BabyPips.com London Session Recap

PipDiddy · October 17, 2018, 2:17pm

London Session Recap: GBP & NZD Take Hits, USD & JPY In The Lead

The Greenback and the yen fought for the top-spot during the morning London session, with the Greenback ultimately coming out on top.

The pound, meanwhile, was rushed by sellers when the morning London session rolled around. And when the U.K.’s inflation report failed to impress, more bears came out of the woods to maul the pound.

The pound’s not the only major loser of the session, however, since the Kiwi was also feeling the pain, very likely because risk aversion made a comeback during the morning London session.

New yuan loans in China: 1,380B vs. 1,355B expected, 1,280B previous
U.K. CPI m/m: 0.1% vs. 0.2% expected, 0.7% previous
U.K. CPI y/y: 2.4% vs. 2.6% expected, 2.7% previous
Core U.K. CPI y/y: 1.9% vs. 2.0% expected, 2.1% previous
HPI in the U.K. y/y: 3.2% vs. 3.5% expected, 3.4% previous
U.K. PPI input m/m: 1.3% vs. 0.9% expected, 1.2% previous
U.K. PPI output m/m: 0.4% vs. 0.2% expected, same as previous
Euro Zone final HIPC: unchanged at 2.1% as expected
Euro Zone final core HIPC: unchanged at 0.9% as expected

Major Events/Reports:

U.K. CPI report

The Office for National Statistics (ONS) released the U.K.’s latest CPI report earlier.

And according to the report, headline CPI increased by 0.1% month-on-month, missing expectations for a 0.2% monthly increase.

Year-on-year, CPI weakened from a six-month high of 2.7% to a three-month low by 2.4%.

This is made even worse since the market was only expecting the annual reading to decelerate to 2.6%.

Despite the miss, the 2.4% reading actually meets the BOE’s own forecast that CPI will increase by 2.4% year-on-year in September, as laid out in the BOE’s August 2018 Inflation Report.

A closer look at the details of CPI report also shows that the weaker annual reading was mainly due to the slower increase in the cost of food and non-alcoholic beverages (+1.5% vs. +2.5% previous).

Also, the weakness was not really broad-based since only 5 of the 12 CPI components printer weaker readings in September. As for the other CPI components, 4 printed stronger annual readings and the remaining 3 maintained the pace.

Skittish risk sentiment in Europe

The major European equity indices had a promising start, but it soon became apparent that risk aversion was the prevalent sentiment since the major European equity indices eventually pared their gains and most were already in negative territory by the end of the morning London session.

Market analysts couldn’t pinpoint the reason for the risk-off vibes in Europe, but they suggested that Brexit-related jitters because of the E.U. Summit and concerns surrounding Italy’s budget may be making investors wary of loading up on European stocks.

The pan-European FTSEurofirst 300 was down by 0.14% to 1,430.73
Germany’s DAX was down by 0.55% to 11,711.98
The blue-chip Euro Stoxx 50 was down by 0.12% to 3,252.65

U.S. equity futures were also feeling the heat.

S&P 500 futures were down by 0.21% to 2,811.75
Nasdaq futures were down by 0.31% to 7,330.75

U.S. bond yields higher

Despite the risk-off vibes in Europe, U.S. bonds yields rose during the morning London session, although they did begin to pare their gains near the end.

U.S. 30-year bond yield up by 0.16% to 3.336%
U.S. 10-year bond yield up by 0.10% to 3.164%
U.S. 5-year bond yield up by 0.05% to 3.026%
U.S. 2-year bond yield up by 0.04% to 2.873%

Major Market Mover(s):

USD & JPY

The Greenback and the yen battled for supremacy during the session, but the the Greenback (barely) won out in the end. The Greenback’s win against the yen also means that the Greenback is now the best-performing currency of the day (so far).

Interestingly enough, the yen actually had the advantage at first, likely because of the risk-off vibes. However, U.S. bond yields began to turn higher, which likely dented demand for the yen while boosting demand for the Greenback, giving the Greenback the winning edge.

USD/JPY was up by 2 pips (+0.02%) to 112.28, USD/CHF was up by 25 pips (+0.28%) to 0.9936, USD/CAD was up by 19 pips (+0.15%) to 1.2974

CHF/JPY was down by 32 pips (-0.28%) to 113.00, CAD/JPY was down by 11 pips (-0.13%) to 86.53, AUD/JPY was down by 22 pips (-0.28%) to 79.94

GBP

The pound got whupped when the morning London session even rolled around. And market analysts blamed that on profit-taking and/or preemptive positioning ahead of the U.K.’s CPI report.

And when the U.K.’s CPI report was revealed to be a disappointment, the pound encountered even more sellers. Bulls did try to fight back, probably because the annual reading is still meeting the BOE’s expectations. However, bears eventually won out. And it probably didn’t help that the E.U. Summit will be starting soon.

GBP/USD was down by 82 pips (-0.62%) to 1.3107, GBP/CHF was down by 43 pips (-0.33%) to 1.3024, GBP/JPY was down by 89 pips (-0.61%) to 147.16

NZD

The Kiwi had a good run during the earlier session, but it was forced to return its gains (and then some) during the morning London session, thanks to the risk-off vibes and the Greenback’s strength.

NZD/USD was down by 33 pips (-0.51%) to 0.6559, NZD/CHF was down by 14 pips (-0.21%) to 0.6518, NZD/JPY was down by 36 pips (-0.49%) to 73.65

Watch Out For:

12:30 pm GMT: Canadian manufacturing sales (-0.6% expected vs. 0.9% previous)
12:30 pm GMT: U.S. building permits (1.27M expected vs. 1.25M previous) and U.S. housing starts (1.22M expected vs. 1.28M previous)
1:30 pm GMT: CB’s U.K. leading index (-0.2% previous)
2:30 pm GMT: U.S. crude oil inventories (1.6M expected vs. 6.0M previous)
4:10 pm GMT: U.S. Fed Governor Lael Brainard will deliver a speech
4:30 pm GMT: Deutsche Bundesbank President Jens Weidmann will be part of a panel discussion
5:00 pm GMT: BOE MPC Member Ben Broadbent will take part in a panel discussion
6:00 pm GMT: FOMC meeting minutes will be released
*** E.U. Summit later; read up on Forex Gump’s What to Expect from the EU Summit This Week.**

This post first appeared here:

PipDiddy · October 18, 2018, 2:03pm

London Session Recap: USD Retreats, AUD & NZD Bid Higher

The Greenback pared its gains from earlier and was the worst-performing currency of the morning London session.

And the main beneficiaries of the Greenback’s weakness were apparently the Aussie and the Kiwi since they were respectively the top-performing and second top-performing currencies of the session.

Other than those three, the yen is also worth noting since it was the second worst-performing currency after the Greenback, likely because of rising bond yields and the risk-friendly vibes in Europe.

The pound is also worth highlighting since it had a strong start, but fumbled a bid when the U.K.’s retail sales report surprised to the downside. However, follow-through buying was ever-present, but late sellers eventually joined the fray, likely because of tweets from a couple of political editors of British newspapers. And so the pound closed out the session in third-to-last place.

Swiss trade balance: CHF 2.43B vs. CHF 2.45B expected, CHF 2.08B previous
German WPI m/m: 0.4% as expected vs. 0.3% previous
U.K. retail sales m/m: -0.8% vs. -0.4% expected, 0.4% previous

Major Events/Reports:

U.K. retail sales report

The U.K.’s retail sales report for the September period was released earlier. And it revealed that headline retail sales volume in the U.K. contracted by 0.8% month-on-month. This is bad enough, but it gets worse since the market was only expecting a 0.4% contraction.

But on a slightly upbeat note, the previous reading was upgraded from +0.3% to +0.4%.

And a closer look at the details show that the slump was due mainly to the 1.5% slump in retail sales volume from predominantly food stores, which is the biggest decline since October 2015.

The annual headline reading, meanwhile, came in at +3.0%. This is slower compared to the previous month’s 3.4% annual increase, and is also contrary to expectations that retail sales will increase by 3.6% year-on-year.

Despite the disappointing readings for September, total retail sales volume is still 1.2% higher in Q3 compared to Q2. And that means that consumer spending will likely have a larger contribution to Q3 GDP growth.

Some Brexit-related updates

There were a bunch of Brexit-related headlines during the session. And focusing only on the more interesting and/or market-moving ones, first up is Brexit Secretary Raab’s statement that “The Prime Minister has the cabinet’s full support.”

That statement was a reply during a Sky News interview wherein Raab was asked about British PM Theresa May’s openness to extending the two-year transition period by a year.

Next, a Reuters report cited a “senior British government official” as saying that an extension of the transition period “is at a very early point, I think the key issue here is that we wouldn’t intend ever for this extension period to be used.”

After that, Theresa May’s spokeswoman had some press time and delivered her boss’ message that the U.K. is supposedly looking at other ways to push Brexit talks forward.

The spokeswoman was asked about May’s openness to an extension of the transition period and she replied that “It’s an idea at this stage, and there are others” without really elaborating on what ideas the U.K. government is looking at to push Brexit talks forward.

Gordon Rayner, political editor of The Daily Telegraph, then had these series of tweets:

And finally, Tom Newton Dunn, political editor of The Sun, tweeted the following:

Mild risk-taking in Europe

The major European equity indices were slightly but broadly higher during the session, so risk appetite was apparently the more dominant sentiment in Europe.

And market analysts say that the risk-friendly vibes in Europe were due to positive earnings results for European companies.

However, those same market analysts also said that gains were capped because of higher Fed rate hike expectations and the ongoing trade war between the U.S. and China.

The pan-European FTSEurofirst 300 was up by 0.17% to 1,429.60
Germany’s DAX was up by 0.13% to 11,730.16
The blue-chip Euro Stoxx 50 was up by 0.05% to 3,244.65

Will risk aversion return?

