Skittish day in Europe

Most European equity indices opened on a downbeat note. And overall sentiment didn’t really improve from there, since European equity indices were poised to close in the red for the day.

  • The pan-European FTSEurofirst 300 was down by 0.08% to 1,540.09
  • Germany’s DAX was down by 0.21% to 12,633.00
  • The blue-chip Euro Stoxx 50 was down by 0.20% to 3,590.50

Market analysts are still blaming the risk-off mood on news from earlier about Moody’s downgrading China’s sovereign credit rating.

However, it’s also possible that we’re seeing the usual skittishness ahead of top-tier items, given that the FOMC’s meeting minutes will be released later.

Major Market Mover(s):

AUD & NZD

The Aussie and the Kiwi outperformed during today’s morning London session, which is rather weird because the risk-off vibes and commodities rout would usually mean bearish pressure on the two higher-yielding comdolls. Weirder still is that most Kiwi and Aussie pairs have already erased their earlier losses due to Moody’s China downgrade. Heck, some were even printing gains for the day already, so the Aussie and Kiwi’s strength during the session was not just due to profit-taking.

AUD/USD was up by 17 pips (+0.23%) to 0.7475, AUD/JPY was up by 10 pips (+0.12%) to 83.58, AUD/CHF was up by 26 pips (+0.36%) to 0.7303

NZD/USD was up by 24 pips (+0.34%) to 0.7032, NZD/CHF was up by 31 pips (+0.46%) to 0.6870, NZD/JPY was up by 18 pips (+0.23%) to 78.62

GBP

The pound showed weakness during the session, even though there were no apparent catalysts. Could be just technicals, since many pound pairs are actually range-bound if you also consider price action from the earlier session.

GBP/USD was down by 7 pips (-0.06%) to 1.2964, GBP/NZD was down by 73 pips (-0.39%) to 1.8431, GBP/AUD was down by 51 pips (-0.29%) to 1.7340

Watch Out For:

  • 12:45 pm GMT: ECB Overlord Draghi will speak
  • 1:00 pm GMT: U.S. HPI (0.5% expected, 0.8% previous)
  • 2:00 pm GMT: BOC rate decision and statement (Overnight rate steady at 0.50% expected); read up on Forex Gump’s write-up here
  • 2:00 pm GMT: U.S. existing home sales (5.65M expected, 5.71M previous)
  • 2:30 pm GMT: U.S. crude oil inventories (-2.4M expected, -1.8M previous)
  • 6:00 pm GMT: FOMC meeting minutes scheduled for release
  • 10:00 pm GMT: Dallas Fed President Robert Kaplan will speak