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Not much in terms of economic reports or market-moving news during today’s morning London session, and the U.K. is away on holiday to boot. As such, trading conditions were a bit tight during the session. Even so, it wasn’t a complete snooze fest since the euro and the Swissy got steadily bid higher while the Kiwi got jumped by buyers near the end.

  • Spanish retail sales y/y: 1.8% vs. 0.7% expected, 1.3% previous
  • Private loans in the Euro Zone y/y: 2.4% vs. 2.5% expected, 2.4% previous
  • Late Spring Bank Holiday in the U.K. today

Major Events/Reports

ECB Nowotny speaks

ECB’s Nowotny was speaking earlier and he said that:

“We have discussed quiet intensively why wage increases are relatively subdued, but in my view this is a matter of some time lag.”

This is a rather optimistic view because Draghi and company have been insisting that the ECB’s easy monetary policy is gonna stay for a while because they’re not sure that the recent rise in inflation is sustainable. And this lack of confidence is rooted partly in the subdued wage growth in the Euro Zone.

Oil dips

Commodities had a mixed performance during the session. However, it is interesting to point out that oil is starting the week by dipping slightly lower despite the extension of the OPEC oil cut deal.

  • U.S. WTI crude oil was down by 0.18% to $49.71 per barrel
  • Brent crude oil was down by 0.19% to $52.41 per barrel

Market analysts blamed the dip in oil prices to optimism over the oil cut deal being overpowered by worries that the continuing rise in U.S. oil output would offset the positive effects of the oil cut deal extension.

Slightly skittish day in Europe

European equity indices were mixed but many were mostly in the red during today’s morning London session.

  • The pan-European FTSEurofirst 300 was down by 0.05% to 12,608.00
  • Germany’s DAX was up by 0.03% to 12,606.00
  • The blue-chip Euro Stoxx 50 was down by 0.08% to 3,574.50

Risk aversion was a bit more prevalent during today’s morning London session because sentiment on Italian banks soured, market analysts say. And aside from jitters over Italy’s banks, market analysts also pointed to political uncertainty in Italy, given the possibility of early elections.

Major Market Mover(s):

EUR & CHF

The euro found buyers early on and the same can be said of the Swissy. There weren’t really any direct catalysts for the two, although it’s possible that Nowotny’s optimistic statement on wage growth may have helped stoke further demand for the euro. As for the Swissy, it was probably tracking the euro higher, although the modest risk-off vibes may have stoked safe-haven demand for the Swissy as well, especially since the yen appears to have been in trouble.

EUR/USD was up by 21 pips (+0.19%) to 1.1186, EUR/JPY was up by 25 pips (+0.21%) to 124.54, EUR/AUD was up by 17 pips (+0.11%) to 1.5039

USD/CHF was down by 15 pips (-0.15%) to 0.9739, AUD/CHF was down by 5 pips (-0.08%) to 0.7243, CAD/CHF was down by 7 pips (-0.09%) to 0.7237

NZD

The Kiwi was steady for most of the session but found buyers near the end. In fact, the late bullish boost was enough to send the Kiwi higher against the euro and the Swissy, so the Kiwi basically stole victory from the euro and the Swissy. As to why the Kiwi got late buyers, there’s no clear reason for that. It’s possible that some market players are trying to extend last week’s theme, though.

NZD/USD was up by 21 pips (+0.30%) to 0.7082, NZD/JPY was up by 26 pips (+0.33%) to 78.85, NZD/CAD was up by 23 pips (+0.24%) to 0.9529

JPY

Despite some signs of modest risk aversion in Europe, the yen ended up as the worst-performing currency of the session. There were no direct catalysts, but it’s possible that earlier news about North Korea’s missile test are still weighing down on the yen.

USD/JPY was up by 8 pips (+0.08%) to 111.33, AUD/JPY was up by 13 pips (+0.16%) to 82.81, CHF/JPY was up by 21 pips (+0.18%) to 114.31

Watch Out For:

  • 1:00 pm GMT: ECB Overlord Draghi has a speech
  • Memorial Day holiday in the U.S.A. today