Despite the modest risk-taking in Europe, U.S. equity futures were down in the dumps, which implies that risk aversion may return during the upcoming U.S. session.

S&P 500 futures were down by 0.37% to 2,805.75
Nasdaq futures were down by 0.47% to 7,278.75

Major Market Mover(s):

USD

U.S. bond yields were on the rise during the session, but the Greenback was still forced to pare its gains across the board.

There were no apparent catalysts, and market analysts were only stating the obvious that the Greenback’s rise has stalled. However, it’s possible that the demand for the Greenback may have been dented because U.S. equity futures were broadly lower during the session.

USD/JPY was down by 4 pips (-0.04%) to 112.45, USD/CHF was down by 14 pips (-0.14%) to 0.9938, USD/CAD was down by 6 pips (-0.05%) to 1.3045

AUD & NZD

The Greenback’s weakness and the prevalence of risk appetite very likely helped to drive up demand for the Aussie and Kiwi.

AUD/USD was up by 25 pips (+0.36%) to 0.7143, AUD/CHF was up by 15 pips (+0.22%) to 0.7100, AUD/JPY was up by 27 pips (+0.34%) to 80.34

NZD/USD was up by 24 pips (+0.35%) to 0.6572, NZD/CHF was up by 13 pips (+0.21%) to 0.6532, NZD/JPY was up by 25 pips (+0.34%) to 73.92

Watch Out For:

12:30 pm GMT: ADP’s Canadian non-farm employment change (13.6K previous)
12:30 pm GMT: U.S. initial jobless claims (212K expected vs. 214K previous)
12:30 pm GMT: Philadelphia Fed manufacturing survey (20.0 expected vs. 22.9 previous)
2:00 pm GMT: CB’s U.S. leading index (0.5% expected vs. 0.4% previous)
4:15 pm GMT: U.S. Fed Governor Randal Quarles is scheduled to speak
9:45 pm GMT: Visitor arrivals in New Zealand (2.8% previous)

This post first appeared here:

PipDiddy · October 19, 2018, 2:26pm

London Session Recap: Comdolls Trend Higher, USD & JPY Tumble

Demand for the comdolls (AUD, NZD, CAD) was sustained during the morning London session, thanks to the steady and broad-based rise in commodity prices.

Greenback weakness may have also helped since the Greenback was one of the major losers of the session.

The Greenback wasn’t the biggest loser of the session, though, since that dishonor goes to the yen.

Euro Zone current account: €23.9B vs. €21.4B expected, €19.5B previous
U.K. public sector net borrowing: £3.3B vs. £4.6B expected, £4.8B previous
Canada’s CPI and retail sales reports coming up

Major Events/Reports:

Commodities broadly higher

Most commodities caught a bid during the earlier session and buyers continued to push commodity prices higher during the morning London session.

We can probably thank the Greenback’s overall weakness for that since a weaker U.S. dollar means that globally-traded commodities (priced in USD) become relatively cheaper, especially for market players who hold non-USD currencies.

And for reference, the U.S. dollar index was down by 0.10% to 95.62 for the day by the end of the session.

However, it’s also probable that trade-related fears may be easing since commodities (and the comdolls) began trending higher after China officially announced that it will ask the WTO to form a dispute resolution panel to address the U.S. tariffs on steel and aluminum.

Other than those, market analysts also say that oil prices were on the rise because of signs that Chinese demand may be picking up, as well as bargain buying after oil slumped hard last week and this week.

Base metals were still in demand.

Copper was up by 0.75% to $2.767 per pound
Nickel was up by 2.38% to $12,592.50 per dry metric ton

Precious metals didn’t do as well, but were still in the green.

Gold was up by 0.10% to $1,231.20 per troy ounce
Silver was up by 0.45% to $14.670 per troy ounce

Oil benchmarks were also well in the green.

U.S. WTI crude oil is up by 0.82% to $69.21
Brent crude oil is up by 1.11% to $80.17

Fading risk-off vibes in Europe

Europe is closing out the week on a downbeat note since the major European equity indices were broadly in the red during the session.

And according to market analysts, the risk-off vibes in Europe were due to disappointing earnings results, as well as concerns surrounding Italy’s budget after the E.U. sent a letter to Rome yesterday since the letter warned that Italy’s budget point to a “particularly serious non-compliance with the budgetary policy obligations laid down in the Stability and Growth Pact.”

Risk aversion appears to be fading, though, since the major European equity indices began turning higher near the end of the session.

The reason for the fading risk-off vibes is not yet very clear. However, energy shares were already in the green and mining shares pared a large chunk of their losses, so it’s likely that the rise in commodity prices may be the reason.

The pan-European FTSEurofirst 300 was down by 0.13% to 1,418.13 but off the day’s low at 1,411.78
Germany’s DAX was down by 0.25% to 11,559.83 but off the day’s low at 11,499.07
The blue-chip Euro Stoxx 50 was down by 0.31% to but off the day’s low at 3,203.65 3,185.65

U.S. equity futures were already well in the green, so risk-taking may return during the U.S. session.

S&P 500 futures were up by 0.32% to 2,781.25
Nasdaq futures were up by 0.58% to 7,179.25

Major Market Mover(s):

Comdolls

The Aussie and the Kiwi battled for supremacy during the morning London session, with the Kiwi ultimately coming out on top.

The Loonie was also bid higher, but couldn’t mount an effective challenge against the Aussie and Kiwi, probably because traders are wary of loading up on the Loonie ahead of Canada’s CPI and retail sales report.

However, it’s also possible that the Aussie and Kiwi were getting an extra boost from the Greenback’s weakness.

NZD/USD was up by 24 pips (+0.37%) to 0.6593, NZD/CHF was up by 23 pips (+0.36%) to 0.6565, NZD/CAD was up by 20 pips (+0.23%) to 0.8594

AUD/USD was up by 19 pips (+0.26%) to 0.7136, AUD/CHF was up by 18 pips (+0.26%) to 0.7107, AUD/CAD was up by 12 pips (+0.13%) to 0.9303

USD/CAD was down by 16 pips (-0.13%) to 1.3037, EUR/CAD was down by 11 pips (-0.07%) to 1.4948, GBP/CAD was down by 33 pips (-0.20%) to 1.6982

USD & JPY

U.S. bond yields were drifting lower for most of the session. And the Greenback was apparently taking directional cues from U.S. bond yields and was lagging behind its peers.

However, U.S. bond yields turned higher late into the session. And that allowed the Greenback to score a win against the yen, so the Greenback only closed out the session in second-to-last place.

NZD/JPY was up by 30 pips (+0.41%) to 74.15, AUD/JPY was up by 25 pips (+0.31%) to 80.26, CAD/JPY was up by 16 pips (+0.18%) to 86.27

EUR/USD was up by 7 pips (+0.06%) to 1.1466, USD/CHF was down by 4 pips (-0.04%) to 0.9959, USD/JPY was up by 6 pips (+0.05%) to 112.48

Watch Out For:

12:30 pm GMT: Headline (0.3% expected, same as previous) and core (0.1% expected vs. 0.9% previous) readings for Canadian retail sales
12:30 pm GMT: Canada’s CPI (0.0% expected vs. -0.1% previous); read Forex Gump’s Event Preview
2:00 pm GMT: U.S. existing home sales (5.29M expected vs. 5.34M previous)
4:00 pm GMT: Atlanta Fed President Raphael Bostic will give a speech
4:10 pm GMT: BOE Guv’nah Mark Carney is scheduled to deliver a speech

This post first appeared here:

PipDiddy · October 22, 2018, 2:19pm

London Session Recap: USD Recovers As EUR & GBP Take Hits, CAD Adds To Gains

The pound and the euro took heavy hits during the morning London session, very likely because of political drama for the former and Italy-related jitters for the latter.

The Greenback, meanwhile, clawed its way up during the session and is now a net winner for the day.

The Greenback wasn’t the top-performing currency of the session, though, since the Loonie continued to attract buyers and there was apparently enough buying pressure to edge out a win against the Greenback.

SNB sight deposits: CHF 577.9B vs. CHF 577.6B previous
British PM Theresa May will be speaking later

Major Events/Reports:

Italy responds to E.U.

If y’all can still recall, the E.U. sent a letter to Italy last week, warning that Italy’s planned budget deficit is “unprecedented in the history of the Stability and Growth Pact,” while giving Italy until today to respond.

Well, Italian Economy Minister Giovanni Tria delivered Italy’s response earlier.

And according to Tria, the government is aware that its budget plan is “not in line with the applicable norms.”

However, Tria defended the budget by saying that:

Tria then basically said that Italy will stick to its budget plan:

Italian PM Giuseppe Conte clarified later that Italy wants to push through with its budget plan but is also willing to negotiate with the E.U.:

British PM to be deposed?

Conservative Party Andrew Bridgen was interviewed by British radio station LBC earlier and, well, this is what Bridgen had to say:

Bridgen’s comment is within the context of news over the weekend that this Wednesday’s Conservative Party meeting may lead to a leadership challenge.

Bundesbank report

The Bundesbank (Germany’s central bank) released its monthly report during the session.

And sadly, the bank warned that Germany’s growth may have stalled in Q3, largely because of weaker car manufacturing output.

But on a more upbeat note, the bank also said that “The economic upswing in Germany is still fundamentally intact.”

Moreover, the bank noted that things could get better in Q4 since “business climate improved noticeably in the third quarter, according to the Ifo Institute, so a significant expansion of economic output is expected for the current quarter.”

Risk-friendly start in Europe

The major European equity indices had a mixed but mostly positive start. And it soon became even more apparent that risk-taking was the name of the game in Europe since the major European equity indices began moving broadly higher and most were moderately in the green by the end of the session.

And market analysts say that the risk-friendly vibes were due to relief that Moody’s decided not to downgrade Italy’s outlook from “stable” (but downgraded Italy’s credit rating), as well as optimism because of China’s plans for a tax cut on personal income.

