Daily Market Outlook by Kate Curtis from Trader's Way

[katetrades]

Forex Major Currencies Outlook (Dec 06, 2017)

USD

The dollar managed to snag some wins even after data was weaker than expected. The ISM non-manufacturing PMI slipped from 60.1 to 57.4 versus the projected 59.2 figure, with hiring and prices indicating declines. The ADP non-farm employment change reading is due next and could show a fall from 235K to 189K.

EUR

The euro was in a weak spot against most of its counterparts as another batch of medium-tier data showed misses. Retail sales also turned out weaker than expected with a 1.1% slide versus the estimated 0.6% fall. Only German factory orders and the region's retail PMI are due next.

GBP

The pound gave up some of its recent wins as more Brexit concerns lingered. Word has it that PM May could be pushed to take a softer Brexit stance as she failed to come up with a deal with the EU in the latest set of meetings. It didn't help that UK services PMI disappointed with a drop from 55.6 to 53.8. There are no reports due from the UK today so the attention is on the EU assessment of Brexit goals.

CHF

The franc also chalked up some gains as risk aversion peeked back in the markets. There were no reports out of the Swiss economy yesterday while today has the CPI due. A flat reading is eyed, following the earlier 0.1% uptick, and upbeat results could be bullish for the franc.

JPY

The Japanese yen was able to end in positive territory thanks to risk-off flows. There were no major reports out of Japan yesterday and none are due today, which means that bond yields and market sentiment could keep pushing yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The Aussie had a good run after the RBA statement was less dovish than before but returned some of its wins earlier today as the GDP disappointed. The economy grew 0.6% versus the 0.7% consensus while the previous reading was upgraded from 0.8% to 0.9%. Canada reported a smaller than expected deficit and the BOC statement is lined up next.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Dec 07, 2017)

USD

The US dollar was able to advance against most of its peers on tax reform optimism, relatively good data, and risk-off flows. The ADP non-farm employment change came in at 190K versus the projected 189K figure but was still lower than the earlier 235K gain. Unit labor costs were revised to show a 0.2% drop from the initially reported 0.5% gain. Only the initial jobless claims is due today so traders could focus on political headlines or place their positions ahead of the NFP.

EUR

The euro was in a weak spot even as data turned out strong. German factory orders rose by 0.5% instead of posting the projected 0.2% fall and the region's retail PMI improved from 51.1 to 52.4. German industrial production and French trade balance are lined up, just ahead of the revised GDP release.

GBP

The pound continued to slump against its rivals on Brexit issues as many warned of a potential collapse in May's government if the Irish border issue isn't sorted out right away. There were no reports out of the UK then and only the Halifax HPI is lined up today, so the focus could remain on Brexit developments.

CHF

The franc was stuck mostly in consolidation, except against the Loonie, even with the rise in risk aversion. Swiss CPI was weaker than expected with a 0.1% dip instead of staying flat. Swiss jobless rate and the SNB foreign currency reserves are lined up today, with a big gain in the latter indicative of central bank intervention.

JPY

The yen was able to end mostly in the green thanks to risk-off moves. There were no reports out of Japan yesterday and only the leading indicators is due today, which means that risk sentiment could be the main driver of yen price action.

Commodity Currencies (AUD, NZD, CAD)

The Loonie was edging higher ahead of the BOC decision in anticipation of a hawkish statement, but bulls were very much disappointed to find out that the central bank is taking a more cautious stance. Crude oil inventories posted a larger draw but oil prices failed to rebound. Australia's trade balance and Canada's Ivey PMI are lined up next, along with New Zealand's quarterly manufacturing sales data.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Dec 08, 2017)

USD

The US dollar stayed strongly supported for the most part of the day thanks, in part, to Congress' moves to avert a government shutdown. US equities also closed in the green. Data was mixed, with the Challenger job cuts report showing a 30.1% year-over-year gain for November and initial jobless claims beating expectations. Consumer credit also advanced, signaling financial optimism.The NFP is expected to show a 198K gain in hiring for November, down from the previous 261K increase. Average hourly earnings could recover by 0.3% after staying flat in the previous month, with positive wage growth likely funneling to upside inflationary pressure later on.

EUR

The euro caught a few gains then consolidated for most of the day. Data was actually weaker than expected, with German factory orders down 1.4% instead of rising by 0.9% and the French trade balance posting a larger than expected deficit. The region's final GDP reading was unchanged at 0.6%. German trade balance and French industrial production data are due next.

GBP

The pound had a shaky ride during the earlier sessions before catching a bid on positive Brexit developments. The EU Commissioner shared that progress is being made while May's rush to Brussels for an early meeting also fueled hopes that a deal will be reached. EU President Tusk scheduled an announcement for the morning as well, so bulls are holding on to their hopes. UK manufacturing and industrial production numbers are also due.

