Daily Market Outlook by Kate Curtis from Trader's Way

[katetrades]

Forex Major Currencies Outlook (Nov 22, 2017)

USD

The US dollar was weaker against its peers during the US session as traders reacted to Yellen's unease about inflation and brought bond yields down. Data was actually stronger than expected as existing home sales rose from 5.37M to 5.48M. The FOMC minutes are due today before traders take off for the Thanksgiving holidays.

EUR

The euro slid a bit lower to most of its peers as the prospect of another election in Germany was brought up. Over the weekend, Merkel failed to secure a coalition and a minority government could bring even more uncertainty. There were no reports out of the euro zone then while today has the region's consumer confidence index on tap.

GBP

The pound tried to hold its ground as optimism over Brexit talks remained and the BOE Inflation Report hearings also gave the currency some support. Data was also upbeat with CBI industrial orders expectations jumping from -2 to +17 versus the consensus at +3. The Autumn Forecast statement is due next and traders are interested to find out how Brexit could factor in budget and outlook changes.

CHF

The franc managed to hold on to some of its gains even though risk-taking was in play. The safe-haven currency appears to be taking the flows away from the euro as the shared currency reacts to German political uncertainty. Swiss trade balance was actually weaker than expected at a surplus of 2.33B CHF versus the estimated 3.21B CHF figure. There are no reports from the Swiss economy today.

JPY

The yen also raked in some gains away from the dollar but was mostly weaker to the higher-yielders. Japan's all industries activity index was weaker than expected with a 0.5% dip versus the estimated 0.4% decline. There are no reports due from Japan today so the yen could take its cue from market sentiment and bond yields once more.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi gave up some ground after seeing yet another decline in GDT dairy prices but the losses were muted as traders realized that this was probably due to higher production. Data in Canada also turned out below expectations with a 1.2% slide in wholesale sales, preventing the Loonie from taking advantage of the pickup in crude oil. The API reported a larger draw in stockpiles than expected and the EIA report is due today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Nov 23, 2017)

USD

The US dollar slumped against its peers when the FOMC minutes focused mostly on weak inflation concerns. In particular, the transcript indicated that many participants worried that inflation would run below the 2% target much longer than expected, hinting at a less aggressive pace of tightening for 2018. The UoM consumer sentiment index also saw a downgrade while inflation expectations were revised lower. US banks are closed for the Thanksgiving holidays so lower liquidity and higher volatility for major pairs are eyed.

EUR

The euro drew some support from rumors of ECB tightening while data also turned out slightly better than expected. The consumer confidence index ticked up from -1 to 0 instead of holding steady and reflecting pessimism. Flash manufacturing and services PMIs are due from Germany and France today, and stronger than expected figures could boost hopes of ECB hikes next year.

GBP

The pound took hits as Hammond announced downgraded growth forecasts released during the Autumn Forecast Statement and increased borrowing estimates for the next few years to offset the impact of Brexit. However, the currency stabilized when he also reassured that support will be provided to help the economy weather any uncertainties. The UK is scheduled to release its second estimate GDP for Q3 but no revisions to the earlier 0.4% estimate are expected.

CHF

The franc advanced against most of its peers even though there were no major reports out of the Swiss economy. The currency appeared to be able to benefit from dollar weakness as it took a larger share of risk-off flows. There are still no reports out of Switzerland today but SNB head Jordan has a speech so franc bulls could be on edge.

JPY

The yen also rallied on the heels of dollar weakness, despite the lack of top-tier data from Japan. Lower US bond yields also contributed to yen demand. There are no reports due from Japan today as banks are closed for the holiday.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi mostly shrugged off downbeat retail sales data as analysts had already predicted a slowdown on account of the end of the rugby season. Headline retail sales rose 0.2% versus the projected 0.4% uptick while core retail sales advanced 0.5% versus 0.9%. Crude oil popped higher on a larger than expected draw of 1.9 million barrels in EIA crude oil stockpiles. Canadian retail sales figures are lined up next.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Nov 24, 2017)

USD

The US dollar chalked up another losing day as market participants continued to adjust their positions to account for the Fed's less upbeat inflation outlook. There were no reports out of the US economy yesterday as markets were closed for the Thanksgiving holidays while today has the flash manufacturing and services PMIs due. Analysts are expecting to see improvements from both industries.