The pan-European FTSEurofirst 300 was up by 0.33% to 1,425.60
Germany’s DAX was up by 0.67% to 7,096.79
The blue-chip Euro Stoxx 50 was up by 0.31% 3,221.65

Major Market Mover(s):

CAD

Oil benchmarks extended their gains during the first half of session, which likely fueled demand for the Loonie.

Oil benchmarks began turning lower during the later half of the session, though. And interestingly enough, the Loonie remained resilient and traded sideways on most pairs instead of getting dragged lower.

USD/CAD was down by 4 pips (-0.03%) to 1.3087, NZD/CAD was down by 25 pips (-0.29%) to 0.8608, AUD/CAD was down by 22 pips (-0.24%) to 0.9298

USD

The Greenback was the second top-performing currency of the session. U.S. bond yields were on the rise at first, so the Greenback’s recovery made sense.

However, the Greenback continued to attract buyers even as U.S. bond yields eased of their highs later.

There was no apparent catalysts for the Greenback’s sustained demand, but it’s probable that the Greenback was just feeding off the euro and the pound’s weakness.

USD/JPY was up by 7 pips (+0.06%) to 112.81, USD/CHF was up by 11 pips (+0.11%) to 0.9971, NZD/USD was down by 17 pips (-0.26%) to 0.6578

GBP

The pound was the biggest loser of the session (and of the day for that matter), very likely because of growing political uncertainty in the U.K. And the apparent catalyst for the pound’s slump during the session was Conservative Party Andrew Bridgen’s comments during an interviewed by British radio station LBC.

GBP/USD was down by 78 pips (-0.60%) to 1.3005, GBP/CHF was down by 65 pips (-0.50%) to 1.2967, GBP/CAD was down by 107 pips (-0.63%) to 1.7021

EUR

The euro was the second biggest loser of the morning London session, likely because of growing concerns over Italy’s budget.

EUR/USD was down by 47 pips (-0.41%) to 1.1495, EUR/CHF was down by 36 pips (-0.32%) to 1.1461, EUR/CAD was down by 66 pips (-0.44%) to 1.5044

Watch Out For:

12:30 pm GMT: Canadian wholesale sales (-0.2% expected vs. 1.5% previous)
2:30 pm GMT: CB’s Australian leading index (0.1% previous)
2:30 pm GMT: British PM Theresa May is expected to give a speech in Parliament

This post first appeared here:

PipDiddy · October 23, 2018, 2:56pm

London Session Recap: GBP Surges, JPY Extends Gains, CAD Broadly Weaker

Price action was a bit choppy during today’s morning London session and trading conditions were relatively tight for the most part .

Having said that, the yen continued to attract buyers, thanks to the risk-off vibes. The yen wan’t the one currency to rule them all, though, since the pound got a bullish volatility infusion near the end (thanks to a Brexit-related rumor) which allowed the pound to steamroll all its forex rivals.

The Loonie, meanwhile, was the biggest loser of the session, very likely because it was dragged lower by falling oil prices.

German PPI m/m: 0.5% vs. 0.3% expected, same as previous
CBI’s U.K. industrial order expectations: -6 vs. -1 expected, same as previous
E.U. expected to rule on Italy’s budget later today

Major Events/Reports:

Brexit-related rumor

According to E.U. sources cited in a report from RTE News, the E.U. will supposedly “offer British Prime Theresa May a UK-wide customs union as a way around the Irish backstop issue.”

It’s worth pointing out, however, that the report also noted that such an offer would have to be negotiated separately.

No challenge against British PM (for now)

Tom Newton Dunn, the political editor of The Sun, as well as Laura Kuenssberg, BBC political editor, tweeted the following comments earlier, so a leadership challenge against Theresa May doesn’t seem imminent … for now at least.

Commodities sink but precious metals shine

Most commodities were taking hits during the morning London session. Not all commodities were in the red, though, since precious metals were actually in demand and well in the green.

Market analysts couldn’t pinpoint the reason for the slide in commodity prices.

And we can’t really pin the blame on the Greenback since the buck was mixed during the session but is currently a net loser for the day. And for reference, the U.S. dollar index was down by 0.12% to 95.63 for the day by the end of the session.

However, market analysts blamed the poor demand for base metals, such as copper, on China-related worries. That makes sense since China is the largest consumer of industrial metals.

The slide in oil prices, meanwhile, was blamed by market analysts on Saudi Energy Minister Khalid al-Falih’s comment that, despite the political rift between the U.S. and Saudi Arabia, Saudi Arabia is ready to increase oil output once sanctions against Iran cause oil supply to dwindle.

As to why precious metals were in demand, that’s likely because of safe-haven demand due to all the geopolitical risks.

Oil benchmarks were down in the dumps.

U.S. WTI crude oil is up by 1.13% to $68.39
Brent crude oil is up by 1.63% to $78.53

Base metals were actually mixed but most were in the red.

Copper was up by 0.40% to $2.763 per pound
Nickel was up by 0.48% to $12,390.00 per dry metric ton

As mentioned earlier, precious metals went against the bearish tide.

Gold was up by 1.32% to $1,237.30 per troy ounce
Silver was up by 0.64% to $14.750 per troy ounce

Risk aversion strikes back

Risk aversion made a strong comeback during today’s morning London session since the major European equity indices opened broadly lower and then plumbed fresh intraday lows as the session progressed before finally recovering a bit near the end of the session.

And according to market analysts, the feelings of doom and gloom were due to disappointing earnings results, as well as a host of geopolitical risks, which include Brexit, Italy’s budget, the ongoing trade war between the U.S. and China, as well as the political rift between the U.S. and Saudi Arabia.

The pan-European FTSEurofirst 300 was down by 1.25% to 1,397.97
Germany’s DAX was down by 0.83% to 6,984.17
The blue-chip Euro Stoxx 50 was down by 1.13% 3,154.65

U.S. equity futures were already down in the dumps, so the risk-off vibes may carry over into the upcoming U.S. session.

S&P 500 futures were down by 1.29% to 2,721.00
Nasdaq futures were down by 1.50% to 7,048.25

Major Market Mover(s):

GBP

The pound got a soft lift from the get-go, probably because of short-covering, although news that a leadership challenge against the British PM not having materialized may have also sustained demand for the pound.

However, what really caused the pound to surge higher across the board was that rumor that the E.U. is supposedly ready to offer a “ a UK-wide customs union” in order to finally resolve the Irish border issue.

GBP/USD was up by 54 pips (+0.42%) to 1.3027, GBP/CAD was up by 85 pips (+0.50%) to 1.7072, GBP/AUD was up by 92 pips (+0.49%) to 1.8437

JPY

The yen was in demand during the session, very likely because of safe-haven demand for the yen.

And interestingly enough, the yen initially had a slight advantage against the pound. But, well, the pound surge higher across the board late into the session, which left the yen eating dust.

The yen still finished the session in second place, though.

USD/JPY was down by 9 pips (-0.08%) to 112.26, AUD/JPY was down by 14 pips (-0.16%) to 79.32, CAD/JPY was down by 14 pips (-0.17%) to 85.66

CAD

All the comdolls (CAD, NZD, AUD) were feeling a bit under the weather during the session. However, the Loonie suffered the most and was the biggest loser of the session.

There were no apparent catalysts for the Loonie’s weakness, but it looks like the Loonie was dragged lower by sliding oil prices. It’s also possible that market players were gearing up for the BOC statement.

Speaking of the upcoming BOC statement, y’all may wanna check out Forex Gump’s write-up on that.

USD/CAD was up by 10 pips (+0.08%) to 1.3105, NZD/CAD was up by 7 pips (+0.09%) to 0.8587, EUR/CAD was up by 30 pips (+0.20%) to 1.5043

Watch Out For:

1:30 pm GMT: Minneapolis Fed President Neel Kashkari will give a speech
2:00 pm GMT: Euro Zone consumer confidence (-3.2 expected vs. -2.9 previous)
2:00 pm GMT: Richmond Fed’s manufacturing index (25 expected vs. 29 previous)
3:20 pm GMT: BOE Guv’nah Carney is scheduled to speak
5:30 pm GMT: Atlanta Fed President Raphael Bostic has a speech
E.U. expected to rule on Italy’s budget later (E.U. will likely reject Italy’s budget)

This post first appeared here:

PipDiddy · October 24, 2018, 2:08pm

London Session Recap: EUR & GBP Sink, AUD & USD Fight For Top Spot

The euro and the pound both had a really bad time during the morning London session.

The latter was dragged down by Italy-related jitters and poor PMI readings, while the latter may have been weakened by Brexit-related concerns and political uncertainty.

The Aussie and the Greenback, meanwhile, were both in demand, with the Greenback ultimately coming out on top.

French flash manufacturing PMI: 51.2 vs. 52.4 expected, 52.5 previous
French flash services PMI: 55.6 vs. 54.7 expected, 54.8 previous
German flash manufacturing PMI: 52.3 vs. 53.4 expected, 53.7 previous
German flash services PMI: 53.6 vs. 55.5 expected, 55.9 previous
Euro Zone flash manufacturing PMI: 52.1 vs. 53.0 expected, 53.2 previous
Euro Zone flash services PMI: 53.3 vs. 54.5 expected, 54.7 previous
U.K. gross mortgage approvals: 38.5K vs. 39.0K expected vs. 39.2K previous
British PM Theresa May currently speaking before Parliament
BOC statement later

Major Events/Reports:

Disappointing Euro Zone PMI reports

Markit released the latest batch of PMI reports for Germany, France, and the Euro Zone as a whole. And sadly (for EUR bulls), they all failed to meet expectations.

Focusing only on the PMI reports for the Euro Zone as a whole, the manufacturing PMI reading weakened from 53.2 to a 24-month low of 52.1 in October, which is rather disappointing since the market was only expecting a the reading to tumble slightly to 53.0.

