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Monday is usually a slow day. However, today is clearly an exception since many currencies were busy busting the moves. And most noteworthy among these were the Loonie, which was likely tracking the rise in oil prices, and the yen, which very likely got sold off because of the risk-on vibes.

The pound, meanwhile, got kicked lower across the board after the manufacturing PMI miss. The pound still won out against the yen in the end, though.

As for the other currencies, the Greenback continued to show broad-based demand and even gave the Loonie a hard time. The Swissy and the euro, meanwhile, were mixed but mostly lower, while the Aussie and the Kiwi were net winners overall, probably because of the risk-on vibes and rising commodity prices.

  • Swiss retail sales y/y: -0.3% vs. -0.8% expected, -0.9% previous
  • Spanish manufacturing PMI: 54.7 vs. 55.6 expected, 55.4 previous
  • Swiss manufacturing PMI: 60.1 vs. 56.5 expected, 55.6 previous
  • Italian manufacturing PMI: 55.2 vs. 55.3 expected, 55.1 previous
  • French final manufacturing PMI: 54.8 vs. unchanged at 55.0 expected
  • German final manufacturing PMI: 59.6 vs. unchanged at 59.3 expected
  • Euro Zone final manufacturing PMI: 57.4 vs. 57.3 expected, 575.3 previous
  • Euro Zone jobless rate: steady at 9.3% as expected
  • U.K. manufacturing PMI: 54.3 vs. 56.4 expected, 56.3 previous

Major Events/Reports

U.K. Manufacturing PMI

Markit is releasing another batch of PMI reports for the U.K. this week.

And today, we got the U.K.’s manufacturing PMI report for the June period. And unfortunately, the headline reading came in at 54.3, which is a three-month low and way below the consensus reading of 56.4.

Moreover, the previous reading was downgraded from 56.7 to 56.3. As such, the PMI report was twice as disappointing.

Commentary from Markit noted that the weaker reading was due to the slowdown in both production and new orders growth because “growth of new business slowed in both the domestic and export markets.”

Commodities mostly higher, precious metals falter

Most commodities marched higher during the morning London session. However, precious metals got trampled and left in the dust instead.

Precious metals were down for the session (and for the day).

  • Gold was down by 0.63% to $1,234.53 per troy ounce
  • Silver was down by 0.89% to $16.420 per troy ounce

Base metals were mostly in the green, with the exception of copper.

  • Copper was down by 0.59% to $2.695 per pound
  • Nickel was up by 0.37% to $9,407.50 per dry metric ton
  • Zinc was up by 0.92% to $2,783.75 per dry metric ton

Oil benchmarks, meanwhile, were also in the green.

  • U.S. WTI crude oil was up by 1.06% to $43.84 per barrel
  • Brent crude oil was up by 1.28% to $46.63 per barrel

Market analysts say that the rise in oil prices was being fueled (wink) by last Friday’s U.S. oil rigs data, which showed that the number of active U.S. oil rigs saw a net weekly decrease for the first time in 24 weeks.

The precious metals rout, meanwhile, was likely due to dampened safe-haven demand because of the risk-on mood in Europe.

As for the broad-based demand for base metals, market analysts pointed mainly to lower inventory levels and speculation that Chinese factory demand will pick up.

Some risk-taking to start the week

European market players are starting the new trading week on an upbeat note since most of the major European equity indices were well in the green.

  • The pan-European FTSEurofirst 300 was up by 0.67% to 1,501.37
  • Germany’s DAX was up by 0.62% to 12,401.50
  • The blue-chip Euro Stoxx 50 was up by 0.89% to 3,471.50

U.S. equity futures also caught a bid, suggesting that the risk-on vibes may carry over into the U.S. session.

  • S&P 500 futures were up by 0.32% to 2,428.75
  • Nasdaq futures were up by 0.25% to 5,667.00

Market analysts attributed the general risk-on vibes to the strong performance of the energy and banking sectors. And these two sectors outperformed, thanks respectively to the rise in oil prices and higher rate hike expectations due to the perceived central bank shifts, as discussed in last week’s recap.

Major Market Mover(s):

CAD

Canada will be away on holiday today but that didn’t seem to dampen demand for the Loonie since the Loonie clearly outperformed its peers, very likely because the Loonie was tracking the rise in oil prices.

USD/CAD was down by 10 pips (-0.08%) to 1.2981, AUD/CAD was down by 22 pips (-0.22%) to 0.9941, NZD/CAD was down by 21 pips (-0.22%) to 0.9472

JPY

The safe-haven yen extended its losses from the earlier Asian session, very likely because of the risk-on vibes during today’s morning London session.

USD/JPY was up by 43 pips (+0.39%) to 112.98, CAD/JPY was up by 35 pips (+0.41%) to 87.02, AUD/JPY was up by 16 pips (+0.18%) to 86.52

GBP

The pound got kicked lower when the U.K.’s manufacturing PMI failed to meet expectations. Other than that and profit-taking after last week’s good run, there wasn’t really anything else that could have driven the pound lower.

GBP/USD was down by 52 pips (-0.40%) to 1.2953, GBP/CAD was down by 72 pips (-0.44%) to 1.6814, GBP/AUD was down by 36 pips (-0.21%) to 1.6912

Watch Out For:

  • 1:45 pm GMT: Markit’s final U.S. manufacturing PMI (no change from 52,1 expected)
  • 2:00 pm GMT: ISM’s U.S. manufacturing PMI (55.0 expected, 54.9 previous)
  • 2:00 pm GMT: U.S. construction spending (0.3% expected, -1.4% previous) and total vehicle sales (16.5M expected, 16.7M previous)
  • 5:30 pm GMT: BOE chief economist and MPC member Andy Haldane will speak
  • Canada Day holiday today