EUR

The euro advanced against most of its peers as PMI readings turned out mostly stronger than expected. Only the German flash services PMI disappointed but it still indicated an improvement from the earlier reading. The German Ifo business climate index is due today and a dip from 116.7 to 116.6 is expected.

GBP

The pound lagged behind most of its peers despite data coming in line with expectations. The second version of the GDP was unchanged at 0.4% while preliminary business investment showed a slightly weaker than expected 0.2% gain versus the projected 0.3% uptick. CBI realized sales jumped from -36 to +26 but an index of consumer confidence measured by YouGov slumped to its lowest post-Brexit level. High Street lending data is due next.

CHF

The franc was able to hold its ground even though SNB head Jordan stepped up to the podium. Instead of jawboning the franc like he usually does, he did have a couple of warnings on the high current account surplus. Although he clarified that this doesn't necessarily relate to currency movements, franc bulls seemed more comfortable buying up the currency afterwards.

JPY

The yen took advantage of dollar weakness once more but at a slightly slower pace as risk appetite was present. Japan's flash manufacturing PMI also turned out stronger than expected at 53.8 versus 52.6. There are no reports due from Japan today so the yen could take its cue from market sentiment.

Commodity Currencies (AUD, NZD, CAD)

The Aussie and Kiwi enjoyed some support during the risk-on sessions but the Kiwi gave up some ground upon seeing downbeat trade balance data. The deficit narrowed to 871 million NZD but was still larger than the projected 750 million NZD figure. The Loonie was bogged down by weaker than expected retail sales figures, preventing it from enjoying crude oil rallies. There are no other reports due from the comdoll economies for the rest of the day.

By Kate Curtis from Trader's Way

 

[TradersWay]

Forex Major Currencies Outlook ( Nov 27, 2017)

USD

The US dollar had a rough run during the Thanksgiving holidays as traders continued to adjust positions on account of the less upbeat outlook on inflation shared by Yellen and most of the FOMC members. Flash manufacturing and services PMIs also fell short of consensus. New home sales and speeches by members Kashkari and Dudley are on today's docket.

EUR

The euro held on to most of its wins thanks to another set of upbeat data. The German Ifo business climate index ticked higher from 116.8 to 117.5 to reflect better optimism, which could then translate to stronger performance. There are no reports due from the region today.

GBP

The pound was able to chalk up some gains towards the end of the week but traders still seem wary of Brexit risks. High Street lending ticked lower from 41.6K to 40.5K versus the estimated 40.9K figure. MPC member Haldane has a speech scheduled today.

CHF

The franc continued to rake in gains against most of its peers as traders dumped the dollar and moved to other safe-haven holdings. There were no reports out of Switzerland but the improving sentiment in the euro region appeared to benefit the currency as well. There are still no reports lined up today, so the Swiss currency could take its cue from market sentiment and euro price action.

JPY

The yen weakened towards the end of the previous week as profit-taking seemed to be in play. However, the Japanese currency is off to a strong start this week as it ticked higher across the board. There are no major reports lined up from Japan but bond yields and market sentiment could still yield big moves for yen pairs.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to advance against the dollar and yen towards the end of the previous week but appear to be off to a rocky start this week. There were no reports out of their economies then and none are lined up today, so market sentiment could be in the driver's seat. Pricing in ahead of the OPEC meeting could come into play, though.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Nov 28, 2017)

USD

The US dollar was off to a rocky start as North Korean jitters and some dovish remarks from FOMC member Kashkari weighed on the currency. However, it drew support from stronger than expected new home sales at 685K versus expectations at 627K, remarks from incoming Fed head Powell suggesting a continuation of the central bank's tightening pace, and Trump's tweet on tax reform. The CB consumer confidence index is up for release today, along with Powell's actual speech and a testimony by Treasury Secretary Mnuchin.