The services PMI reading, meanwhile, slumped from a three-month high of 54.7 to a 24-month low of 53.3, which is a much steeper drop compared to the 54.5 consensus.

And since both manufacturing and services sectors deteriorated, the composite PMI also dropped from 54.1 to a 25-month low of 52.7. That’s a two-year low, yo!

According to Markit, jobs growth “was the second-lowest for just over a year, easing to a 22-month low in manufacturing and three-month low in services.”

Moreover, new orders growth “eased to the slowest since August 2016, weakened by manufacturing orders falling for the first time since November 2014.”

Exports also took hits, since “New export orders for goods decreased for the first time since June 2013.”

And the downbeat vibes don’t end there since Markit also noted that “companies’ expectations of future growth slipped to the lowest for nearly four years, with a near six-year low seen in manufacturing.”

Italy’s Salvini speaks

Italian Deputy PM Matteo Salvini got interviewed earlier. And he was asked about the E.U.’s rejection of Italy’s budget.

And, well, this is what he had to say:

Salvini did try to tone down his rhetoric, though, by also saying that:

Risk-taking prevails in Europe

After yesterday’s beat-down, most of the major European equity indices were glowing gamma green by the end of the session, which implies that risk appetite was the more prevalent sentiment in Europe.

Market analysts say that the risk-on vibes in Europe were due to positive earnings results for luxury stocks. However, those same market analysts also noted that the Euro Zone’s poor PMI reports and concerns over the tech sector were putting a cap on gains.

The pan-European FTSEurofirst 300 was up by 0.71% to 1,402.83
Germany’s DAX was up by 0.37% to 11,316.27
The blue-chip Euro Stoxx 50 was up by 0.83% 3,168.65

Risk aversion to return?

Europe may be enjoying a bout of risk-taking, but U.S. equity futures were broadly in the red, which signals that risk aversion could potentially return during the upcoming U.S. session.

S&P 500 futures were down by 0.57% to 2,730.50
Nasdaq futures were down by 0.66% to 7,093.00

Major Market Mover(s):

EUR

The euro was the worst-performing currency of the morning London session and is also currently the biggest loser of the day.

The euro began to encounter sellers when Salvini referred to the E.U.’s budget rules as “silly“.

However, began attacking in force after the Euro Zone’s PMI reports all missed expectations while also painting a rather bleak outlook.

EUR/USD was down by 66 pips (-0.58%) to 1.1393, EUR/AUD was down by 87 pips (-0.55%) to 1.6058, EUR/CAD was down by 81 pips (-0.54%) to 1.4911

GBP

The pound got whupped pretty hard and was the second biggest loser of the session.

There were no apparent catalysts, but market analyst were pointing to Brexit-related jitters and political uncertainty ahead of and during Theresa May’s speech before Parliament.

GBP/USD was down by 64 pips (-0.49%) to 1.2908, GBP/AUD was down by 81 pips (-0.45%) to 1.8193, GBP/CAD was down by 79 pips (-0.46%) to 1.6893

USD

The Greenback was broadly in demand and was the top-performing currency of the morning London session.

There were no apparent catalysts for the Greenback’s strength, but it’s probable that the Greenback may have gotten a lift from rising U.S. bond yields. It’s also probable that the Greenback may have just been feeding off the euro and the pound.

USD/CHF was up by 30 pips (+0.30%) to 0.9979, USD/JPY was up by 24 pips (+0.22%) to 112.72, USD/CAD was up by 7 pips (+0.05%) to 1.3089

AUD

The Aussie had a wobbly start, but it was able to attract enough buyers to extend its gains and almost edge out a win against the Greenback during the session, likely because of the risk-friendly vibes and rising gold prices.

AUD/USD was down by 3 pips (-0.05%) to 0.7095, AUD/JPY was up by 13 pips (+0.17%) to 79.98, AUD/CHF was up by 17 pips (+0.25%) to 0.7080

Watch Out For:

British PM Theresa May currently speaking before Parliament
1:00 pm GMT: U.S. HPI (0.3% expected vs. 0.2% previous)
1:45 pm GMT: Markit’s flash manufacturing PMI (55.4 vs. 55.6 previous)
1:45 pm GMT: Markit’s flash services PMI (54.1 vs. 53.5 previous)
2:00 pm GMT: U.S. new home sales (625K expected vs. 629K previous)
2:00 pm GMT: BOC monetary policy statement (BOC expected to hike overnight rate from 1.50% to 1.75%); read up on Forex Gump’s write-up
2:30 pm GMT: U.S. crude oil inventories (3.6M expected vs. 6.5M previous)
3:15 pm GMT: BOC presser with Poloz and Wilkins
5:00 pm GMT: Atlanta Fed President Raphael Bostic has a speech
5:10 pm GMT: Cleveland Fed President Loretta Mester will speak
9:45 pm GMT: New Zealand’s trade balance (-$1,365M expected vs. -$1,484M previous)

This post first appeared here:

PipDiddy · October 25, 2018, 2:10pm

London Session Recap: AUD & NZD Higher, CHF & JPY Lower In Risk-Friendly Session

Battle lines were drawn between the higher-yielding Aussie and Kiwi and the safe-havens yen and Swissy.

And since risk-taking prevailed (and commodities recovered), the yen and the Swissy got whupped pretty bad and were forced to submit to the Aussie and Kiwi.

In other news, the ECB announced no changes to its monetary policy, so the event was essentially a dud and the euro had a mixed performance during the session.

The ECB presser is coming up, though, and that could potentially be a catalyst for the euro, depending on what ECB Overlord Draghi has to say.

Spanish jobless rate: 14.6% vs. 14.9% expected, 15.3% previous
German IFO business climate: 102.8 vs. 103.1 expected, 103.7 previous
ECB announced no changes to current monetary policy
ECB maintained refinancing rate at 0.00%
Marginal lending rate steady at at 0.25%
Deposit rate unchanged at -0.40%
QE at €15B per month will continue until December 2018
Forward guidance that QE program will end after December also reaffirmed
ECB repeated forward guidance that rates won’t budge “through the summer of 2019″
ECB presser coming up; watch it live here

Major Events/Reports:

ECB’s monetary policy decision

As widely expected (and usual), the ECB stated in its official press statement that it was maintaining the current monetary policy.

The refinancing rate is is therefore steady at 0.00%, while the marginal lending rate is unchanged at 0.25%. As for the deposit rate, that’s still at -0.40%.

Also as usual, the ECB reaffirmed that its QE program will continue at a reduced monthly pace of €15 billion until the end of December of this year.

The ECB also repeated its forward guidance that “subject to incoming data confirming the medium-term inflation outlook, net purchases will then end” after December 2018.

As for future rate hikes, the ECB reiterated its hiking bias while also repeating its message that:

Overall, nothing really new, so the event was essentially a dud. Market players are now sitting tight for what ECB Overlord Draghi has to say in the ECB presser.

And if you didn’t know, you can watch a live stream of the ECB presser by clicking here.

Commodities broadly higher

Most commodities slumped during the late Asian session and some of them even slipped into negative territory.

However, most commodities were able to stage a broad-based recovery during the session and are now mostly in positive territory for the day again.

It’s not really clear what caused commodities to recover, but the Greenback’s overall weakness is a probable reason since a weaker U.S. dollar would make globally-traded commodities relatively cheaper for investors who hold non USD currencies.

And for reference, the U.S. dollar index was down by 0.16% to 96.04 for the day by the time the session ended.

Oil benchmarks are in the green.

U.S. WTI crude oil is up by 0.36% to $67.06
Brent crude oil is up by 0.58% to $76.61

Base metals were mixed, but most were also in the green.

Copper was up by 0.49% to $2.760 per pound
Zinc was up by 0.07% to $19,327.50 per dry metric ton

Precious metals didn’t seem to mind the risk-friendly vibes too much and were also in the green.

Gold was up by 0.64% to $1,235.60 per troy ounce
Silver was up by 1.02% to $14.760 per troy ounce

Risk-on vibes in Europe

The major European equity indices had a wobbly start, but they quickly regained their footing and began marching broadly higher, so risk-taking was apparently the prevalent sentiment in Europe.

Market analysts couldn’t pinpoint a reason for the risk-friendly vibes in Europe, but some of them suggested that European equities may be perceived to be oversold, so we may be seeing some short-covering and/or bargain buying.

Energy shares outperformed, though, and mining shares weren’t far behind, so it’s also probably safe to assume that the risk-friendly vibes may have been due to the commodities rally.

The pan-European FTSEurofirst 300 was up by 0.33% to 1,394.67
Germany’s DAX was up by 0.44% to 11,240.91
The blue-chip Euro Stoxx 50 was up by 0.80% 3,155.65

Major Market Mover(s):

AUD & NZD

The Aussie and the Kiwi were both in demand during the session, thanks to the risk-friendly vibes and higher commodity prices.

AUD/USD was up by 23 pips (+0.33%) to 0.7090, AUD/CHF was up by 43 pips (+0.61%) to 0.7085, AUD/JPY was up by 42 pips (+0.53%) to 79.65

NZD/USD was up by 18 pips (+0.28%) to 0.6534, NZD/CHF was up by 36 pips (+0.56%) to 0.6529, NZD/JPY was up by 34 pips (+0.48%) to 73.40

CHF & JPY

The risk-friendly vibes may have been great for the Aussie and Kiwi, but they were apparently very toxic for the safe-havens yen and Swissy.

