The pound has already been showing weakness since the Asian session. And that weakness only worsened during the course of today’s morning London session.
The yen, meanwhile, got bid higher across the board, very likely because of another bout of risk aversion in Europe.
Another noteworthy currency is the Kiwi since it was the second best-performing currency of the morning London session, even though the RBNZ will be announcing its monetary policy decision later.
- French trade balance: -€4.67B vs. -€4.68B expected, -€4.20B previous
- Spanish industrial production y/y: 3.4% vs. 3.2% expected, 1.9% previous
- RBNZ monetary policy statement and presser later; you can read Forex Gump’s RBNZ preview here
Another risk-off day in Europe
The major European equity indices got hit by another wave of risk aversion, sending them into negative territory during the morning London session.
And market analysts say that the today’s round of risk aversion was due to growing doubts over the proposed tax reform plans in the U.S., which weighed heavily on financial shares.
- The pan-European FTSEurofirst 300 was down by 0.25% 1,548.07
- Germany’s DAX was down by 0.20 to 13,353.50
- The blue-chip Euro Stoxx 50 was down by 0.42% to 3,646.50
The risk-off vibes also weighed on U.S. equity futures.
- S&P 500 futures were down by 0.14% to 2,583.25
- Nasdaq futures were down by 0.04% to 6,313.38
Commodities rise, but oil dips
After yesterday’s selloff, most commodities caught a bid and bounced higher during the morning London session.
And the commodities rally was likely stoked by the Greenback’s recent weakness, which makes globally-traded commodities relatively cheaper.
And for reference, the U.S. dollar index was down by 0.06% to 94.75 for the day when the morning London session ended.
The commodities rally wasn’t across the board, however, since oil got left behind. As to why oil didn’t do too well, market analysts blamed that mainly on lower oil imports from China.
Precious metals got some love.
- Gold was up by 0.46% to $1,281.62 per troy ounce
- Silver was up by 0.93% to $17.097 per troy ounce
Base metals were actually mixed, but most were in positive territory.
- Copper was up by 0.13% to $3.093 per pound
- Nickel was up by 0.92% to $3,185.50 per dry metric ton
As mentioned earlierm, oil benchmarks did not do too well.
- U.S. WTI crude oil was down by 0.40% to $56.97 per barrel
- Brent crude oil was down by 0.38% to $63.45 per barrel
Major Market Mover(s):
The safe-haven yen was the one currency to rule them all during today’s morning London session, very likely because of the persistent risk-off vibes in Europe.
USD/JPY was down by 38 pips (-0.34%) to 113.45, CHF/JPY was down by 38 pips (-0.34%) to 113.54, EUR/JPY was down by 52 pips (-0.39%) to 131.45
The higher-yielding Kiwi was the second strongest currency of the session, despite the risk-off vibes and even though the RBNZ will be giving its monetary policy decision later.
The commodities rally likely helped to prop up the Kiwi since the Aussie was also a net winner during the session. However, it’s also possible that we’re seeing some preemptive positioning by Kiwi bulls and/or unwinding by Kiwi shorts ahead of the RBNZ statement.
NZD/USD was up by 19 pips (+0.28%) to 0.6929, NZD/CAD was up by 6 pips (+0.08%) to 0.8827, NZD/CHF was up by 19 pips (+0.28%) to 0.6924
The pound has been sliding since the earlier Asian session and it only extended its losses during the course of the morning London session.
There were no apparent catalysts for the pound’s weakness, but some market analysts pointed to growing doubts over British PM Theresa May’s authority and her ability to deliver on a soft Brexit as a reason for the pound’s weakness.
GBP/USD was down by 55 pips (-0.42%) to 1.3100, GBP/JPY was down by 114 pips (-0.77%) to 148.63, GBP/NZD was down by 133 pips (-0.70%) to 1.8902
Watch Out For:
- 1:15 pm GMT: Canadian housing starts (211.0K expected, 217.1K previous)
- 1:30 pm GMT: Canadian building permits (1.0% expected, -5.5% previous)
- 3:30 pm GMT: U.S. crude oil inventories (-2.5M expected, -2.4M previous)
- 8:00 pm GMT: RBNZ monetary policy decision (OCR steady at 1.75% expected); you can read Forex Gump’s RBNZ preview here
- 9:00 pm GMT: RBNZ presser