Daily Market Outlook by Kate Curtis from Trader's Way

[katetrades]

Forex Major Currencies Outlook (August 26, 2016)

USD

The US dollar continued to rake in gains earlier in the day but wound up retreating on profit-taking. Data from the US economy was mostly stronger than expected as the durable goods orders figures saw strong gains while the initial jobless claims figure was slightly lower than consensus. The flash services PMI, on the other hand, turned out to be a disappointment when it showed a slower pace of industry growth. For today, the main event risk is Yellen's Jackson Hole testimony which might set the tone for Fed rate hike expectations. Apart from that, the US preliminary GDP reading and revised UoM consumer sentiment figures are due.

EUR

The euro was mostly weaker against its peers as the death toll from the earthquake in Central Italy continued to rise. Germany's Ifo business climate index was weaker than expected as it slid from 108.3 to 106.2 instead of improving to 108.5. The GfK consumer climate index is due today and a rise from 10.0 to 10.2 is eyed.

GBP

The pound gave up ground despite stronger than expected CBI realized sales data. The reading rose from -14 to +9 to reflect a return to growth, higher than the estimated rise to -5. The UK second GDP estimate is due today and no change from the initially reported 0.6% growth figure is eyed.

CHF

The franc failed to establish a strong direction in recent trading as there were no top-tier reports from Switzerland. There are still no major reports lined up today so risk sentiment could push franc pairs around.

JPY

Yen pairs were mostly stuck in their tight ranges as traders continued to sit on their hands and wait for more economic clues. Inflation readings from Japan and Tokyo both printed weaker than expected results, reviving talks of additional BOJ easing in their next meeting.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were mostly weaker once more as risk aversion weighed on higher-yielders. There were no reports out of the comdoll economies yesterday and none are due today, although large moves could be seen if risk sentiment is stronger after Yellen's testimony.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Aug 29, 2016)

USD

The US dollar enjoyed a strong boost on Friday when Fed Chairperson Yellen made her speech and confirmed that a rate hike could still be in play before the end of the year. These remarks were echoed by Fed official Fischer, reminding market participants that a number of FOMC policymakers support the case for tightening soon. The core PCE price index, along with personal spending and income reports, are up for release today.

EUR

The euro suffered a sharp selloff to the dollar but managed to advance against its other rivals. Germany's GfK consumer climate reading came in line with expectations at 10.2, up from the earlier 10.0 reading. There are no reports due from the euro zone today.

GBP

The pound managed to put up a strong fight against its peers but gave up some ground to the dollar after Yellen's speech. The preliminary UK GDP reading was unchanged at 0.6% while preliminary business investment showed a strong 0.5% rebound instead of the estimated 0.9% drop. UK banks are closed for the holiday today.

CHF

The franc slid against the dollar and its European counterparts as there were no reports to prop it up last Friday. There are still no major reports lined up from Switzerland today so the franc could take its cue from risk sentiment or simply consolidate.

JPY

The yen was in a weak spot after traders moved their safe-haven holdings to the dollar in anticipation of a rate hike before the end of the year. Also, traders are still reeling from BOJ Governor Kuroda's hints about further easing earlier in the week, on top of weaker CPI readings from Japan. Japanese household spending and retail sales figures are due in the next Asian session.

Commodity Currencies (AUD, NZD, CAD)

The comdolls chalked up big losses to the dollar on risk-off flows. There were no reports out of their economies then but traders couldn't help but price in the impact of higher US rates on business investment, consumer spending, and demand for raw materials. There are still no major reports lined up today so the comdolls could move on risk sentiment.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Aug 30, 2016)

USD

The US dollar retreated as traders booked profits off their recent long positions after Yellen's Jackson Hole testimony. Data from the US came in line with expectations, with the core PCE price index posting a feeble 0.1% uptick. Personal income and spending data from June enjoyed a small upgrade, still keeping rate hike expectations in play. US CB consumer confidence is due today and a dip from 97.3 to 97.2 is eyed.