USD/JPY was up by 22 pips (+0.20%) to 112.33, EUR/JPY was up by 24 pips (+0.19%) to 128.13, GBP/JPY was up by 15 pips (+0.10%) to 144.86

USD/CHF was up by 28 pips (+0.28%) to 0.9992, EUR/CHF was up by 31 pips (+0.27%) to 1.1402, GBP/CHF was up by 22 pips (+0.17%) to 1.2885

Watch Out For:

12:30 pm GMT: ECB presser; watch it live here
12:30 pm GMT: Headline (-1.3% expected vs. 4.4% previous) and core (0.5% expected vs. 0.0% previous) readings for U.S. durable goods orders
12:30 pm GMT: U.S. goods trade balance (-$74.9B expected vs. -$75.5B previous)
12:30 pm GMT: U.S. preliminary wholesale inventories (0.5% expected vs. 1.0% previous)
12:30 pm GMT: U.S. initial jobless claims (214K expected vs. 210K previous)
1:00 pm GMT: CB’s Chinese leading index (0.7% previous)
2:00 pm GMT: U.S. pending home sales (-0.1% expected vs. -1.8% previous)
4:15 pm GMT: U.S. Fed Governor Richard Clarida will be speaking
9:30 pm GMT: Cleveland Fed President Loretta Mester has a speech

This post first appeared here:

PipDiddy · October 26, 2018, 2:12pm

London Session Recap: JPY Dominates, EUR & GBP Take Hits, USD Higher Ahead of GDP Report

The yen easily trounced all opposition and was the champion of the morning London session, apparently because the yen is the safe-haven of choice as risk aversion plagued Europe.

The euro and the pound, meanwhile, were both feeling the pain, with the ECB presser still being blamed for the euro’s slide while Brexit-related uncertainty is being cited as the reason for the pound’s weakness.

Other than those three, the Greenback is also noteworthy since it barely won out against the Kiwi and the Aussie and was the second top-performing currency after the yen, even as the U.S. GDP report loomed.

German GFK consumer climate: 10.6 vs. 10.5 expected, 10.6 previous
U.S. GDP report coming up

Major Events/Reports:

ECB survey

The ECB released its Q4 2018 ECB Survey of Professional Forecasters near the start of the session.

And unfortunately, the survey results showed that respondents lowered their GDP growth forecasts for 2018 (+2.0% vs. 2.2% previous) and 2019 (+1.8% vs. 1.9% previous).

And while headline HICP inflation forecasts were unchanged, forecasts for underlying inflation were downgraded in 2018 (+1.1% vs. +1.2% previous) and 2019 (+1.4% vs. +1.5% previous).

Rate hike expectations deteriorate post-ECB

According to a Reuters report, odds for a September 2019 rate hike now only stands at around 50%, much lower compared to the “nearly 90 percent on Monday.”

Commodities sink but precious metals rise

Most commodities got a good stomping during the morning London session. Not all commodities were on the defensive, however, since precious metals were in demand.

The slide in commodity prices may have been prompted by the Greenback’s recovery. And for reference, the U.S. dollar index was up by 0.17% to 96.62 for the day when the session ended. It was in the red earlier and hit an intraday low of 96.32.

Aside from Greenback strength, market analysts also blamed the poor performance of base metals such as copper on the stock market rout since that raised concerns that global growth may slow, which would naturally mean weaker demand for industrial metals.

The slide in oil prices, meanwhile, was also blamed by market analysts on fears of a global slowdown, although Saudi Arabia’s warning of a potential oversupply was also cited as another reason for the slide in oil prices.

As to why precious metals were shining, that’s likely because of safe-haven demand. After all, precious metals are considered as traditional safe-havens.

Oil benchmarks got torpedoed.

U.S. WTI crude oil is down by 1.40% to $66.39
Brent crude oil is down by 1.08% to $76.06

Base metals were bleeding out.

Copper was down by 1.19% to $2.716 per pound
Nickel was down by 2.21% to $11,882.50 per dry metric ton

Precious metals were swimming against the bearish tide.

Gold was up by 0.79% to $1,238.80 per troy ounce
Silver was up by 0.61% to $14.700 per troy ounce

Intense risk-off vibes in Europe

Europe is closing out the trading week with a general feeling of doom and gloom since the major European equity indices were broadly and deeply in negative territory.

Market analysts blamed the risk-off vibes on disappointing earnings results and the poor performance of tech companies. The usual general themes were also invoked, namely the ongoing trade war between the U.S. and China and rising input costs.

And to that I’d add the usual skittishness ahead of the U.S. GDP report.

The pan-European FTSEurofirst 300 was down by 1.51% to 1,376.92
Germany’s DAX was down by 1.89% to 11,093.90
The blue-chip Euro Stoxx 50 was down by 1.91% 3,106.65

Major Market Mover(s):

JPY

The yen reigned supreme during the morning London session, very likely because of safe-haven flows due to the intense risk-off vibes in Europe.

USD/JPY was down by 22 pips (-0.19%) to 112.01, AUD/JPY was down by 23 pips (-0.30%) to 78.71, CAD/JPY was down by 27 pips (-0.32%) to 85.20

USD

The Greenback was the second top-performing currency of the morning London session.

There were no apparent catalysts, but market analysts were pointing to possible preemptive buying ahead of the U.S. GDP report.

AUD/USD was down by 8 pips (-0.11%) to 0.7028, USD/CHF was up by 25 pips (+0.25%) to 1.0021, USD/CAD was up by 18 pips (+0.14%) to 1.3147

EUR

The euro was the biggest loser of the session. And the apparent catalyst was the ECB’s survey report since the euro began encountering sellers after that was released.

The euro also encountered more sellers when that Reuters report that I mentioned earlier was released, so the ECB presser is still apparently weighing down on the euro.

EUR/USD was down by 31 pips (-0.27%) to 1.1337, EUR/JPY was down by 59 pips (-0.46%) to 126.96, EUR/AUD was down by 29 pips (-0.18%) to 1.6130

GBP

The pound was only able to score a win against the euro and was therefore the second biggest loser of the session.

There were no direct catalysts for the pound’s weakness, but market analysts were pointing to Brexit-related uncertainty without really highlighting a specific reason.

GBP/USD was down by 29 pips (-0.23%) to 1.2781, GBP/JPY was down by 55 pips (-0.38%) to 143.16, GBP/AUD was down by 20 pips (-0.11%) to 1.8185

Watch Out For:

12:30 pm GMT: U.S. advanced Q3 GDP estimate (3.3% expected vs. 4.2% previous) and GDP price index (2.1% expected vs. 3.3% previous); read Forex Gump’s Event Preview
2:00 pm GMT: University of Michigan’s revised consumer sentiment index (98.9 expected vs. 99.0 previous)
2:00 pm GMT: ECB Overlord Draghi is scheduled to give a short speech

This post first appeared here:

PipDiddy · October 29, 2018, 2:20pm

London Session Recap: JPY & CHF Lose More Ground In Risk-Friendly Session

Risk-taking persisted and even intensified during the morning London session, so the safe-havens yen and Swissy got another beating.

The Aussie and the Kiwi, meanwhile, were able to extend their gains. However, neither the Kiwi nor the Aussie were able to claim the top spot since that honor goes to the Loonie.

The euro is also noteworthy since it slumped when when word got around that German Chancellor Merkel has no plans to run for the CDU Party Chair, before quickly bouncing back up when word also hit the wires that Merkel plans to stick around as Chancellor.

U.K. net lending to individuals: £4.7B vs. £4.1B expected, £4.3B previous
Mortgage approvals in the U.K.: 65.27K vs. 65.00K expected, 66.10K previous

Major Events/Reports:

Oil recovers

Oil benchmarks slumped during the earlier session and some still in the red for the day. However, they were able to stage a broad-based recovery during the morning London session.

Market analysts blamed oil’s earlier slide on concerns over global growth. As for the later recovery in oil prices, that appears to have been driven by a Bloomberg report which claimed that China plans to slash the car purchase tax by 50% from 10% to 5%, which would naturally mean higher demand for oil products as well.

U.S. WTI crude oil was up by 0.44% to $65.72 for the session
Brent crude oil was up by 0.42% to $77.60 for the session

Rumor about German politics

According to a Reuters report and the tweet below from SPIEGEL editor Melanie Amann, German Chancellor Angela Merkel supposedly no longer plans to run as CDU Party Chair during the December party conference.

But before political uncertainty can flare up, however, a later tweet from DPA claimed that even though Merkel has no plans to run for re-election as party chair, Merkel plans to stay on as Chancellor.

BOJ-related rumor

According to unnamed sources cited in a Reuters report, the BOJ is supposedly thinking about tweaking its bond-buying program.

The Reuters report then went on to note that:

However, the sources also reportedly say that the BOJ is not in a hurry to introduce any of the planned tweaks. Also, if (or when) the BOJ does finally tweak its monetary policy, the BOJ plans to do so in a way that “won’t trigger excessive volatility.”

Very risk-friendly start in Europe

After last week’s beating, the major European equity indices are starting the week with an intense bout of risk-taking that propelled the major European equity indices broadly higher.

At first, market analysts attributed the risk-friendly vibes to the positive earnings report for HSBC, which sent banking shares higher, as well as bargain-buying after last week’s beat-down.

However, auto shares surged higher late into the session when Bloomberg released a report claiming that China supposedly plans to slash the car purchase tax from 10% to 5%.

And quite naturally, market analysts quickly began attributing the risk-friendly vibes to that Bloomberg report.

The pan-European FTSEurofirst 300 was up by 1.54% to 1,407.98
Germany’s DAX was up by 2.02% to 11,426.32
The blue-chip Euro Stoxx 50 was up by 1.27% 3,180.65

Major Market Mover(s):

JPY & CHF

Risk-taking prevailed, so the safe-havens yen and Swissy continued to bleed out.

USD/JPY was up by 42 pips (+0.38%) to 112.37, CAD/JPY was up by 42 pips (+0.50%) to 85.80, NZD/JPY was up by 33 pips (+0.46%) to 73.50

USD/CHF was up by 12 pips (+0.12%) to 0.9995, CAD/CHF was up by 18 pips (+0.24%) to 0.7632, NZD/CHF was up by 13 pips (+0.20%) to 0.6538

CAD

The Loonie was bid higher across the board during the session and is now the second top-performing currency of the day after the Kiwi.