CHF

The franc was stuck in consolidation at sentiment flipped back and forth, particularly in the European region. The Swiss jobless rate improved from 3.1% to 3.0% while the SNB foreign currency reserves declined from 742B CHF to 738B CHF, which means that the central bank is probably not trying to actively depreciate the currency. There are no reports due from Switzerland today.

JPY

The yen lost ground as the dollar regained its spot as the preferred safe-haven. Data from Japan was actually mostly upbeat, with the GDP upgraded from 0.3% to 0.6% versus the projected 0.4% figure and the current account balance also surpassing estimates. Average cash earnings disappointed with a 0.6% uptick versus the projected 0.8% rise. Yen pairs could take their cue from dollar price action from here.

Commodity Currencies (AUD, NZD, CAD)

The comdolls weakened to the dollar but were able to recover slightly against the yen. Data from Canada was mixed as building permits posted a stronger than expected 3.5% gain while the Ivey PMI dipped. Chinese trade balance is due next and a smaller surplus of $34.9 billion is eyed, possibly signaling weaker demand for raw materials.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (December 11, 2017)

USD

The US dollar staged a good rally against most of its counterparts last week on tax reform progress and a bit of risk aversion. The US economy added 228K jobs in November according to the NFP report, higher than the projected 198K figure. Average hourly earnings turned out weaker than expected, with a downgrade in the earlier report to boot. There are no major reports due today, leaving traders to price in expectations ahead of the FOMC decision and top-tier data releases, such as CPI and retail sales, later this week.

EUR

The shared currency was able to hold on to its gains and go for a few more on Friday, even as medium-tier data turned out mixed. The German trade balance showed a smaller than expected surplus but French industrial production saw a 1.9% gain instead of the projected 0.1% dip. Only the Italian retail sales is due today.

GBP

The pound was able to stage a strong rally before pulling back as the Brexit deal was announced. There are still plenty of questions left unanswered, but it seems that the deal was able to provide some reassurance. UK manufacturing and industrial production simply came in line with expectations. There are no major reports due from the UK today so the focus could remain on Brexit negotiations.

CHF

The franc regained ground on Friday as risk aversion stayed in play. There were no major reports out of the Swiss economy then and none are due today, so risk sentiment could continue to push franc pairs around.

JPY

The yen was in a weak spot as most traders placed their safe-haven bets on the dollar instead. Reports from Japan over the weekend were also in the red, with the BSI manufacturing index falling short of the estimated gain to 10.1. Preliminary machine tool orders are due next.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a mixed run as they fell to the dollar but advanced to most of their other counterparts. Over the weekend, Chinese PPI reportedly sank from 6.9% to 5.8% as expected while CPI fell short of estimates. There are no reports due from the comdoll economies today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Dec 12, 2017)

USD

The US dollar was off to a weak start for the day as risk appetite weighed on the safe-haven currency. However, rising US bond yields and positioning ahead of this week's events allowed the currency to recover later in the day. JOLTS job openings fell from 6.18M to 6.00M versus the 6.03M forecast. US PPI data are due today, with the headline reading slated to show another 0.4% gain and the core figure to show a 0.2% uptick.

EUR

The euro was mostly stuck in consolidation as traders might be holding out for Draghi's speech later today. Italian retail sales turned out weaker than expected with a 1.0% drop versus the projected 0.1% dip. ZEW economic sentiment readings from Germany and the region are up for release today, with the former expected to dip from 18.7 to 17.9 and the latter to fall from 30.9 to 30.2.

GBP

The pound was still in a weak spot as traders didn't seem to impressed by the details of the Brexit deal and focused on remaining uncertainties. UK CPI is due today, with the headline figure projected to hold steady at 3.0% and the core reading also to stay unchanged at 2.7%. Underlying data such as PPI and RPI could also dictate the pound's direction.

CHF

The franc gave up a bit of ground to some of its peers as risk appetite improved for most of the trading sessions. There were no reports out of the Swiss economy then and none are due today, which suggests that market sentiment and currency-specific factors could push franc pairs around.

JPY

The yen was in a weak spot on risk-taking and a stronger dollar. Japan's PPI turned out better than expected with a gain from 3.4% to 3.5% versus the estimated drop to 3.3%. The tertiary industry activity index is due next and a 0.2% rebound from the earlier 0.2% dip is eyed.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi got a strong boost from the appointment of new RBNZ head Orr while the Loonie was bogged down by falling oil prices on the heels of another gain in US oil rigs. In Australia, the HPI fell by 0.2% versus the estimated 0.6% gain while the NAB business confidence index dropped from 9 to 6.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Dec 13, 2017)

USD

The US dollar crawled slowly higher, drawing support from positive FOMC expectations and more progress in tax reform. Senator Coryn suggested that they are making progress and could get the deal done before Christmas but Senator Rand signaled that he won't be voting for the tax bill. US PPI turned out stronger than expected, with the headline figure up another 0.4% while the core reading posted a higher 0.3% gain. CPI readings are due next but the Fed's updated economic projections during their statement could take center stage.

