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The Kiwi got a bullish boost during today’s morning London session, very likely because of the returning risk-on vibes. The pound, meanwhile, encountered sellers when the final estimate for the U.K.’s Q1 GDP growth got released.

  • German retail sales m/m: 0.5% vs. 0.3% expected, -0.2% previous
  • French consumer spending m/m: 1.0% vs. 0.5% expected, 0.4% previous
  • French preliminary CPI m/m: 0.0% as expected, same as previous
  • KOF’s Swiss economic barometer: 105.5 vs. 102.5 expected, 102.0 previous
  • German unemployment change: 7K vs. -10K expected, -7K previous
  • U.K. current account: -£16.9B vs. -£17.2B expected, -£12.1B previous
  • U.K. final Q1 GDP q/q: unchanged at 0.2% as expected
  • Euro Zone flash estimate y/y: 1.3% vs. 1.2% expected, 1.4% previous
  • Euro Zone flash core estimate y/y: 1.1% vs. 1.0% expected, 0.9% previous

Major Events/Reports

U.K.’s final Q1 GDP report

The final estimates for the U.K.’s Q1 GDP growth were released earlier. On the surface, nothing seemed amiss since Q1 GDP growth was unchanged at 0.2% quarter-on-quarter and 2.0% year-on-year.

The details, however, are a bit more disappointing. Particularly the fact that household incomes fell for the third consecutive quarter since household disposable income slumped by 1.4% quarter-on-quarter, which is the hardest drop since the Q1 2013.  And worse yet, household incomes haven’t seen a decline for three consecutive quarters since Q2 1977.

Also, household consumption, which accounts for a large chunk of GDP, only rose by 0.4%. This is a tick higher than the original estimate of 0.3%. Even so, it’s a drastic slowdown from the 0.7% gain in Q4 2016. Moreover, this is the smallest quarter-on-quarter increase increase since the Q4 2015.

Oil climbs higher

Oil benchmarks printed more gains during today’s morning London session.

  • U.S. WTI crude oil was up by 0.60% to $45.20 per barrel
  • Brent crude oil was up by 0.44% to $47.84 per barrel

Market analysts couldn’t pinpoint the reason for oil’s persistent climb, although some market analysts were pointing to the Greenback’s recent weakness.

I’m not really sure about that explanation, though, since U.S. dollar index was up by 0.15% to 95.47 for the day when the session was about to end.

Risk appetite finally returns in Europe

After getting swamped by risk aversion for three consecutive days, signs of risk-taking finally began to show during today’s morning London session.

  • The pan-European FTSEurofirst 300 was up by 0.45% to 1,504.70
  • Germany’s DAX was up by 0.16% to 12,436.00
  • The blue-chip Euro Stoxx 50 was up by 0.41% to 3,484.00

Even U.S. equity futures got a bullish boost

  • S&P 500 futures were up by 0.20% to 2,424.75
  • Nasdaq futures were up by 0.21% to 5,664.75

Market analysts point out that tech stocks were leading the way, so we’re likely seeing some profit-taking by shorts and/or bargain buyers jumping in after tech stocks got sold off almost all week due to the global hacking attack this week.

Major Market Mover(s):


The pound had a steady start but began getting sellers when the final estimate for the U.K.’s Q1 GDP growth was released. GDP growth was unchanged on both a quarterly and annual basis.

However, the details were a bit disappointing. Although it should be pointed out that the BOE has been warning that consumer spending and household incomes would be taking hits, so it’s also likely that pound bulls were using the GDP report to unwind trades after a mostly good week for the pound.

GBP/USD was down by 27 pips (-0.21%) to 1.2978, GBP/CAD was down by 50 pips (-0.30%) to 1.6839, GBP/NZD was down by 86 pips (-0.49%) to 1.7690


The Kiwi was broadly higher during the session. There were no direct catalysts for the Kiwi’s strength. However, it’s very likely that the returning risk-on vibes gave the Kiwi some much-needed boost.

NZD/USD was up by 20 pips (+0.28%) to 0.7335, NZD/CHF was up by 20 pips (+0.29%) to 0.7027, NZD/JPY was up by 21 pips (+0.24%) to 82.15

Watch Out For:

  • 12:30 pm GMT: Canada’s monthly GDP (0.2% expected, 0.5% previous)
  • 12:30 pm GMT: Canadian RMPI (-0.6% expected, 1.6% previous) and IPPI (0.4% expected, 0.6% previous)
  • 12:30 pm GMT: U.S. core PCE price index (0.1% expected, 0.2% previous)
  • 12:30 pm GMT: U.S. personal income (0.3% expected, 0.4% previous) and personal spending (0.1% expected, 0.4% previous)
  • 1:45 pm GMT: Chicago PMI (58.1 vs. 59.4 previous)
  • 2:00 pm GMT: University of Michigan’s revised consumer sentiment (unchanged at 94.5 expected)
  • 2:30 pm GMT: BOC’s business outlook survey will be released