There were no direct catalysts for the Loonie’s strength, but it looks like the Loonie was tracking the recovery in oil prices during the session.

USD/CAD was down by 16 pips (-0.12%) to 1.3096, EUR/CAD was down by 17 pips (-0.11%) to 1.4920, GBP/CAD was down by 25 pips (-0.15%) to 1.6800

Watch Out For:

12:30 pm GMT: U.S. personal income (0.4% expected vs. 0.3% previous) and personal spending (0.4% expected vs. 0.3% previous)
12:30 pm GMT: U.S. core PCE price index (0.1% expected vs. 0.0% previous)
2:30 pm GMT: British Chancellor of the Exchequer Philip Hammond is expected to present the latest budget

This post first appeared here:

PipDiddy · October 30, 2018, 2:47pm

London Session Recap: EUR & GBP Take Heavy Hits, AUD Nudged Higher

The euro and the pound were in a race to the bottom during the morning London session.

The euro sustained heavy damage after Italian and Euro Zone GDP reports both surprised to the downside, while the pound’s weakness was blamed largely on Brexit-related uncertainty.

Other than those two, the Aussie is also noteworthy since it continued to edge higher, even though risk aversion returned during the session.

The yen is also worth noting since it failed to attract buyers despite the risk-off vibes, probably because global bond yields were on the rise.

French flash Q3 GDP q/q: 0.4% as expected vs. 0.2% previous
French consumer spending m/m: -1.7% vs. -0.4% expected, 1.1% previous
KOF Swiss economic barometer: 100.1 vs. 100.8 expected, 102.3 previous
Spanish flash HICP y/y: 2.3% vs. 2.2% expected, 2.3% previous
Euro Zone industrial sentiment: 3.0 vs. 3.9 expected, 4.7 previous
Euro Zone consumer confidence: -2.7 as expected, same as previous
Italian Q3 GDP q/q: 0.0% vs. 0.2% expected, 0.2% previous
Italian Q3 GDP y/y: 0.8% vs. 0.9% expected, 1.2% previous
Euro Zone Q3 GDP q/q: 0.2% vs. 0.4% expected, same as previous
Euro Zone Q3 GDP y/y: 1.7% vs. 1.9% expected, 2.2% previous
CBI’s U.K. realized sales: 5 vs. 27 expected, 23 previous

Major Events/Reports:

Disappointing Euro Zone GDP reports

The latest GDP report for France, Italy, and the Euro Zone as a whole were released earlier during the session. And, well, they were rather disappointing.

Focusing only on the Q3 GDP report for the entire Euro Zone, that revealed that GDP only expanded by 0.2% quarter-on-quarter, missing expectations that it will match the previous quarter’s pace by printing a 0.4% increase. The 0.2% quarterly increase is the weakest since Q2 2014.

If you think that’s bad, then the year-on-year reading is even worse since that came in at 1.7%, which is slower than the +1.9% consensus, marks the fourth consecutive quarter of ever weaker readings, and is the weakest annual reading in eight quarters to boot.

More importantly, the 1.7% reading is well below the ECB’s forecast that GDP for the whole Euro Zone will grow by 2.0% in 2018, as laid out in the September 2018 ECB Staff Macroeconomic Projections.

Risk aversion strikes back

The major European equity indices had a promising start and were broadly in the green. However, selling pressure later swamped the major European equity indices, sending them broadly lower, so much so that most were already in negative territory by the end of the session.

Market analysts attributed the earlier risk-on vibes to risk sentiment spillover from the earlier Asian session, as well as positive earnings reports.

As for the later risk-off vibes, the disappointing GDP reports for Italy and the Euro Zone appear to have been the culprits since sentiment turned sour after those were released.

However, market analysts also blamed disappointing earnings results from Lufthansa and BNP Paribas as poisoning overall risk sentiment.

The pan-European FTSEurofirst 300 was down by 0.06% to 1,397.65
Germany’s DAX was down by 0.37% to 11,294.02
The blue-chip Euro Stoxx 50 was down by 0.22% to 3,147.85

Global bond yields rise

Despite the risk-off vibes in Europe, global bonds yields were on the rise during the morning London session.

German 10-year bond yield up by 2.37% to 0.388%
French 10-year bond yield up by 2.01% to 0.760%
U.K. 10-year bond yield up by 1.21% to 1.418%
U.S. 10-year bond yield up by 0.97% to 3.117%
Canadian 10-year bond yield up by 0.88% to 2.417%

Major Market Mover(s):

GBP

The pound was the biggest loser of the session and is also the second worst-performing currency of the day (so far) after the yen.

There were no direct catalysts for the pound’s weakness, but market analysts were pointing to Brexit-related uncertainty (without citing a specific catalyst) and/or preemptive positioning ahead of the BOE statement.

GBP/USD was down by 56 pips (-0.44%) to 1.2738, GBP/AUD was down by 82 pips (-0.45%) to 1.7956, GBP/CHF was down by 39 pips (-0.31%) to 1.2773

EUR

The euro closed out the session in second-to-last place. And the direct catalysts for the euro’s slump are the disappointing GDP reports for Italy and the Euro Zone as a whole.

EUR/USD was down by 27 pips (-0.24%) to 1.1346, EUR/AUD was down by 41 pips (-0.26%) to 1.5994, EUR/CHF was down by 15 pips (-0.13%) to 1.1376

AUD

The Aussie’s was nudged broadly higher and was the top-performing currency of the session.

The Aussie’s rise made sense at first since risk-taking initially prevailed in Europe. However, risk aversion made a strong comeback later, but the Aussie just soldiered on.

We can’t really point to gold since most commodities were taking a beating during the session. However, it’s possible that Aussie bulls are still celebrating Trump’s comment from the earlier session that he sees a “great” trade deal with China (while also threatening to slap more tariffs if China won’t play nice).

AUD/USD was up by 4 pips (+0.06%) to 0.7094, AUD/JPY was up by 15 pips (+0.19%) to 80.11, AUD/CHF was up by 10 pips (+0.14%) to 0.7113

JPY

The yen just couldn’t get a break and was the third worst-performing currency of the session, even though risk aversion was the dominant sentiment in Europe.

Bond yields were on the up and up, though, which may have weighed down on JPY pairs.

USD/JPY was up by 20 pips (+0.18%) to 112.93, NZD/JPY was up by 7 pips (+0.10%) to 73.92, CHF/JPY was up by 7 pips (+0.06%) to 112.62

Watch Out For:

1:00 pm GMT: S&P/Case-Shiller U.S. composite HPI (5.85% expected vs. 5.92% previous)
2:00 pm GMT: CB’s U.S. consumer confidence index (136.0 ex[ected vs. 138.4 previous)
7:30 pm GMT: BOC Guv’nah Stephen Poloz and Deputy Guv’nah Carolyn Wilkins will testify before the House of Commons
9:45 pm GMT: New Zealand’s building consents (7.8% previous)

This post first appeared here:

PipDiddy · October 31, 2018, 2:11pm

London Session Recap: GBP Catches A Bid, NZD Broadly Lower

Price action during the morning London session was rather wonky, possibly because of month-end flows.

Having said that, the pound easily steamrolled over its peers to claim the top spot, even though there were no direct catalysts for the pound.

The comdolls, meanwhile, were broadly lower, with the Kiwi getting the worst of it, despite recovering commodity prices and the risk-friendly vibes in Europe.

And while the euro is mixed, it’s noteworthy as well since it didn’t really react to any of the economic reports, including the latest inflation report.

German retail sales m/m: 0.1% vs. 0.5% expected, -0.3% previous
French preliminary HICP y/y: 2.5% vs. 2.6% expected, 2.5% previous
Spanish flash GDP q/q: 0.6% as expected, same as previous
Credit Suisse economic expectations: -39.1 vs. -30.8 previous
Euro Zone flash HICP y/y: 2.2% as expected vs. 2.1% previous
Euro Zone flash core HICP y/y: 1.1% as expected vs. 0.9% previous
Italian HICP y/y: 1.7% vs. 1.8% expected, 1.5% previous
Euro Zone jobless rate: steady at 8.1% as expected

Major Events/Reports:

Month-end flows?

October is about to end, so some month-end capital flows are to be expected as hedge funds, mutual funds, pension funds, and other large players rebalance their portfolios and/or prepare to make cash distributions.

And these month-end flows sometimes result in some rather wonky price action, which may be why we’re seeing some wonky price action today.

BOJ’s Kuroda speaks

Earlier today (just before the London session rolled around), BOJ Shogun Kuroda held a presser on the BOJ’s most recent monetary policy announcement.

When Kuroda was asked about the BOJ’s downgraded inflation projections, Kuroda merely said that:

Kuroda was also asked about the ongoing trade war between the U.S. and China, and whether or not Kuroda has seen any evidence of negative spillover into Japan’s economy. And Kuroda replied as follows (emphasis mine):

Other than those, Kuroda was also asked about the BOJ’s yield target for 10-year Japanese government bonds (JGB), and Kuroda reiterated that (emphasis mine):

Euro Zone’s HICP report

It’s the end of the trading month, so the latest batch of inflation reports for the Euro Zone and its member states were released earlier during the session.

And focusing only on the HICP report for the Euro Zone as a whole, that showed that the Euro Zone’s headline HICP rose by 2.2% year-on-year in October, which is in-line with expectations but a tick faster compared to the previous month’s annual pace of +2.1% and is also the strongest reading since December 2012.

More importantly, the reading is well above the ECB’s forecast that headline HICP will increase by 1.7% year-on-year in 2018, as reported in the September Eurosystem/ECB Staff Macroeconomic Projections.

Taking a closer look at the report, HICP less energy, one of the ECB’s preferred measures for core inflation, came in at +1.3% for the third month in a row.

The reading is also meeting the ECB’s forecast that HICP less energy will print a 1.3% annual increase by year-end.