EUR

The euro retreated against most of its counterparts as ECB head Draghi did not sound as hawkish as expected in his speech. Euro zone data also turned out weaker than expected, with the German ZEW index down from 18.7 to 17.4 versus the 17.9 consensus and the region's figure down from 30.9 to 29.0. German final CPI and WPI are lined up, ahead of the region's employment change and industrial production numbers.

GBP

The pound jumped upon seeing stronger than expected inflation reports but quickly retreated. Headline CPI is up from 3.0% to 3.1% instead of holding steady as expected and core CPI is steady at 2.7%. PPI was also stronger than expected but RPI and HPI fell short. Jobs data is due next and a smaller gain of 0.4K claimants is eyed compared to the earlier 1.1K increase. Also, the average earnings index is projected to advance from 2.2% to 2.5% to reflect stronger wage growth and more upside inflationary pressure.

CHF

The franc had a mixed run as it reacted to currency-specific factors. The currency was higher against the euro but caved to the comdolls as there were no reports from Switzerland yesterday. There are still no reports lined up today so market sentiment could push the franc around.

JPY

The yen was in a weak spot as the dollar took most of the safe-haven flows. Japanese core machinery orders turned out stronger than expected with a 5.0% gain versus the estimated 3.1% increase. There are no other reports due from Japan next so the yen could take its cue from bond yields and dollar price action.

Commodity Currencies (AUD, NZD, CAD)

The Aussie raked in more gains thanks to higher gold prices while the Loonie drew a bit of a lift from stronger oil on the heels of another pipeline shutdown. Australia's Westpac consumer sentiment index also posted an impressive 3.6% rebound after the earlier 1.7% drop. In New Zealand, the appointment of next RBNZ head Orr turned out bullish for the currency. There are no major reports from the comdolls today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Dec 14, 2017)

USD

The US dollar took hits from downbeat CPI data, profit-taking during the FOMC statement, and Yellen's presser. Core CPI missed forecasts by posting a meager 0.1% uptick versus the estimated 0.2% gain. The FOMC statement was a bit more positive on jobs and inflation but it was Yellen's remarks downplaying price gains and tax cuts that led to more losses. US retail sales figures are also lined up today, with the headline figure slated to show a 0.3% gain and the core reading likely to show a much stronger 0.6% increase.

EUR

The euro took advantage of dollar weakness but was still shaky against the commodity currencies. Euro zone reports were mixed and today's ECB decision could lead to big moves. Medium-tier data from the euro zone has been mixed since the last decision but inflation has ticked higher, so many are expecting some clues on tightening for next year.

GBP

The pound managed to hold some ground despite weak jobs data. Claimants increased by 5.9K versus the projected 3.3K gain in joblessness while the unemployment rate was unchanged at 4.3% instead of improving to the projected 4.2% figure. Average earnings improved from 2.3% to 2.5% as expected, though. The BOE decision is lined up today and could also mean extra volatility for pound pairs.

CHF

The franc was able to regain a bit of ground as traders were more cautious ahead of the top central bank events. There were no reports out of the Swiss economy then while today has the PPI and the SNB decision. No actual rate changes are eyed and the central bank might refrain from jawboning this time.

JPY

The yen also took advantage of risk aversion and dollar weakness, even as there were no major reports out of Japan. Today has the revised industrial production numbers lined up but the yen could continue to take its cue from global bond yields and risk sentiment.

Commodity Currencies (AUD, NZD, CAD)

The Aussie continued to be the strongest performer of the bunch, getting a boost from rising gold on risk aversion and a less dovish RBA earlier on. The Loonie was in a weak spot as crude oil barely got a boost from a larger than expected draw in EIA stockpiles. Australia's jobs report turned out stronger than expected with a 61.6K jump in hiring.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Dec 15, 2017)

USD

The US dollar had a mixed run as it reacted to other currency-specific factors. Data turned out stronger than expected as headline retail sales rose 0.8% versus the estimated 0.3% gain while the core reading posted a 1.0% jump versus the estimated 0.6% increase. Import prices posted the projected 0.7% gain while the flash manufacturing PMI also beat consensus. Industrial production and capacity utilization numbers are lined up, along with the Empire State manufacturing index.

