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Price action was a bit choppy during the morning London session. However, the euro and the Swissy were clearly moving in one direction – up.

The pound, meanwhile, was broadly lower during the morning London session. It’s slide wasn’t as clear-cut as the euro and Swissy’s strength, though.

  • Swiss KOF economic barometer: 101.1 vs. 101.6 expected, 101.3 previous
  • Spanish flash HICP m/m: -1.2% s. -1.1% expected, 0.2% previous
  • U.K. mortgage approvals: 65.62K vs. 65.50K expected vs. 64.68K previous
  • U.K. net lending to individuals: £5.4B vs. £5.3B expected, £5.3B previous
  • Euro Zone business climate: 1.29 vs. 1.35 expected, 1.38 previous
  • Euro Zone consumer confidence: unchanged at -0.6 as expected
  • German HICP m/m: 0.4% as expected vs. 0.1% previous

Major Events/Reports:

BOE Carney speaks

Bloomberg published its interview with BOE Guv’nah Mark Carney earlier during the session. And Carney warned that “a low road of protectionism focused on bilateral goods-trade balances … will cost jobs, growth, and stability.”

When Carney was asked what he thinks about Trump’s trade war in particular, Carney noted that “The impact of the actions to date is likely to be small … and would be largely confined to the countries directly involved.”

However, Carney was quick to add that “a larger increase in tariffs would have a substantial impact.”

Carney then gave the following example of how higher tariffs would affect the U.S. and global economy:

“For example, an increase in tariffs of 10 percentage points between the U.S. and all of its trading partners could take 2.5 percent off U.S. output and 1 percent off global output through trade channels alone.”

After that, Carney warned that there are already tentative signs that trade-related uncertainty may be “dampening activity,” noting that:

“[S]urvey measures of global export orders and manufacturing output have fallen back from highs at the start of this year, and growth in U.S. and euro-area capital goods orders fell to zero in the first quarter of this year.”

With regard to Brexit, Carney admitted that “it takes 50 percent of [his] time now,” adding that the BOE “spent a fair amount of time in the contingency planning.”

And apparently, the BOE is also planning for a “no deal” Brexit scenario since Carney later noted that “Within nine months [the BOE] could have a disorderly Brexit stress test.”

BOE’s Money and Credit report

The BOE released its Money and Credit report for the June period today.

And according to the report, the number of mortgage approvals came in at 65.62K, slightly more than the expected 65.50K and the previous month’s 64.68K figure. This is the largest increase in five months and marks the second consecutive month of stronger readings.

Aside from that, net lending to individuals increased by £5.4 billion in June, slightly more than the expected £5.3 billion.

Overall, a good enough report. Some market analysts even say that report support expectations for a BOE rate hike this Thursday.

Downbeat start in Europe

Europe is apparently starting the new trading week on a sour note since the major European equity indices were broadly in the red today.

And according to market analysts, the downbeat vibes in Europe were due to poor earnings results and lingering concerns over tech stocks.

  • The pan-European FTSEurofirst 300 was down by 0.28% to 1,530.81
  • Germany’s DAX was down by 0.24% to 12,830.07
  • The blue-chip Euro Stoxx 50 was down by 0.40% to 3,514.95

The risk-off vibes also weighed down on U.S. equity futures, hinting that risk aversion may persist into the upcoming U.S. session.

  • S&P 500 futures were down by 0.09% to 2,815.25
  • Nasdaq futures were down by 0.22% to 7,285.50

Major Market Mover(s):


The euro was the second strongest currency of the morning London session. There were no apparent catalysts, but some market analysts were pointing to bargain buying since last week’s ECB-induced slide was supposedly seen as overdone.

EUR/USD was up by 26 pips (+0.23%) to 1.1681, EUR/AUD was up by 27 pips (+0.17%) to 1.5793, EUR/GBP was up by 22 pips (+0.24%) to 0.8910


The Swissy was the top-performing currency of the morning London session, likely because it got an extra boost from the risk-off vibes in Europe.

USD/CHF was down by 29 pips (-0.29%) to 0.9925, AUD/CHF was down by 17 pips (-0.24%) to 0.7341, NZD/CHF was down by 13 pips (-0.19%) to 0.6755


The pound’s price action wasn’t really as clear-cut or unidirectional as the Swissy or the euro’s respective price action.

With that said, the pound was the weakest currency of the morning London session. It’s not really clear why, however. Sure, Carney said some cautious stuff about Trump’s trade policies and Brexit, but the pound’s slide started hours after Carney’s interview was published.

There was also a Sky News poll showing a lack of faith in British PM Theresa May’s handling of Brexit negotiations, but that was released around the same time as Carney’s interview.

GBP/USD was down by 6 pips (-0.05%) to 1.3108, GBP/CHF was down by 40 pips (-0.31%) to 1.3012, GBP/CAD was down by 45 pips (-0.26%) to 1.7104

Watch Out For:

  • 2:00 pm GMT: U.S. pending home sales (0.4% expected vs. -0.5% previous)