Daily Market Outlook by Kate Curtis from Trader's Way

[katetrades]

Forex Major Currencies Outlook (Oct 2, 2015)

USD

The US dollar had a mixed performance in recent trading sessions, as traders are probably squaring off their positions ahead of the US NFP release today. Data from the US came in mostly weaker than expected, with the initial jobless claims report showing a 277K figure and the ISM manufacturing PMI falling from 51.1 to 50.2. The jobs report is expected to show a 201K increase in hiring for September, up from the previous 173K gain. Stronger than expected figures could fuel rate hike expectations for the Fed, possibly resulting to a dollar rally.

EUR

The euro regained a bit of ground in recent trading when data from the euro zone came in mostly in line with expectations. Only the Italian manufacturing PMI missed the mark while the German and French final PMI readings were unchanged. The Spanish unemployment change report is up for release today and a 17.9K increase in joblessness is eyed.

GBP

The pound staged a small rebound yesterday when the UK manufacturing PMI came in line with expectations. The figure fell from 51.6 to 51.5 in September, slightly higher than the projected 51.3 figure. For today, the construction PMI is due and a climb from 57.3 to 57.5 is expected, although traders might want to wait until the release of the services PMI next week.

CHF

The franc was still in a weak spot after Switzerland reported a weaker than expected retail sales figure. Consumer spending fell by 0.3% year-over-year in August instead of showing the projected 0.3% increase. There are no reports due from the Swiss economy today.

JPY

The yen gave up ground to its forex rivals, as data from Japan has been coming in weaker than expected. Earlier today, the country reported an increase in joblessness, as the unemployment rate ticked up from 3.3% to 3.4%. Household spending, on the other hand, came in strong with a 2.9% gain versus the projected 0.4% uptick. There are no other reports lined up from Japan, leaving market sentiment in control of yen price action.

Commodity Currencies (AUD, NZD, CAD)

The comdolls strengthened in recent trading sessions, after Chinese PMI readings came in mostly in line with expectations. Australia reported a 0.4% increase in retail sales as expected, enough to bounce back from the previous 0.1% decline. No other reports are lined up from the comdoll economies today, which suggests that they might take their cues from commodity movements.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Oct 5, 2015)

USD

The US dollar sold off sharply against its forex rivals when the NFP report came in way below expectations. The report indicated a mere 142K increase in hiring instead of the projected 201K gain while the previous reports were downgraded to a total of 59K in negative revisions. The jobless rate still held steady at 5.1% as expected but wage growth was absent. The US ISM non-manufacturing PMI is due today and a fall from 59 to 58 is eyed.

EUR

The euro took advantage of dollar weakness and the pickup in risk appetite at the end of the week, even though data from the region came in below consensus. The Spanish unemployment change report showed a 26.1K increase in joblessness versus the projected 17.9K rise and the previous 21.7K increase. Final services PMI readings from the euro zone's largest economies are due today, along with the Sentix investor confidence index.

GBP

The pound managed to take a break from its recent slide against the dollar on Friday, as the UK construction PMI came in better than expected. The figure climbed from 57.3 to 59.9, reflecting a faster pace of industry expansion in September. For today, the services PMI is due and a rise from 55.6 to 56.4 is expected. This might have a larger impact on pound price action since the services sector contributes more to overall economic growth.

CHF

The franc was able to advance against its forex peers in recent trading, as market participants sought another safe-haven alternative after seeing the dismal US NFP. There were no reports released from Switzerland then and none are due today, keeping the franc sensitive to risk flows.

JPY

The yen gained ground to the dollar on Friday, even though the reports from Japan came in mixed. Household spending picked up by 2.9% year-over-year while the jobless rate increased from 3.3% to 3.4% in the same month. Earlier today, the average cash earnings report showed a weaker than expected rise in wages of 0.5% versus the projected 0.7% figure.

Commodity Currencies (AUD, NZD, CAD)

The comdolls took advantage of dollar and yen weakness on Friday, as commodities also drew a bit of support as well. Australian retail sales came in line with expectations of 0.4% growth while today's ANZ job advertisements release showed a 3.9% jump in listings. No other reports are due from the comdolls today, keeping risk sentiment in play.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Oct 6, 2015)
USD

The dollar had a mixed performance against its peers, although it was generally weaker due to the downbeat NFP release last week.

