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Today’s morning London session was rather lively with the Aussie and the euro standing out, since the former easily steamrolled its peers during the course of the session while the latter was swamped by sellers.

  • German HICP m/m: no change from +0.5% as expected
  • German HICP y/y: no change from +1.4% as expected
  • Italian retail sales m/m: -0.5% vs. -0.1% expected, -0.9% previous
  • Euro Zone’s employment change q/q: 0.3% as expected vs. 0.4% previous
  • Euro Zone industrial production m/m: -1.0% vs. -0.4% expected, 0.4% previous

Major Events/Reports:

ECB members speak

Earlier today, a few ECB members gave speeches at the ECB’s press conference in Frankfurt or were interviewed . And some of them touched upon monetary policy and/or the euro in their respective speeches.

First up is ECB Overlord Draghi. And in his speech, he said that ECB is confident that inflation will rise. However, “we [the ECB] still need to see further evidence that inflation dynamics are moving in the right direction. So monetary policy will remain patient, persistent and prudent.”

Draghi also took the opportunity to jab at the euro, saying that:

“The euro has appreciated since the beginning of last year, and according to our analysis, this has recently been driven more by exogenous factors … This might weigh on inflation down the line as it does not fully arise from stronger euro area fundamentals.”

Up next is Peter Praet, the ECB’s chief economist. And in his speech, Praet gave the same assessment and outlook on inflation as Draghi. To quote directly from his speech:

“We cannot yet declare ‘mission accomplished’ on the inflation front, but we have made substantial progress on the path towards a sustained adjustment in inflation.”

Moving on, ECB board member Yves Mersch, in a newspaper interview, reiterated the ECB’s message that interest rates aren’t budging anytime soon since Mersch was quoted as saying that:

“We are not yet ready at this stage to change interest rates. We first take the non-conventional measures towards the exit.”

Most commodities rise

Commodities were broadly in demand during the morning London session, even though the U.S. dollar is still a net winner for the day.

And for reference, the U.S. dollar index was up by 0.12% to 89.81 for the day by the end of the session.

Anyhow, market analysts say that the commodities rally was fueled mainly by China’s better-than-expected readings for industrial production from earlier.

Not all commodities were in rally mode, though, precious metals had a hard time catching a bid, very likely because the prevalence of risk appetite. After all, precious metals are considered as traditional safe havens.

Base metals were in high demand. In fact, most top performers were base metals.

  • Copper was up by 1.40% to $3.182 per pound
  • Tin was up by 0.95% to $14,015.00 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 up by 0.63% to $61.09 per barrel
  • Brent crude oil was up by 0.56% to $65.00 per barrel

As mentioned earlier, precious metals were the odd ones out since they were down in the dumps.

  • Gold was down by 0.16% to $1,325.00 per troy ounce
  • Silver was down by 0.31% to $16.575 per troy ounce

Risk appetite revived in Europe

Initially, it looked like risk aversion from the earlier Asian session spilled over into Europe.

However, it soon became very clear that risk appetite got revived since the major European equity indices were broadly in the green by the end of the morning London session.

And market analysts say that the risk-taking returned to Europe because of the commodities rally, which boosted mining shares, as well positive news from Adidas. Lingering jitters related to a potential trade war were notable, though, and likely capped the gains of the major European equity indices.

  • The pan-European FTSEurofirst 300 was up by 0.41% to 1,474.17
  • Germany’s DAX was up by 0.35% to 12,263.37
  • The blue-chip Euro Stoxx 50 was up by 0.43% to 3,412.00

U.S. equity futures were also in the green, which implies that the risk-on vibes may carry over into the upcoming U.S. session.

  • S&P 500 futures were up by 0.30% to 2,781.00
  • Nasdaq futures were up by 0.46% to 7,116.00

Major Market Mover(s):


The euro was already feeling a bit under the weather before the morning London session even rolled around. And the euro’s malady only became worse during the session itself, so much so that the euro was the worst-performing currency of the morning London session.

And linking price action to the available catalysts, it looks like the euro began encountering broad-based selling pressure when Draghi gave his speech, so the ECB Overlord is likely the culprit for the euro’s weakness.

EUR/USD was down by 12 pips (-0.09%) to 1.2377, EUR/GBP was down by 17 pips (-0.19%) to 0.8856, EUR/AUD was down by 54 pips (-0.34%) to 1.5667


The Aussie easily dominated its peers during the morning London session, likely because of the risk-on vibes and the commodities rally.

Sure, gold was in the red during the session, but it was already off its lows. Moreover, it’s likely that the Aussie also got a boost from the surge in iron ore prices from earlier.

AUD/USD was up by 21 pips (+0.28%) to 0.7902, AUD/CHF was up by 23 pips (+0.31%) to 0.7467, AUD/CAD was up by 24 pips (+0.24%) to 1.0232

Watch Out For:

  • 12:30 pm GMT: Headline (0.3% expected, -0.3% previous) and core (0.4% expected, 0.0% previous) readings for U.S. retail sales; read Forex Gump’s Event Preview
  • 12:30 pm GMT: Headline (0.1% expected, 0.4% previous) and core (0.2% expected, 0.4% previous) readings for U.S. PPI
  • 2:00 pm GMT: U.S. business inventories (0.6% expected, 0.4% previous)
  • 2:30 pm GMT: U.S. crude oil inventories (2.2M expected, 2.4M previous)
  • 9:45 pm GMT: New Zealand’s GDP (0.8% expected, 0.6% previous)