EUR

The euro was able to hold on to most of its gains as signs point to a coalition being formed in Germany. There were no reports out of the euro zone then, allowing traders to price in expectations for the data points in the next few days. Today has German import prices and the GfK consumer confidence index lined up.

GBP

The pound had a mixed run as it slid to the dollar and yen but managed to hold steady versus the comdolls. There were no major reports out of the UK economy other than BOE member Haldane's speech and today has the BOE Financial Stability Report due. Bank stress test results could incorporate Brexit risks but could still reassure market watchers that the UK financial sector might stay resilient.

CHF

The franc raked in a few gains against its rivals even though there were no reports out of the Swiss economy yesterday. Today has an empty docket as well, leaving the Swiss currency to take its cue from market sentiment or euro price action.

JPY

The yen caught pips against most of its rivals in recent session as traders still appeared hesitant to buy the dollar. There were no major reports out of Japan then and none are due today so market sentiment and global bond yields could push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The Loonie was the weakest of the bunch as news of the Keystone Pipeline reopening this week led to a drop in crude oil. This drove expectations of higher supply in the US, possibly making up for the previous draws. Traders also seem more cautious ahead of the OPEC meeting as Russia's participation in the deal could determine the market reaction. The Kiwi has been able to benefit from short-covering but is facing risks from the release of the RBNZ Financial Stability Report.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Nov 29, 2017)

USD

The US dollar was able to rake in gains versus most of its counterparts on strong data and Powell's confirmation as next Fed head. The US goods trade deficit widened but the Richmond manufacturing index and CB consumer confidence index both beat expectations. Today has the preliminary GDP due and an upgrade from 3.0% to 3.3% is eyed. Traders are also keeping their hopes up for progress on Senate's tax reform bill vote.

EUR

The euro dipped against some of its peers as Germany's GfK consumer climate index failed to impress. However, the German import prices report noted a stronger than expected 0.6% gain that could be positive for overall inflation. Today has the German preliminary CPI and French preliminary GDP, along with the Spanish flash CPI.

GBP

The pound had one of its more volatile days as rumors swirled that the UK and EU already reached a deal on the Brexit bill. Some government officials denied this but bulls still appear hopeful that progress could be made before the next set of official meetings. The BOE bank stress test results have also been mostly positive but wary of Brexit risks. Today has net lending to individuals and mortgage approvals due.

CHF

The franc had a mixed run as it mostly reacted to currency-specific factors. There were no reports out of the Swiss economy then while today has the UBS consumption indicator and Credit Suisse economic expectations index on tap. Stronger than expected reports could continue to give the franc support.

JPY

The yen weakened against some of its counterparts on news of another ICBM test from North Korea that landed off the coast of Japan. Japanese retail sales also fell short of estimates as it posted a 0.2% drop instead of the estimated 0.1% uptick. There are no reports due from Japan today as traders stay on edge on North Korea tensions.

Commodity Currencies (AUD, NZD, CAD)

The Loonie was still in a weak spot as the API reported a small build in stockpiles while the BOC seemed to ease off its tightening bias. The OPEC meetings are starting today and traders are on the lookout for clues on how the output deal extension might go and if non-OPEC countries like Russia might join in. EIA crude oil inventories data is due next and a small build is also eyed.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Nov 30, 2017)

USD

The US dollar caught a few gains against most of its counterparts as the US GDP was upgraded, Yellen sounded upbeat in her testimony, and the Senate version of the tax bill cleared a hurdle. However, there are still several risks that remain, including the full vote that the Senate might have on the tax bill this week. The core PCE price index is also due today and a weak result could remind traders of the cautious inflation outlook in the FOMC. Initial jobless claims, Chicago PMI, and speeches from FOMC members Quarles and Kaplan are lined up.