Data from the US came in weaker than expected, as the ISM non-manufacturing PMI fell from 59.0 to 56.9, worse than the projected fall to 58.0. The US trade balance is up for release today and a wider deficit is eyed, possibly indicating a fall in export activity.

EUR

The euro continued to chalk up losses against its higher-yielding forex counterparts, as the euro zone final services PMI readings came in mixed. Spain and Italy posted weaker than expected results while France printed an upward revision and Germany's reading was downgraded slightly. Euro zone retail sales came in flat instead of showing the projected 0.1% dip. German factory orders data is due today and a 0.5% rebound is eyed.

GBP

The pound struggled to end its decline in recent trading sessions, but was pushed lower by a bleak services PMI figure. The report showed a drop from 55.6 to 53.3 instead of the projected rise to 56.4, indicating that industry growth slowed down in September. There are no major reports lined up from the UK today.

CHF

The franc could be in for a bit more volatility today since Switzerland is set to print its latest CPI reading. The report could show a 0.1% uptick in price levels after falling by 0.2% in the previous month, but weaker than expected data could mean more losses for the franc.

JPY

The yen sold off heavily against its forex rivals, as risk appetite appeared to improve yesterday and traders priced in downbeat remarks from the BOJ in this week's rate statement. Japanese average cash earnings data was weaker than expected with a 0.5% uptick instead of the estimated 0.7% increase. There are no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to advance against their counterparts in recent trading sessions, thanks to the pick up in commodity prices and the return in risk appetite due to forecasts of a delayed Fed rate hike. Australia's ANZ job advertisements picked up by 3.9% indicating better hiring prospects while the RBA kept rates on hold at 2.00% earlier today. In New Zealand, the NZIER business confidence index slipped from 5 to -14 but traders seem to be awaiting positive results from the upcoming dairy auction. Canada's trade balance and Ivey PMI are also on today's docket.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Oct 7, 2015)


USD


The US dollar reacted mostly to risk sentiment and continued to weaken against its forex rivals, as data from the economy simply came in line with expectations. The trade deficit widened from 41.8 billion USD to 48.3 billion USD, indicating a 2% decline in exports and an increase in shipments coming from China. For today, only the crude oil inventories report is due and this might have more of an impact on the Loonie rather than the Greenback.


EUR


The euro resumed its advance to the dollar in recent trading sessions, despite weaker than expected data from Germany. Instead of printing the estimated 0.5% rebound, Germany factory orders slipped by 1.8% and the previous reading was downgraded to show a 2.2% tumble. German industrial production and French trade balance numbers are due today and more weak figures could erase the euro's recent gains.


GBP


The pound managed to make a bit of recovery in yesterday's trading sessions, even though the Halifax HPI from the UK came in below expectations. The report showed a 0.9% drop in house prices instead of the projected 0.1% uptick. For today, the UK manufacturing production figure is due and it might show a 0.4% rebound from the previous 0.8% decline.


CHF


The franc advanced against its forex peers when the Swiss CPI came in line with expectations of a 0.1% uptick. For today, data on foreign currency reserves is due and a large increase in holdings could suggest currency intervention by the SNB, which might drive the franc lower again.


JPY


The yen was still in a weak spot leading up to today's BOJ rate statement, as investors are pricing in dovish remarks from the central bank. Data from Japan has been mostly disappointing recently, which might factor in the central bank's decision. No actual policy changes are expected for now.


Commodity Currencies (AUD, NZD, CAD)


The comdolls continued to advance against their peers in recent trading sessions, supported by the pickup in dairy prices in New Zealand and the RBA's decision to stand pat. The latest GDT auction recorded a 9.9% increase in prices, marking its fourth consecutive bi-weekly gain and signaling a bottom in the dairy industry. In Canada, the trade balance and Ivey PMI came in weaker than expected. Canadian building permits data is due today and a 0.5% increase is expected.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Oct 8,2015)


USD


The US dollar had a mixed performance once more, as it gave up ground to most of its forex peers but advanced to the euro and the franc. There have been no major reports out of the US yesterday, leaving the dollar to act mostly as a counter currency. For today, the FOMC minutes are up for release and might contain some upbeat remarks from Fed officials. However, traders are likely to take this in light of the recent NFP disappointment, possibly brushing off strong hints about a liftoff later this year.


