Daily Market Outlook by Kate Curtis from Trader's Way

[katetrades]

Forex Major Currencies Outlook (July 15, 2016)

USD

The US dollar gave up ground as risk appetite improved in earlier trading sessions but soon recovered when US data came in strong. Initial jobless claims stood at 254K versus the 263K forecast while PPI reports also beat expectations. US retail sales and CPI are up for release today. Analysts are expecting to see a 0.1% uptick in headline retail sales and a 0.4% increase in core retail sales. Headline and core CPI could show 0.2% gains. Preliminary UoM consumer sentiment data is also up for release.

EUR

The euro followed in the pound's footsteps and rallied when the BOE refrained from cutting interest rates. There were no major reports out of the euro zone economy yesterday while today has the trade balance and final CPI readings due. Stronger than expected data could allow the shared currency to hold on to its gains and go for more.

GBP

The pound staged a strong rally when the BOE decided to sit on its hands instead of cutting interest rates. However this keeps the possibility of an August easing announcement in play, as the MPC minutes showed that policymakers discussed a range of stimulus options. BOE Governor Carney has a testimony lined up today.

CHF

The franc gave up ground to its peers as European traders flocked to the pound and euro. Data from Switzerland was weaker than expected as producer prices showed a meager 0.1% uptick versus the projected 0.2% increase. There are no reports due from the Swiss economy today.

JPY

The yen consolidated to its peers as traders continued to wait for more easing clues from the Japanese government and central bank. There were no major reports out of Japan yesterday and none are due today, which suggests that risk appetite could push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The comdolls saw a lot of volatility as risk sentiment kept switching. Data from Australia came in weaker than expected as hiring grew by 7.9K versus the projected 10.1K increase. Traders are holding out for the release of top-tier data from China today, as the world's second largest economy is scheduled to print its Q2 GDP, retail sales, fixed asset investment, and industrial production reports.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 18, 2016)

USD
The US dollar regained a lot of ground against its forex counterparts during Friday's US trading session, thanks to stronger than expected retail sales reports. Headline retail sales rose 0.6% versus the projected 0.1% uptick while core retail sales advanced 0.7% versus the estimated 0.4% gain. Headline and core CPI came in line with expectations of 0.2% gains.There are no major reports due from the US economy today.

EUR

The euro gave up most of its recent gains at the end of the week when the attacks in Nice and the coup in Turkey weighed on market sentiment in the region. Final CPI readings in the euro zone were unchanged from the initial estimates for a 0.1% uptick in the headline figure and a 0.9% gain for the core reading. There are no major reports due from the region today.

GBP

The pound slumped on Friday as traders booked profits off the currency's post-BOE relief rally. There were no new reports out of the UK then and BOE Governor Carney didn't share any clues on the central bank's next moves in his testimony that day, but investors seem to be pricing in an August cut already. There are no reports due from the UK today.

CHF

The franc had a mixed performance as it lost ground to the dollar but advanced to the euro and pound. There were no reports out of the Swiss economy then so the currency likely reacted to changing market sentiment. There are still no reports due from Switzerland today.

JPY

The yen got back on its feet on Friday as traders probably booked profits off their yen shorts from earlier in the week. In addition, data from China was mostly better than expected, reviving confidence in the Asian market. There are no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were off to a good start thanks to mostly upbeat Chinese data. The Q2 GDP held steady at 6.7% while industrial production rose from 6.0% to 6.2% instead of falling to 5.9%. Over the weekend, New Zealand printed a weaker than expected quarterly CPI of 0.4% and the RBNZ noted that they will provide an update on the economy by the end of this week. There are no major reports due from the comdoll economies today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 19, 2016)

USD

The US dollar was able to hold its ground against most of its forex peers when equity indices closed at all-time highs thanks to upbeat earnings data. US building permits and housing starts are up for release today with small improvements eyed, although the currency could continue to take its cue from stock market behavior.

EUR

The euro consolidated to the dollar but continued to advance against its comdoll counterparts. There were no major reports out of the euro zone yesterday while today has the ZEW economic sentiment figures on tap. The index from Germany could fall from 19.2 to 8.2 while the region's reading is slated to fall from 20.2 to 12.3.

GBP

The pound struggled to stay afloat as traders started pricing in expectations for this week's reports. For today, the CPI numbers are due and price gains are expected. The headline CPI could rise from 0.3% to 0.4% while the core reading could climb from 1.2% to 1.3%. Stronger than expected data could mean more gains for the pound.

CHF

The franc had a mixed performance as it functioned mostly as a counter currency. There were no reports out of the Swiss economy yesterday while today has an empty schedule as well, keeping market sentiment and country-specific price action in play.

