Currency pairs made some decent moves during the morning London session, despite a slew of top-tier events for the upcoming U.S. session.
Anyhow, the pound jumped higher before getting some selling pressure later. However, the pound was able to hold onto its gains and was the best-performing currency of the session.
The Kiwi, the Aussie, and the Greenback, meanwhile, vied for the second top spot, but the Aussie stumbled along the way, leaving the Kiwi and the Greenback to fight it out. And in the end, the Kiwi manged to win out against the Greenback. Although there signs of selling pressure on the Kiwi late into the session, so the Kiwi’s position is not yet secure.
As for the morning London session’s main losers, those happen to be the safe-havens Swissy and yen, probably because of the risk-off vibes. The yen was clearly much weaker, however, although there was a rush of selling pressure on CHF/JPY later, so the yen may still regain some poise.
As for the euro and the Loonie, they were mixed for the session. The euro, in particular, had rather choppy price action on many pairs.
- UBS Swiss consumption indicator: 1.53 vs. 1.46 previous
- Credit Suisse economic expectations: 28.0 vs 25.0 previous
- Euro Zone private loans y/y: 2.7% as expected, 2.6% previous
- CBI’s U.K. realized sales: 42% vs. 6% expected, -10% previous
- BOC Boss Poloz will be speaking later
- Trump will be talking about his tax plans later
- RBNZ statement much later
CBI’s U.K. retail sales
According to the latest retail sales report from the Confederation of British Industry (CBI), “Retail sales volumes grew at the fastest pace for two years in the year to September following a decline in the previous month’s figures.”
Moreover, 56% of the retailing companies surveyed reported higher sales volume in September while 15% reported lower sales.
This gives a balance of 42%, which is much bigger than the consensus that only 6% of retail companies would report higher sales and is “the highest since September 2015” to boot.
Thing also look upbeat going forward since 37% of survey respondents said they expected another increase in sales volume next month while only 14% were expecting a decrease in sales. This give a balance of 23% of respondents, which is a rather upbeat reading.
Risk-taking ahead of top-tier events
Normally, markets become skittish ahead of top-tier events like Trump’s tax plan speech and the RBNZ statement.
However, today wasn’t a normal day it seems since there was clearly some risk-taking going on, given that European equity indices and U.S. equity futures were in the green.
And according to market analysts, the risk-on vibes were due to the strong performance of banks after Yellen said yesterday that the Fed will push through with tightening despite weak inflation, as well as cautious optimism ahead of Trump’s tax speech later.
- The pan-European FTSEurofirst 300 was up by 0.38% to 1,515.36
- Germany’s DAX was up up by 0.50% to 12,668.00
- The blue-chip Euro Stoxx 50 was up by 0.69% to 3,556.50
As mentioned earlier, the risk-on vibes also pushed U.S. equity futures into positive territory.
- S&P 500 futures were up by 0.17% to 2,499.62
- Nasdaq futures were up by 0.22% to 5,905.26
Major Market Mover(s):
The pound was the best-performing currency of the morning London session. Most market analysts pointed to CBI’s U.K. retail sales report as the main catalysts. However, the pound was actually already climbing higher ahead of that report. Although the report did cause the pound to jump higher still.
GBP/USD was up by 44 pips (+0.33%) to 1.3419, GBP/CAD was up by 81 pips (+0.48%) to 1.6631, GBP/AUD was up by 55 pips (+0.32%) to 1.7082
The Kiwi was the second best-performing currency of the morning London session after it edged out the Greenback and the Aussie.
The risk-on vibes likely helped to stoke demand for the Kiwi since the Aussie was also underpinned. However, it’s also highly probable that Kiwi shorts were taking some profits off the table ahead of the RBNZ statement.
NZD/USD was up by 23 pips (+0.33%) to 0.7204, NZD/JPY was up by 45 pips (+0.56%) to 81.33, NZD/CHF was up by 40 pips (+0.57%) to 0.7026
The Greenback was edged out by the Kiwi and had to content itself with being the third strongest currency of the session. There were no direct catalysts for the Greenback’s strength, but preemptive positioning ahead of Trump’s tax plan is highly likely.
USD/JPY was up by 23 pips (+0.22%) to 112.89, USD/CAD was up by 21 pips (+0.17%) to 1.2394, USD/CHF was up by 23 pips (+0.24%) to 0.9752
The yen suffered and was the worst-performing currency of the session, very likely because of the risk-on vibes, since the Swissy was also feeling the heat.
EUR/JPY was up by 13 pips (+0.10%) to 132.59, AUD/JPY was up by 19 pips (+0.22%) to 88.68, GBP/JPY was up by 83 pips (+0.55%) to 151.49
Watch Out For:
- 12:30 pm GMT: Headline (1.0% expected, -6.8% previous) and core (0.3% expected, 0.6% previous) readings for U.S. durable goods orders
- 1:15 pm GMT: Minneapolis Fed President Neel Kashkari has a speech
- 2:00 pm GMT: U.S. pending home sales (-0.5% expected, -0.8% previous)
- 2:30 pm GMT: U.S. crude oil inventories (2.9M expected, 4.6M previous)
- 3:45 pm GMT: BOC Governor Stephen Poloz will speak
- 4:55 pm GMT: BOC Governor Stephen Poloz will speak again
- 6:00 pm GMT: Fed Governor Lael Brainard is scheduled to speak
- 7:20 pm GMT: U.S. President Donald Trump will talk about his tax plans
- 8:00 pm GMT: RBNZ statement (OCR steady at 1.75% expected); read Forex Gump’s preview here and his economic roundup for New Zealand here