As for HICP less energy and unprocessed food, another of the ECB’s preferred measures for core inflation, that accelerated from 1.1% to 1.3%, which is a couple of ticks above the ECB’s forecast of +1.1% by the end of the year.

Intense risk-taking in Europe

Risk sentiment in Europe switched back to risk-on during today’s morning London session since almost all of the major European equity indices were flying high in positive territory.

And market analysts say that the intense risk-on vibes in Europe were due to mostly positive earnings results.

However, it’s also probable that we’re just seeing some short-covering and/or month-end flows since most of the major European equity indices took a heavy beating in October.

The pan-European FTSEurofirst 300 was up by 1.38% to 1,417.56
Germany’s DAX was up by 1.15% to 11,417.65
The blue-chip Euro Stoxx 50 was up by 1.40% to 3,190.25

U.S. equity futures were also glowing gamma-green, which signals that the risk-friendly vibes may potentially carry over into the upcoming U.S. session.

Dow 30 futures were up by 0.56% to 24,998.0
S&P 500 futures were up by 0.65% to 2,702.75
Nasdaq futures were up by 1.03% to 6,885.75

Major Market Mover(s):

GBP

The pound easily trumped all its peers to claim the top spot, not just of the session, but of the day (so far) as well.

There were no direct catalysts for the pound’s strength, but some market analysts suggest that we may be seeing some short-covering and/or preemptive positioning ahead of tomorrow’s BOE statement.

Of course, the pound’s rise may have just been due to month-end flows since ALL GBP pairs have been trending lower since October 12.

GBP/USD was up by 51 pips (+0.40%) to 1.2769, GBP/CAD was up by 75 pips (+0.45%) to 1.6769, GBP/NZD was up by 91 pips (+0.47%) to 1.9502

NZD

The Kiwi extended its losses and was the worst-performing currency of the session, even though risk-taking prevailed and commodity prices were in recovery mode.

NZD pairs encountered sellers from the get-go, but began turning higher about halfway through the session. The damage was already done, however, so the Kiwi closed out the session last place.

As to what caused the Kiwi to stumble earlier, there are no apparent catalysts for that, but it’s possible that China-related worries were still weighing down on the Kiwi since the Aussie also took hits at the start of the session.

NZD/USD was down by 5 pips (-0.08%) to 0.6546, NZD/JPY was down by 10 pips (-0.14%) to 74.04, NZD/CHF was down by 4 pips (-0.06%) to 0.6581

Watch Out For:

12:15 pm GMT: ADP’s U.S. private non-farm employment change (187K expected vs. 230K previous)
12:30 pm GMT: U.S. employment cost index (0.7% expected vs. 0.6% previous)
12:30 pm GMT: Canada’s monthly GDP (0.0% expected vs. 0.2% previous)
12:30 pm GMT: Canadian RMPI (-0.5% expected vs. -4.6% previous) and IPPI (0.0% expected vs. -0.5% previous)
1:45 pm GMT: Chicago PMI (60.0 expected vs. 60.4 previous)
2:30 pm GMT: U.S. crude oil inventories (3.6M expected vs. 6.3M previous)
5:15 pm GMT: SNB Overlord Thomas Jordan will give a speech
8:15 pm GMT: BOC Guv’nah Stephen Poloz and Deputy Guv’nah Carolyn Wilkins will testify before the Senate Standing Committee on Banking, Trade, and Commerce
9:30 pm GMT: AIG’s Australian manufacturing index (59.0 previous)

This post first appeared here:

PipDiddy · November 5, 2018, 2:21pm

London Session Recap: CHF Wobbles, GBP Finds Late Sellers, CAD Bid Higher

Price action during the morning London session was relatively muted and many currency pairs were essentially range-bound.

However, some themes were clearly playing out, namely demand for the Loonie, likely because of recovering oil prices, and selling pressure on the safe-haven Swissy, likely because of the risk-friendly vibes in Europe.

The pound is also worth highlighting since it started the session by stumbling a bit, but quickly regained its footing and marched higher against all its peers, only to encounter late sellers and close out the session in second-to-last place.

Spanish unemployment change: 52.2K vs. 20.4K
Sentix Euro Zone investor confidence: 8.8 vs. 9.9 expected, 11.4 previous
U.K. services PMI: 52.2 vs. 53.4 expected, 53.9 previous

Major Events/Reports:

U.K. services PMI

Markit released the U.K.’s latest services PMI report earlier today. And, well, it was a disappointment since the headline reading fell from 53.9 to a seven-month low of 52.2. The market was only expecting a soft tumble to 53.4.

According to Markit, the weaker-than-expected headline reading was due to “the weakest upturn in new work since July 2016.”

And according to survey respondents, “Brexit-related uncertainty and concerns about the global economic outlook had constrained demand growth for business services.”

But on a more upbeat note, Markit pointed out that “a moderate rate of job creation continued across the service sector.”

Moreover, input prices rose at the fastest pace since June. Even better, the increase in input prices “was mainly linked to higher transport costs and rising staff wages.”

Better still (particularly for CPI), “Higher operating expenses led to the fastest rise in prices charged by service sector firms since June.”

Schinas speaks

European Commission spokesman Margaritis Schinas got some press time earlier. And when he asked about the state of Brexit negotiations, he replied by saying that “We are not there yet.”

Brexit-related rumor

Tom Newton Dunn, Political Editor of The Sun newspaper, shared the following late into the session.
tweet

Oil recovers

After taking hits earlier, oil benchmark staged a recovery during the morning London session and largely erased the losses from earlier.

The earlier dip in oil prices was blamed by market analysts on news that the U.S. will grant waivers that will allow some countries to continue buying oil from Iran, even as U.S. sanctions against Iran are reimposed today.

As to what triggered the recovery in oil prices, there’s no apparent catalyst for that since oil benchmarks turned higher at around 9:00 am GMT when there were no major oil-related news.

U.S. WTI crude oil was up by 0.48% to $63.04
Brent crude oil was up 0.55% to $73.05

Risk-friendly start in Europe

The major European equity indices had a weak start. However, it soon became apparent that risk-taking was making a comeback since the major European equity indices began pulling up and most were even in positive territory already by the end of the morning London session.

And market analysts say that the risk-off vibes from earlier were due to risk sentiment spillover from the earlier Asian session, with higher Fed rate hike expectations, U.S. midterm election jitters, and the ongoing trade war between the U.S. and China still being blamed for the skittish risk sentiment.

As for the later risk recovery, the catalyst for that is still not clear. However, the energy sector outperformed, so it’s probable that the recovery in oil prices may have been the reason for the recovery in risk sentiment.

The pan-European FTSEurofirst 300 was up by 0.34% to 1,434.48
Germany’s DAX was up by 0.29% to 11,552.84
The blue-chip Euro Stoxx 50 was up by 0.40% to 3,227.15

Major Market Mover(s):

CHF

The safe-haven Swissy was the biggest loser of the morning London session, likely because of the risk-friendly vibes in Europe.

USD/CHF was up by 26 pips (+0.26%) to 1.0067, EUR/CHF was up by 10 pips (+0.10%) to 1.1438, NZD/CHF was up by 26 pips (+0.27%) to 1.0068

GBP

The pound stumbled when the morning London session rolled around and before the U.K.’s services PMI report was released.

And when the PMI report was finally released, the pound tried to slide even lower. However, dip demand was present and limited the pound’s losses, probably because the details of the PMI report were not too bad, particularly with regard, to jobs growth, wage growth, and inflationary pressure.

After a short tussle, the bulls finally began to win out. Unfortunately for GBP bulls, sellers returned when E.U. Commission Schinas gave a reality check on the state of Brexit talks.

And more GBP bears came out of the woods to maul the bulls when The Sun’s Tom Newton Dunn sent out those tweets.

GBP/USD was down by 33 pips (-0.25%) to 1.2973 but reached a session high of 1.3027, GBP/CAD was down by 49 pips (-0.29%) to 1.6998 but reached a session high of 1.7067, GBP/NZD was down by 43 pips (-0.22%) to 1.9503 but reached a session high of 1.9568

CAD

The Loonie overcame all opposition and was the one currency to rule them all (during this session at least). And from the looks of it, CAD pairs appear to have been tracking the recovery in oil prices.

USD/CAD was down by 5 pips (-0.04%) to 1.3102, AUD/CAD was down by 13 pips (-0.14%) to 0.9418, NZD/CAD was down by 8 pips (-0.10%) to 0.8714

Watch Out For:

1:10 pm GMT: BOC Guv’nah Poloz will speak
2:45 pm GMT: Markit’s finals U.S. services PMI (no change from 54.7 expected)
3:00 pm GMT: ISM’s U.S. non-manufacturing PMI (59.4 expected vs. 61.6 previous)

This post first appeared here:

PipDiddy · November 6, 2018, 2:27pm

London Session Recap: GBP Goes On A Round Trip, AUD & NZD Extend Gains, USD Tumbles

Plenty of themes were playing out during today’s morning London session. And the most notable theme is demand for the Aussie and the Kiwi despite the skittish risk sentiment in Europe.

That’s right. The Aussie and the Kiwi overpowered the yen and the Swissy, probably because the Greenback was on the back foot ahead of the U.S. midterm elections.

The Greenback wasn’t the weakest currency of the session, though, since that (dis)honor goes to the Loonie, likely because of the slide in oil prices.

And while the pound was mixed for the session, the pound is also noteworthy since it was the weakest currency for most of the session, but caught a bid late into the session, allowing the pound to pare its losses and close out the session mixed but a net winner.

The euro is also worth highlighting since it took hits when European Economic Commissioner Pierre Moscovici warned that the E.U. will impose sanctions on Italy if the Italian government won’t revise the budget.

