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Price action was rather wonky during the morning London session since the Loonie crushed its peers, even though oil prices were in retreat.

And that’s not the end of it since the safe-havens yen and Swissy were the worst-performing currencies despite the prevalence of risk aversion in Europe.

  • French consumer confidence: steady at 100.0 as expected
  • German GFK consumer climate: 10.9 vs. 10.7 expected, 10.8 previous
  • Credit Suisse economic expectations: 16.7 vs. 25.8 previous
  • CBI’s realized sales in the U.K.: -8 vs. 7 expected, 8 previous

Major Events/Reports:

Trump tweets (about North Korea)

U.S. President Trump was up early it seems. And he was enthusiastic to share these with the rest of us:

SNB’s Maechler speaks

SNB Governing Board member Andrea Maechler was interviewed by Swiss newspaper Handelszeitung earlier.

Maechler was asked about the possibility of an SNB rate hike, but Maechler was quick to dismiss the idea, saying that:

“If we would now end our expansive monetary policy, there would be a big risk that we would endanger the favorable development.”

And since Maechler is an SNB official, she also (quite naturally) took advantage of the opportunity to talk down the Swissy by saying the following:

“The franc is still highly valued, and in recent months it has even become stronger. Additionally the situation in the currency markets remains fragile.”

“It is hardly foreseeable that there will be a fundamental change in demand for the franc.”

Canada’s Freeland speaks

Chrystia Freeland, Canada’s foreign minister, was interviewed by NHK earlier today.

And she said that Canada will seek to have a full and permanent exemption from Trump’s tariffs. Other than that, she also defended her country’s decision to expel Russian diplomats from Canada in order to punish Russia for Russia’s alleged (and unproven) role in the poisoning of a Russian double agent.

Not really new or market-moving stuff, but it did coincide with the Loonie’s rise during the session.

Risk aversion prevails (but fading)

The major European equity indices opened broadly lower and then promptly proceeded to plumb new intraday lows, which clearly shows that risk aversion was the dominant sentiment in Europe.

However, signs that risk aversion was easing began to show later, so much so that the major European equity indices were broadly off their lows by the end of the morning London session.

The prevalence of risk aversion was blamed by market analysts on renewed fears of a trade war, as well as the slide in tech shares due to fears of potentially more regulations.

As for the later signs of recovering risk sentiment, there’s no clear reason for that yet, but the European bourses did seem to begin to erase their losses shortly after Trump’s tweet.

  • The pan-European FTSEurofirst 300 was still down by 0.15% to 1,436.23 but off the intraday low at 1,419.35
  • Germany’s DAX was stilldown by 0.40% to 11,922.38 but off the intraday low at 11,768.90
  • The blue-chip Euro Stoxx 50 was stilldown by 0.18% to 3,310.85 but off the intraday low at 3,268.45

U.S. equity futures were in the red earlier but they were already in positive territory by the end of the session, which is evidence that risk sentiment is recovering.

  • S&P 500 futures were up by 0.32% to 2,624.25
  • Nasdaq futures were up by 0.20% to 6,574.50

Month-end flows?

March is about to end, so some month-end capital flows are to be expected as hedge funds, mutual funds, pension funds, and other large players rebalance their portfolios and/or prepare to make cash distributions.

And these month-end flows sometimes result in some rather wonky price action.

In fact, some market analysts have been blaming some of the wonky price action since yesterday on month-end flows.

Also, month-end flows help to explain the wonky price action during today’s morning London session.

Major Market Mover(s):


The Loonie stood triumphant against its peers, which is rather strange since there were no market moving catalysts and oil was down in the dumps during the morning London session.

Chrystia Freeland, Canada’s foreign minister, did give an interview around the time the Loonie began to climb higher, but she didn’t really say anything new or market-moving.

USD/CAD was down by 26 pips (-0.20%) to 1.2876, NZD/CAD was down by 9 pips (-0.10%) to 0.9347, GBP/CAD was down by 62 pips (-0.34%) to 1.8217


The yen and Swissy were the biggest losers of the morning London session, even though risk aversion prevailed for the most part.

The Swissy had Maechler ‘s dovish comments at least, but there wasn’t really anything that could have caused the yen to slide. In fact, bond yields were down during the session, but that didn’t really help to prop up the yen.

The wonky performance of the two safe-havens may have been due to month-end flows.

However, it’s also possible that Trump’s tweet may have eased geopolitical tensions which then caused an unwinding of safe-haven trades. After all, the major European equity indices began to recover from their losses after Trump’s tweet, as mentioned earlier.

USD/CHF was up by 22 pips (+0.24%) to 0.9510, EUR/CHF was up by 32 pips (+0.27%) to 1.1795, CAD/CHF was up by 32 pips (+0.43%) to 0.7386

USD/JPY was up by 55 pips (+0.53%) to 106.03, EUR/JPY was up by 72 pips (+0.56%) to 131.45, NZD/JPY was up by 50 pips (+0.66%) to 76.96

Watch Out For:

  • 12:30 pm GMT: U.S. final GDP (2.7% expected vs. 2.5% previous) and GDP price index (no expected change from +2.3%)
  • 12:30 pm GMT: U.S. goods trade balance (-$74.4B expected vs. -$75.3B previous)
  • 12:30 pm GMT: U.S. preliminary wholesale inventories (0.5% expected vs. 0.8% previous)
  • 2:00 pm GMT: U.S. pending home sales (2.0% expected vs. -4.7% previous)
  • 2:30 pm GMT: U.S. crude oil inventories (0.5M expected vs. -2.6M previous)
  • 4:00 pm GMT: Atlanta Fed President Raphael Bostic is scheduled to speak
  • 9:45 pm GMT: Building consents in New Zealand (0.2% previous)