EUR


The euro was still in a weak spot yesterday, particularly against commodity currencies. There have been no major reports out of the euro zone, as traders seem to be bracing themselves for more dovishness in the ECB meeting minutes to be released today. Keep in mind that it was during the September meeting when Draghi admitted that they're open to further easing if inflation falls further, and support from his other policymakers could weigh on the euro.


GBP


The pound was able to stage a decent rebound in yesterday's trading sessions, thanks to an upbeat UK manufacturing production figure. The report showed a 0.5% increase versus the projected 0.4% rise, following a positive revision in the previous reading. Industrial production was also better than expected with a 1.0% gain versus the projected 0.3% uptick. The BOE rate statement and MPC meeting minutes are due today, with reassuring remarks likely to extend the pound's rallies.


CHF


The franc gave up ground to the dollar, even though the Swiss foreign currency reserves didn't confirm any large intervention moves by the SNB. Traders seem to be trading the Swissy carefully ahead of the ECB meeting minutes release, as dovish remarks could lead the Swiss central bank to ease as well. The Swiss jobless rate is also due today and a climb from 3.3% to 3.4% is eyed.


JPY


The yen was off to a weak start as traders anticipated dovish remarks from the BOJ, but the safe-haven currency was able to regain ground during the latter sessions. The central bank kept monetary policy unchanged as expected, acknowledging the recent slump but maintaining its outlook that the economy would continue to recover moderately. Earlier today, the core machinery orders report printed a surprise 5.7% slide versus the projected 3.3% increase.


Commodity Currencies (AUD, NZD, CAD)


The comdolls carried on with their rallies, despite weaker than expected building permits data from Canada and an increase in oil stockpiles in the US. The latest dairy auction in NZ yielded a 9.9% gain in prices, providing support for the Kiwi throughout the day. Canadian housing starts data is due today, although the return of Chinese traders from their holiday could also spur volatility among higher-yielders today.


By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Oct 9,2015)


USD


The US dollar gave up ground once more, as the FOMC minutes seemed less hawkish than expected. Fed officials acknowledged that the slowdown in China poses additional uncertainties for the global and domestic economy, although their outlook hasn't changed materially. Policymakers emphasized that they'd like to see more labor market progress and be reasonably confident that inflation would move closer to its 2% target, but latest reports haven't been so impressive. For today, import prices data and speeches from FOMC members Lockhart and Evans are lined up.


EUR


The euro took advantage of dollar weakness but was unable to stay afloat against most of its other rivals, particularly the commodity currencies. The ECB minutes seemed to be in line with analysts' expectations, although ECB member Weidmann reiterated that further easing isn't warranted just yet. French and Italian industrial production numbers are up for release today and more signs of weakness could mean more losses for the shared currency.

GBP


The pound gave up ground in recent trading, except against the US dollar, thanks to a downbeat BOE statement. The central bank sounded less hawkish than it used to be, as policymakers admitted that the downturn in China led to a weaker inflationary outlook and might lead them to push back their tightening time line. Only one member voted to hike rates as usual while the rest agreed to keep the status quo. The UK trade balance is up for release today and a smaller deficit of 10 billion GBP is expected.

CHF


The franc advanced against the US dollar but was in a weak spot against its other forex rivals, as the Swiss jobless rate ticked up from 3.3% to 3.4% as expected. No other reports were released from Switzerland but the dovish ECB outlook kept franc traders wary of potential intervention from the SNB. There are no reports due from Switzerland today.

JPY
The yen had a mixed performance as it acted mostly as a counter currency, as data from Japan came in mostly weaker than expected. The core machinery orders report showed a surprise 5.7% decline versus the projected 3.3% increase while the Economy Watchers Sentiment index slipped from 49.3 to 47.5. There are no reports due from Japan today, leaving yen pairs sensitive to risk sentiment.

Commodity Currencies (AUD, NZD, CAD)


The comdolls continued with their recent rallies, advancing to the European currencies and safe-havens. Data from Canada was mostly stronger than expected while the pickup in oil prices also added support for the Loonie. Canada is set to print its jobs report today and might show a 10.5K increase in hiring, enough to bring the jobless rate down from 7.0% to 6.9%. Earlier today, Australia reported a meager 2.9% gain in home loans instead of the projected 4.9% increase.


