The U.S. midterm election results continued to weigh down on the Greenback during the morning London session.
And the main beneficiaries of the Greenback’s pain were apparently the Aussie and the Kiwi, although it’s very likely that the comdolls were also boosted by the commodities rally and the prevalence of risk-taking in Europe.
The Swissy also appears to have benefited from the Greenback’s weakness since demand for the Swissy began to ramp up after the Democrats were able to secure the 218 seats needed to take control of the House of Representatives.
As for the other currencies, the yen is also noteworthy since it was actually slightly weaker than the Greenback and was the worst-performing currency of the morning London session, likely because of the risk-friendly vibes in Europe.
- German industrial production m/m: 0.2% vs. -0.1% expected, 0.1% previous
- Swiss foreign currency reserves: CHF 753B vs. CHF 740B previous
- Halifax U.K. HPI m/m: 0.7% vs. 0.5% expected, -1.3% previous
- Italian retail sales m/m: -0.8% vs. -0.1% expected, 0.6% previous
- Euro Zone retail sales m/m: 0.0% vs. 0.1% expected, 0.3% previous
- U.S. President Trump will be speaking later
- RBNZ statement and presser later
Major Events/Reports:
Democrats seize control of U.S. House
There were already indications earlier, but it’s now official that the Democrats were able to secure the needed 218 seats to take over the U.S. House of Representatives.
And naturally, there were also headlines about messing with Trump’s agenda or even having Trump investigated.
Of course, Trump also gave them a piece of his mind (via Twitter).
If the Democrats think they are going to waste Taxpayer Money investigating us at the House level, then we will likewise be forced to consider investigating them for all of the leaks of Classified Information, and much else, at the Senate level. Two can play that game!
— Donald J. Trump (@realDonaldTrump) November 7, 2018
To any of the pundits or talking heads that do not give us proper credit for this great Midterm Election, just remember two words – FAKE NEWS!
— Donald J. Trump (@realDonaldTrump) November 7, 2018
Commodities add to gains
Most commodities steadily marched higher during the course of the morning London session, very likely because of the Greenback’s overall weakness.
In fact, market analysts were attributing the rise in base metal and precious metal prices to the Greenback’s slide.
And for reference, the U.S. dollar index was down by 0.57% to 95.57 for the day by the end of the session.
The rise in oil prices, meanwhile, were partly attributed by market analysts to rumors that Russia and Saudi Arabia are supposedly discussing a potential oil production cut in 2019.
Oil benchmarks were on the rise.
- U.S. WTI crude oil is down by 1.24% to $62.98
- Brent crude oil is down by 1.64% to $73.31
Base metals were also in demand.
- Copper was down by 1.19% to $2.763 per pound
- Tin was down by 0.26% to $19,062.50 per dry metric ton
Precious metals were also in the green.
- Gold was up by 0.87% to $1,234.50 per troy ounce
- Silver was up by 1.71% to $14.705 per troy ounce
Strong appetite for risk in Europe
The major European equity indices had a running start and then continued to move higher as the session progressed, which is a sign that risk-taking was the name of the game in Europe.
And market analysts say that the risk-friendly vibes in Europe were due to positive earnings results and strong demand for Spanish banks after a favorable court ruling.
- The pan-European FTSEurofirst 300 was up by 1.12% to 1,440.38
- Germany’s DAX was up by 1.02% to 11,601.21
- The blue-chip Euro Stoxx 50 was up by 1.31% to 3,249.45
Major Market Mover(s):
AUD & NZD
The Kiwi and the Aussie attracted more buyers and were the top-performing currencies of the session, thanks to the Greenback’s weakness, the commodities rally, and the risk-friendly vibes in Europe.
AUD/USD was up by 44 pips (+0.61%) to 0.7293, AUD/JPY was up by 55 pips (+0.68%) to 82.52, AUD/CAD was up by 22 pips (+0.23%) to 0.9538
NZD/USD was up by 28 pips (+0.42%) to 0.6776, NZD/JPY was up by 37 pips (+0.49%) to 76.67, NZD/CAD was up by 6 pips (+0.07%) to 0.8864
USD
The Greenback continued to bleed out during the session, thanks to the midterm election results since that raised political uncertainty in the U.S. while also weakening expectations for further fiscal stimulus, market analysts say.
The Greenback wasn’t the worst-performing currency of the session, though.
USD/CAD was down by 48 pips (-0.37%) to 1.3078, USD/CHF was down by 39 pips (-0.39%) to 0.9962, EUR/USD was up by 36 pips (+0.32%) to 1.1490
JPY
The yen barely lost out to the Greenback and was the worst-performing currency of the morning London session, likely because of the risk-friendly vibes in Europe.
USD/JPY was up by 8 pips (+0.07%) to 113.14, EUR/JPY was up by 50 pips (+0.39%) to 129.99, GBP/JPY was up by 25 pips (+0.17%) to 148.78
Watch Out For:
- 2:00 pm GMT: SNB Member Fritz Zurbrugg will give a speech
- 3:00 pm GMT: Canada’s Ivey PMI (50.9 expected vs. 50.4 previous)
- 3:30 pm GMT: U.S. crude oil inventories (2.0M expected vs. 3.2M previous)
- 4:30 pm GMT: U.S. President Donald Trump will speak
- 8:00 pm GMT: RBNZ statement (OCR steady at 1.75% expected); read Forex Gump’s preview
- 9:00 pm GMT: RBNZ presser