EUR

The euro managed to hold on to most of its gains despite warnings from the ECB Financial Review on risks associated with a stronger euro and higher interest rates. German retail sales and unemployment rate are due today, along with French and Italian preliminary CPI. However, traders might pay closer attention to euro zone CPI flash estimates as strong gains could renew expectations for an ECB hike next year. The headline reading is projected to climb from 1.4% to 1.6% while the core figure could rise from 0.9% to 1.0%.

GBP

The pound continued to advance across the board on improving Brexit sentiment as negotiating parties seem more amenable to a compromise. Data also turned out upbeat while today has only the Nationwide HPI on tap. With that, the attention could still be on Brexit as traders weigh the odds ahead of the next official meeting on December 4.

CHF

The franc also chalked up strong gains across the board as medium-tier reports turned out stronger than expected. The UBS consumption indicator improved from 1.51 to 1.54 while the Credit Suisse economic expectations index rose from 32.0 to 40.7. Swiss GDP is due today and a higher growth figure of 0.6% is expected versus the earlier 0.3% uptick.

JPY

The yen was on weak footing as traders stayed wary of risks from North Korea. The rise in US bond yields also drew traders away from the lower-yielding yen. Japan's preliminary industrial production report turned out weaker than expected with a 0.5% uptick versus the estimated 1.9% gain. Housing starts data is due next.

Commodity Currencies (AUD, NZD, CAD)

The Loonie was still in a weak spot despite a larger than expected draw of 3.4 million barrels in stockpiles reported by the EIA. Traders appear to be positioning for a large build later on as the Keystone Pipeline resumed operations this week. There are also jitters surrounding the OPEC meeting as Russia could push for a review of the output deal extension by June. Data from Australia came in mixed but the currency appeared to draw support from better than expected Chinese official PMI readings.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Dec 01, 2017)

USD

The US dollar swung this way and that on tax reform updates and more developments in Washington. Economic data from the US has been mostly stronger than expected, with personal spending and income both surpassing expectations and initial jobless claims printing a lower increase in unemployment. Traders are paying close attention to tax reform progress in Senate, which is due to have a full vote on their version of the bill this week. The US ISM manufacturing PMI is also due today and a dip from 58.7 to 58.4 is eyed.

EUR

The euro managed to hold on to most of its gains despite weaker than expected data form the region. The headline flash CPI rose from 1.4% to 1.5% versus the 1.6% estimate while the core reading held steady at 0.9% instead of improving to 1.0%. German retail sales missed expectations while the unemployment change turned out strong. Only the final manufacturing PMI reports are lined up today.

GBP

The pound continued to rake in gains on improving Brexit sentiment even as there were no major reports out of the UK economy yesterday. Today has the UK manufacturing PMI due and a gain from 56.3 to 56.6 is expected, with stronger than expected results likely pushing the pound higher.

CHF

The franc regained ground against its rivals as risk aversion lingered in the financial markets. The Swiss GDP came in line with expectations of a 0.6% expansion while the earlier figure was upgraded from 0.3% to 0.4%. The KOF economic barometer also beat expectations while Swiss retail sales posted a surprise 3% slump. Swiss manufacturing PMI is due next and a rise from 62.0 to 62.6 is eyed.

JPY

The Japanese yen had a mixed round despite a couple of reports beating expectations. Household spending was flat instead of falling by 0.2% while capital spending rose by 4.2%. National core CPI and Tokyo core CPI came in line with estimates while the final manufacturing PMI was downgraded from 53.8 to 53.6.

Commodity Currencies (AUD, NZD, CAD)

The Loonie lost more ground even as the OPEC announced an output deal extension. Traders are wary of the June review that might still lead to the deal being called off if the market overheats by then. New Zealand's overseas trade index posted a meager 0.7% uptick versus the estimated 1.3% increase while Australia's AIG manufacturing index jumped to 57.3. The Chinese Caixin manufacturing PMI disappointed with a drop from 51.0 to 50.8 versus the estimated rise to 51.2. Canada's jobs report and monthly GDP are due next.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Dec 04, 2017)

USD

The US dollar had a volatile run on Friday as updates on tax reform and the ongoing investigation into Trump's dealings with Russia pushed the currency around. In terms of data, the ISM manufacturing PMI turned out weaker than expected as it fell from 58.7 to 58.2 versus the consensus at 58.4. US factory orders data is due today and a 0.3% dip is eyed.

