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The pound was on the hot seat during the morning London session, mostly because of the U.K. CPI miss. Other than the pound, the Swissy is also noteworthy because it was the best-performing currency, despite the persistent risk-on vibes.

  • German preliminary GDP q/q: 0.6% vs. 0.7% expected, 0.7% previous
  • Swiss PPI m/m: 0.0% as expected, -0.1% previous
  • Chinese new yuan loans: 826B vs. 810B expected, 1,540B previous
  • U.K. CPI y/y: 2.6% vs. 2.7% expected, 2.6% previous
  • U.K. core CPI y/y: 2.4% vs. 2.5% expected, 2.4% previous
  • U.K. PPI input m/m: 0.0% vs. 0.4% expected, -0.3% previous
  • U.K. PPI output m/m: 0.1% vs. 0.0% expected, 0.0% previous
  • U.K. RPI input y/y: 3.6% vs. 3.5% expected, 3.5% previous
  • U.K. HPI input y/y: 4.9% vs. 4.3% expected, 5.0% previous
  • U.S. retail sales report coming up
  • Dairy auction currently underway

Major Events/Reports

U.K. CPI miss expectations

It’s a brand new month, which means another round of economic reports for the U.K.  And today, the Office for National Statistics released the U.K.’s CPI report for the July period.

And unfortunately for the U.K. (and the pound), CPI fell by 0.1% month-on-month in July, missing expectations that it would be flat. Also, this is the first negative reading in five months.

As for the year-on-year reading, the headline reading came in at 2.6%, which is the same annual pace as last month.

However, the general consensus was for CPI to accelerate to +2.7%, so the reading’s a miss.

But on a slightly more upbeat note, the 2.6% reading is in line with the BOE’s inflation forecast, as laid out in the BOE’s August Inflation Report, so MPC members likely won’t be dissuaded from removing their hiking bias, despite the miss.

The core reading, meanwhile, came in at 2.4%, which also matched the annual core reading for the previous month. But like the headline annual reading, the market was expected a faster 2.5% increase, so a miss on this one as well.

Commodities gutted

Commodities are having a really bad week so far since commodities chalked even more losses during today’s morning London session.

And the likely reason for the persistent and broad-based commodities rout is the Greenback’s recent strength since globally-traded commodities (that are priced in USD) become relatively more expensive to buy whenever the Greenback appreciates.

And for reference, the U.S. dollar index was up by 0.39% to 93.70 by the end of the session.

Precious metals had another bad run.

  • Gold was down by 0.79% to $1,280.27 per troy ounce
  • Silver was down by 1.48% to $16.868 per troy ounce

Base metals had another mixed performance but most off their highs and some were already in the red by the end of the session.

  • Copper was down by 0.02% to $2.904 per pound
  • Tin was down by 0.07% to $20,300.00 per dry metric ton

Oil benchmarks were down.

  • U.S. WTI crude oil was down by 0.53% to $47.34 per barrel
  • Brent crude oil was down by 0.69% to $50.38 per barrel

More risk-taking in Europe

Another round of risk-taking gave the major European equity indices a boost during today’s morning London session.

And like yesterday, market analysts pointed to easing geopolitical jitters related to the recent spat between the U.S. and North Korea as the main reason for the risk-friendly environment.

However, these same market analysts also point out that the commodities rout dampened demand for mining and energy shares, which capped gains and kept the risk-taking in check.

  • The pan-European FTSEurofirst 300 was up by 0.19% to 1,480.37
  • Germany’s DAX was up by 0.32% to 12,204.50
  • The blue-chip Euro Stoxx 50 was up by 0.34% to 3,468.50

U.S. equity futures were in the green, so the risk-taking could potentially persist into the upcoming U.S. session.

  • S&P 500 futures were up by 0.24% to 2,469.50
  • Nasdaq futures were up by 0.30% to 5,927.50

Major Market Mover(s):


The pound was already showing signs of weakness ahead of the U.K.’s CPI report, likely because of preemptive positioning. And when the U.K.’s CPI report was revealed to be a miss, the pound got a severe beat-down until the session ended.

GBP/USD was down by 88 pips (-0.68%) to 1.2869, GBP/JPY was down by 86 pips (-0.60%) to 142.10, GBP/AUD was down by 89 pips (-0.54%) to 1.6424


The safe-haven Swissy was the best-performing currency of the session, even though risk-taking prevailed for another day. There’s no clear reason why and most market analysts are just to ignoring the Swissy’s wonky price action. However, one possible reason for the Swissy’s strength is profit-taking by Swissy shorts after yesterday’s intense Swissy selloff.

USD/CHF was down by 25 pips (-0.26%) to 0.9721, EUR/CHF was down by 22 pips (-0.20%) to 1.1413, GBP/CHF was down by 108 pips (-0.86%) to 1.2519

Watch Out For:

  • 12:30 pm GMT: Headline (0.3% expected, -0.2% previous) and core (0.3% expected, -0.2% previous) readings for U.S. retail sales
  • 12:30 pm GMT: U.S. import prices (0.1% expected, -0.2% previous)
  • 12:30 pm GMT: Empire State manufacturing index (10.1 expected, 9.8 previous)
  • 1:30 pm GMT: CB’s U.K. leading index (-0.1% previous)
  • 2:00 pm GMT: U.S. business inventories (0.4% expected, 0.3% previous)
  • 2:00 pm GMT: NAHB U.S. housing market index (steady at 64 expected)
  • Dairy auction currently underway (-1.6% previous); auction usually ends at around 2:00 pm GMT