The forex calendar was empty and there weren’t really any market-moving news, so price action was rather muted during today’s morning London session.
The session wasn’t devoid of action, though, since the Loonie did find some buyers while the euro continued to slide lower against its peers ahead of tomorrow’s ECB statement.
- No economic reports were released during the session
Tight trading conditions
Volatility dried up and directional movement was limited during today’s morning London session, very likely because market players are hunkering down ahead of the BOJ statement and ECB statement tomorrow.
By the way (shameless plug incoming), Forex Gump has a write-up on those top-tier events. If you wanna read up on them, you can check out Forex Gump’s write-up on the BOJ statement here and the ECB statement here.
Commodities retreat but oil resists
The commodities rally that started last week finally ended during today’s morning London session. Oil was an exception, though, since it printed more gains.
Precious metals were in negative territory.
- Gold was down by 0.08% to $1,235.85 per troy ounce
- Silver was down by 0.17% to $16.240 per troy ounce
Base metals were actually mixed but most were in the red.
- Copper was down by 0.24% to $2.725 per pound
- Zinc was down by 0.77% to $2,773.50 per dry metric ton
Oil benchmarks swam against the tide and were able to print moderate gains.
- U.S. WTI crude oil was up by 0.34% to $46.56 per barrel
- Brent crude oil was up by 0.24% to $49.08 per barrel
Market analyst couldn’t really pinpoint the reason for the broad-based retreat.
However, the Greenback was able to recover from its earlier losses since the U.S. dollar index was up by 0.08% to 94.53 for the day when the session was just about to end.
And that may have triggered some profit-taking on commodities. And all the more so since there will be central bank statements tomorrow.
As to why oil was swimming against the bearish tide, market analysts pointed to a strong gasoline market. Although it’s also possible that market players are betting that U.S. inventories will print another draw, despite API data from earlier showing an increase.
Risk appetite returns to Europe
After an intense bout of risk aversion yesterday, there were signs of risk-taking during today’s morning London session since the major European equity indices were printing some gains.
Market analysts noted that almost all sectors were in the green, thanks to positive earnings reports for European companies. The slide in mining shares due to the commodities slide was keeping a lid on overall risk sentiment, though.
- The pan-European FTSEurofirst 300 was up by 0.37% to 1,508.48
- Germany’s DAX was up by 0.12% to 12,445.46
- The blue-chip Euro Stoxx 50 was up by 0.13% to 3,485.50
U.S. equity futures were also in positive territory, which implied that the risk-on vibes may carry over into the U.S. session.
- S&P 500 futures were up by 0.05% to 2,459.00
- Nasdaq futures were up by 0.20% to 5,894.25
Major Market Mover(s):
The euro has been sliding lower against its peers since yesterday’s U.S. session. And in today’s morning London session, the euro extended its losses and was the worst-performing currency of the session.
There were no apparent catalysts, but profit-taking by some euro bulls ahead of tomorrow’s ECB statement is a possibility.
EUR/USD was down by 3 pips (-0.03%) to 1.1529, EUR/JPY was down by 12 pips (-0.10%) to 129.10, EUR/CHF was down by 18 pips (-0.17%) to 1.0995
For what it’s worth, the Loonie outperformed during the session, very likely because oil stood its ground and continued to advance, even though most other commodities were in retreat during the session.
USD/CAD was down by 21 pips (-0.17%) to 1.2619, AUD/CAD was down by 18 pips (-0.18%) to 1.0009, NZD/CAD was down by 16 pips (-0.17%) to 0.9298
Watch Out For:
- 12:30 pm GMT: Canadian manufacturing sales (0.9% expected, 1.1% previous)
- 12:30 pm GMT: U.S. building permits (1.20M expected, 1.17M previous) and housing starts (1.16M expected, 1.09M previous)
- 2:30 pm GMT: CB’s Australian leading index (0.5% previous)
- 2:30 pm GMT: U.S. crude oil inventories (-3.6M expected, -7.6M previous)