EUR

The euro tumbled during the ECB decision and presser even as the central bank upgraded growth and inflation forecasts. Draghi refrained from dropping any hints on interest rate hikes, which left bulls disappointed. Euro zone trade balance is due next and a smaller surplus of 24.4 billion EUR from the earlier 25 billion EUR is eyed.

GBP

The pound was also in a weak spot following the BOE decision as policymakers had a unanimous vote to keep rates and asset purchases unchanged. The central bank cited Brexit as a risk in their economic outlook. Only the BOE quarterly bulletin and a speech by MPC member Haldane are lined up from the UK today.

CHF

The franc had another mixed run as the currency reacted to market sentiment and currency-specific factors. The SNB kept policy unchanged and reiterated that the franc remains overvalued but stopped short of intervention threats. There are no reports due from the Swiss economy today so sentiment could be the driving factor.

JPY

The yen was able to regain some ground to the euro, pound, and Kiwi. The Tankan report had mixed results, with the manufacturing index up from 22 to 25 versus the consensus at 24 and the non-manufacturing component steady at 23 instead of improving to the consensus at 24. There are no other reports lined up from Japan so sentiment could push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The Loonie got a bit of a boost from Poloz's testimony as the central bank head mentioned that there is less need for stimulus for the Canadian economy. He still warned of several uncertainties, including youth unemployment, but appeared overall confident in his outlook. There are no other reports lined up from the comdoll economies.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Dec 18, 2017)

USD

The US dollar regained a lot of ground on Friday despite weaker than expected reports. The Empire State manufacturing index fell from 19.4 to 18.0 instead of the estimated dip to 18.8 while industrial production saw a smaller than expected gain of 0.2% versus the estimated 0.3% uptick. Only the NAHB housing market index is due today.

EUR

The euro regained a bit of ground on Friday as sellers booked profits off their post-ECB short positions. The central bank did upgrade growth forecasts after all and could maintain their hawkish stance for the next few months. Euro zone trade balance came in weaker than expected, though, and final CPI readings are due today.

GBP

The pound slumped against most of its peers towards the end of the week even though there were no reports out of the UK then. Today has the CBI industrial order expectations index and a dip from 17 to 14 is eyed to reflect slower demand. Traders could also keep close attention to Brexit updates for the rest of the day.

CHF

The franc had a mixed run as the lack of top-tier events kept risk sentiment and currency-specific factors in play for Friday. Today's economic schedule is still empty for Switzerland so franc pairs could simply take their cues from the same factors.

JPY

The yen continued to slide against its counterparts as risk-off flows went to the dollar instead. The Tankan survey printed mixed results while the trade balance released over the weekend turned out better than expected. There are no reports due from Japan today so sentiment and currency-specific factors could stay in control.

Commodity Currencies (AUD, NZD, CAD)

The comdolls managed to hold on to most of their gains against their rivals as risk sentiment improved. There were no reports out of Australia, New Zealand, and Canada then and there are no major ones lined up today. The Aussie is currently supported by a less dovish RBA stance and rising gold prices while the Kiwi got a boost from the RBNZ head announcement.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Dec 19, 2017)

USD

The US dollar had a rocky start but managed to end overall positive against most of its counterparts. The NAHB housing market index jumped from 69 to 74 instead of just merely advancing to the consensus at 70. Lawmakers are set to vote on the tax bill this week and Trump might be able to sign it into law by the end of the week if approved. US current account, along with building permits and housing starts, are lined up today.

EUR

The euro rallied and reversed as the Italian trade balance printed stronger than expected results but the final CPI readings were unchanged. Today has the German Ifo business climate index due and an uptick from 117.5 to 117.6 is expected.

GBP

The pound was also unable to hold on to most of its intraday gains, but it's worth noting that the CBI industrial order expectations index held steady at 17 instead of falling to 14. There are no major reports due from the UK today so the focus could remain on Brexit updates and how this could keep the future uncertain for UK businesses.

CHF

The franc was one of the bigger winners for the day as it even managed to chalk up gains to the dollar. There were no reports out of the Swiss economy then and none are due today so market sentiment and currency-specific action might still push franc pairs around.

JPY

The yen was trading a bit more carefully as traders are probably positioning ahead of the BOJ statement later this week. For today, there are no major reports lined up so yen pairs might wait for cues from market sentiment or currency-specific factors.

Commodity Currencies (AUD, NZD, CAD)

The Aussie remained supported as the RBA minutes indicated why the central bank was no longer as dovish as before, but weaker gold prices on risk-taking took back some of the currency's gains. Crude oil prices also stayed afloat on account of the recent pipeline shutdown. In New Zealand, the ANZ business confidence index improved slightly from -39.3 to -37.8.

By Kate Curtis from Trader's Way