JPY

The yen regained a bit of ground against its peers as risk aversion weighed on the commodity currencies. There were no reports out of Japan yesterday and none are due today so risk sentiment could push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi took another hit when the RBNZ shared its proposal to tighten lending conditions in the housing market, possibly keeping their options for a rate cut if necessary. In Australia, the RBA minutes showed that policymakers were more worried about inflation than they seemed in their actual policy announcement. The Loonie was dragged lower by falling oil prices once more and weaker Canadian foreign securities purchases. New Zealand has its GDT auction coming up next.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 20, 2016)

USD

The US dollar got a boost from risk aversion in yesterday's sessions, thanks to the IMF's downgrades on global growth forecasts. Building permits and housing starts came in line with expectations. There are no reports due from the US economy today so risk sentiment could be the main driver of price action.

EUR

The euro weakened to the dollar and yen but managed to hold on to its gains against the commodity currencies. Data from the euro zone was weaker than expected, as Germany reported that its ZEW economic sentiment index fell from 19.2 to -6.2 while the region's reading dropped from 20.2 to -14.7. German PPI and euro zone current account balance are due today.

GBP

The pound was unable to take advantage of stronger than expected CPI readings as the IMF downgraded growth forecasts for the UK and the global economy. Headline CPI rose from 0.3% to 0.5%, outpacing the estimate at 0.4%, while core CPI rose from 1.2% to 1.4% versus the consensus at 1.3%. For today, the jobs figures are up for release. Claimant count could increase by 4.1K versus the previous 0.4K drop while the unemployment rate is expected to hold steady at 5.0%. The average earnings index might rise from 2.0% to 2.3% to show faster wage growth.

CHF

The franc had a mixed performance as it weakened to the dollar but advanced to the comdolls and European currencies. There were no reports out of the Swiss economy yesterday and none are due today, leaving the franc to trade as a counter currency.

JPY

The yen took advantage of the return in risk aversion after the IMF downgraded global growth forecasts. There have been no reports out of Japan recently and talks of additional stimulus appear to have fizzled out. There are still no reports lined up from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls suffered sharp losses due to falling commodity prices, particularly for the oil-related Loonie. New Zealand reported a flat reading for its GDT index in the latest dairy auction. In Australia, the MI leading index printed a 0.2% drop. Crude oil inventories are due next and an increase in stockpiles could spur more losses for the Loonie.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 21, 2016)

USD

The lack of top-tier data from the US economy left the Greenback reacting to country-specific data. The US dollar advanced to the commodity currencies but was mostly weaker against the euro, pound, and franc as sentiment seemed to improve in that region. Initial jobless claims and the Philly Fed index are due today.

EUR

The euro struggled to hold its ground as some traders started pricing in dovish remarks for today's ECB statement. ECB head Draghi might decide to sit on his hands since the BOE refrained from cutting rates in last week's policy statement, deciding to keep their options open for further easing down the line. German PPI beat expectations while the euro zone consumer sentiment index was down from -7 to -8.

GBP

The pound got a lot of support from better than expected UK jobs data. Claimants rose by 0.4K in June while the jobless rate fell from 5.0% to 4.9%. The average earnings index rose from 2.0% to 2.3% as expected, indicating wage growth and upside pressure on consumer inflation. UK retail sales data is due today and a 0.4% drop is eyed.

CHF

The franc advanced to the dollar but weakened to its other European rivals. There were no reports out of the Swiss economy yesterday and none are due today, which suggests that the franc could keep moving as a counter currency as well.

JPY

The yen resumed its slide when rumors of a 20 trillion JPY economic stimulus package from the government hit the newswires. No details have been provided just yet but traders seem to be pricing in additional easing from the BOJ in their statement next week as well. There are no reports up for release from Japan today so risk sentiment could also push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were mostly weaker as the RBNZ revealed in its economic update that additional easing could be needed in order to bring inflation back to its target level. Policymakers also mentioned that the exchange rate needs to be lower. Visitor arrivals were down 1.0% in June and credit card spending data is due next.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 22, 2016)

USD

The US dollar gave up a bit of ground against its forex peers when risk appetite improved after the ECB statement. Still, the Greenback managed to rake in some gains against the Loonie. The Philly Fed index missed expectations as it fell from 4.7 to -2.9 instead of improving to 5.1 while initial jobless claims, existing home sales, and the CB leading index beat expectations. The US flash manufacturing PMI is due today and a rise from 51.3 to 51.9 is eyed.