EUR

The euro gapped down over the weekend as more political troubles in Germany continued. Chancellor Merkel remains hard pressed to form a coalition government. Euro zone reports came in mostly in line with expectations as there were barely any revisions to final PMI readings. The Spanish unemployment change report and region's Sentix investor confidence index are up for release today, and stronger than expected reports could revive the shared currency's strength.

GBP

The pound staged a strong rally on more evidence that the EU and UK government could reach a Brexit deal before the next EU Summit on December 14. Investors remain hopeful that this week's meeting between May and Juncker could confirm these rumors. UK manufacturing PMI also turned out stronger than expected as it advanced from 56.6 to 58.2. Construction PMI is due today.

CHF

The franc gave up a bit of ground on risk-taking at the end of the previous week. Swiss manufacturing PMI was actually stronger than expected as it climbed from 62.0 to 65.1 versus the forecast at 62.6. There are no reports due from Switzerland today so market sentiment could be in play.

JPY

The yen was also mostly weaker on risk-taking and North Korean jitters. The hermit nation has pledged to start a nuclear war with the US unless Russia agrees to be a guarantor state. Japan's consumer confidence index is due next and an improvement from 44.5 to 44.8 is eyed.

Commodity Currencies (AUD, NZD, CAD)

The Loonie got back on its feet upon seeing stronger than expected jobs figures from Canada. The economy added 79.5K positions versus the estimated 10.2K gain and the earlier 35.3K figure. GDP also came in better than expected at 0.2% versus 0.1%. Data from Australia has been mostly weaker than expected so far this week, with quarterly company operating profits down 0.2% versus the projected 0.3% uptick.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Dec 05, 2017)

USD

The US dollar rallied then reversed on tax bill developments and jitters over the investigation into Trump's dealings with Russia. Trump Jr. and other business associates are scheduled to testify this week. Data was better than expected as factory orders showed a smaller than expected decline, and the core version of the report reflected stronger business spending in anticipation of tax cuts. The ISM non-manufacturing PMI is due next and a dip from 60.1 to 59.2 is expected.

EUR

The euro took a sharp tumble on reports that the SPD will still think about forming a coalition with Merkel if members give the green light next weekend. The issue of immigration is still on the table, so there are no guarantees that a deal will be struck yet. Data has been mixed as the region's Sentix investor confidence index came in weaker than expected at 31.1 versus the 32.3 consensus while Spain reported a smaller increase in joblessness of 7.3K versus 54.3K. Final services PMI readings and the region's retail sales report are lined up next.

GBP

The pound continued to edge higher on stronger Brexit deal hopes, even as May and the EU remain at odds when it comes to the Irish border issue. UK data was better than expected as the construction PMI jumped from 50.8 to 53.1 versus the 51.2 consensus. The services PMI is due next and a dip from 55.6 to 55.2 is eyed.

CHF

The franc was in a weak spot to most of its peers as risk-on vibes were present for most of the day. There were no reports out of Switzerland then and none are due today so market sentiment could keep pushing franc pairs around.

JPY

The yen was also mostly weaker but it managed to chalk up some wins to the dollar. Japanese consumer confidence rose from 44.5 to 44.9 versus the 44.8 consensus. There are no reports due from Japan today so bond yields and risk sentiment could drive yen price action.

Commodity Currencies (AUD, NZD, CAD)

The Aussie enjoyed a strong rally on mostly upbeat data today. The current account balance had a wider deficit of 9.1 billion AUD versus the estimated 8.8 billion AUD shortfall but still an improvement over the earlier 9.7 billion AUD deficit. Retail sales ticked higher at 0.5% versus the projected 0.3% uptick while the previous reading saw an upgrade. The RBA statement is due next and no rate changes are eyed. Meanwhile, the Loonie was able to hold its ground despite higher US oil rig counts and weaker crude oil prices.

By Kate Curtis from Trader's Way