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The pound and the Loonie got the short end of the stick during the U.S. session after an MP vote failed to boost the former while sharp drops in oil prices dragged the latter lower.

  • U.S. Beige Book report shows modest activity increase across all 12 districts
  • NZ Q1 2017 CPI jumps by 1.0% vs. 0.8% uptick expected, 0.4% previous
  • Japan’s trade balance shows 0.17T JPY surplus vs. 0.61T expected and previous

Major Events:

MPs approve U.K.’s general election – In a 522-13 vote, the U.K.’s House of Commons has backed PM Theresa May’s call to hold the general elections earlier than expected.

Remember that May had to secure at least two-thirds majority of MPs to hopefully capitalize her party’s popularity and strengthen their numbers ahead of formal Brexit negotiations.

But with opposition members like Labour Party leader Jeremy Corbyn and his gang throwing their support, the notion passed the U.K.’s lower house like butter. The U.K. is officially scheduled to conduct an election on June 8.

The idea failed to extend the pound’s rally, however. Heck, the U.K.’s currency even capped the session lower across the board! Let’s see if campaigning over the next couple of days will inspire even more volatility for Sterling.

Oil prices slipped – Crude oil prices dropped like a rock during the U.S. session after a report from the U.S. Energy Information Administration (EIA) showed a surprise increase in gasoline inventories and a smaller-than-expected draw in crude oil stock piles.

Crude oil inventories fell by 1 million barrels in the week ending April 15, which is slightly below the expected draw of 1.5 million barrels.

Meanwhile, gasoline stocks shot up by 1.5 million barrels when market players had expected a drop of 1.9 million barrels.

Naturally, the report supported speculations that further output cuts from OPEC and friends won’t help much in the rebalancing of the oil markets especially when the U.S., another major oil producer, is choosing to dance to its own beat.

EIA’s report, together with a break below some key technical levels, helped drag U.S. crude oil futures down 3.8% to $50.44 while Brent crude oil prices also slid 3.6% lower to $52.93.

Major Market Movers:

GBP – The British pound slipped across the board despite the MPs throwing their overwhelming support behind a general election on June 8.

GBP/USD fell 66 pips (-0.51%) to 1.2786, GBP/JPY dropped by 97 pips (-0.69%) to 139.18, and EUR/GBP shot up by 38 pips (+0.46%) to .8380.

CAD – The lack of economic releases didn’t stop Loonie bears from attacking.

Thanks to the EIA’s report, USD/CAD shot up by 50 pips (+0.37%) to 1.3480 and CAD/JPY dropped by 45 pips (-0.55%) to 80.75 while EUR/CAD popped up by 50 pips (+0.35%) to 1.4446 and NZD/CAD inched 18 pips (+0.18%) higher to .9437.

Watch Out For:

  • 1:30 am GMT: AU NAB quarterly business confidence to improve from 5?

See also:

London Session Recap
Asian Session Recap

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