Daily Market Outlook by Kate Curtis from Trader's Way

[katetrades]

Forex Major Currencies Outlook (Feb 07, 2018)

USD

The US dollar was off to a good start but failed to hold on to most of its gains as risk appetite returned to the markets when equities recovered. Data was mixed, with the trade balance showing a wider deficit and the IBD/TIPP economic optimism index beating expectations. Today has speeches by FOMC members Dudley and Williams.

EUR

The euro was able to stay mostly resilient despite the volatility in the financial markets for the most part of the day. German factory orders beat expectations with a 3.8% gain while the retail PMI dipped. German industrial production, French trade balance, and Italian retail sales are all lined up today.

GBP

The pound was still in a weak spot despite the pickup in risk-taking during the latter sessions. There were no major reports out of the UK but sterling still seems to be reeling from the set of bleak PMI readings across all sectors for January. Traders could start pricing in expectations for Super Thursday as early as today.

CHF

The franc gave back some of its recent winnings when risk appetite improved in the markets. There were no reports out of the Swiss economy then while today has the SNB foreign currency reserves data. A large increase from their earlier 744 billion CHF holdings could be indicative of central bank intervention, but SNB head Jordan doesn't seem to be too bothered by the latest franc gains.

JPY

The yen also gave up some ground as risk appetite peeked back in the financial markets. Data from Japan has been stronger than expected today with the average earnings up 0.7% versus the 0.6% consensus and the leading indicators coming up next.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi emerged on top thanks to risk-taking and stronger than expected data. The GDT auction yielded a 5.9% gain in dairy prices, its third consecutive gain this year, and the employment change figure was also better than expected at 0.5% versus 0.4%. The jobless rate improved from 4.6% to 4.5% instead of rising to 4.7% but this was partly due to a drop in labor force participation. Canada's trade balance and Ivey PMI missed. The RBNZ decision is coming up and a slight shift to a hawkish tone could be Kiwi bullish.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Feb 08, 2018)

USD

The US dollar rebounded against most of its counterparts in recent sessions but analysts have doubts that it can hold on to its winnings. Data has been weaker than expected and FOMC officials have warned of the dangers of low inflation. Only initial jobless claims and mortgage delinquencies are due from the US today.

EUR

The euro barely drew support from news of a German coalition. Although full details are yet to be revealed, Merkel's CDU party and CSU allies were able to strike a deal with the SPD. Data has been mixed with German industrial production and French trade balance beating consensus and Italian retail sales falling short. German trade balance and the ECB economic bulletin are due next.

GBP

The pound had a mixed performance as it slumped to the dollar and yen but advanced to the comdolls. UK Halifax HPI was actually weaker than expected with a 0.6% fall. Today is Super Thursday for the BOE so additional volatility around the central bank decision, release of MPC minutes, and Inflation Report is expected.

CHF

The franc was in a weak spot during the London session but recouped some of its losses as risk aversion returned later on. Swiss foreign currency reserves fell from 744B CHF to 731B CHF, easing intervention fears. There are no reports due from the Swiss economy today.

JPY

The yen continued its advance in the latter sessions as risk-off flows returned. Data from Japan was mixed as average cash earnings beat expectations while leading indicators slipped from 108.3% to 107.9%. The 30-year bond auction is scheduled today and any major changes could impact yen pairs once more. The Economy Watchers Sentiment index is also due.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi lagged behind its comdoll peers when the RBNZ maintained its cautious stance and even downgraded Q1 growth forecasts. Governor Spencer didn't seem too concerned about Kiwi strength as the central bank's projections hint at a weaker currency down the line. Meanwhile, the Loonie has been a bit more resilient despite weaker crude oil prices on rising inventory and NAFTA concerns. RBA Governor Lowe has a speech coming up.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Feb 09, 2018)

USD

The US dollar was able to take advantage of risk-off flows as stock markets tanked once more. Equity indices were down roughly 4% mostly due to the short volatility trade, another pending government shutdown, and global tightening prospects. US data was stronger than expected as the initial jobless claims figure improved from 230K to 221K versus the 232K forecast.

EUR

Data from the euro zone was weaker than expected as Germany printed a smaller trade surplus of 21.4 billion EUR versus the earlier 22.3 billion EUR figure and the projected 21.5 billion EUR surplus. Today has French and Italian industrial production numbers on tap and strong data could keep ECB hike expectations in play.

