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Most currency pairs were milling about in tight ranges during the morning London session, likely because forex traders were bracing themselves for the trade meeting between U.S. President Trump and European Commission President Jean-Claude Juncker.

The session wasn’t a complete snooze fest, however, since the euro and the Greenback both showed weakness during the course of the session.

The Aussie, meanwhile, was able to stage a broad-based recovery despite the risk-off vibes. The Aussie did eventually take a step back against the yen and Swissy, though.

Anyhow, the Aussie wasn’t the top-performing currency of the session, since that honor actually goes to the Loonie, probably because of higher oil prices.

  • German IFO current conditions: 105.3 vs. 104.9 expected, 105.1 previous
  • German IFO business climate: 101.7 vs. 101.5 expected, 101.8 previous
  • Credit Suisse economic expectations: -4.0 vs 8.0 previous
  • U.K. gross mortgage approvals: 40.5K vs. 39.0K expected, 39.2K previous
  • Euro Zone private loans y/y: 2.9% vs. 3.0% expected, 2.9% previous
  • CBI’s U.K. realized sales: 20 vs. 16 expected, 32 previous
  • Trump and Juncker will meet later

Major Events/Reports:

E.U. is ready to escalate trade war

Earlier today, E.U. trade commissioner Cecilia Malmstrom was interviewed by Swedish newspaper Dagens Nyheter and she said that:

“We hope that it doesn’t come to that and that we can find a solution. If not, the EU Commission is preparing a rather long list of many American goods. It would be around $20 billion.”

In other words, the E.U. is ready to slap more tariffs on U.S. goods if trade talks fail to pan out and Trump pushes through with his plan to impose tariffs on European cars.

Commodities rise some more

Commodities extended their bullish run for yet another day during the morning London session.

And like yesterday, the commodities rally was likely sustained by the Greenback’s overall weakness.

And for reference, the U.S. dollar index was down by 0.15% to 94.25 for the day by the end of the morning London session.

Other than Greenback weakness, some market analysts also attributed the rise in oil prices to a report from the American Petroleum Institute, which revealed that U.S. oil inventories fell, thereby fueling speculation that the official inventory data from the Energy Information Administration will also print a draw later on.

  • Base metals extended their gains, albeit at a slower pace.
  • Copper was up by 0.20% to $2.816 per pound

Nickel was up by 0.26% to $13,645.00 per dry metric ton

Oil benchmarks had another good run.

  • U.S. WTI crude oil was up by 0.22% to $68.66 per barrel
  • Brent crude oil was up by 0.89% to $74.09 per barrel

Precious metals were in the green again today.

  • Gold was up up 0.40% to $1,230.40 per troy ounce
  • Silver was up by 0.52% to $15.600 per troy ounce

Sentiment flips back to risk-off

Risk sentiment apparently switched back to risk-off since the major European equity indices were broadly lower during today’s morning London session.

Market analysts noted that earnings results were actually mostly positive, but the optimism generated by those earnings results was overpowered by trade-related jitters ahead of the meeting between U.S. President Trump and European Commission President Jean-Claude Juncker

  • The pan-European FTSEurofirst 300 was down by 0.22% to 1,517.89
  • Germany’s DAX was down by 0.33% to 12,648.64
  • The blue-chip Euro Stoxx 50 was down by 0.31% to 3,476.35

The risk-off vibes also pushed U.S. equity futures into the red.

  • S&P 500 futures were down by 0.14% to 2,817.00
  • Nasdaq futures were down by 0.05% to 7,413.25

Global bond yields tumble

Another sign that risk aversion was the dominant sentiment in Europe was the demand for bond which caused global bond yield to fall. Although some market analysts also say that market players were wary of pushing European bond yield higher because of tomorrow’s ECB statement.

  • German 10-year bond yield down by 0.76% to 0.391%
  • French 10-year bond yield down by 1.27% to 0.692%
  • U.K. 10-year bond yield down by 0.78% to 1.266%
  • U.S. 10-year bond yield down by 0.24% to 2.943%
  • Canadian 10-year bond yield down by 0.09% to 2.223%

Major Market Mover(s):


Today’s morning London session was relatively quiet. Even so, the euro and the Greenback were clearly on the back.

And between the two, it was the Greenback that was weaker since EUR/USD was up by 5 pips (+0.04%) to 1.1695, which makes the Greenback the worst-performing currency of the session.

There were no negative catalysts for the two and there were even positive catalysts for the euro. However, it’s possible that the two currencies were encountering sellers because of jitters ahead of the trade meeting between U.S. President Trump and European Commission President Jean-Claude Juncker.

USD/CAD was down by 33 pips (-0.26%) to 1.3120, USD/CHF was down by 15 pips (-0.15%) to 0.9916, USD/JPY was down by 16 pips (-0.14%) to 111.04

EUR/CHF was down by 12 pips (-0.11%) to 1.1597, EUR/NZD was down by 11 pips (-0.07%) to 1.7175, EUR/AUD was down by 25 pips (-0.16%) to 1.5770


After sliding earlier, the Aussie was able to stage a broad-based recovery during the morning London session and even managed to close higher against the Swissy and yen (for now), even though risk aversion was the dominant sentiment in Europe.

As to why the Aussie bounced back, short covering is a likely reason, although Greenback weakness and higher gold prices also helped.

AUD/USD was up by 10 pips (+0.13%) to 0.7415, AUD/JPY was up by 3 pips (+0.03%) to 82.34, AUD/NZD was up by 10 pips (+0.09%) to 1.0889


The Aussie may have been able to score wins against the yen and the Swissy, but the Aussie still lost out to the Loonie, probably because the Loonie was tracking oil prices higher.

EUR/CAD was down by 29 pips (-0.19%) to 1.5343, GBP/CAD was down by 36 pips (-0.20%) to 1.7269, NZD/CAD was down by 11 pips (-0.12%) to 0.8933

Watch Out For:

  • 2:00 pm GMT: U.S. new home sales (669K expected vs. 689K previous)
  • 2:30 pm GMT: U.S. crude oil inventories (-2.6M expected vs. 5.8M previous)
  • 5:30 pm GMT: U.S. President Donald Trump is expected to meet with European Commission President Jean-Claude Juncker at the White House