EUR

The euro took advantage of dollar weakness but was slightly weaker against its other counterparts. There were no reports out of the euro zone yesterday while today has flash CPI readings from Germany and Spain, along with import prices data from Germany.

GBP

The pound made a quick bounce to the dollar but retreated against its other peers. UK banks were closed for the holiday and are set to reopen today ahead of the release of net lending to individuals and mortgage approvals data. Stronger than expected UK reports could reassure traders that the economy didn't fare so poorly after the Brexit vote.

CHF

The franc moved mostly sideways in recent trading since there have been no major reports out of Switzerland this week. The Swiss KOF economic barometer is due today and a drop from 102.7 to 102.2 is expected, possibly keeping a lid on the currency's gains.

JPY

The yen regained some ground despite BOJ Governor Kuroda's easing hints during the Jackson Hole Symposium. Data from Japan beat expectations, as household spending and retail sales saw smaller than expected declines. The unemployment rate also improved from 3.1% to 3.0%.

Commodity Currencies (AUD, NZD, CAD)

The comdolls rallied then quickly reversed as risk aversion returned to the markets. Data from Australia came in better than expected with building approvals up 11.3% instead of staying flat. Canadian current account balance and underlying inflation reports are due today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Aug 31, 2016)

USD

The US dollar regained ground against its forex rivals in recent trading as data beat expectations. The CB consumer confidence index rose from 96.7 to 101.1 in August to reflect stronger optimism and hint at higher spending down the line. The ADP report is due today and a 174K increase in hiring is expected for August, slower than the earlier 179K gain. Chicago PMI and pending home sales are also up for release.

EUR

The euro was weaker against the dollar and comdolls but managed to advance against the yen. Data from the region was mixed, as Germany's preliminary CPI was flat while Spain reported a smaller than expected 0.1% dip in price levels. German import prices posted a 0.1% uptick versus the estimated 0.1% drop. German retail sales and unemployment change data are lined up today ahead of the region's flash CPI readings, with downbeat results likely to revive additional ECB easing expectations.

GBP

The pound was able to stay resilient against the dollar, despite weaker than expected UK data. Net lending to individuals fell from 5.1 billion GBP to 3.8 billion GBP while mortgage approvals slid from 64K to 61K. Only the UK Nationwide HPI is up for release today and a 0.1% decline is expected.

CHF

The franc lost ground to the dollar and its European counterparts as the KOF economic barometer dropped from 103.5 to 99.8 versus the projected 102.2 reading. For today, the UBS consumption indicator is lined up and a reading below the earlier 1.34 figure could mean more losses.

JPY

The yen was the weakest performer in the bunch as traders continued pricing in expectations of aggressive stimulus from the BOJ. Japan's preliminary industrial production showed a flat reading instead of the estimated 0.7% gain. Housing starts data is due next.

Commodity Currencies (AUD, NZD, CAD)

The comdolls lost ground to the dollar but managed to advance against the euro and yen. Data from Canada was mixed, but the downbeat current account deficit reflected much weaker export activity and is weighing on monthly GDP expectations for today. Underlying inflation data such as IPPI and RMPI reflected weaker price pressures as well. In New Zealand, the ANZ business confidence index fell from 16.0 to 15.5. Crude oil inventories data is also lined up and a buildup of 1.1 million barrels is eyed, likely weighing on the commodity price once more.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Sep 1, 2016)

USD

The US dollar slowed down from its climb after data came in mixed. The ADP report printed a 177K increase in hiring for August, higher than the projected 174K figure. The July figure was upgraded to show a 194K increase from the initially reported 179K gain. Meanwhile, the Chicago PMI showed a sharper than expected drop to 51.5 to show a slowdown in industry growth. The ISM manufacturing PMI is due today and a drop from 52.6 to 52.0 is expected, with the jobs component likely having a stronger say in USD price action.