GBP

The pound got a strong boost from a hawkish BOE statement as the committee expressed their intention to tighten at a faster pace than initially expected. The BOE also upgraded growth and inflation forecasts, underscoring their hiking bias. UK manufacturing and industrial production numbers are due next. The former could show a 0.3% uptick while the latter might see a 0.9% decline.

CHF

The franc was the king of pips as it raked in safe-haven gains more than the dollar and yen. There were no reports out of the Swiss economy yesterday while today has the unemployment rate. Analysts are expecting to see no change from the 3.0% reading.

JPY

The yen was also in the top spot due to risk-off flows stemming from the stock market selloff. Data from Japan was actually weaker than expected as the Economy Watchers Sentiment index fell from 53.9 to 49.9 versus the 53.7 consensus. The tertiary index is due next and analysts expect to see a 0.2% uptick. Market sentiment is likely to keep pushing yen pairs around today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were in a weak spot because of the risk-off moves in the financial markets. The Aussie was strongest hit due to RBA head Lowe's remarks and weak data in the earlier session. Today Australia reported a 2.3% drop in home loans while Chinese inflation reports came in line with expectations of a dip in price levels. Canada's jobs reports are lined up next, with the employment change figure expected to post a 10.3K gain.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Feb 12, 2018)

USD

The US dollar held its ground on Friday despite the lack of top-tier data. However, the spending bill just recently signed prevented another shutdown from taking place, leading to a bit of reprieve for bulls. Only the federal budget balance is due today, so market sentiment could play a stronger role in pushing the currency around.

EUR

The euro gave up some ground on Friday despite seeing stronger than expected figures. French industrial production rose 0.5% versus the estimated 0.1% uptick while Italian industrial production was up 1.6% versus the 0.7% consensus. There are no major reports due from the euro zone today.

GBP

The pound struggled to hold on to its gains despite the hawkish BOE Super Thursday earlier last week. Weaker than expected industrial production data was blamed for the drop, as the reading showed a 1.6% fall versus the estimated 0.9% drop. Manufacturing production came in line with estimates of a 0.3% uptick while the goods trade balance printed a wider than expected deficit. MPC members Vlieghe and McCafferty have speeches today.

CHF

The franc gave up some gains on Friday due to profit-taking and a slight improvement in risk appetite. The Swiss jobless rate was unchanged at 3.0% as expected. Swiss CPI is due today and a 0.1% dip in price levels is eyed after the earlier flat reading. A larger than expected fall could put the blame on franc strength, which might then revive intervention fears.

JPY

The yen also returned some gains as traders booked profits at the end of the week. Yen pairs gapped higher as risk appetite was off to a strong start this week. Japanese banks are closed for the holiday, so yen pairs could be more sensitive to currency-specific flows.

Commodity Currencies (AUD, NZD, CAD)

The comdolls made a bit of a bounce as risk appetite returned on Friday. Canada's jobs figures were in the red as the employment change showed an 88K decline while the unemployment rate rose from 5.7% to 5.9% versus the 5.9% consensus. Components of the report revealed that the drop was mostly due to a large reduction in part-time hiring while full-time employment was actually 49K higher. There are no reports due from the comdoll economies today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Feb 13, 2018)

USD

The US dollar was off to a weak start on Monday as risk-taking took hold and traders flocked to stocks and commodities. The mood was positive after the Trump administration released their infrastructure spending plans. There are no major reports due from the US today but FOMC member Mester has a speech due.

EUR

The euro was weaker on more signs of trouble in German coalition talks. There were no reports to prop up the shared currency then while today has French private payrolls on tap. Analysts are expecting to see a 0.2% uptick for the quarter, although this might not have much of an impact on euro behavior.

GBP

The pound barely drew support from another round of mostly hawkish remarks from BOE officials, even as McCafferty reiterated that further hikes are needed. He did say that they need to get rates up to a level where they can cut later on if needed, though. UK CPI readings are due today and a dip in the annual headline figure from 3.0% to 2.9% is eyed. The core reading could advance from 2.5% to 2.6%.

CHF

The franc was mostly stuck in consolidation as a bit of risk appetite returned to the financial markets. Swiss CPI came in line with estimates of a 0.1% dip and PPI data is due today. Another 0.2% uptick is expected.

