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There wasn’t much on the docket. Even so, today’s morning London was rather lively, with Loonie strength and euro weakness being the main themes.

  • German PPI m/m: 0.1% vs. 0.2% expected, -0.1% previous
  • German PPI y/y: 1.9% vs. 2.0% expected, 1.8% previous
  • Canada’s retail sales and CPI reports coming up

Major Events/Reports:

BOE’s Saunders speaks

BOE MPC Member Michael Saunders was speaking earlier. And he appeared to contradict Carney’s cautious comments from yesterday when he (Saunders) said right off the bat that:

“[W]ith spare capacity largely used up and cost pressures rising, I believe the economy no longer needs as much stimulus as previously. Rather, we probably need to move over time to something more like neutral, in order to ensure a sustainable return of inflation to target.”

And that’s not the end of it since he also had this to say about the pace of hiking:

“Gradual does not imply that the MPC can only raise rates at a very low frequency, such as once per year. Nor does gradual mean that the MPC cannot tighten faster than markets price in.”

Most commodities end on a high note

Commodities had an early wobble but most had clearly regained their footing by the end of the session, with the exception of precious metals. Although oil benchmarks also pared some of their gains after Trump tweeted the following:

Anyhow, precious metals were likely on the losing side because of the returning risk-on vibes.

The rise in base metals, meanwhile, was still being attributed by market analysts to the sanctions imposed by the U.S. on Russia’s Rusal

As for oil’s rise before Trump’s tweet, market analysts say that was due to reports that supply is contracting, as well as reports that Russia has renewed its commitment to maintain the OPEC-led oil cut deal until the end of 2018.

Base metals were broadly in the green.

  • Copper was up by 0.15% to $3.136 per pound
  • Zinc was up by 0.90% to $3,258.75 per dry metric ton

Oil benchmarks were knocked down after Trump’s tweet but closed the session with some gains.

  • U.S. WTI crude oil was up by 0.31% to $68.50 per barrel
  • Brent crude oil was up by 0.26% to $73.97 per barrel

As mentioned earlier, precious metals had a rough time.

  • Gold was down by 0.44% to $1,342.90 per troy ounce
  • Silver was down by 0.72% to $17.115 per troy ounce

A little risk-taking to end the week

The major European equity indices started the trading day on a weak footing, which market analysts blamed on the dip in commodity prices.

However, positive earnings reports for Sweden’s Ericsson and Telia helped to drive up demand for telecoms and limit the damage.

And when commodities began to recover later, the major European equity indices also began shedding their losses and many were already in the green by the end of the session.

  • The pan-European FTSEurofirst 300 was up by 0.18% to 1,499.24
  • Germany’s DAX was already up by 0.08% to 12,575.86
  • The blue-chip Euro Stoxx 50 up by 0.46% to 3,503.15

Major Market Mover(s):


The euro was the worst-performing currency of the morning London session.

Oddly enough, there wasn’t really any apparent catalyst for the euro’s slide. Sure, there was disappointing German PPI data, but the euro’s broad-based slide commenced about an hour after Germany’s PPI report was released, so that wasn’t the likely catalysts.

However, it’s possible that we’re just seeing some profit-taking since the euro has been climbing broadly higher this week. And all the more so, given the uncertainty ahead of next week’s ECB statement.

Other market analysts share this view about unwinding ahead of the ECB statement.

EUR/USD was down by 39 pips (-0.31%) to 1.2304, EUR/CHF was down by 29 pips (-0.25%) to 1.1965, EUR/CAD was down by 69 pips (-0.44%) to 1.5566


The Loonie easily dominated its peers during today’s morning London session. And while the Loonie may have taken directional cues from the rise in oil prices earlier, it’s worth noting that the Loonie just soldiered on when oil prices began to retreat after Trump’s tweet.

It’s not clear what drove the Loonie higher, but preemptive positioning ahead of top-tier Canadian data is a possibility.

USD/CAD was down by 17 pips (-0.14%) to 1.2651, NZD/CAD was down by 30 pips (-0.33%) to 0.9139, GBP/CAD was down by 44 pips (-0.25%) to 1.7771

Watch Out For:

  • 12:30 pm GMT: Headline (0.4% expected vs. 0.3% previous) and core (0.4% expected vs. 0.9% previous) readings for Canada’s retail sales
  • 12:30 pm GMT: Canada’s headline CPI reading (0.4% expected vs. 0.6% previous)
  • 2:00 pm GMT: Euro Zone consumer confidence (-0.1 expected vs. 0.1 previous)
  • 3:15 pm GMT: San Francisco Fed President John Williams will speak