EUR

The euro was mostly weaker after data from the euro zone missed expectations. The region's flash headline CPI stood at 0.2% versus the projected 0.3% figure while the core figure came in at 0.8% versus the projected 0.9% increase, keeping expectations up for additional ECB easing. German retail sales and unemployment change data beat expectations but French consumer spending and CPI fell short. Final manufacturing PMI readings are due today.

GBP

The pound continued to put up a fight against its counterparts as the UK Nationwide HPI printed a stronger than expected 0.6% gain instead of the projected 0.1% dip. For today, the UK manufacturing PMI is due and a rise from 48.2 to 49.1 is expected. Stronger than expected data could lead to a fresh boost for the pound since this would reassure traders that the economy is stable even after the Brexit vote.

CHF

The franc gave up a lot of ground to its European counterparts and the dollar even as the UBS consumption indicator came in at 1.32. As it turns out, the previous reading suffered a sharp downward revision, suggesting that the economic situation wasn't as rosy as it seemed. Swiss retail sales and manufacturing PMI are lined up for today.

JPY

The yen continued to sink across the board after Japan printed yet another downbeat report. Capital spending came in at 3.1% for the quarter, lower than the projected 5.6% reading and the previous 4.2% figure. The final manufacturing PMI was also downgraded from 49.6 to 49.5.

Commodity Currencies (AUD, NZD, CAD)

Canada printed a stronger than expected 0.6% monthly GDP figure for June, but the quarterly GDP amounted to a 1.6% contraction compared to the earlier 2.5% growth. Crude oil also sank after the US oil inventories report showed a larger than expected buildup of 2.3 million barrels. In Australia, private capital expenditure slipped 5.4% for Q2 versus the projected 4.0% drop while the previous reading suffered a downgrade. China's official manufacturing PMI rose from 49.9 to 50.4 but the Caixin version fell from 50.6 to 50.0.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Sep 2, 2016)

USD

The US dollar gave up a lot of ground in the previous US session when the ISM manufacturing PMI printed dismal results. The reading slipped from 52.6 to 49.4 to indicate industry contraction, lower than the estimated fall to 52.0. The jobs component showed a sharper contraction, signaling that the NFP might fall short of estimates. Analysts are expecting to see a 180K gain in hiring, lower than the previous 255K increase, but an upbeat figure could keep rate hike expectations in play.

EUR

The euro took advantage of dollar weakness but gave up ground to the pound. Final manufacturing PMI readings were mostly in line with expectations and no major revisions were made. Only the euro zone PPI is due today and a 0.1% uptick in producer prices is eyed, lower than the earlier 0.7% gain.

GBP

The pound staged a strong rally when the UK manufacturing PMI beat expectations, reminding traders that the economy is doing well despite the Brexit vote. The reading jumped from 48.3 to 53.3 to indicate a return to industry growth, outpacing the projected rise to 49.1. There are no reports due from the UK economy today.

CHF

The franc was able to get a boost from stronger than expected Swiss retail sales. The report showed a 2.2% year-over-year decline, smaller than the projected 3.1% slump and the previous 3.5% drop. There are no reports due from the Swiss economy today.

JPY

The yen continued to fall across the board as BOJ easing expectations continued to weigh on the Japanese currency. Japan's consumer confidence index is due next and an improvement from 41.3 to 41.6 is expected, although a weak read could revive expectations of slower spending down the line.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to take advantage of the dollar selloff, as the weak leading employment indicators could weigh on Fed rate hike odds. Also, China's official manufacturing PMI beat expectations and showed a return to industry growth. Canada's trade balance and labor productivity data are due today, with the former expected to show a smaller deficit of 3.2 billion CAD from the earlier 3.6 billion CAD shortfall.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Sep 5, 2016)

USD

The US dollar returned a lot of its recent gains to its counterparts when the NFP reading turned out weaker than expected. The economy added 151K jobs in August, lower than the projected 180K figure, but the previous reading was upgraded from 255K to 275K. The unemployment rate was unchanged at 4.9% instead of improving to the estimated 4.8% reading while average hourly earnings indicated a 0.1% uptick instead of the estimated 0.2% gain. US banks are closed for the holiday today.

