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The risk-off vibes from the earlier session spilled over into the morning London session. And the major beneficiary of safe-haven flows during the session was the safe-haven Swissy.

As for other currencies of note, there’s the pound, which was apparently weighed down by Brexit-related jitters and was the worst-performing currency of the session.

Other noteworthy currencies are the higher-yielding Aussie and Kiwi, since they just shrugged off the risk-off vibes and were able to put up a fight against the mighty Swissy.

  • German GFK consumer climate: 10.9 vs. steady at 10.8 expected
  • Nationwide U.K. HPI m/m: -0.1% vs. 0.0% expected, 0.2% previous
  • Nationwide U.K. HPI y/y: 2.1% vs. 2.5% expected, 2.9% previous
  • French consumer spending m/m: 0.7% as expected, -0.7% previous
  • French preliminary Q2 GDP q/q: 0.5% as expected, same as previous

Major Events/Reports

Jean-Claude Juncker speaks on Brexit

European Commission President Jean-Claude Juncker spoke at a conference earlier today. And Juncker took the time to criticize the U.K. government’s position papers by saying that:

“I would like to be clear that I did read with the requisite attention all the papers produced by Her Majesty’s government and none of those is actually satisfactory.”

Juncker also said that “an enormous amount of issues … remain to be settled” during the course of the Brexit negotiation process.

Worse (for the U.K.), Juncker reiterated the E.U.’s hard stance that establishing a trade deal should only happen after divorce proceedings are done.

To quote Juncker himself:

“We need to be crystal clear that we will commence no negotiations on the new relationship particularly the new economic and trade relationship between the U.K. and the E.U. before all these questions are resolved – that is to say the divorce between the E.U. and the U.K.”

Commodities rally but oil sinks

Most commodities were raking in gains during today’s morning London session. The commodities rally was broad-based but not across the board, though, since oil prices took hits during the session.

The Greenback was mixed for the session but mostly weaker, with the U.S. dollar index down by 0.52% to 91.69 for the day.

And that likely enticed buyers to jump in since a weaker Greenback means that globally-traded commodities become relatively cheaper.

As to why oil prices went the other way, some market analysts blamed that on profit-taking as traders reassessed and weighed the potential supply disruption caused by Hurricane Harvey versus lower seasonal demand.

Precious metals were doing well.

  • Gold was up by 0.87% to $1,326.77 per troy ounce
  • Silver was up by 0.46% to $17.521 per troy ounce

Base metals were also in the green and some even outperformed, namely zinc and nickel.

  • Copper was up by 0.49% to $3.101 per pound
  • Zinc was up by 1.50% to $3,113.25 per dry metric ton

Oil benchmarks, meanwhile, went their own way and were in negative territory.

  • U.S. WTI crude oil was down by 0.04% to $46.55 per barrel
  • Brent crude oil was down by 0.64% to $51.09 per barrel

Severe risk aversion in Europe

Severe risk aversion is still the name of the game during the morning London session, since European equity indices took a major beating and were leaking red.

And practically all market analysts pinned the blame for the persistent risk-off vibes on earlier news about North Korea’s missile launch.

  • The pan-European FTSEurofirst 300 was down by 1.29% to 1,443.69
  • Germany’s DAX was down by 1.78% to 11,907.00
  • The blue-chip Euro Stoxx 50 was down by 1.49% to 3,373.50

U.S. equity futures were also in the red, hinting that the risk-off vibes may also spill into the U.S. session.

  • S&P 500 futures were down by 0.70 to 2,426.75
  • Nasdaq futures were down by 0.88% to 5,793.12

Major Market Mover(s):

CHF

The risk-off vibes from the earlier session refused to go away. And the main beneficiary of all that gloom and (literal) doom was the safe-haven Swissy since the Swissy was the one currency to rule them all during the session.

USD/CHF was down by 47 pips (-0.50%) to 0.9454, EUR/CHF was down by 34 pips (-0.30%) to 1.1384, GBP/CHF was down by 67 pips (-0.55%) to 1.2246

GBP

The pound had a good start, despite the miss in Nationwide’s U.K. HPI readings. However, signs of selling pressure on the pound began to show when Juncker gave his piece.

This means that Juncker’s strong words likely reignited Brexit-related jitters since the pound’s weakness only intensified during the course of the session, with the end result being the pound’s dismal performance during the session. Well, it’s dismal only if you’re a pound bull.

GBP/USD was down by 7 pips (-0.05%) to 1.2953, GBP/AUD was down by 81 pips (-0.50%) to 1.6243, GBP/NZD was down by 119 pips (-0.67%) to 1.7768

AUD & NZD

The higher-yielding Kiwi and Aussie just shrugged off the risk-off vibes and even gave a Swissy a good fight, although both ultimately lost (during this session at least).

There were no direct catalysts for the two higher-yielding comdolls, but commodities were in rally mode during the session.

Other than that, global bond yields were plunging because of intense safe-haven demand for bonds, which improved the yield advantage of the Aussie and the Kiwi, and likely made them more attractive, despite the risk-off vibes.

AUD/USD was up by 36 pips (+0.46%) to 0.7974, AUD/JPY was up by 24 pips (+0.28%) to 86.58, AUD/CAD was up by 35 pips (+0.35%) to 0.9947

NZD/USD was up by 45 pips (+0.63%) to 0.7290, NZD/JPY was up by 35 pips (+0.44%) to 79.13, NZD/CAD was up by 47 pips (+0.52%) to 0.9092

Watch Out For:

  • 12:30 pm GMT: Canadian RMPI (-0.2% expected, -3.7% previous)
  • 12:30 pm GMT: Canadian IPPI (-0.7% expected, -1.0% previous)
  • 1:00 pm GMT: S&P Case-Shiller composite HPI y/y (5.6% expected, 5.7% previous)
  • 2:00 pm GMT: CB’s consumer confidence (120.9 expected, 121.1 previous)
  • 10:45 pm GMT: New Zealand’s building consents (-1.0% previous)