JPY

The yen was also in a weak spot like the dollar as safe-havens lagged behind. The announcement that BOJ head Kuroda would likely be appointed for another full five-year term also kept easing expectations in place. PPI dipped from 3.0% to 2.7% and preliminary machine tool orders data is due next.

Commodity Currencies (AUD, NZD, CAD)

The Aussie and Kiwi took advantage of risk-on flows while the Loonie lagged despite a bounce in crude oil. Australia's NAB business confidence index rose from a downgraded reading of 10 to 12 to reflect a bit more optimism. There are no major reports due from the comdolls next.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Feb 14, 2018)

USD

The US dollar was still in the loser's end during the latest trading sessions as risk appetite was present. There were also no major reports to prop the US dollar higher while traders price in expectations for weaker inflation data. Headline CPI is expected to rise by 0.3% versus the earlier 0.1% uptick, though, while the core reading could dip from 0.3% to 0.2%. Retail sales figures are also up for release.

EUR

The euro was one of the top performers of the day, despite the lack of any major data. Today has German and Italian preliminary GDP figures due early in the London session before the region's flash GDP reading is printed. Analysts are expecting to see another 0.6% expansion, but a stronger than expected read could boost ECB tightening expectations.

GBP

The pound drew support from upbeat CPI data, with the headline reading holding steady at 3.0% instead of dipping to 2.9% and the core figure up from 2.5% to 2.7% versus the 2.6% consensus. Only the CB leading index is due from the UK today and another decline could mean pound weakness.

CHF

The franc had a mixed run as it reacted mostly to currency-specific data. Swiss PPI beat expectations with a 0.3% gain versus the estimated 0.2% uptick. There are no reports due from Switzerland today but SNB Governing Board member Zurbrugg has a speech lined up.

JPY

The yen was also a strong performer as it took advantage of dollar weakness when risk-off flows returned. The preliminary GDP reading printed a weaker than expected 0.1% expansion for Q4 2017 but the earlier figure was upgraded to 0.6% growth. There are no other reports lined up from Japan so market sentiment could push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The comdolls returned some of their wins to the yen but held their ground versus the dollar. The Loonie lagged for another day, however, as crude oil looked ready to resume its drop. New Zealand's quarterly inflation expectations rose from 2.0% to 2.1%.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Feb 15, 2018)

USD

The US dollar chalked up another losing day as traders favored the higher-yielding currencies. Although CPI data surprised to the upside, the focus was on weaker retail sales data. Headline retail sales slipped 0.3% versus the estimated 0.2% gain while the core reading was flat. Medium-tier reports such as PPI, Empire State manufacturing index, and Philly Fed index are due today.

EUR

The euro had a mixed performance as data also turned out mixed. German preliminary GDP came in line with estimates of a 0.6% expansion while the region's industrial production was stronger than expected at 0.4% versus 0.1%. Only the region's trade balance is lined up today.

GBP

The pound advanced to the dollar but weakened to the yen as there were no major reports providing a clear direction in the latest London session. There are still no major reports lined up today, as the next top-tier release is the UK retail sales on Friday.

CHF

The franc took a break from its rallies as risk-taking was in play in recent sessions. SNB member Zurbrugg gave a couple of speeches during the UK session but didn't really spark a big move for the currency. There are no reports due from Switzerland today.

JPY

The yen was one of the strongest performers as it took advantage of dollar weakness and some risk-off flows. Only the revised industrial production report is due today and no changes from the 2.7% reading are eyed. Apart from that, sentiment and dollar action could push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The Loonie caught a bid thanks to a smaller than expected build of 1.8 million barrels in EIA stockpiles versus the estimated 2.8 million gain. The Aussie and Kiwi continued their ascent, with the former shrugging off weaker than expected underlying jobs data. Headline employment change was at 16K versus the estimated 15.3K increase. Chinese banks are closed for the holiday today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Feb 16, 2018)

USD

The dollar had another day in the red as equities advanced but traders remained wary of fiscal risks. Data turned out mixed but positive PPI readings failed to draw support for the currency. The Empire State manufacturing index posted a downside surprise while the Philly Fed index jumped. Industry production and capacity utilization also missed estimates. Building permits and housing starts, along with import prices and UoM consumer expectations data, are due next.

