Price action was choppy and volatility was muted on most pairs during today’s morning London session, with some pairs trading roughly sideways and ending up flat.
The only real mover during the session was the Swissy, since it got weighed down by sellers, likely because of the risk-on vibes.
However, the other European currencies were net losers as well, since the euro edged even lower while the pound got a bearish infusion at the start of the session before finding support later.
- German import prices m/m: 0.9% vs. 0.5% expected, 0.0% previous
- German import prices y/y: 3.0% vs. 2.6% expected, 2.1% previous
- French consumer confidence: 100.0 vs. steady at 101.0 expected
- U.S. GDP report coming up; read Forex Gump’s U.S. GDP preview
Draghi mentioned during yesterday’s ECB presser that the decision to extend the ECB’s QE program by 9 months but at a tapered pace while keeping the QE program open-ended “was not unanimous,” adding that “There were different viewpoints. I would characterise the discussion as ranging between consensus, broad consensus on several issues and large majority on other issues.”
Well, according to an article from German newspaper Börsen-Zeitung, Deutsche Bundesbank President Jens Weidmann was one of those who was against the decision because Weidmann supposedly wanted to signal a future end to the ECB’s QE program.
And Dutch Central Bank Commissioner Klaas Knot and the Executive Director of the ECB, Sabine Lautenschläger, were supposedly in agreement with Weidmann.
Aside from those three, ECB Executive Board Member Benoît Coeuré was also a dissenter, although no specifics on what he dissented on was mentioned.
Risk-taking to end the week
Europe is ending the trading week on a high note it seems, since the major European equity indices were glowing gamma green again.
And the risk-on vibes, according to market analysts, were due to positive earnings reports for European companies, as well as the weaker euro because of the ECB’s dovish taper announcement yesterday.
- The pan-European FTSEurofirst 300 was up by 0.38% to 1,544.19
- Germany’s DAX was up by 0.71% to 13,226.00
- The blue-chip Euro Stoxx 50 was up by 0.54% to 3,659.50
U.S. equity futures also enjoyed the risk-on vibes.
- S&P 500 futures were up by 0.22% to 2,567.12
- Nasdaq futures were up by 0.48% to 6,114.13
Commodities were reeling across the board during the morning London session And market analysts blamed the broad-based commodities rout on the Greenback’s recent strength. And for reference, the U.S. dollar index was up by 0.38% to 94.91 for the day when the morning London session ended.
Base metals got dumped hard.
- Copper was down by 2.09% to $3.111 per pound
- Nickel was down by 3.13% to $11,390.00 per dry metric ton
Precious metals were down.
- Gold was down by 0.14% to $1,267.76 per troy ounce
- Silver was down by 0.67% to $16.699 per troy ounce
Oil benchmarks were also leaking red.
- U.S. WTI crude oil was down by 0.17% to $52.55 per barrel
- Brent crude oil was down by 0.24% to $59.16 per barrel
Major Market Mover(s):
The safe-haven Swissy was the main loser of the morning London session, likely because of the risk-on vibes since there wasn’t really anything else.
USD/CHF was up by 29 pips (+0.29%) to 1.0024, EUR/CHF was up by 19 pips (+0.16%) to 1.1635, GBP/CHF was up by 29 pips (+0.22%) to 1.3128
The euro was the second worst-performing currency of the morning London session. And market analysts are still pointing to yesterday’s ECB monetary policy decision as the reason for the euro’s slide.
EUR/USD was down by 15 pips (-0.13%) to 1.1607, EUR/JPY was down by 25 pips (-0.18%) to 132.49, EUR/AUD was down by 24 pips (-0.17%) to 1.5185
The pound barely edged out a win against euro and was the third worst-performing currency of the session. There were no direct catalysts, but some market analysts blamed the pound’s weakness on jitters ahead of next week’s BOE statement.
GBP/USD was down by 11 pips (-0.09%) to 1.3096, GBP/JPY was down by 20 pips (-0.13%) to 149.49, GBP/NZD was down by 31 pips (-0.16%) to 1.9135
Watch Out For:
- 12:30 pm GMT: Advanced Q3 U.S. GDP (+2.5% expected, +3.1% previous); read Forex Gump’s U.S. GDP preview
- 12:30 pm GMT: Q3 U.S. GDP price index (+1.7% expected, +1.0% previous)
- 2:00 pm GMT: University of Michigan’s revised consumer sentiment (100.8 expected, 101.1 previous)