EUR

The euro took advantage of dollar weakness but weakened against most of its other counterparts even when euro zone data came in line with expectations. The Spanish unemployment change figure came in at 14.4K while PPI rose 0.1%. Final services PMI readings are due today, along with the region's Sentix investor confidence index.

GBP

The pound was able to rake in more gains at the end of the week after the UK construction PMI also showed stronger than expected results. The reading rose from 45.9 to 49.2 to show a slower pace of industry contraction versus the projected rise to 46.6. The services PMI is due today and a rise from 47.4 to 49.1 is eyed, although another upside surprise might be seen.

CHF

The franc took advantage of dollar and euro weakness but was no match to pound strength. There were no reports out of the Swiss economy then and none are due today, which suggests that the franc could keep taking its cue from risk sentiment.

JPY

The yen capped off the week with a continued losing streak as dovish BOJ sentiment kept dragging the currency down. Japan's consumer confidence index rose from 41.3 to 42.0, better than the projected 41.6 figure. Average cash earnings rose 1.4% year-over-year versus the estimated 0.5% gain. BOJ Governor Kuroda has a testimony lined up and more downbeat remarks could keep a lid on the yen's gains.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to benefit from the selloff in the dollar, as lower odds of a Fed hike in September brought a bit of risk appetite back to the table. Canada's trade balance and quarterly labor productivity data also beat expectations. Medium-tier reports from Australia such as the MI inflation gauge, quarterly company operating profits, and ANZ job advertisements are due while New Zealand has its ANZ commodity prices report on the docket. Canadian banks are closed for the holiday.

By Kate Curtis from Trader’s Way

 

[katetrades]

Forex Major Currencies Outlook (Sep 06, 2016)

USD

The US dollar barely made any headway on Monday as US traders were off enjoying the Labor Day holiday. The ISM non-manufacturing PMI is due today and a drop from 55.5 to 55.4 is expected, likely reflecting a slowdown in the jobs component as well. The US labor market conditions index is also lined up.

EUR

The euro was mostly weaker against its peers as traders seem to be positioning for a dovish ECB statement. Final services PMI readings from its top economies and the region's Sentix investor confidence index were in line with expectations. German factory orders, euro zone retail PMI and revised GDP figures are due today.

GBP

The pound was able to score some gains after the UK services PMI also beat expectations, following impressive readings from the manufacturing and construction sectors last week. The services PMI jumped from 47.4 to 52.9 as the weak pound attracted more tourists, which supports service sector activity. There are no major reports due from the UK today.

CHF

The franc held its ground as there were no major market catalysts affecting market sentiment on Monday. SNB head Thomas Jordan has a speech lined up today and any remarks against franc strength could spur a selloff. Also lined up is the Swiss CPI which might show a 0.1% drop in price levels, slower than the earlier 0.4% decline.

JPY

The yen gave up a bit of ground against its peers as BOJ Governor Kuroda simply reiterated his previous dovish remarks and didn't provide more details on additional stimulus. Japan's average cash earnings also beat expectations, putting upside pressure on spending and inflation. Still, the yen resumed its slide in the Asian session as traders tried to sell the currency at better levels.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to score some gains as risk appetite appeared to improve ahead of the joint statement from Saudi Arabia and Russia. However, the countries simply announced that they agreed to form a working group to assess oil market movements, leading many to think that the OPEC informal meeting might be a dud as well. The RBA is set to make its policy statement today while New Zealand will have its dairy auction in the late US session.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Sep 07, 2016)

USD

The US dollar resumed its slump when the ISM non-manufacturing report turned out weaker than expected. The index fell from 55.5 to 51.4 to show a slower pace of industry growth, lower than the estimated 55.4 reading. Also, the Fed's labor market conditions index landed back in negative territory with a -0.7 figure versus the previous 1.1 reading For today, FOMC member Geroge has a testimony lined up ahead of the release of the JOLTS job openings.