By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Oct 12, 2015)

USD

The US dollar continued to give up ground against its forex counterparts despite stronger than expected data from the economy. Import prices posted a mere 0.1% decline instead of the projected 0.5% drop while the previous reading was revised slightly higher. For today, US traders are off on a Columbus Day holiday, which suggests lower liquidity and potentially higher volatility among dollar pairs.

EUR

The euro advanced against some of its peers on Friday, even though data from the region came in mixed. France reported a 1.6% jump in industrial production while Italy recorded a worse than expected 0.5% slide. There are no reports lined up from the euro zone today, suggesting that pairs could take their cue from market sentiment or stay in range.

GBP

The pound was still in a weak spot last week, particularly against the commodity currencies, due to bleak data from the UK. The trade balance was weaker than expected, as it showed a deficit of 11.1 billion GBP versus the projected 10 billion GBP shortfall while the previous reading was downgraded. Construction output was also weaker than expected with a surprise 4.3% decline. The UK CB leading index is due today, along with a speech by hawkish MPC member Weale.

CHF

The franc was able to regain ground to the dollar on Friday, despite the lack of data from Switzerland. It appears that European traders are looking for a safe-haven alternative, keeping the Swiss currency supported. There are still no reports due from the Swiss economy today, keeping market sentiment in play.

JPY

The yen gave up ground to its forex rivals, as risk appetite improved. There have been no reports out Japan recently, although the earlier ones have been mostly disappointing. Japanese traders are out on a holiday today, suggesting subdued price action during the Asian trading hours.

Commodity Currencies (AUD, NZD, CAD)

The comdolls continued to rally across the forex charts, thanks to improved data. However, the Loonie fell behind when the components of the Canadian jobs report showed a dismal picture. As it turns out, the strong headline figure was simply a result of part-time hiring while full-time employment showed losses. Canadian traders are out on holiday but BOC Governor Poloz has a speech lined up.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Oct 14, 2015)

USD

The US dollar had a mixed performance as it acted mostly as a counter currency in recent trading sessions. Low-tier data from the US economy came in somewhat better than expected, with the NFIB small business index rising from 95.9 to 96.1. For today, the top-tier retail sales release is likely to have a stronger effect on the dollar, as the headline reading could show a 0.2% uptick while the core figure could print a 0.1% decline. Also due today are the PPI reports, with the headline figure slated to show a 0.2% decline and the core reading to show a 0.1% uptick.

EUR

The euro regained a bit of ground in recent trading sessions, even though data from Germany came in weaker than expected. The ZEW economic sentiment index plummeted from 19.1 to 1.9, indicating a sharp drop in optimism in the euro zone's strongest economy. However, the region's ZEW index still managed to come in line with expectations for a drop from 33.3 to 30.1. Euro zone industrial production and French CPI data are up for release today.

GBP

The pound retreated against its forex peers when the UK headline CPI printed a 0.1% decline instead of the projected flat reading for September. The core figure held steady at 1.0% instead of improving to the estimated 1.1% reading while the PPI showed a stronger than expected 0.6% rise in producer input prices. The UK jobs report is up for release today and a 2.3K drop in joblessness is expected. Traders are also likely to pay close attention to the average earnings index, which might climb from 2.9% to 3.1% and reflect stronger wage inflation.

CHF

The franc was able to advance against its rivals, as traders appear to be seeking an alternative safe-haven currency in the European region. Data from Switzerland came in line with consensus, as the PPI indicated the projected 0.1% dip in producer price levels. The Swiss ZEW economic expectations index is up for release today and a climb from the earlier 9.7 reading might give the franc an additional boost.

