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Another choppy morning London session today. The euro was busting the moves, however, since it jumped higher across the board ahead of Draghi’s speech.

Other currencies of note are the pound, which was the second strongest currency of the session, and the yen, which was under bearish pressure during the session. The Greenback is noteworthy as well since it was showing signs of weakness ahead of Yellen’s Jackson Hole speech.

  • German final Q2 GDP q/q: unchanged at 0.6% as expected
  • German import prices m/m: -0.4% vs. 0.1% expected, -1.1% expected
  • French consumer confidence: 103 as expected vs. 104 previous
  • Spanish PPI: 3.2%, same as previous
  • IFO’s German business climate: 115.9 vs. 115.5 expected, 116.0 previous
  • ECB Overlord Draghi and Fed Head Yellen will speak later at Jackson Hole; read Forex Gump’s write-up on that here

Major Events/Reports

Boris Johnson speaks

U.K. foreign secretary Boris Johnson was interviewed earlier during the session.

And the main takeaway from that interview is that the U.K. government appears to have softened its stance and sounded more conciliatory towards the Brexit.

The following statements from Johnson, in particular, showed that the U.K. government was more open to paying up for the divorce bill.

“Some of the sums that I’ve seen seem very high and, of course we will meet our obligations, we are law-abiding, bill-paying people.”

“I’m not saying that I accept Barnier’s interpretation of what our obligations are. But I’m certainly saying that we have to meet our legal obligations as we understand them.”

The soft tone is rather striking, especially if one considers that Johnson told E.U. officials last month that they were “extortionate”, adding that they should “go whistle.”

Commodities in rally mode

Commodities were bid broadly higher during today’s morning London session.

No clear reason for the broad-based commodities rally. But as mentioned earlier, the Greenback was feeling some selling pressure during the session.

In fact, the U.S. dollar index was down by 0.09% to 93.15 for the day when the session ended. And that may have attracted some buyers since a weaker Greenback makes commodities relatively cheaper.

Other than that, some market analysts also said that oil prices were higher because of expected disruptions in U.S. oil production because of Hurricane Harvey.

Precious metals were in positive territory.

  • Gold was up by 0.07% to $1,290.44 per troy ounce
  • Silver was up by 0.23% to $17.002 per troy ounce

Oil benchmarks were in the green.

  • U.S. WTI crude oil was down by 0.63% to $47.73 per barrel
  • Brent crude oil was down by 0.73% to $52.42 per barrel

Base metals were actually mixed, but most were in the green.

  • Copper was up by 0.49% to $3.049 per pound
  • Zinc was up by 0.60% to $3,125.50 per dry metric ton

Optimism in Europe

Ths risk-on vibes from yesterday persisted into the morning London session, so the major European equity indices printed more gains today.

That may change, though, depending on what ECB Overlord Draghi and Fed Head Yellen have to say later when they deliver their respective speeches at Jackson Hole.

  • The pan-European FTSEurofirst 300 was up by 0.32% to 1,476.25
  • Germany’s DAX was up by 0.33% to 12,221.50
  • The blue-chip Euro Stoxx 50 was up by 0.20% to 3,454.50

The prevalence of risk appetite also gave U.S. equity futures a lift.

  • S&P 500 futures were up by 0.28 to 2,447.62
  • Nasdaq futures were up by 0.40% to 5,864.00

Major Market Mover(s):

EUR

The euro was broadly higher during the session, even though the economic reports released during the course of the session were actually net negative.

No clear reason for the euro’s strength, but preemptive positioning ahead of ECB Overlord Draghi’s speech at Jackson Hole is highly likely. By the way, if you need to get up to speed on this Jackson Hole thing, then you may want to read up on Forex Gump’s write-up on that here.

EUR/USD was up by 23 pips (+0.21%) to 1.1815, EUR/CAD was up by 21 pips (+0.15%) to 1.4773, EUR/GBP was up by 3 pips (+0.03%) to 0.9210

GBP

The pound was the second strongest currency of the session, apparently because it caught a bid when Boris Johnson had a more conciliatory tone with regard to Brexit earlier.

GBP/USD was up by 24 pips (+0.19%) to 1.2828, GBP/CAD was up by 20 pips (+0.13%) to 1.6040, GBP/AUD was up by 16 pips (+0.10%) to 1.6207

JPY

Another bout of risk aversion didn’t do any favors for the safe-haven yen since the yen found itself at the bottom of the head during the session after barely losing out to the Greenback.

EUR/JPY was up by 28 pips (+0.22%) to 129.59, GBP/JPY was up by 27 pips (+0.20%) to 140.70, CHF/JPY was up by 18 pips (+0.17%) to 113.79

Watch Out For:

  • 12:30 pm GMT: Headline (-6.0 expected, 6.4% previous) and core (0.4% expected, 0.1% previous) readings for U.S. durable goods orders
  • 2:00 pm GMT: Fed Head Yellen will be speaking at Jackson Hole
  • 7:00 pm GMT: ECB Overlord Draghi will also speak at Jackson Hole