German factory orders m/m: 0.3% vs. -0.5% expected, 2.5% previous
Spanish services PMI: 54.0 vs. 51.9 expected, 52.5 previous
Italian services PMI: 49.2 vs. 52.1 expected, 53.3 previous
French final services PMI: 55.3 vs. no change from 55.6 expected
German final services PMI: 54.7 vs. no change from 53.6 expected
Euro Zone final services PMI: 53.7 vs. no change from 53.3 expected
Euro Zone PPI m/m: 0.5% vs. 0.4% expected, 0.4% previous

Major Events/Reports:

Brexit-related updates

There were a few Brexit-related headlines during the session. And focusing only on the most interesting and/or market-moving ones, first up is British Trade Minister Liam Fox’s comments during a Reuters interview that it’s “impossible” to say if a Brexit deal can be hammered out by this month or next.

Fox did try to sound more optimistic when he quickly added that:

However, Fox took that optimistic message back when he went on to say that:

Another downbeat upbeat is the following tweet from DUP MP Jeffrey Donaldson:

Fortunately (for GBP bulls), BBC Political Editor Laura Kuenssberg tweeted the following late into the session.

And to give that tweet some context, Brexit Secretary Raab was meeting with British PM Theresa May in order to try and iron out a solution to the persistent Irish border issue.

And apparently, that tweet was interpreted by the market as a sign that some progress was made.

Moscovici speaks (against Italy’s budget)

European Economic Commissioner Pierre Moscovici got some press time earlier during the session.

And, well, Moscovici demanded that:

Moscovici also warned that there will be consequences if Italy will refuse to cooperate:

Oil dips

Oil benchmarks were broadly lower during the morning London session. And market analysts say that the slide in oil prices was due to the waivers granted by the U.S. to some of Iran’s major oil buyers.

U.S. WTI crude oil is down by 0.41% to $62.84
Brent crude oil is down by 0.62% to $72.72

Risk-off vibes in Europe

Risk aversion was apparently the dominant sentiment in Europe since most of the major European equity indices were taking hits during the course of the session and were broadly in negative territory by the end of the session.

And according to market analysts, the risk-off vibes in Europe were due to disappointing earnings results, as well as skittishness ahead of the U.S. midterm elections.

The pan-European FTSEurofirst 300 was up down 0.27% to 1,425.33
Germany’s DAX was down by 0.29% to 11,461.93
The blue-chip Euro Stoxx 50 was down by 0.30% to 3,207.65

Major Market Mover(s):

NZD & AUD

The Kiwi and the Aussie were respectively the top-performing and second top-performing currencies of the morning London session. But for the day so far, the Aussie is still currently on top, with the Kiwi in second place.

Oddly enough, risk aversion was the dominant sentiment in Europe. The Greenback was broadly lower ahead of the U.S. midterm elections, though, so the Aussie and the Kiwi may have just been feeding off the Greenback’s weakness.

NZD/USD was up by 16 pips (+0.24%) to 0.6678, NZD/CHF was up by 12 pips (+0.18%) to 0.6700, NZD/CAD was up by 26 pips (+0.30%) to 0.8763

AUD/USD was up by 13 pips (+0.19%) to 0.7236, AUD/CHF was up by 9 pips (+0.13%) to 0.7260, AUD/CAD was up by 24 pips (+0.25%) to 0.9495

CAD

The Loonie was the biggest loser of the morning London session, likely because CAD pairs were dragged down by the falling oil prices.

USD/CAD was up by 9 pips (+0.07) to% 1.3122, GBP/CAD was up by 16 pips (+0.09%) to 1.7157, EUR/CAD was up by 14 pips (+0.09%) to 1.4980

GBP

The pound was mixed for the session, but GBP pairs were the most volatile and had roughly uniform, two-way price action, so the pound is worth highlighting.

With that said, the pound was hammered by selling pressure when Trade Minister Liam Fox was interviewed. And more sellers would later come out to torment the pound when DUP MP Jeffrey Donaldson sent out that tweet.

However, the pound was bid higher across the board later on when BBC Political Editor Laura Kuenssberg sent out that tweet about Brexit Secretary Raab, which likely revived hopes for a Brexit deal.

GBP/USD was up by 2 pips (+0.02%) to 1.3074 but hit a session low of 1.3053, GBP/JPY was down by 18 pips (-0.12%) to 147.97 but hit a session low of 147.30, GBP/CHF was down by 6 pips (-0.05%) to 1.3117 but hit a session low of 1.3083

Watch Out For:

1:30 pm GMT: Canadian building permits (0.3% expected vs. 0.4% previous)
3:00 pm GMT: U.S. JOLTS job openings (7.09M expected vs. 7.14M previous)
9:30 pm GMT: AIG’s Australian construction index (49.3 previous)
9:45 pm GMT: New Zealand’s jobless rate (4.4% expected vs. 4.5% previous), quarterly employment change (0.5% expected, same as previous), and labor cost index (0.5% expected vs. 0.6% previous)
Dairy auction currently underway (-0.3% previous); auction usually ends at around 2:00 pm GMT
*** U.S. midterm elections today**

This post first appeared here:

PipDiddy · November 7, 2018, 2:05pm

London Session Recap: USD On The Ropes, AUD & NZD Broadly Higher

The U.S. midterm election results continued to weigh down on the Greenback during the morning London session.

And the main beneficiaries of the Greenback’s pain were apparently the Aussie and the Kiwi, although it very likely helped that commodities were in rally mode and risk-taking prevailed in Europe.

The Swissy also appears to have benefited from the Greenback’s weakness since demand for the Swissy began to ramp up after the Democrats were able to secure the 218 seats needed to take control of the House of Representatives.

As for the other currencies, the yen is also noteworthy since it was actually slightly weaker than the Greenback and was the worst-performing currency of the morning London session, likely because of the risk-friendly vibes in Europe.

German industrial production m/m: 0.2% vs. -0.1% expected, 0.1% previous
Swiss foreign currency reserves: CHF 753B vs. CHF 740B previous
Halifax U.K. HPI m/m: 0.7% vs. 0.5% expected, -1.3% previous
Italian retail sales m/m: -0.8% vs. -0.1% expected, 0.6% previous
Euro Zone retail sales m/m: 0.0% vs. 0.1% expected, 0.3% previous
U.S. President Trump will be speaking later
RBNZ statement and presser later

Major Events/Reports:

Democrats seize control of U.S. House

There were already indications earlier, but it’s now official that the Democrats were able to secure the needed 218 seats to take over the U.S. House of Representatives.

And naturally, there were also headlines about messing with Trump’s agenda or even having Trump investigated.

Of course, Trump also gave them a piece of his mind (via Twitter).

Commodities add to gains

Most commodities steadily marched higher during the course of the morning London session, very likely because of the Greenback’s overall weakness.

In fact, market analysts were attributing the rise in base metal and precious metal prices to the Greenback’s slide.

And for reference, the U.S. dollar index was down by 0.57% to 95.57 for the day by the end of the session.

The rise in oil prices, meanwhile, were partly attributed by market analysts to rumors that Russia and Saudi Arabia are supposedly discussing a potential oil production cut in 2019.

Oil benchmarks were on the rise.

U.S. WTI crude oil is down by 1.24% to $62.98
Brent crude oil is down by 1.64% to $73.31

Base metals were also in demand.

Copper was down by 1.19% to $2.763 per pound
Tin was down by 0.26% to $19,062.50 per dry metric ton

Precious metals were also in the green.

Gold was up by 0.87% to $1,234.50 per troy ounce
Silver was up by 1.71% to $14.705 per troy ounce

Strong appetite for risk in Europe

The major European equity indices had a running start and then continued to move higher as the session progressed, which is a sign that risk-taking was the name of the game in Europe.

And market analysts say that the risk-friendly vibes in Europe were due to positive earnings results and strong demand for Spanish banks after a favorable court ruling.

The pan-European FTSEurofirst 300 was up by 1.12% to 1,440.38
Germany’s DAX was up by 1.02% to 11,601.21
The blue-chip Euro Stoxx 50 was up by 1.31% to 3,249.45

Major Market Mover(s):

AUD & NZD

The Kiwi and the Aussie attracted more buyers and were the top-performing currencies of the session, thanks to the Greenback’s weakness, the commodities rally, and the risk-friendly vibes in Europe.

AUD/USD was up by 44 pips (+0.61%) to 0.7293, AUD/JPY was up by 55 pips (+0.68%) to 82.52, AUD/CAD was up by 22 pips (+0.23%) to 0.9538

NZD/USD was up by 28 pips (+0.42%) to 0.6776, NZD/JPY was up by 37 pips (+0.49%) to 76.67, NZD/CAD was up by 6 pips (+0.07%) to 0.8864

USD

The Greenback continued to bleed out during the session, thanks to the midterm election results since that raised political uncertainty in the U.S. while also weakening expectations for further fiscal stimulus, market analysts say.

The Greenback wasn’t the worst-performing currency of the session, though.

USD/CAD was down by 48 pips (-0.37%) to 1.3078, USD/CHF was down by 39 pips (-0.39%) to 0.9962, EUR/USD was up by 36 pips (+0.32%) to 1.1490

JPY

The yen barely lost out to the Greenback and was the worst-performing currency of the morning London session, likely because of the risk-friendly vibes in Europe.

USD/JPY was up by 8 pips (+0.07%) to 113.14, EUR/JPY was up by 50 pips (+0.39%) to 129.99, GBP/JPY was up by 25 pips (+0.17%) to 148.78

Watch Out For:

2:00 pm GMT: SNB Member Fritz Zurbrugg will give a speech
3:00 pm GMT: Canada’s Ivey PMI (50.9 expected vs. 50.4 previous)
3:30 pm GMT: U.S. crude oil inventories (2.0M expected vs. 3.2M previous)
4:30 pm GMT: U.S. President Donald Trump will speak
8:00 pm GMT: RBNZ statement (OCR steady at 1.75% expected); read Forex Gump’s preview
9:00 pm GMT: RBNZ presser

This post first appeared here: