The pound traded sideways for the most part, but caught a bid late into the session. And there were apparently enough buyers to propel the pound to the top spot.
The Loonie, meanwhile, was under bearish pressure and is now the second biggest loser of the day (so far), even as oil prices recovered from an earlier dip.
- German PPI m/m: 0.2% vs. 0.4% expected, 0.3% previous
- Lots of central bankers will be speaking later
Brexit talks will resume tomorrow
Theresa May’s office announced over the weekend that Brexit Secretary Dominic Raab will meet with Michel Barnier, his E.U. counterpart, to start another round of Brexit talks.
And during the session, media reports were trumpeting about the upcoming two-day Brexit meeting since the topic of discussion will supposedly be about the growing possibility of a “no deal” scenario.
And to spice things up even further, there are also reports that Theresa May will release technical notices on Thursday (after Brexit talks end), which will supposedly help British citizens and businesses prepare for a “no-deal” scenario.
Turkish President Tayyip Erdogan’s pre-recorded speech was televised earlier during the session. And, well, Erdogan apparently maintained his defiant tone since he said that:
“Those who think they can make Turkey give in with the exchange rate will soon see that they are mistaken.”
Erdogan even appears to have upped the ante by flavoring his statements with a dash of patriotism and a pinch of religion when he said that:
“The attack on our economy has absolutely no difference from attacks on our call to prayer and our flag. The goal is the same. The goal is to bring Turkey and the Turkish people to their knees, to take it prisoner.”
Risk-friendly start in Europe
Europe is apparently starting the new trading week on an optimistic note since the major European equity indices were broadly in the green after a mixed start.
And according to market analysts, the risk-friendly vibes in Europe were due to hopeful speculation that the U.S. and China can hammer out a deal to deescalate or even resolve their ongoing trade war.
- The pan-European FTSEurofirst 300 was up by 0.60% to 1,499.71
- Germany’s DAX was up by 1.03% to 12,336.45
- The blue-chip Euro Stoxx 50 was up by 0.74% to 3,396.25
The risk-friendly vibes in Europe also kept U.S. equity futures well supported.
- S&P 500 futures were up by 0.18% to 2,857.25
- Nasdaq futures were up by 0.32% to 7,411.50
Major Market Mover(s):
Most GBP pairs were range-bound during the earlier half of the session. However, they caught a bid across the board during the later half, which allowed the pound to claim the top spot (during the session at least).
The trigger for all that buying pressure is not really clear, but it’s possible that some GBP bears were covering their shorts after last week’s GBP slide and ahead of this week’s Brexit meeting.
GBP/USD was up by 29 pips (+0.23%) to 1.2768, GBP/CHF was up by 26 pips (+0.21%) to 1.2704, GBP/CAD was up by 46 pips (+0.28%) to 1.6691
The Loonie’s price action was also kinda wonky in that there was steady selling pressure on the Loonie, which pushed the Loonie to the bottom of the forex heap.
Oil prices did dip during the earlier Asian session and also began to encounter sellers late into the session. But for most of the session, oil benchmarks were actually clawing their way higher.
Despite the recovery in oil prices during the session, the Loonie continued to encounter sellers, so much so that the Loonie was not only the biggest loser of the session, but is also the second worst-performing currency of the day (so far) after the Kiwi.
No clear reason why, though.
USD/CAD was up by 11 pips (+0.08%) to 1.3072, EUR/CAD was up by 14 pips (+0.09%) to 1.4930, AUD/CAD was up by 8 pips (+0.09%) to 0.9551
Watch Out For:
- 1:15 pm GMT: BOC Senior Deputy Governor Carolyn Wilkins will speak in a panel discussion
- 2:30 pm GMT: CB’s Australian leading index (0.1% previous)
- 3:00 pm GMT: Atlanta Fed President Raphael Bostic is scheduled to speak
- 4:00 pm GMT: Deutsche Bundesbank President and ECB Member Jens Weidmann will speak
- 10:00 pm GMT: RBA Governor Philip Lowe will give a speech