EUR

The euro encountered additional volatility during the ECB decision but managed to stay afloat when the central bank refrained from adding stimulus. Draghi was less downbeat than usual as he assured that the region can weather the Brexit and that they'd need additional information before deciding to ease further. Flash PMI readings from France and Germany are up for release today and strong readings could keep the euro afloat.

GBP

UK retail sales missed expectations by showing a 0.9% drop versus the estimated 0.4% slide in consumer spending. Still, the pound tried to put up a fight against its peers as the UK government showed progress in moving towards Brexit negotiations. UK manufacturing PMI is up for release today and a tumble from 52.1 to 47.8 is eyed.

CHF

The franc was acting mostly as a counter currency recently but managed to draw a bit of support when the ECB refrained from easing. After all, this means that the SNB won't need to intervene in the forex market for now to keep EURCHF above its target levels. Swiss trade balance also beat expectations at 3.35 billion CHF. There are no reports due from the Swiss economy today.

JPY

The yen regained a lot of ground towards the end of yesterday's Asian session when BOJ Governor Kuroda confirmed that they're not likely to increase stimulus just yet. Data from Japan came in line with expectations yesterday as the all industries activity index had a 1.0% drop while today's flash manufacturing PMI release came in stronger than expected at 49.0.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were mostly weaker against their peers as the likelihood of easing increased for the RBA and RBNZ. Crude oil prices continued to slide and drag the positively-correlated Loonie with it in the process. Canadian CPI and retail sales figures are due today, with analysts expecting to see weaker inflation and consumer spending data.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 25, 2016)

USD

The US dollar was the king of pips on Friday as risk aversion returned and data from the US beat expectations. The flash manufacturing PMI rose from 51.3 to 52.9, higher than the consensus at 51.9. There are no major reports up for release from the US economy today so traders could price in expectations for this week's GDP release and FOMC statement.

EUR

The euro suffered a sharp selloff towards the end of the trading week when reports of a shooting in a Munich mall hit the newswires. Data from the euro zone earlier in the day was actually stronger than expected, with French flash manufacturing and services PMIs beating expectations. The German Ifo business climate index is due today and a drop from 108.7 to 107.7 is expected.

GBP

Traders dumped the pound upon seeing a sharp contraction in both manufacturing and services PMIs. The former fell from 52.1 to 49.1, higher than the estimated 47.8 figure but still a drop to contraction, while the latter slipped from 52.3 to a record low of 47.4. CBI industrial orders expectations data is due today and a decline from -2 to -6 is eyed.

CHF

The franc got a boost from its safe-haven appeal in the European region, as its counterparts were weighed down by weak data and attacks, but the Swiss currency was still no match to USD strength. There were no reports out of the Swiss economy on Friday and none are due today, which suggests that market sentiment could keep driving franc action.

JPY

The Japanese yen got a boost when BOJ Governor Kuroda made comments ruling out "helicopter money" and led traders to dismiss speculations of additional BOJ easing this week. However, in his remarks during the G20 conference over the weekend, it seemed as though ruling out "helicopter money" doesn't necessarily mean that stimulus won't be possible. There are no major reports out of Japan today so traders might price in expectations for the BOJ decision.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were in a weak spot as risk-off vibes weighed on the higher-yielders last Friday. Data from Canada was somewhat upbeat, with CPI readings coming in line with expectations and retail sales data posting strong results. New Zealand's trade balance is due next and a smaller surplus of 128 million NZD is eyed.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 26, 2016)

USD

The US dollar was the big winner for the day, as it raked in gains across the board on risk aversion. Commodity prices have been on the decline while stock indices appear to have peaked since traders are taking profits ahead of this week's FOMC statement. There were no reports out of the US economy yesterday while today has the CB consumer confidence, new home sales, and Richmond manufacturing index on tap.

EUR

The euro was able to recover against most of its forex peers when the German Ifo business climate reading beat expectations. The index fell from 108.7 to 108.3 instead of dropping all the way down to the 107.7 consensus, suggesting that confidence hasn't weakened that much after the EU referendum. Only the Belgian NBB business climate index is up for release today.

GBP

The pound was still in a weak spot against its forex rivals despite the stronger than expected CBI industrial order expectations figure. The reading fell from -2 to -4, higher than the projected -6 figure. BBA mortgage approvals data is due today.

CHF

The franc was able to advance against its higher-yielding peers when risk aversion gripped the financial markets, but it was still no match to dollar strength. There were no reports out of the Swiss economy yesterday and none are due today, keeping market sentiment as the main driver of franc price action.