EUR

The euro had a mixed round as it advanced to the dollar and Loonie but gave up ground to most of its other rivals. Low-tier data from the region was mostly stronger than expected, keeping tightening expectations in play, but traders are careful of potential jawboning in case currency appreciation starts hurting inflation. Only the German WPI is lined up today.

GBP

The pound was one of the top performers in recent sessions, although there were no major catalysts. BOE tightening expectations stemming from upbeat CPI data may still be in play. UK retail sales data is due next and a 0.5% rebound is eyed.

CHF

The franc gave up some ground on risk-taking but remained supported versus the dollar. There were no reports out of the Swiss economy then and none are due today so sentiment and currency-specific factors could push franc pairs around.

JPY

The yen scored another set of wins as it took most of the anti-dollar flows. Data from Japan also turned out stronger than expected as the industrial production figure was upgraded from 2.7% to 2.9%. There are no reports lined up today so sentiment could be the main driver.

Commodity Currencies (AUD, NZD, CAD)

The comdolls managed to hold their ground as risk-taking carried on and commodities drew support. Australia's headline jobs data turned out slightly better than expected but this was mostly due to part-time hiring. Canadian foreign securities purchases and manufacturing sales are lined up next.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (February 19, 2018)

USD

The US dollar was able to rebound against most of its peers on Friday as profit-taking happened before the long weekend. US banks are closed in observance of President's Day today, which means that liquidity is low and volatility could tick higher. This could also give equities reason to pause from their rallies.

EUR

The euro was still in a weak spot despite mostly upbeat low-tier data. German WPI beat expectations with a 0.9% gain versus the estimated 0.2% uptick. Only the current account balance is due today, leaving traders to price in expectations for the ECB minutes due later on.

GBP

The pound gave up some ground on Friday due to weak retail sales data. Consumer spending was expected to have increased by 0.5% in January but only rose 0.1%. Still, the previous reading enjoyed a small upgrade. BOE Governor Carney has a speech today.

CHF

The franc continued to rake in gains on Friday even though there were no major reports from the Swiss economy. There are still no major reports due from the Swiss economy today so market sentiment and currency-specific factors could stay in play.

JPY

The yen held on to its top spot for the most part of the week as dollar demand ticked lower. Over the weekend, Japan printed a stronger than expected trade balance of 0.37 trillion JPY. There are no other reports due from Japan today but the bank holiday in the US could bring more traders to the yen.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a mixed run as they gave up some ground to the dollar on Friday. Canadian manufacturing sales and foreign securities purchases turned out weaker than expected while New Zealand has its quarterly PPI numbers due next. Input prices could rise 0.3% while output prices could increase by 0.4%.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (February 20, 2018)

USD

The dollar was able to pocket a few gains even as US markets were closed for the President's Day holiday. Markets will reopen today and another round of risk-taking could prompt weakness for the safe-haven currency. There are no major reports from the US today, so sentiment could be a main mover.

EUR

The euro was mostly weaker due to a lower than expected current account surplus. There were no other reports released from the region, leaving traders to price in expectations for the ECB minutes due later in the week. Today has German PPI and the ZEW economic sentiment figures lined up.

GBP

The pound also gave up ground to most of its peers when Brexit concerns resurfaced in the headlines. PM May's spokesperson said that ministers are setting plans for the post-Brexit EU deal, which reminded market watchers that a plan isn't actually set in stone yet. BOE Governor Carney's speech contained no surprises and the CBI industrial order expectations index is due next.


CHF

The franc slid lower to the yen and dollar but managed to hold its ground against the commodity currencies. There were no reports out of the Swiss economy then while today has the trade balance due. A larger surplus of 2.78 billion CHF is eyed compared to the earlier 2.63 billion CHF figure.

JPY

The yen gave back some of its previous gains as traders continued to book profits after last week's rallies. There were no reports out of Japan then and none are due today, which means that risk sentiment could be the prime mover of yen pairs.

Commodity Currencies (AUD, NZD, CAD)

New Zealand printed stronger than expected quarterly PPI figures, keeping bulls hopeful that the RBNZ could shift its policy stance sooner rather than later. Still, PPI readings were slightly weaker compared to the previous quarter. The RBA minutes were released and it revealed that the central bank was slightly more optimistic about the consumer sector. Canadian wholesale sales and New Zealand's GDT auction are lined up next.

By Kate Curtis from Trader's Way