EUR

The euro took advantage of dollar weakness but was mostly weaker against its other counterparts. Medium-tier euro zone data came in line with expectations but it could be possible that traders are bracing for a potentially downbeat ECB statement later on this week. German industrial production and French trade balance numbers are due today.

GBP

The pound was able to go for more gains, except against the Japanese yen, despite the lack of top-tier UK data. Today has the manufacturing production report due and a 0.4% decline is eyed. Also lined up today is the BOE Inflation Report hearings, which could contain clues on the central bank's policy bias.

CHF

The franc was able to regain a bit of ground against the euro and pound while raking in more wins against the US dollar. SNB head Jordan refrained from currency jawboning as his speech mostly focused on education reform. Swiss foreign currency reserves data are due today and any sharp increase could still be indicative of currency intervention.

JPY

The yen was able to recover against its peers even though there were no major releases from Japan. According to a Sankei report, the odds of additional BOJ easing are slim since policymakers are still unable to establish a consensus position ahead of the actual policy statement later this month. Japan's leading indicators report is due today and a decline from 98.2% to 98.6% is expected.

Commodity Currencies (AUD, NZD, CAD)

The Aussie was able to hold on to its gains after a brief dip following the weaker than expected Q2 GDP. The report showed a 0.5% expansion versus the projected 0.6% rise and the previous reading was downgraded from 1.1% to 1.0%. New Zealand reported a 7.7% rise in its GDT dairy index and a 2.2% rebound in manufacturing sales for Q2. The BOC statement is due next, along with Canada's Ivey PMI.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Sep 08, 2016)

USD

Dollar pairs relaxed in their ranges during the latest US session as medium-tier reports printed stronger than expected results. The JOLTS job openings report showed positive hiring momentum while the Beige Book acknowledged that several districts reported moderate gains in employment and wages. According to FOMC member George, the US economy is nearing full employment. There are no major reports due from the US economy today.

EUR

The euro consolidated against most of its peers ahead of today's ECB interest rate decision, as many are expecting to see additional easing efforts. However, the euro's reaction could hinge on how aggressive the central bank might be, as less dovish moves could still be accompanied by euro gains. In any case, additional volatility is expected around the time of the statement and press conference.

GBP

The pound slumped across the board as manufacturing production missed expectations and BOE Governor Carney admitted that he wouldn't mind doling out more stimulus. Carney explained that there's still a lot of uncertainty because of the Brexit, downplaying the recent improvements in the PMI readings. There are no major reports due from the UK today.

CHF

The franc squeezed out a few more gains against the dollar and its European counterparts, as the SNB foreign currency reserves report didn't indicate such a huge rise. The figure was up from 616 billion CHF to 627 billion CHF in August. There are no reports lined up from the Swiss economy today.

JPY

The yen continued to advance against its peers as traders reevaluated their short positions after a news agency reported that BOJ officials haven't come to an agreement on whether they'd increase stimulus later this month or not. This threw cold water on BOJ Governor Kuroda's dovish remarks earlier in the month, especially since data from Japan hasn't been too bleak. The final GDP reading for Q2 was upgraded to show 0.2% growth from the initially reported flat reading.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a mixed performance, as the Kiwi was one of the best performers while the Loonie lagged. Even though the BOC refrained from cutting interest rates, the Canadian currency was notably weaker since the official statement sounded more cautious than usual. Earlier today, Australia reported a better than expected trade balance but was unable to make further headway when China released its August trade numbers. US crude oil inventories are due next.

By Kate Curtis from Trader's Way