JPY

The yen was off to a weak start but soon reversed and rallied against its rivals when Economy Minister Ishihara suggested that BOJ easing could be moderate. He added that volatility in yen pairs has subsided, leading market watchers to think that the BOJ won't try to weaken the currency this week. There are no reports lined up from Japan today so officials' remarks could keep pushing yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The Loonie gave up a lot of ground when crude oil prices hit their lowest level since April. Speculations that stockpiles could show gains revived fears of an oversupply and weak demand. In New Zealand, the trade surplus narrowed to 127 million NZD from a downgraded 348 million NZD figure, although components showed gains in both imports and exports. There are no reports due from the comdoll economies today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 27, 2016)

USD

The US dollar was off to a weak start in the day but it managed to recoup its losses during the US session, thanks to upbeat data. The CB consumer confidence index was down from 97.4 to 97.3 but this was higher than the projected 95.6 figure. New home sales also increased in June, following an upgraded May reading. On the other hand, the flash services PMI posted a larger than expected decline to 50.9 but still indicative of industry growth. Durable goods orders data is due today ahead of the FOMC statement, which might set the tone for rate hike expectations and longer-term USD price action.

EUR

The euro chalked up sharp losses despite seeing stronger than expected business climate data from Belgium. German import prices and GfK consumer sentiment data are up for release today, with the former expected to show a 0.6% increase and the latter likely to fall from 10.1 to 9.9. Still, stronger than expected figures from the euro zone's top economy could revive strength for the shared currency.

GBP

The pound had a volatile run but was mostly weaker against its forex counterparts. There were no reports out of the UK economy yesterday while today has the preliminary GDP reading due. A growth figure of 0.5% is eyed for Q2, stronger than the earlier 0.4% expansion and probably enough to assure market participants that the economy is on strong footing ahead of the Brexit. UK CBI realized sales data is also due and a drop from 4 to 2 is eyed.

CHF

The franc was in a weak spot against the dollar and its European counterparts even though there were no major reports out of Switzerland. Today has the UBS consumption indicator due and any improvement from the previous 1.35 figure could allow the Swiss currency to recover.

JPY

The yen enjoyed a strong rally during the latter part of the Asian session when news reports indicated that the government stimulus package was much smaller than anticipated. This doused hopes of an aggressive easing announcement from the BOJ this week, leading bears to exit their short positions. There are no reports due from Japan today but any news updates related to economic stimulus could push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The comdolls staged a bit of a recovery yesterday thanks to a pickup in risk appetite. Crude oil prices were still weak as traders priced in a buildup in stockpiles, but the markets appear to be expecting a reduction of 2.1 million barrels for the US EIA data. In Australia, the quarterly CPI came in line with expectations of a 0.4% gain, reducing expectations of an RBA cut.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 28, 2016)

USD

The US dollar had a volatile run during the actual FOMC statement as it initially rallied on an upbeat announcement but returned its recent gains and more when risk appetite picked up. FOMC members upgraded their economic assessment, particularly when it comes to hiring and household spending, leading some market participants to keep their hopes up for a September hike. Prior to this announcement, durable goods orders and pending home sales data missed expectations. Only the US initial jobless claims report is due today.

EUR

The euro was able to rake in gains against the dollar but was weaker against the pound and comdolls. Data from the euro zone was mixed, with the German GfK consumer climate index down from 10.1 to 10.0 versus the projected 9.9 reading and German import prices up 0.5% versus the projected 0.6% increase. German preliminary CPI and unemployment change reports are due today.

GBP

The pound barely reacted to the upbeat UK GDP reading, which showed a larger than expected 0.6% expansion versus the projected 0.5% growth figure and the previous 0.4% reading. UK CBI realized sales slipped from 4 to -14, far below the projected dip to 2. Only the UK GfK consumer climate index is due today and a rise from -9 to -7 is eyed.

CHF

The franc regained ground to the dollar and its European counterparts as the UBS consumption indicator rose from 1.24 to 1.34. There are no reports due from the Swiss economy today so risk sentiment could push franc pairs around.

JPY

The yen lost ground to most of its peers when reports suggested that the government was ready to announce a much larger stimulus program than previously anticipated. However, traders quickly booked profits now that the actual BOJ statement is approaching. Prior to this, Japan will release its inflation, retail sales, and industrial production figures in the next Asian session.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were big winners when risk-taking resumed, as the oil-related Loonie even managed to shrug off the buildup in US crude oil inventories. Australia's CPI came in line with expectations of a 0.4% increase while the trimmed mean CPI posted a higher than expected 0.5% gain. Australian import prices are due next.


By Kate Curtis from Trader's Way