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There wasn’t much on the docket for today’s morning London session. However, there was more than enough action to keep the session interesting.

And most noteworthy among the currencies is the pound, since it closed higher against its peers, supposedly because of higher rate hike expectations and positive Brexit-related updates.

The Loonie is noteworthy as well since it was the worst-performing currency of the session, likely because of the slide in oil prices.

  • U.K. gross mortgage approvals: 40.1K vs. 37.2K expected, 36.1K previous
  • ECB Overlord Draghi will be speaking later

Major Events/Reports:

British Labour Leader Corbyn speaks

Jeremy Corbyn, the Labour leader in the U.K., gave a speech earlier today. Although it’s worth noting that excerpts of his speech were released earlier.

Anyhow, Corbyn said that the Labour Party doesn’t want the “Norway model” wherein the U.K. enters the European Free Trade Association or remain a member of the European Economic Area.

Instead, Corbyn said that Labour wants the government to negotiate a “new comprehensive UK-EU customs union.”

That way, trade between the U.K. and the E.U, would be tariff-free, Corbyn argued.

And Corbyn being Corbyn, he also took a shot at Theresa May’s government when he said that:

“Like with so much else, they haven’t spelt that out. But that is the consequence of ruling out the option of a customs union, which this government has done.”

Most commodities rise but oil falls

Most commodities were in rally mode during the morning London session. And I say “most” because oil quite noticeably got left behind and was even going in the opposite direction.

The broad-based commodities rally was likely due to the Greenback’s recent weakness, which makes globally-traded commodities relatively cheaper.

And for reference, the U.S. dollar index was down by 0.23% to 89.61 when the morning London session came to an end.

As to why oil prices dipped, there’s no clear reason for that yet. In fact, oil was also in the green earlier.

Base metals were in positive territory.

  • Copper was up by 0.15% to $3.238 per pound
  • Nickel was up by 1.25% to $13,920.00 per dry metric ton

Precious metals were also in the green, despite the risk-on vibes.

  • Gold was up by 0.72% to $1,339.900 per troy ounce
  • Silver was up by 0.92% to $16.635 per troy ounce

As mentioned earlier, oil benchmarks didn’t do too well.

  • U.S. WTI crude oil was up by 0.20% to $63.42 per barrel
  • Brent crude oil was down by 0.30% to $66.84 per barrel

Risk-on start in Europe

The European equity are opening the trading week on an upbeat mood it seems, since the major European equity indices were broadly in positive territory.

Aside from risk sentiment spillover from the earlier Asian session, market analysts couldn’t really pinpoint a reason for the risk-on vibes since there were no major corporate updates during the session.

  • The pan-European FTSEurofirst 300 was up by 0.50% to 1,500.17
  • Germany’s DAX was up by 0.31% to 12,522.63
  • The blue-chip Euro Stoxx 50 was up by 0.63% to 3,462.50

U.S. equity futures also enjoyed the risk-on vibes.

  • S&P 500 futures were up by 0.35% to 2,758.50
  • Nasdaq futures were up by 0.26% to 6,928.00

Major Market Mover(s):

GBP

The pound ruled over all during the morning London session. And market analysts attributed the pound’s strength on Corbyn’s comments about a custom union, as well as BOE Deputy Governor Dave Ramsden’s hawkish comment over the weekend as boosting expectations for a rate hike.

GBP/USD was up by 8 pips (+0.06%) to 1.4035, GBP/AUD was up by 87 pips (+0.49%) to 1.7884, GBP/JPY was up by 39 pips (+0.26%) to 149.85

CAD

The Loonie was edged out by the Aussie and ended up as the worst-performing currency of the morning London session, very likely because the Loonie was tracking the slide in oil prices.

USD/CAD was up by 42 pips (+0.34%) to 1.2672, EUR/CAD was up by 54 pips (+0.35%) to 1.5613, GBP/CAD was up by 67 pips (+0.38%) to 1.7783

Watch Out For:

  • 2:00 pm GMT: ECB Overlord Draghi will testify before the European Parliament
  • 3:00 pm GMT: U.S. new home sales (648K expected, 625K previous)
  • 6:00 pm GMT: BOE Deputy Governor Jon Cunliffe is scheduled to speak
  • 8:15 pm GMT: Federal Reserve Governor Randal Quarles will speak
  • 9:45 pm GMT: New Zealand’s trade balance (-$2,711.0M expected, -$2,8376.0M previous)