Volatility and directional movement were both in short supply during the session. Loonie pairs were on the move, though, since the Loonie was getting some broad-based demand.
- German final HICP m/m: unchanged at +0.4% as expected
- German final HICP y/y: unchanged at +1.5% as expected
- French final HICP m/m: unchanged at -0.4% as expected
- French final HICP y/y: unchanged at +0.8% as expected
- U.S. CPI report coming up
Tight trading conditions
Both volatility and directional movement got sapped during the morning London session.
This usually happens ahead of top-tier reports. And it just so happens that there’s one lined up since the U.S. will be releasing its July CPI report.
By the way, Forex Gump has an Event Preview for the July U.S. CPI report. You can read it here, if you’re interested.
Oil trims losses
Oil benchmarks were still in the red today but they were able to claw their way higher and reduced their losses.
And the apparent trigger for the oil recovery was apparently Saudi Arabian Energy Minister Khalid al-Falih’s comment that Saudi Arabia is open to deeper oil production cuts, although he also emphasized that it has to be a deal with other oil producers and not just a unilateral action on Saudi Arabia’s part.
There was also a report from the IEA that was released during the session. And according to the report, the IEA upgraded its oil demand growth projection for 2017 from 1.4 million barrels per day to 1.5 million barrels per day. And that may have also helped in giving oil prices a lift.
- U.S. WTI crude oil was still down by 0.37% to $48.41 per barrel but off the day’s low at $48.02
- Brent crude oil was still down by 0.27% to $51.76 per barrel but off the day’s low at $51.30
Risk-off vibes to end the week
Europe is ending the trading week on a sour note since the major European equity indices had another bleeding session. And as usual, market analysts are pointing to geopolitical risks, particularly the recent spat between the U.S. and North Korea.
- The pan-European FTSEurofirst 300 was down by 1.00% to 1,462.50
- Germany’s DAX was down by 0.15% to 11,996.00
- The blue-chip Euro Stoxx 50 was down by 0.54% to 3,410.50
The gloomy mood also weighed down on U.S. equity futures.
- S&P 500 futures were down by 0.04% to 2,436.50
- Nasdaq futures were down by 0.14% to 5,781.38
Major Market Mover(s):
The Loonie was the only real mover during the session since the other currencies either had little volatility or didn’t really show much in terms of directional movement.
Anyhow, the Loonie closed higher for the session. There were no apparent catalysts, but it looks like the Loonie was taking cues from the recovery in oil prices during the session.
USD/CAD was down by 22 pips (-0.18%) to 1.2717, EUR/CAD was down by 27 pips (-0.18%) to 1.4952, GBP/CAD was down by 34 pips (-0.21%) to 1.6498
Watch Out For:
- 12:30 pm GMT: Headline (+0.2% expected, +0.0% previous) and core (+0.2% expected, +0.1% previous) readings for U.S. CPI; read Forex Gump’s Preview here
- 1:40 pm GMT: Dallas President Robert Kaplan has a speech
- 3:30 pm GMT: Minneapolis Fed President Neel Kashkari will speak