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The pound had a mixed start but jumped higher across the board when the U.K.’s CPI readings turned out to be better-than-expected.

And while the Greenback continued to take hits across the board, it was the Loonie that was the worst-performing currency of the morning London session, probably because of falling oil prices.

  • French preliminary private payrolls q/q: 0.3% vs. 0.2% expected, 0.3% previous
  • Swiss PPI m/m: 0.3% vs. 0.2% expected and previous
  • U.K. CPI m/m: -0.5% vs. -0.6% expected, 0.4% previous
  • U.K. CPI y/y: 3.0% vs. 2.9% expected, 3.0% previous
  • Core U.K. CPI y/y: 2.7% vs. 2.6% expected, 2.5% previous
  • HPI in the U.K. y/y: 5.2% vs. 4.9% expected, 5.0% previous
  • U.K. PPI input m/m: 0.7% vs. 0.6% expected vs. 0.6% previous
  • U.K. PPI output m/m: 0.1% vs. 0.2% expected, 0.4% previous

Major Events/Reports

U.K. CPI beats expectations

Earlier today, the U.K.’s latest CPI report revealed that headline CPI fell by 0.5% month-on-month in January after printing a 0.4% back in December.

Still, this is a softer fall compared to the consensus that headline CPI will decline by 0.6%.

Year-on-year, headline CPI rose by 3.0% year-on-year, matching the previous month’s reading and beating expectations that annual CPI will decelerate to +2.9%.

More importantly for BOE rate hike expectations the +3.0% annual reading meets the BOE’s forecasts, as laid out in the BOE’s February Inflation Report.

And remember, the BOE noted during the February 8 BOE Statement that:

“The Committee judges that, were the economy to evolve broadly in line with the February Inflation Report projections, monetary policy would need to be tightened somewhat earlier and by a somewhat greater extent over the forecast period than anticipated at the time of the November Report, in order to return inflation sustainably to the target.”

Commodities extend gains but oil falls

Most commodities staged another rally today’s morning London. However, today’s commodities rally wasn’t as broad-based compared to yesterday’s rally since oil quite noticeably got left behind.

Like yesterday, market analysts attributed the rise in commodity prices on the Greenback’s poor performance.

And for reference, the U.S. dollar index was down by 0.48% to 89.58 for the day when the morning London session ended.

As for oil’s lackluster performance, market analysts blamed that on the International Energy Agency’s (IEA) dour outlook for the oil market, given the IEA’s forecast that higher oil supply, mainly from the U.S., will surpass the expected rise in demand for oil in 2018.

Base metals raked in even more gains.

  • Copper was up by 1.57% to $3.135 per pound
  • Nickel was up by 1.33% to $13,285.00 per dry metric ton

Precious metals also got another bullish boost.

  • Gold was up by 0.37% to $1,331.30 per troy ounce
  • Silver was up by 0.03% to $16.575 per troy ounce

As mentioned earlier, oil benchmarks went in the opposite direction towards negative territory.

  • U.S. WTI crude oil was down by 0.44% to $59.03 per barrel
  • Brent crude oil was down by 0.19% to $62.47 per barrel

Risk aversion returns to Europe

Yesterday’s optimism apparently faded away during today’s morning London session since the major European equity indices were mostly printing losses.

Market analysts couldn’t pinpoint the reason for the returning risk-off vibes, but they did them on mixed earnings reports and lack of faith in the global recovery.

  • The pan-European FTSEurofirst 300 was down by 0.26% to 1,459.63
  • Germany’s DAX was down by 0.53% to 12,218.84
  • The blue-chip Euro Stoxx 50 was down by 0.96% to 3,343.50

U.S. equity futures were also down in the dumps, which implies that risk aversion may also infect the upcoming U.S. session.

  • S&P 500 futures were down by 0.66% to 2,637.75
  • Nasdaq futures were down by 0.70% to 6,485.75

Major Market Mover(s):


The pound was the best-performing currency of the morning London, thanks to the broad-based bullish boost after the U.K.’s better-than-expected CPI readings.

GBP/USD was up by 40 pips (+0.29%) to 1.3897, GBP/CAD was up by 53 pips (+0.31%) to 1.7493, GBP/AUD was up by 49 pips (+0.28%) to 1.7674


The euro was the second strongest currency after the pound. There weren’t really any direct catalysts for the euro’s strength. However, some market analysts said that euro was probably benefiting from capital flows due to the falling Greenback.

EUR/USD was up by 24 pips (+0.20%) to 1.2340, EUR/AUD was up by 30 pips (+0.19%) to 1.5697, EUR/CAD was up by 32 pips (+0.21%) to 1.5534


The Greenback continued to take hits during the morning London session. However, the Greenback was only the second-weakest currency of the session since the (dis)honor of being the worst-performing currency goes to the Loonie.

As to why the Loonie fell, there weren’t any apparent catalysts. Oil was sliding, though, and it’s probable that the Loonie was tracking oil prices lower.

USD/CAD was up by 11 pips (+0.09%) to 1.2587, CAD/JPY was down by 12 pips (-0.15%) to 85.49, CAD/CHF was down by 12 pips (-0.16%) to 0.7414

Watch Out For:

  • 9:45 pm GMT: New Zealand’s monthly FPI (-0.8% previous)