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The pound spent the session by giving back some of its gains from last week’s monster move, likely because of profit-taking ahead of BOE Guv’nah Carney’s scheduled speech.

And interestingly enough, the Swissy was the best-performing currency of the session, even though risk appetite was the more dominant sentiment.

The comdolls (AUD, NZD, CAD) were also interesting since they showed mostly weakness during the session, likely because of the commodities rout.

  • Italian trade balance: €6.56B vs. €3.89B expected, €4.50B previous
  • Euro Zone final HICP y/y: no revision from 1.5% as expected
  • Euro Zone final core HICP y/y: no revision from 1.2% as expected
  • BOE Guv’nah Mark Carney will be speaking later

Major Events/Reports

Base metals rise as most commodities fall

Commodities were in retreat during today’s morning London session. However, not all kinds of commodities were in retreat since base metals were more mixed. In fact, most base metals were in positive territory.

Precious metals suffered.

  • Gold was down by 0.46% to $1,319.17 per troy ounce
  • Silver was down by 0.68% to $17.580 per troy ounce

Oil benchmarks were down.

  • U.S. WTI crude oil was down by 0.57% to $50.16 per barrel
  • Brent crude oil was down by 0.56% to $55.31 per barrel

Base metals were mixed but most were winning (at least for now).

  • Copper was up by 0.81% to $2.973 per pound
  • Nickel was up by 0.45% to $11,175.00 per dry metric ton

There was no clear reason for the commodities rout since the Greenback was mixed for the session and the U.S. dollar index was slightly down by 0.06% to 91.60 for the day when the session ended. Although the risk-on vibes very likely dampened safe-haven demand for precious metals.

Meanwhile, market analysts only acknowledge the slide in oil prices but can’t pinpoint the reason since the surrounding fundamentals actually supported oil strength. However, oil did end stronger last week, so profit-taking is a possibility.

As for the the strong performance of base metals, that was attributed by market analysts to bargain-buying after last week’s base metals rout caused by poor Chinese data.

Not all base metals were in rally mode, though. One such industrial metal was steel. And since steel was down, so was iron ore. As to why steel and iron ore were down, market analysts blamed that on expected lower Chinese demand after Beijing announced over the weekend that major constructions in the city will be delayed in winter.

Optimistic start in Europe

The risk-on vibes from the earlier Asian session apparently spilled over into today’s morning London session since the major European equity indices were printing gains.

Aside from risk sentiment spillover, market analysts also pointed to improved risk sentiment amid strong demand for Portuguese stocks after news over the weekend that ratings agency S&P raised Portugal’s rating from BB+ to BBB-, since this means that Portugal’s credit rating became investment grade again after about five-and-a-half years.

  • The pan-European FTSEurofirst 300 was up by 0.35% to 1,500.63
  • Germany’s DAX was up by 0.30% to 12,556.50
  • The blue-chip Euro Stoxx 50 was up by 0.45% to 3,530.50

U.S. equity futures were also enjoying the risk-friendly environment.

  • S&P 500 futures were up by 0.22% to 2,502.62
  • Nasdaq futures were were up by 0.18% to 6,005.88

Major Market Mover(s):

GBP

The pound was the worst-performing currency of the morning London session, even though there were no direct catalysts. BOE Guv’nah Mark Carney is scheduled to speak later, though. And market analysts say that the pound’s weakness was just due to profit-taking after last week’s monster move and ahead of Carney’s speech for later.

GBP/USD was down by 47 pips (-0.35%) to 1.3542, GBP/JPY was down by 53 pips (-0.35%) to 150.81, GBP/CHF was down by 62 pips (-0.48%) to 1.2998

CHF

The safe-haven Swissy was the best-performing currency of the session, which is rather weird because risk-taking was the more dominant sentiment in Europe. There’s no clear reason for the Swissy’s wonky strength, but since traders were unwinding their pound bets ahead of Carney’s speech, it’s possible that some traders were taking cover by buying up the safe-haven Swissy.

USD/CHF was down by 11 pips (-0.11%) to 0.9598, EUR/CHF was down by 17 pips (-0.15%) to 1.1464, AUD/CHF was down by 34 pips (-0.45%) to 0.7685

Comdolls

All the comdolls (CAD, AUD, NZD) were showing weakness during the session, very likely because of the commodities rout. And among the three comdolls, the Aussie was the weakest after closing the session marginally weaker against the Kiwi.

Interestingly enough, risk-taking was the name of the game during the session. But the risk-on vibes didn’t provide any support to the higher-yielding Kiwi and Aussie.

AUD/USD was down by 13 pips (-0.17%) to 0.8005, AUD/JPY was down by 30 pips (-0.34%) to 88.99, AUD/CAD was down by 7 pips (-0.08%) to 0.9756

NZD/USD was down by 24 pips (-0.34%) to 0.7283, NZD/JPY was down by 27 pips (-0.33%) to 81.10, NZD/CAD was down by 6 pips (-0.07%) to 0.8891

USD/CAD was up by 32 pips (+0.27%) to 1.2208, EUR/CAD was up by 35 pips (+0.24%) to 1.4581, CAD/CHF was down by 30 pips (-0.38%) to 0.7862

Watch Out For:

  • 12:30 pm GMT: Canada’s foreign security purchases ($4.46B expected, -$0.92B previous)
  • 2:00 pm GMT: NAHB builders survey (67.0 expected, 68.0 previous)
  • 2:30 pm GMT: ECB’s Lautenschlager will speak
  • 2:30 pm GMT: CB’s leading Australian index (0.5% previous)
  • 3:00 pm GMT: BOE Guv’nah Carney is scheduled to speak
  • 6:00 pm GMT: BOC’s Lane will give a speech
  • 10:00 pm GMT: Westpac New Zealand consumer sentiment (113.4 previous)