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The Aussie beat back the Greenback (for now) to claim the top spot during today’s morning London session, thanks to the steady rise in gold prices and risk-on vibes.

The Loonie, meanwhile, got stomped lower across the board (again) as oil prices slumped (again).

  • German IFO business climate: 102.2 vs. 102.0 expected, 102.1 previous
  • German IFO current conditions: 106.0 vs. 105.6 expected, 105.7 previous
  • U.K. second Q1 GDP estimate q/q: unchanged at 0.1% as expected
  • U.K. second Q1 GDP estimate y/y: unchanged at 1.2% as expected
  • Top central bankers will be speaking later

Major Events/Reports:

Q1 U.K. GDP unchanged

The second estimate of the U.K.’s Q1 2018 GDP growth was unchanged at +0.1% quarter-on-quarter, which is rather sad.

The annual reading was also unchanged at +1.2% year-on-year, which is rather disappointing since it’s the weakest reading since Q2 2012 and marks the fourth consecutive quarter of ever slower annual GDP growth.

A breakdown using the expenditure approach was also finally made available and it showed that consumer spending weakened even further (+0.2% vs. +0.3% previous).

Also business investment fell by 0.2% quarter-on-quarter, which is the first decline after four straight quarters of growth.

Year-on-year, consumer spending also eased (+1.1% vs. +1.2% previous). This marks the seventh consecutive quarter of ever weaker consumer spending.

Business investment, meanwhile grew at a slower annual pace (+2.0% vs. +2.6% previous).

Oil output to rise?

According to a Reuters report that cited unnamed “sources familiar with the matter,” Russia and Saudi Arabia are supposedly discussing the possibility of raising “raising OPEC and non-OPEC oil output by around 1 million barrels per day.”

No decision has been made yet, the unnamed sources say, but a decision will likely be made during the June 22-23 OPEC meeting in Vienna.

Khalid Al-Falih, the Saudi energy minister, was later asked to comment on this and he said that scaling back oil production limits is “on the table” but he stressed that nothing’s set in stone yet.

Oil slumps as other commodities gain (Part 2)

Today’s morning London session saw a repeat of yesterday’s commodities price action in that most commodities extended their gains while oil benchmarks got another beat-down.

The Greenback was actually mixed during the session but mostly higher for the day. We therefore can’t really attribute the commodities rally to Greenback weakness. And for reference, the U.S. dollar index was up by 0.18% to 93.89 for the day when the session ended.

Anyhow, market analysts said that precious metals (gold in particular) was well supported because safe-haven flows due to lingering worries after Trump backed out of a denuclearization talks with North Korea.

Base metals, meanwhile, were bid higher because of speculation that Chinese demand will pick up because of the electric vehicle boom in China, as well as supply concerns for some base metals, market analysts say.

As for the slide in oil prices, market analysts blamed that on expectations that OPEC and Russia may ramp up their oil output.

Precious metals were in positive territory despite the risk-on vibes.

  • Gold was up by 0.06% to $1,305.20 per troy ounce
  • Silver was up by 0.11% to $16.705 per troy ounce

Base metals were also in demand again.

  • Copper was up by 0.26% to $3.104 per pound
  • Zinc was up by 1.10% to $3,067.00 per dry metric ton

Oil benchmarks got kicked lower again.

  • U.S. WTI crude oil was down by 1.82% to $69.42 per barrel
  • Brent crude oil was down by 2.03% to $77.19 per barrel

Some risk-taking to end to the week

The major European equity indices were finally glowing broadly gamma green after two days of risk aversion.

And according to market analysts, the risk-friendly vibes in Europe was due to relief that North Korea did not respond in a hostile manner to Trump’s decision to call of denuclearization talks.

However, it’s also possible that we’re just seeing some short-covering to avoid weekend risk.

  • The pan-European FTSEurofirst 300 was up by 0.50% to 1,536.86
  • Germany’s DAX was up by 1.02% to 12,985.96
  • The blue-chip Euro Stoxx 50 was up by 0.67% to 3,547.05

Major Market Mover(s):

AUD

The Aussie was able to fight back against Greenback domination (for now) and was the best-performing currency of the morning London session and is also the top gainer of the day (so far).

And Aussie bulls can probably thank the steady rise in gold prices and risk-on vibes for that.

AUD/USD was up by 10 pips (+0.13%) to 0.7571, AUD/NZD was up by 22 pips (+0.21%) to 1.0952, AUD/CAD was up by 40 pips (+0.41%) to 0.9804

CAD

The Loonie had another bad run during today’s morning London session, very likely because of another slump in oil prices.

USD/CAD was up by 35 pips (+0.27%) to 1.2949, EUR/CAD was up by 16 pips (+0.10%) to 1.5110, NZD/CAD was up by 17 pips (+0.19%) to 0.8952

Watch Out For:

  • 12:30 pm GMT: Headline (-1.3% expected vs. 2.6% previous) and core (0.5% expected vs. 0.0% previous) readings for U.S. durable goods orders
  • 1:20 pm GMT: BOE Guv’nah Mark Carney will be speaking in a panel discussion
  • 1:20 pm GMT: Fed Chair Jerome Powell is scheduled to give a speech
  • 2:00 pm GMT: University of Michigan’s revised consumer sentiment (steady at 98.8 expected)
  • 2:00 pm GMT: University of Michigan’s revised inflation expectations (steady at 2.8% expected)
  • 3:45 pm GMT: Atlanta Fed President Raphael Bostic will speak