The forex front was calmer than usual during today’s morning London session, probably because forex traders were hunkering down for the upcoming NFP report. There was some directional movement from the Kiwi, though.
NFP Friday! – Today is another NFP Friday, so volatility was naturally a bit more subdued than usual and most currency pairs ended up trading sideways, as forex traders hunkered down for the upcoming NFP report. Still, there were a few currencies that were slowly but clearly on the move, which I’ll be pointing out later.
Oh, if you’re planning to trade the NFP report, make sure to gear up by reading up on Forex Gump’s Forex Preview for the May NFP report.
U.K. services PMI beats consensus – Markit’s U.K. services PMI for the May period came in at 53.3, beating expectations that it would hold steady at 53.1. However, commentary from Markit noted that the growth of new businesses slowed down to a very disappointing 41-month low, which is one of the reasons why employment growth slowed to a 33-month low. The slower growth in new businesses was quite naturally blamed by the respondents on uncertainty ahead of the Brexit referendum.
Most commodities in the green – Commodities staged another broad-based rally during today’s morning London session, with the precious metals gold and silver respectively up by 0.12% to $1,214.05 per troy ounce and 0.50% to $16.105 per troy ounce during the session. Meanwhile, the base metal copper was up by 2.13% to $2.114 per pound. Oil benchmarks weren’t doing too well, though, since U.S. crude oil was down by 0.39% to $48.98 per barrel while Brent blend crude oil was down by 0.36% to $49.86 per barrel.
Another risk-on session in Europe – Most European equity indices were able to end the morning London session with moderate gains. As examples, the pan-European FTSEurofirst 300 was up by 0.60% to 1,359.08, the blue-chip Euro Stoxx 50 was up by 0.46% to 3,051.00, and the DAX was up by 0.64% to 10,273.50.
Market analysts attributed the risk-on vibes to the broad-based commodities rally since the shares of European mining companies were leading the way higher.
NZD – The Kiwi’s price action was kinda choppy, but it was clear across all Kiwi pairs that the Kiwi was in demand. There weren’t any direct catalysts for the Kiwi during the morning London session, but it’s possible that the risk-on environment encouraged some forex traders to load up on the higher-yielding Kiwi.