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The Aussie was crushed earlier when ANZ and CBA announced that they’ll follow in Westpac’s footsteps by also hiking rates on variable home loans. And the Kiwi was apparently dragged lower in sympathy and because of the risk-off vibes.

However, the two-higher yielding comdolls got some respite during the morning London session, likely because of the risk-on vibes and rising commodity prices, as well the Greenback’s broad-based weakness.

The pound is also noteworthy since it finished the session in third place despite the lack of catalysts. And market analysts attributed the pound’s resilience to Brexit-related speculation, thanks mainly to the Bloomberg report that was released during yesterday’s U.S. session.

  • Swiss GDP q/q: 0.7% vs. 0.5% expected, 1.0% previous
  • German factory orders m/m: -0.9% vs. 1.8% expected, -3.9% previous
  • ADP report coming up
  • ISM’s non-manufacturing PMI report later
  • A bunch of central bankers will be speaking later

Major Events/Reports:

China issues warning to U.S.

Chinese Commerce Ministry Gao Feng had a presser earlier. And he was asked about the likely imposition of tariffs on $200B worth of Chinese goods once the public comment period in the U.S. expires later today.

And, well, Gao Feng replied by giving the following warning to the U.S.

“If the United States, regardless of opposition, adopts any new tariff measures, China will be forced to roll out necessary retaliatory measures.”

Commodities broadly higher

Most commodities were in rally mode during the morning London session. And we can probably thank the Greenback’s overall weakness for that since a weaker U.S. dollar means that globally-traded commodities (priced in USD) become relatively cheaper, especially for market players who hold non-USD currencies.

In fact, market analysts were attributing the demand for base metals such as copper on the Greenback’s weakness. Market analysts also attributed the demand for precious metals like gold on the Greenback’s weakness.

Anyhow, the U.S. dollar index was down by 0.05% to 95.03 for the day by the end of the session. It was actually in the green earlier.

Base metals were well in the green.

  • Copper was up by 2.11% to $2.665 per pound
  • Nickel was up by 0.62% to $12,555.00 per dry metric ton

Precious metals were also in high demand.

  • Gold was up by 0.81% to $1,211.00 per troy ounce
  • Silver was up by 0.53% to $14.295 per troy ounce

Oil benchmarks didn’t fare as well but were also in the green.

  • U.S. WTI crude oil is up by 0.16% to $68.83
  • Brent crude oil is up by 0.44% to $77.61

Signs of risk-taking in Europe

The major European equity indices had a wobbly start, but most of them eventually found support and even closed out the session modestly higher, which implies that risk-taking was the more dominant sentiment in Europe.

And according to market analysts, sentiment improved in Europe because of positive updates for French engine maker Safran and Italian utilities company Enel.

However, those same market analysts noted that gains were limited because of lingering concerns over emerging markets, as well as trade-related jitters since the public comment period on slapping tariffs on $200B worth of Chinese goods will expire today.

  • The pan-European FTSEurofirst 300 was up by 0.14% to 1,469.20
  • Germany’s DAX was up by 0.15% to 12,057.43
  • The blue-chip Euro Stoxx 50 was up by 0.11% to 3,319.85

Major Market Mover(s):


The higher-yielding Aussie and Kiwi were both in recovery mode during the session. In fact, the Aussie was the top-performing currency of the session, but the Kiwi was a close second. And AUD and NZD bulls can probably thank the recovery in risk sentiment, the Greenback’s weakness, and rising commodity prices for that.

NZD/USD was up by 17 pips (+0.26%) to 0.6594, NZD/JPY was up by 15 pips (+0.20%) to 73.40, NZD/CAD was up by 16 pips (+0.19%) to 0.8696

AUD/USD was up by 27 pips (+0.38%) to 0.7196, AUD/JPY was up by 25 pips (+0.31%) to 80.09, AUD/CAD was up by 28 pips (+0.30%) to 0.9489


All the safe-havens (USD, JPY, CHF) were actually feeling some bearish pressure during the session. However, it was the Greenback that was the weakest currency of the morning London session.

There weren’t any apparent catalysts for the Greenback’s weakness, but market analysts were pointing to the possible unwinding of safe-haven bets because of the risk-friendly vibes in Europe, as well as demand for the pound (at the Greenback’s expense).

USD/CHF was down by 12 pips (-0.12%) to 0.9694, USD/JPY was down by 9 pips (-0.08%) to 111.29, USD/CAD was down by 11 pips (-0.10%) to 1.3185

Watch Out For:

  • 12:15 pm GMT: ADP’s U.S. private non-farm employment change (200K expected vs. 219K previous)
  • 12:30 pm GMT: Canadian building permits (1.1% expected vs. -2.3% previous)
  • 12:30 pm GMT: U.S. initial jobless claims (213K expected vs. 213K previous)
  • 12:30 pm GMT: U.S. revised non-farm productivity (no change from 2.9% expected) and revised unit labor costs (no change from -0.9% expected)
  • 1:45 pm GMT: Markit’s final U.S. services PMI (no change from 55.2 expected)
  • 2:00 pm GMT: ISM’s U.S. non-manufacturing PMI (56.8 expected vs. 55.7 previous)
  • 2:00 pm GMT: U.S. factory orders (-0.6% expected vs. 0.7% previous)
  • 2:00 pm GMT: New York Fed President John Williams is scheduled to speak
  • 3:00 pm GMT: U.S. crude oil inventories (-2.2M expected vs. -2.6M previous)
  • 4:30 pm GMT: SNB Governing Board Member Fritz Zurbrugg has a speech
  • 6:30 pm GMT: BOC Senior Deputy Guv’nah Carolyn Wilkins will speak
  • 9:30 pm GMT: RBNZ Guv’nahAdrian Orr will be giving a speech