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The pound resumed its uphill trek during the session after closing the bullish gaps on most GBP pairs during the earlier session.

The pound was unable to claim the top spot, though, since it was challenged by the higher-yielding Kiwi and Aussie, with the Kiwi ultimately coming out on top (during this session at least).

While all that was happening, the Greenback quietly slipped broadly lower. The Greenback wasn’t the weakest currency of the session, though, since that (dis)honor goes to the Swissy.

  • Swiss jobless rate: 2.6% vs. 2.5% expected, 2.7% previous
  • German trade balance: €20.3B as expected vs. €19.0B previous
  • German exports m/m: 1.8% vs, 0.8% expected, -0.3% previous
  • Sentix Euro Zone investor confidence: 12.1 vs. 9.0 expected, 9.3 previous

Major Events/Reports:

Meet the new Brexit secretary

I’ll just leave this here…

David Davis speaks

Former Brexit Secretary David Davis was interviewed by the BBC earlier during the session.

Davis’ tone sounded negative at first when he said that:

“It seems to me we are giving too much away too easily and that’s a dangerous strategy at this time.

“Hopefully we will resist very strongly any attempt to get any further concessions from us on this, because I think this further than we should have gone already.”

In simpler terms, Davis is saying that Theresa May’s proposals will likely deliver a Brexit that’s in name only and not an actual exit from the E.U., which is goods news for investors who want a so-called “soft Brexit”.

Davis then went on to say that he could no longer be “front and center” of delivering the policy, since he’s “unpersuaded” that the government’s current approach “will not just lead to further demands for concessions.”

However, Davis did try to sound conciliatory when he said that Theresa May should continue as the Prime Minister, adding that ousting Theresa May now would be “the wrong thing to do,” adding that “I won’t throw my hat into the ring.”

ECB’s Nowotny speaks

ECB Member Ewald Nowotny was spoke during the session and is still actually speaking as I wite the recap.

Anyhow, here are some choice quotes, courtesy of LiveSquawk.

Upbeat start in Europe

Europe is apparently starting the new trading week on a strong footing, given that the major European equity indices are broadly in the green for the day.

And according to market analysts, the risk-friendly vibes are due to last Friday’s U.S. NFP report, which is viewed as balanced (or positive) overall despite the weaker-than-expected wage growth.

Those market analysts also cited risk sentiment spillover from the earlier Asian session, thanks to the Chinese equities rally caused by an announcment over the weekend that China will remove some restrictions on foreign investment at the Shanghai or Shenzhen stock exchanges.

Other market analysts, meanwhile, pointed to positive German trade data and relief buying since there’s still no evidence that the trade spat between the U.S. and China is already having a negative effect on the global economy.

  • The pan-European FTSEurofirst 300 was up by 0.57% to 1,506.70
  • Germany’s DAX was up by 0.26% to 12,527.78
  • The blue-chip Euro Stoxx 50 was up by 0.45% to 3,462.05

U.S. equity markets also got a lift, so there’s a good chance that the risk-friendly vibes may also carry over into the upcoming U.S. session.

  • S&P 500 futures were up by 0.36% to 2,773.25
  • Nasdaq futures were up by 0.44% to 7,265.25

Major Market Mover(s):

GBP

The pound opened the trading week by gapping higher across the board, thanks to news over the weekend that Theresa May and her cabinet have agreed on a “collective” Brexit proposal. Those gaps then began to close when word got around that Brexit Secretary David Davis resigned.

Anyhow, the pound began moving broadly higher after the gaps were closed and before the morning London session even rolled around. And according to market analysts, that’s because Davis’ resignation would make a so-called  “soft Brexit” more likely to come about, superseding concerns that Davis’ resignation might mean political trouble for Prime Minister Theresa May.

And during the morning London session itself, the pound got a bullish boost when David Davis was interviewed by the BBC, likely because Davis reinforced the idea that his exit would make a a so-called  “soft Brexit” more likely. Moreover, Davis did try to assuage the market when he encouraged Theresa May to stay on.

GBP/USD was up by 37 pips (+0.28%) to 1.3346, GBP/CHF was up by 42 pips (+0.32%) to 1.3186, GBP/JPY was up by 33 pips (+0.22%) to 147.40

NZD

As mentioned earlier, the pound climbed broadly higher. However, the pound’s rise was not unopposed since the higher-yielding Aussie and Kiwi gave the pound a tough time, likely because of rising commodity prices and the risk-friendly vibes in Europe.

In fact, the Kiwi was even able to dethrone the pound to claim the top spot (during this session at least).

NZD/USD was up by 15 pips (+0.23%) to 0.6854, NZD/CHF was up by 22 pips (+0.33%) to 0.6773, NZD/JPY was up by 18 pips (+0.24%) to 75.71

USD

The Greenback was the second weakest currency of the morning London session. There were no apparent catalysts, but it’s possible that the Greenback’s weakness is just an extension of last week’s slide due to trade-related worries and a weaker-than-expected wage growth.

Market analysts mainly blamed the weaker-than-expected wage growth for the Greenback’s weakness, but they also pointed to higher demand for the Chinese yuan and higher-yielding currencies like the Kiwi and the Aussie, which sapped demand for the Greenback.

EUR/USD was up by 19 pips (+0.16%) to 1.1782, USD/JPY was down by 5 pips (-0.04%) to 110.44, USD/CAD was down by 7 pips (-0.05%) to 1.3075

CHF

The safe-haven Swissy barely lost out to the Greenback and was the worst-performing currency of the morning London, likely because of the risk-on vibes.

USD/CHF was up by 5 pips (+0.05%) to 0.9880, CAD/CHF was up by 6 pips (+0.09%) to 0.7555, AUD/CHF was up by 22 pips (+0.30%) to 0.7390

Watch Out For:

  • 1:00 pm GMT: ECB Overlord Draghi will testify before the European Parliament Economic and Monetary Affairs Committee
  • 3:00 pm GMT: Draghi will testify again
  • 7:00 pm GMT: U.S. consumer credit ($12.0B expected vs. $9.3B previous)