JPY

The Japanese yen took advantage of the run in risk aversion, as it raked in gains across the board. Data from Japan was actually weaker than expected, as the consumer confidence index fell from 41.7 to 40.6 instead of just dipping to 41.6. Preliminary machine tool orders fell by 19.1%, worse than the previous 16.5% drop. Earlier today, the Japanese PPI release printed a 3.9% fall in prices as expected.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave up more gains in yesterday's trading, after China printed dismal import figures. The trade surplus was better than expected at 60.3 billion USD versus the projected 46.9 billion USD and the previous 60.2 billion USD, but the components revealed that this was mostly caused by a 17.7% drop in domestic demand. Later on, RBNZ Governor Wheeler hinted that they're open to "some further easing" even as the country's dairy industry showed a strong rebound. Earlier today, China printed a weaker than expected CPI of 1.6% instead of the estimated 1.8% figure and worse than the previous 2.0% reading.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Oct 15, 2015)

USD

The US dollar gave up a lot of ground to its forex counterparts in recent trading sessions, spurred mostly by disappointing retail sales data. The headline figure indicated a mere 0.1% uptick instead of the 0.2% rise while the core figure showed a 0.3% drop. Producer prices were also weaker than expected, suggesting weaker consumer price pressures down the line and a potentially disappointing CPI release, which might be enough to cast Fed rate hike hopes out the window. CPI reports and manufacturing indices from New York and Philadelphia are lined up today.

EUR

The euro took advantage of dollar weakness but gave up ground to most of its other currency counterparts. Industrial production data was weaker than expected, as the region printed a 0.5% decline instead of the 0.4% drop. There are no reports due from the euro zone today.

GBP

The pound reacted positively to the UK jobs release, even though the claimant count change figure showed a 4.6K increase in joblessness versus the projected 2.3K decline. The jobless rate improved from 5.5% to 5.4% while the average earnings index rose from 2.9% to 3.0%, just short of the 3.1% consensus. No reports are due from the UK today.

CHF

The franc took its cue from the euro and retreated against most of its forex peers, except for the US dollar. Data from Switzerland was actually better than expected, as the ZEW economic expectations index rose from 9.7 to 18.3. There are no reports due from Switzerland today.

JPY

The yen continued to advance against most of its peers, most notably the US dollar. There were no major reports out of Japan but traders seemed to move their safe-haven holdings to the yen instead of the dollar. Earlier today, Japan reported a downgrade in its industrial production report to show a 1.2% decline from the initially reported 0.5% downtick. The tertiary industry index recorded a 0.1% uptick instead of the projected flat reading.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to take advantage of dollar weakness, despite mostly weaker than expected data. In Australia, the employment report showed a 5.1K drop in employment, its first monthly decline since April. The unemployment rate held steady at 6.2% but this was partly spurred by a drop in the participation rate. US crude oil inventories and New Zealand's quarterly CPI data are up for release next.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Oct 19, 2015)


USD


The US dollar regained some ground against its peers on Friday when reports came in line with expectations. Capacity utilization rose 77.5% while industrial production dipped by only 0.1% as expected. The preliminary UoM consumer sentiment report showed a rise to 92.1 from an upgraded 87.2 reading, indicating stronger optimism. For today, FOMC member Brainard is set to give a speech and usually highlights the reasons why the Fed should stand pat.

EUR


The euro gave up ground to most of its forex peers when the final CPI readings confirmed that the region suffered deflation in September. No changes were made to the headline CPI of -0.1% and the core CPI of 0.9%. There are no reports due from the euro zone today, leaving traders to price in expectations for the ECB statement later on this week.

GBP


The pound consolidated to the dollar and regained some ground on Friday, even though there were no major reports out of the UK. For today, there are still no reports lined up, although the weekend release of the Rightmove HPI indicated at 0.6% gain in house prices.

CHF


The franc returned some of its recent wins, as traders probably booked profits off their long trades by the end of the week. Weak inflation in the euro zone increases the odds of further ECB easing, which could mean more intervention from the SNB to keep the franc weak. There are no reports due from Switzerland today.

JPY


The yen struggled to hold on to its recent gains when profit-taking took place by the end of last week. Comments from BOJ Governor Kuroda suggesting that they plan to continue easing until Japan reaches its 2% inflation target kept the yen's gains limited. There are no reports due from Japan today, although the safe-haven currency appears to be giving up ground after China's data dump.

Commodity Currencies (AUD, NZD, CAD)


The comdolls made a quick bounce upon seeing the latest reports from China, which indicated that the slowdown wasn't so bad for now. The GDP showed 6.8% growth versus the projected 6.9% figure and the previous 7.0% expansion while retail sales came in better than expected. Industrial production and fixed asset investment both came in below expectations. In Canada, manufacturing sales and foreign securities purchases beat expectations. Canada's federal election is scheduled today.


By Kate Curtis from Trader's Way