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Lots of action in today’s morning London session, with the pound getting slapped lower after the U.K.’s Q1 GDP got downgraded and the Loonie getting dragged down by slumping oil prices. The Loonie wasn’t the weakest currency, though, since that (dis)honor goes to the Aussie, which likely got weighed down by the risk-off vibes and commodities rout.

The Greenback, meanwhile, staged a broad-based recovery. However, the risk-off vibes apparently allowed the yen to steal victory from the Greenback.

As for the other currencies, the Swissy also likely got safe-haven demand since it ended up as the third best-performing currency of the session. As for the euro and the Kiwi, they were mixed.

  • Ascension day holiday in many parts of Europe today
  • Second estimate for U.K. Q1 GDP q/q: 0.2% vs. unchanged at 0.3% expected
  • Second estimate for U.K. Q1 GDP y/y: 2.0% vs. unchanged at 2.1% expected
  • Preliminary U.K. business investment q/q: 0.6% vs. 0.3% expected, -0.9% previous
  • U.K. BBA mortgage approvals: 40.8K as expected vs. 40.9K previous
  • OPEC meeting still ongoing, OPEC hasn’t talked with non-OPEC members yet

Major Events/Reports

U.K. Q1 GDP downgraded

The second estimate for the U.K.’s Q1 GDP was released earlier today, and, well, it was rather disappointing because quarter-on-quarter growth was downgraded from 0.3% to 0.2% while annual growth was revised lower from 2.1% to 2.0%.

The quarterly rate of expansion is much slower than Q4 2016’s 0.7% and is the weakest reading in four quarters. But at least the annual growth rate in Q1 2017 is still a tick faster than Q4’s 1.9% and is the shared (with Q3 2016) highest reading since Q3 2015.

The second estimate uses the expenditure approach. And digging through the details, net trade was the major drag on quarterly growth, thanks to exports slumping by 1.6% while imports jumped by 2.7%.

Private consumption also weakened, growing only by 0.3% (0.7% back in Q4 2016). But on a more upbeat note, total business investment increased by 0.6% quarter-on-quarter, beating expectations for a 0.3% increase (-0.9% back in Q4 2016).

OPEC rumors

The OPEC meeting in Vienna is still underway. Moreover, OPEC has yet to talk to non-OPEC members. That doesn’t stop rumors from flying about, though.

And according to a widely-circulated Reuters report, OPEC delegates have supposedly already agreed to extend OPEC’s oil cut deal by nine months.

The Reuters report also quoted Saudi Energy Minister Khalid al-Falih as saying that “There have been suggestions (of deeper cuts), many member countries have indicated flexibility but … that won’t be necessary.” In addition, “OPEC members Nigeria and Libya would still be excluded from cuts as their output remained curbed by unrest.”

Most commodities see red, especially oil

Commodities felt the pain (again) during today’s morning London session, with oil getting hit the hardest. Precious metals outperformed, though.

Oil benchmarks led the downhill charge.

  • U.S. WTI crude oil was down by 1.58% to $50.55 per barrel
  • Brent crude oil was down by 1.35% to $53.23 per barrel

Base were also in negative territory.

  • Copper was down by 0.14% to $2.580 per pound
  • Nickel was down by 0.22% to $9,107.50 per dry metric ton

Meanwhile, precious metals got some love, very likely because of the risk-off vibes.

  • Gold was up by 0.30% to $1,256.83 per troy ounce
  • Silver was up by 0.36% to $17.178 per troy ounce

The Greenback staged a recovery during the session, which may have soured overall sentiment on commodities. And for reference, the U.S. dollar index was up slightly by 0.12% to 97.07 for the day when the session ended.

Other than that, market analysts also pointed to demand worries from China as weighing down on base metals.

As for the drop in oil prices, oil was already treading water early on, but it got drowned after the Reuters report came, likely because the market was disappointed that OPEC (supposedly) will not cut even deeper.

Returning risk aversion

European equity indices opened strong and initially tried to climb higher still. However, optimism slowly began to fade during the course of the session. And in the end, many of the major indices were already printing modest losses.

  • The pan-European FTSEurofirst 300 was down by 0.02% to 1,541.23
  • Germany’s DAX was down by 0.10% to 12,630.50
  • The blue-chip Euro Stoxx 50 was still up by 0.21% to 3,591.00 but off its session high of 3,607.00

Market analysts say that the early risk-taking was due to banking shares getting a boost from yesterday’s FOMC minutes, as well as positive earnings reports. As for the later slide, market analysts blamed than on mining and energy shares getting weighed down by falling commodity prices.

Major Market Mover(s):


The pound had a steady start but found sellers across the board when the U.K.’s Q1 GDP growth was downgraded. After that flurry of action, pound pairs began contentedly trading sideways until the session ended, possibly because there were some positive points on the GDP report, namely the rise in business investment. And given the lack of follow-though selling, the pound only ended up as the third worst-performing currency of the session.

GBP/USD was down by 20 pips (-0.16%) to 1.2961, GBP/JPY was down by 26 pips (-0.18%) to 144.81, GBP/CHF was down by 19 pips (-0.15%) to 1.2604


The Aussie and the Loonie suffered during the session, thanks to the commodities rout. The Aussie get hit extra hard, however, likely because of additional bearish pressure from the risk-off vibes.

AUD/CHF was down by 26 pips (-0.37%) to 0.7257, AUD/NZD was down by 25 pips (-0.23%) to 1.0619

USD/CAD was up by 31 pips (+0.23%) to 1.3436, NZD/CAD was up by 12 pips (+0.13%) to 0.9444


The Greenback was one of the top-performers during the session, thanks to a broad-based recovery after yesterday’s FOMC meeting minutes kicked the Greenback lower. There were no apparent catalysts for the Greenback’s recovery, though.

AUD/USD was down by 26 pips (-0.34%) to 0.7464, EUR/USD was down by 17 pips (-0.15%) to 1.1212, NZD/USD was down by 8 pips (-0.11%) to 0.7027


The yen was the once currency to rule them all during today’s morning London session. However, the yen was actually a loser early on. The yen only barely managed to steal a win from the Greenback, thanks to the returning risk-off vibes.

USD/JPY was down by 3 pips (-0.03%) to 111.73, AUD/JPY was down by 30 pips (-0.36%) to 83.39, CAD/JPY was down by 21 pips (-0.26%) to 83.15

Watch Out For:

  • 12:30 pm GMT: U.S. initial jobless claims (238K expected, 232K previous) and
  • goods trade balance (-$64.7B expected, -$64.8B previous)
  • 2:00 pm GMT: U.S. Fed Governor Lael Brainard will speak
  • 4:00 pm GMT: BOC Deputy Governor Sylvain Leduc has a speech
  • OPEC meeting still ongoing