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The Swissy was in demand during the morning London session, so much so that it ended up at the top of the forex heap, which is kinda wonky since there were no market-moving reports or news for the Swissy and risk appetite was apparently the dominant sentiment to boot.

The yen’s weakness made more sense, though, given the risk-on vibes and rise in global bond yields.

As for the Greenback’s weakness during the course of the session, there was no apparent reason for that.

Major Events/Reports

Precious metals fall as other commodities rise

Most commodities were on the rise during the morning London. Not all commodities found a bid, however, since precious metals were broadly feeling some bearish pressure, likely because of the risk-on vibes.

Anyhow, the commodities rally was very likely due to the Greenback’s slide. After all, a weaker U.S. dollar means that globally-traded commodities that are priced in dollars become relatively cheaper for buyers holding non-USD currencies. And for reference, the U.S. dollar index was down by 0.35% to 90.33 for the day when the session ended.

Other than that, market analysts also pointed to China’s strong industrial data as the reason why base metals such as copper were in demand.

Base metals were bid higher.

  • Copper was up by 0.60% to $3.208 per pound
  • Nickel was up by 0.41% to $12,465.00 per dry metric ton

Oil benchmarks were slightly in positive territory after printing losses earlier.

  • U.S. WTI crude oil was up by 0.17% to $64.08 per barrel
  • Brent crude oil was up by 0.09% to $69.44 per barrel

Precious metals had a tough time, however, likely because of the risk-on vibes in Europe.

  • Gold was down by 0.68% to $1,330.10 per troy ounce
  • Silver was down by 0.44% to $17.090 per troy ounce

Modest risk-taking in Europe

There were signs of modest taking during today’s morning London session, given that the major European equity indices were raking in some gains.

And aside from risk sentiment spillover from the earlier session, market analysts also pointed to positive earnings for some companies, with strong results for Dutch semiconductor ASML being cited as boosting demand for tech shares in particular.

  • The pan-European FTSEurofirst 300 was up by 0.10% to 1,566.15
  • Germany’s DAX was up by 0.37% to 13,232.50
  • The blue-chip Euro Stoxx 50 was up by 0.15% to 3,615.50

Global bond yields rise

Another sign that risk-taking was the dominant sentiment in Europe was the rise in global bond yields.

  • German 10-year bond yield up by 2.50% to 0.575%
  • French 10-year bond yield up by 1.14% to 0.851%
  • U.K. 10-year bond yield up by 1.60% to 1.331%
  • U.S. 10-year bond yield up by 1.06% to 2.605%
  • Canadian 10-year bond yield up by 0.32% to 2.211%

Major Market Mover(s):

CHF

The Swissy outpaced all its peers and was the one currency to rule them all during the morning London session, which is rather wonky since there were no apparent catalysts and risk appetite was the dominant sentiment to boot.

USD/CHF was down by 44 pips (-0.46%) to 0.9600, NZD/CHF was down by 25 pips (-0.35%) to 0.7005, EUR/CHF was down by 23 pips (-0.20%) to 1.1750

GBP

The pound was the second best-performing currency after the Swissy. Like the Swissy, there were no apparent catalysts for the pound’s strength, but some market analysts pointed to easing Brexit-related jitters without really pinpointing a specific catalyst.

GBP/USD was up by 38 pips (+0.28%) to 1.3868, GBP/CAD was up by 53 pips (+0.31%) to 1.7261, GBP/NZD was up by 33 pips (+0.18%) to 1.9006

USD

The Greenback was edged out by the yen and was the worst-performing currency of the morning London session, even though U.S. bond yields continued to rise and there weren’t really any catalysts.

AUD/USD was up by 15 pips (+0.18%) to 0.7989, NZD/USD was up by 9 pips (+0.11%) to 0.7297, EUR/USD was up by 32 pips (+0.27%) to 1.2240

JPY

The yen was the second weakest currency after the Greenback. Unlike the Greenback (and the pound and Swissy), however, the yen’s weakness made more sense, given the risk-on vibes and rise in global bond yields during the morning London session.

CHF/JPY was up by 52 pips (+0.45%) to 115.84, EUR/JPY was up by 34 pips (+0.25%) to 136.12, GBP/JPY was up by 39 pips (+0.25%) to 154.23

Watch Out For:

  • 1:30 pm GMT: ADP’s Canadian non-farm employment change (59.2K previous)
  • 1:30 pm GMT: U.S. building permits (1,295K expected, 1,298K previous) and housing starts (1.275K expected, 1.297K previous)
  • 1:30 pm GMT: U.S. initial jobless claims (249K expected, 261K previous)
  • 1:30 pm GMT: Philadelphia Fed’s manufacturing index (25.0 expected, 26.2 previous)
  • 4:00 pm GMT: U.S. crude oil inventories (-1.4M expected, -4.9M previous)
  • 9:30 pm GMT: Business NZ’s manufacturing index (57.7 previous)