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The Swissy was the one currency to rule them all during the morning London session, likely because of fading appetite for risk.

The Greenback, meanwhile, was broadly in retreat. And while the euro was able to capitalize on the Greenback’s retreat, the euro only ranked in third place since it was the Kiwi that claimed the second top spot.

As for the other currencies, the pound and Aussie were mixed, while the yen was generally weaker, probably because of higher bond yields. As for the Loonie, it finished in fourth place, but was getting a boost near the end when Mnuchin was interviewed by CNBC.

  • French consumer confidence: steady at 97.0 as expected
  • Italian consumer confidence: 115.2 vs. 115.9 expected, 116.2 previous
  • Italian PPI m/m: 0.3% expected, same as previous

Major Events/Reports:

Mnuchin speaks

Treasury Secretary Steven Mnuchin was interviewed by CNBC very late into the session.

And, well, this was the main takeaway from Mnuchin’s interview:

Mnuchin also said that their objective “is to try to get Canada on board quickly,” which is a good sign for Canada.

However, Mnuchin was quick to add that “this deal is about more trade for U.S. companies and goods and services, and that’s what we’re focused on.” And if the U.S. can’t hammer out a deal with Canada, then the U.S. will just leave Canada behind and proceed with the deal it hammered out with Mexico.

North Korea rumors

According to a CNN report that cited “Three sources with direct knowledge of the North Korean position on denuclearization” as saying that North Korean officials have supposedly sent a letter to U.S. Secretary of State Mike Pompeo.

The letter allegedly stated that “the U.S. is still not ready to meet [North Korean] expectations in terms of taking a step forward to sign a peace treaty.” Moreover, the unnamed sources supposedly said that denuclearization talks “may fall apart.”

Rumors of the alleged letter are not new since The Washington Post released a similar report yesterday. However, the CNN report does appear to support the Washington Post report, increasing the probability that such a letter does exist.

Oil struggles as other commodities rise

Most commodities extended their bullish run during the morning London session. And while oil benchmarks were also initially on the rise, they were hit by selling pressure late into the session.

The broad-based rise in commodity prices was likely sustained by the Greenback’s weakness. And just for reference, the U.S. dollar index was down by 0.11% to 94.57 for the day by the end of the session.

Other than that, market analysts also say that easing trade war fears helped to boost demand for base metals like copper.

As to why oil benchmarks were hit by selling pressure near the end, that appears to have been a reaction to a Reuters report that cited Ibrahim al-Muhanna, an advisor to the Saudi Energy Minister, as saying that (emphasis mine):

“Is Iran able or willing to close completely, or even partially, the Strait of Hormuz or Bab Al-Mandab, or both? The answer is no, and a really big no … Current sanctions are unlikely to stop Iranian exports completely.”

Base metals were broadly in the green.

  • Copper was up by 0.81% to $2.754 per pound
  • Nickel was up by 0.73% to $13,527.50 per dry metric ton

Precious metals were also in positive territory.

  • Gold was up by 0.31% to $1,219.80 per troy ounce
  • Silver was up by 0.38% to $14.915 per troy ounce

Oil benchmarks were in positive territory earlier, but encountered selling pressure late into the session and are now mixed for the day.

  • U.S. WTI crude oil is already down by 0.22% to $68.72 per barrel after reaching an intraday high of $69.19 earlier
  • Brent crude oil is still up by 0.34% to $76.77 per barrel for the day but reached an intraday high of $77.14 earlier

Risk-taking prevails but faltering

The major European equity indices started the day on a strong footing but eventually ran into sellers and began paring their gains. Some were even pushed into negative territory by the end of the morning London session.

Market analysts attributed the earlier risk-on vibes to optimism over the progress in NAFTA talks as well as the commodities rally.

As to why risk-taking appeared to fade late on, that’s not yet very clear. The energy sector was the one that got hit the hardest, though, so retreating oil prices is very likely one of the reasons for the deterioration in risk sentiment. However, oil prices only began to retreat late into the session.

It’s also possible that jitters related to North Korea may have helped to sour sentiment since many of the major European equity indices began to turn south after the CNN report was released.

  • The pan-European FTSEurofirst 300 was still up 0.03% to 1,509.07 but off the day’s high at 1,513.39
  • Germany’s DAX was still up by 0.09% to 12,549.99 but off the day’s high at 12,595.95
  • The blue-chip Euro Stoxx 50 was already down by 0.07% to 3,455.45 after reaching an intraday high of 3,463.25

Major Market Mover(s):


The Greenback was on the back foot during the morning London session and even happens to be the worst-performing currency of the session.

There were no direct catalysts for the Greenback’s weakness, but market analysts suggest that market players may be unwinding their safe-haven bets because of optimism related to the progress in NAFTA talks.

USD/CHF was down by 39 pips (-0.40%) to 0.9757, USD/JPY was down by 12 pips (-0.12%) to 111.03, USD/CAD was down by 37 pips (-0.29%) to 1.2927


The Swissy was the top-performing  currency of the morning London session and is also currently the top-performing currency of the day (so far).

And Swissy bulls can probably thank the returning risk-off vibes for that since there wasn’t really anything else.

GBP/CHF was down by 22 pips (-0.18%) to 1.2601, AUD/CHF was down by 20 pips (-0.28%) to 0.7175, CAD/CHF was down by 9 pips (-0.12%) to 0.7547


The Kiwi and the euro were in second place and third place respectively. There were a few minor updates for the euro while the Kiwi practically had none. However, it’s likely that the two were just feeding off the Greenback’s weakness.

NZD/USD was up by 22 pips (+0.33%) to 0.6712, NZD/CAD was up by 8 pips (+0.09%) to 0.8676, NZD/JPY was up by 16 pips (+0.22%) to 74.53

EUR/USD was up by 27 pips (+0.23%) to 1.1716, EUR/AUD was up by 17 pips (+0.12%) to 1.5930, EUR/JPY was up by 27 pips (+0.21%) to 130.08

Watch Out For:

  • 12:30 pm GMT: U.S. goods trade balance (-$69.0B expected vs. -$67.9B previous)
  • 12:30 pm GMT: Preliminary U.S. wholesale inventories (0.2% expected vs. 0.1% previous)
  • 1:00 pm GMT: S&P Case-Shiller composite U.S. HPI (6.43% expected vs. 6.51% previous)
  • 2:00 pm GMT: CB’s U.S. consumer confidence (126.5 expected vs. 127.4 previous)
  • 2:00 pm GMT: Richmond Fed’s manufacturing index (18 expected vs. 20 previous)