There was plenty of volatility during the morning London session. However, directional movement was a bit lacking, so price action was rather choppy for the most part. Yen pairs were clearly an exemption, though, since the yen took more hits across the board, extending its losses from earlier.
- French final private payrolls q/q: 0.4% vs. 0.3% expected, same as previous
- Italian quarterly jobless rate: 11.0% as expected vs. 11.2% previous
- U.S. NFIB small business index: 107.6 vs. 107.1 expected, 106.9 previous
Jean-Claude Juncker, the European Commission President, was speaking at the European Parliament earlier during the session. And he said that an actual Brexit will happen on March 29, 2019, which caused British MEPs and other Anti-EU MEPs to clap and cheer.
In response, Juncker warned that the time “will come when you will regret your decision,” which caused the British MEPs to cheer some more.
Other than that, Juncker also repeated the E.U.’s stance that “cherry-picking is not going to be possible” when it comes to a future trade deal.
Moreover, he called out to British PM Theresa May, asking her to give “more clarity on how the UK sees its future relationship with the EU.”
Juncker also talked about Trump’s tariffs, saying that:
“We are expecting more clarity on the American side in the coming days and will continue to work with our partners to push for an exemption.”
Commodities were broadly in the red during the morning London session, likely because of the Greenback’s recovery. Although it should be noted that the Greenback’s performance was actually mixed during the session itself.
With that said, the U.S. dollar index closed the session 0.13% higher for the day to 90.01.
Precious metals were down.
- Gold was down by 0.16% to $1,318.70 per troy ounce
- Silver was down by 0.16% to $16.510 per troy ounce
Base metals were actually mixed, but even those that were still in the green were off the day’s highs.
- Copper was down by 0.03% to $3.123 per pound
- Tin was down by 0.09% to $21,387.50 per dry metric ton
Oil benchmarks were in the green when the session opened but were in the red by the end.
- U.S. WTI crude oil was down by 0.21% to $61.23 per barrel
- Brent crude oil was down by 0.31% to $64.75 per barrel
More risk-taking in Europe
Europe enjoyed another bout of optimism that kept the major European equity indices well-supported throughout the morning London session.
Market analysts attributed the risk-on vibes to deal-making activity, such as between German utility companies RWE and E.ON to acquire Innology.
However, other market analysts noted that gains in the European equities market were capped because of jitters ahead of the U.S. CPI report. There’s therefore a risk sentiment may change, depending on how the U.S. CPI readings turn out.
- The pan-European FTSEurofirst 300 was up by 0.15% to 1,485.12
- Germany’s DAX was up by 0.16% to 12,437.25
- The blue-chip Euro Stoxx 50 was up by 0.41% to 3,444.00
U.S. equity futures were also well-supported, reinforcing the idea that risk-taking was the more prevalent sentiment ahead of the U.S. CPI report.
- S&P 500 futures were up by 0.22% to 2,795.25
- Nasdaq futures were up by 0.11% to 7,173.50
Major Market Mover(s):
The yen was arguably the only real mover during the morning London session since the yen was clearly suffering across the board, extending its losses from earlier.
This risk-on vibes in Europe likely helped to sustain the yen’s weakness. However, some market analysts also blamed the political uncertainty in Japan caused by allegations of a possible cover up by Japanese PM Shinzo and Finance Minister Taro Aso in their suspected involvement in a scandal.
USD/JPY was up by 22 pips (+0.21%) to 107.19, GBP/JPY was up by 31 pips (+0.21%) to 148.89, NZD/JPY was up by 25 pips (+0.32%) to 78.51
Watch Out For:
- 12:30 pm GMT: Headline (0.2% expected, 0.5% previous) and core (0.2% expected, 0.3% previous) readings for U.S. CPI
- 2:15 pm GMT: BOC Guv’nah Stephen Poloz is scheduled to give a speech
- 9:45 pm GMT: New Zealand’s current account (-$2.45B expected, -$4.68B previous)