Not much on the docket during today’s morning London session, but there was enough action to keep the session interesting.
To be more specific, the Greenback caught a bit and climbed higher across the board after a mixed performance earlier. The safe-haven Swissy, meanwhile, apparently took the brunt of the risk-on vibes since the yen was roughly steady during the session after suffering losses earlier.
Another currency worth noting is the pound since it was the second worst-performing currency of the morning London session.
- U.K. CBI industrial order expectations: -2 vs. 9 expected, 7 previous
U.K. business lobbies want transition deal
According to separate reports from The Guardian and the BBC, five of the biggest business lobby groups in the U.K. have supposedly sent a letter to Brexit Secretary David Davis, urging him to hurry up and get a transitional Brexit deal.
As for specifics, the quotes below are supposedly snippets from the letter:
“We need agreement of transitional arrangements as soon as possible, as without urgent agreement many companies have serious decisions about investment and contingency plans to take at the start of 2018.”
“Failure to agree a transition period of at least two years could have wide-reaching and damaging consequences for investment and trade, as firms review their investment plans and business strategies.”
Trump and the next Fed Head
According to reports floating about during the morning London session, including a Reuters report, U.S. President Donald Trump supposedly said in a Fox Business Network interview that was aired earlier that:
“I will make my decision very shortly, pretty shortly.”
No specifics on when “very shortly” is, however.
As to who will likely be the next Fed Chair, Trump has hinted that Taylor and Powell are the favored picks. Although Trump has also dropped hints that he may still be considering reappointing Yellen to head the Fed.
Risk-friendly start in Europe
The major European equity indices opened the new trading week mostly flat and then traded sideways for a while.
However, it soon became clear that the risk-on vibes from the earlier Asian session were spilling over into Europe since the major European equity indices began climbing higher across the board to post respectable gains by the end of the morning London session.
And according to market analysts, the prevalence of risk-taking in Europe was still due to the earlier news about Shinzo Abe’s victory, which is seen as the continuation of Abenomics and stimulative monetary policy.
- The pan-European FTSEurofirst 300 was up by 0.28% to 1,538.62
- Germany’s DAX was up by 0.47% to 13,052.00
- The blue-chip Euro Stoxx 50 was up by 0.51% to 3,622.50
U.S. equity futures were also in positive territory, which implies that the risk-on party may continue into the upcoming U.S. session.U.S. equity futures were also in positive territory, which implies that the risk-on party may continue into the upcoming U.S. session.
- S&P 500 futures were up by 0.09% to 2,576.25
- Nasdaq futures were up by 0.19% to 6,122.38
Another sign that risk appetite was the dominant sentiment in Europe is that precious metals, which are considered as traditional safe-havens, were pushed into the red.
- Gold was down by 0.27% to $1,277.04 per troy ounce
- Silver was down by 0.37% to $17.015 per troy ounce
Major Market Mover(s):
The Greenback ruled over all during today’s morning London session. There were no direct catalysts but it’s possible that we’re seeing a continuation of last Friday’s theme, mainly renewed faith in Trump’s tax plans after the U.S. Senate approved the 2018 fiscal budget blueprint.
However, some market analysts also point to Shinzo Abe’s victory and the resulting yen weakness as the reason for the Greenback’s strength, implying that bullish pressure on USD/JPY pulled other Greenback pairs higher.
USD/CHF was up by 25 pips (+0.26%) to 0.9866, USD/CAD was up by 13 pips (+0.11%) to 1.2632, USD/JPY was up by 9 pips (+0.08%) to 113.84
The safe-haven Swissy had a tough time during today’s morning London session, very likely because of the risk-on vibes and because the yen was consolidating and had a mixed performance during the session after suffering losses earlier.
EUR/CHF was up by 9 pips (+0.08%) to 1.1583, CAD/CHF was up by 18 pips (+0.23%) to 0.7810, AUD/CHF was up by 10 pips (+0.13%) to 0.7710
The pound grudgingly dipped during the session and even ended up as the second worst-performing currency after the Swissy.
And according to some market analysts, the pound’s dip was due to renewed political uncertainty in the U.K. because of news over the weekend. Although renewed Brexit fears is also a possibility, given the alleged warning letter from U.K. business lobby groups.
GBP/USD was down by 31 pips (-0.28%) to 1.3163, GBP/JPY was down by 31 pips (-0.21%) to 149.83, GBP/CAD was down by 43 pips (-0.26%) to 1.6628
Watch Out For:
- 12:30 pm GMT: Canadian wholesale sales (1.1% expected, 1.5% previous)
- 2:00 pm GMT: Euro Zone consumer confidence index (-1.1 expected vs. -1.2 previous)
- 2:30 pm GMT: CB’s Australian leading index (0.1% previous)