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Today’s morning London session was a lively one (but somewhat choppy), with lots of themes playing out.

However the most notable themes are the Kiwi’s broad-based recovery, and weakness on the part of the Swissy and the Greenback, as well as the euro’s poor performance after the ECB statement.

  • German GFK consumer climate: 10.8 vs. unchanged at 10.9 expected
  • Spanish jobless rate: 16.7% vs. 16.3% expected, 16.6% previous
  • CBI’s U.K. realized sales: -2 vs. -3 expected, -8 previous
  • ECB announced no changes to current monetary policy
  • ECB maintained refinancing rate at 0.00%
  • Marginal lending rate maintained at at 0.25%
  • Likewise, deposit rate maintained at -0.40%
  • QE extension until September 2018 at €30B per month was reaffirmed
  • ECB presser coming up; watch it live here

Major Events/Reports:

ECB monetary policy decision

As expected, the ECB announced during its official press statement that no changes were made to the current monetary policy.

In fact, the ECB’s press statement is a verbatim copy of the March ECB press statement.

The refinancing rate is therefore still at 0.00%. The marginal lending rate, meanwhile, is unchanged at 0.25%. As for the deposit rate, that’s still at -0.40%.

The ECB also reaffirmed that interest rates ain’t moving anytime soon when it repeated its forward guidance that:

“The Governing Council expects the key ECB interest rates to remain at their present levels for an extended period of time, and well past the horizon of the net asset purchases.”

Moreover, the ECB reaffirmed that reaffirmed that its extended QE program will run “until the end of September 2018, or beyond, if necessary” at a monthly pace of €30 billion.

Market players are now sitting tight for what ECB Overlord Draghi has to say in the ECB presser. And if you didn’t know, you can watch the ECB presser live by clicking here, if you’re interested.

Risk-friendly vibes in Europe

After yesterday’s intense bout of risk aversion, the major European equity indices were blessed with some risk-taking that sent them broadly higher.

And according to market analyts, the risk-off vibes were banished because of positive earnings reports and renewed demand for industrial shares, which were more than able to offset the disappointment caused by some disappointing earnings reports.

And to that I would add the slide in bond yields since the rise in bond yields have recently been blamed for the risk-off vibes since higher bond yields were interpreted to mean higher borrowing costs down the road and weaker demand for so-called “bond proxies” which are defensive stocks that pay steady dividends.

  • The pan-European FTSEurofirst 300 was up by 0.39% to 1,497.54
  • Germany’s DAX was up by 0.20% to 12,446.21
  • The blue-chip Euro Stoxx 50 up by 0.31% to 3,494.55

U.S. equity futures were also well-supported, thanks to the prevalence of risk appetite.

  • S&P 500 futures were up by 0.22% to 2,650.25
  • Nasdaq futures were up by 0.63% to 6,596.75

Global bond yields fall

Global bond yields have been falling before the morning London session rolled around.

There were no clear catalysts, however. And market analysts were only stating the obvious when they pointed out that global bond yields were tracking the slide in U.S. bond yields ahead of the ECB statement.

  • German 10-year bond yield down by 3.46% to 0.613%
  • French 10-year bond yield down by 2.15% to 0.842%
  • U.K. 10-year bond yield down by 1.36% to 1.519%
  • U.S. 10-year bond yield down by 1.05% to 2.992%
  • Canadian 10-year bond yield down by 1.21% to 2.358%

Major Market Mover(s):


After getting whipped earlier, the Kiwi managed to stage a broad-based recovery during the morning London session.

In fact, the Kiwi was the best-performing currency of the session. And Kiwi bulls can likely thank the Greenback’s weakness and risk-on vibes for that.

NZD/USD was up by 11 pips (+0.15%) to 0.7073, NZD/JPY was up by 5 pips (+0.06%) to 77.24, NZD/CAD was up by 17 pips (+0.18%) to 0.9081


The euro was the second weakest currency of the morning London session. The euro was mixed but was already showing some weakness ahead of the ECB statement, likely because of the slide in European bond yields. However, the euro got a final kick lower when the ECB announced no changes to its monetary policy.

EUR/USD was down by 21 pips (-0.17%) to 1.2157, EUR/CAD was down by 22 pips (-0.14%) to 1.5608, EUR/NZD was down by 53 pips (-0.31%) to 1.7187


The euro was weak, but the Swissy was even weaker. And that’s likely because the Swissy was also feeling some extra selling pressure because of the risk-on vibes in Europe. Although the possibility that the SNB is sneakily weakening the Swissy is always there.

USD/CHF was up by 16 pips (+0.17%) to 0.9846, CAD/CHF was up by 10 pips (+0.13%) to 0.7669, NZD/CHF was up by 21 pips (+0.30%) to 0.6964


The Greenback was actually the second worst-performing currency until sellers charged in and kicked the euro lower after the ECB statement. And we can probably blame the Greenback’s weakness on the slide in U.S. bond yields. After all, the Greenback’s recent strength was supposedly due to the surge in U.S. bond yields since last week.

USD/JPY was down by 12 pips (-0.11%) to 109.17, AUD/USD was up by 8 pips (+0.11%) to 0.7569, GBP/USD was up by 15 pips (+0.12%) to 1.3956

Watch Out For:

  • 12:30 pm GMT: ECB presser; watch it live here
  • 12:30 pm GMT: Headline (1.6% expected vs. 3.1% previous) and core (0.5% expected vs. 1.0% previous)readings for U.S. durable goods orders
  • 12:30 pm GMT: U.S. wholesale inventories (0.7% expected, 1.0% previous)
  • 12:30 pm GMT: U.S. initial jobless claims (230K expected, 232K previous)
  • 12:30 pm GMT: Advanced U.S. goods trade balance (-$75.0B expected vs. -$75.9B previous)