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Not much on the docket for today’s morning London session. Even so, there was price action aplenty since forex traders just continued the themes from the earlier session. As such, the yen grew even stronger while the pound got kicked even lower.

Another currency worth noting is the Kiwi since it was the second best-performing currency, even though there was no direct catalyst for the Kiwi’s strength. It gets even weirder because risk aversion prevailed while most commodities got clobbered again.

The euro is noteworthy as well, since it was the second worst-performing currency after the pound, probably because of the renewed worries over Italy’s banks.

  • No major economic reports were released during the session
  • U.S. preliminary GDP estimate and durable goods orders coming up

Major Events/Reports

Most commodities tumble again, precious metals resist

Commodities got hit by another wave of sellers during today’a morning London session. Precious metals still manged to swim against the bearish tide, though.

Oil benchmarks were steady for most of the session but got smacked hard near the end.

  • U.S. WTI crude oil was down by 1.19% to $48.32 per barrel
  • Brent crude oil was down by 1.20% to $50.84 per barrel

Base metals got another hammering.

  • Copper was down by 1.60% to $2.556 per pound
  • Nickel was down by 0.06% to $9,042.50 per dry metric ton

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

  • Gold was up by 0.72% to $1,265.47 per troy ounce
  • Silver was up by 0.42% to $17.265 per troy ounce

Market analysts couldn’t really pinpoint a reason for today’s round of selling, although it is possible that market players were unwinding some of their bets to avoid the long weekend since the U.K., the U.S., and China would be away on holiday next Monday.

More risk aversion in Europe

Europe is closing the trading week on a downbeat note since risk aversion continued to plague European equity indices.

  • The pan-European FTSEurofirst 300 was down by 0.58% to 1,531.84
  • Germany’s DAX was down by 0.69% to 12,533.50
  • The blue-chip Euro Stoxx 50 was down by 0.91% to 3,549.50

The risk-off vibes also weighed down on U.S. equity futures

  • S&P 500 futures were down by 0.22% to 2,408.25
  • Nasdaq futures were down by 0.14% to 5,773.62

Market analysts say that the poor performance of European banking shares soured overall risk sentiment. And the slide in banking shares, in turn, was due to renewed jitters over Italy’s banks, namely Popolare di Vicenza and Veneto Banca, which sparked fears that investors may be forced to “bail-in” the embattled banks in order to avoid a taxpayer-funded bailout.

Global bond yields plunge

Another clear sign of risk aversion was the drop in global yields during the session.

  • French 10-year bond yield down by 4.10% to 0.762 %
  • German 10-year bond yield down by 9.37% to 0.329%
  • U.K. 10-year bond yield down by 2.02% to 1.018%
  • Canadian 10-year bond yield down by 1.98% to 1.433%
  • U.S. 10-year bond yield down by 0.92% to 2.234%

Major Market Mover(s):

GBP

The pound selloff continued into the morning London session. There were no fresh catalysts for the pound, but market analysts are still pointing to the disappointing poll results from earlier.

GBP/USD 35 was down by pips (-0.27%) to 1.2836, GBP/NZD 93 was down by pips (-0.51%) to 1.8184, GBP/CHF 32 was down by pips (-0.26%) to 1.2488

JPY

The safe-haven yen extended its gains from the earlier session, thanks to the risk aversion and plunging bond yields during the morning London session.

USD/JPY 31 was down by pips (-0.28%) to 111.00, EUR/JPY 57 was down by pips (-0.47%) to 124.23, GBP/JPY 79 was down by pips (-0.55%) to 142.48

EUR

The euro was the second worst-performing currency of the session, probably because of renewed jitters over Italy’s banks. Although it’s also possible that renewed Brexit jitters are also weighing down on the euro. After all, the E.U. is the other party to the Brexit negotiations.

EUR/USD 20 was down by pips (-0.18%) to 1.1190, EUR/NZD 68 was down by pips (-0.43%) to 1.5853, EUR/CHF 18 was down by pips (-0.17%) to 1.0888

NZD

Today was another wonky day for the Kiwi since it just shrugged off the risk-off vibes and commodities rout to end up as the second best-performing currency of the session.

NZD/USD 18 was up by pips (+0.26%) to 0.7058, NZD/CAD 25 was up by pips (+0.26%) to 0.9504, NZD/CHF 18 was up by pips (+0.26%) to 0.6867

Watch Out For:

  • 12:30 pm GMT: U.S. preliminary Q1 GDP (upgrade from 0.7% to 0.9% expected)
  • 12:30 pm GMT: Headline (-1.4% expected, 0.9% previous) and core (0.4% expected, 0.0% previous) readings for U.S. durable goods orders
  • 2:00 pm GMT: University of Michigan’s revised consumer sentiment index (tick lower from 97.7 to 97.6 expected)