Daily Market Outlook by Kate Curtis from Trader's Way

[katetrades]

Forex Major Currencies Outlook (Aug 10, 2015)

USD

The US dollar had a volatile trading run on Friday, as the NFP report came in slightly weaker than expected. The economy added 215K jobs in July, lower than the projected 225K gain. However, the previous figures enjoyed upgrades amounting to an additional 14K positions. Meanwhile, the jobless rate held steady at 5.3% while the participation rate was unchanged at 62.6%. A few Fed officials are set to give testimonies today and their rhetoric could be interpreted as signals for when the central bank might hike rates.

EUR

The euro was mostly weaker last week, thanks to downbeat reports from most of the top economies in the region. German industrial production and trade balance missed expectations while French industrial production came up short as well. Only the euro zone Sentix investor confidence report is due today and a climb from 18.5 to 20.2 is expected.

GBP

The pound was in a weak spot last Friday when the UK trade balance missed expectations. The report showed that the deficit widened from a downgraded 8.4 billion GBP to 9.2 billion GBP instead of the projected 9.1 billion GBP shortfall. This cast doubts on the BOE’s hawkishness, especially since the Super Thursday events revealed that most of the policymakers are not too eager to hike rates just yet. There are no reports due from the UK today.

CHF

The franc continued to sell off against the US dollar without any major catalysts from Switzerland. The unemployment rate was unchanged at 3.3% as expected while the foreign currency reserves report showed an increase from 516 billion CHF to 531.8 billion CHF, suggesting potential intervention. No reports are due from Switzerland today.

JPY

The yen had a mixed trading day on Friday as it reacted to currency specific data. The BOJ statement didn’t contain any changes to monetary policy as expected and central bank officials barely provided clues on what they might do next. For today, Japanese current account balance, consumer confidence, and Economy Watchers sentiment data are lined up.

Commodity Currencies (AUD, NZD, CAD)

The Canadian dollar gave up ground after the release of Canada’s jobs report, even though the actual reading came in slightly better than expected at 6.6K versus 5.3K while the jobless rate was unchanged at 6.8%. The Ivey PMI was also better than expected at 52.9 versus the projected 51.8 figure but was down from the previous 55.9. Over the weekend, China reported a better than expected annual CPI of 1.6% versus the projected 1.5% figure but the PPI fell short of consensus.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Aug 11, 2015)

USD

The US dollar gave up ground in yesterday’s trading sessions when the labor market index fell from 1.4 to 1.1, leading some traders to pare expectations on a Fed rate hike this September. Testimonies from Fed officials have also been mixed, which suggests that policymakers aren’t quite sure if they should vote for tightening soon. Preliminary labor costs and non-farm productivity numbers are up for release today and improvements should allow the dollar to regain ground while weak figures could push it lower.

EUR

The euro regained traction on hopes that a Greek deal will be passed soon. Data from the euro zone was weaker than expected, with the Sentix investor confidence reading falling from 18.5 to 18.4 instead of improving to 20.2. The German ZEW economic sentiment reading is lined up today and analysts are expecting to see a climb from 29.7 to 31.7. The euro zone’s ZEW figure is slated to improve from 42.7 to 43.9 as well, but disappointing results could force the euro to return its recent wins.

GBP

The pound was still in a weak spot against most of its forex rivals, except for the US dollar. There have been no reports out of the UK yesterday while today had the BRC retail sales monitor on tap. The report indicated a 1.2% year-over-year gain, down from the previous 1.8% increase.

CHF

The franc erased some of its losses in yesterday’s sessions, as some traders booked profits off their short positions. The SNB is seen to have intervened in the markets again, as the foreign currency reserves data showed a large increase last week. There were no reports released from Switzerland yesterday and none are due today.

JPY

The yen got sold off when data from Japan came in mostly weaker than expected yesterday. The current account surplus shrank from 1.64 trillion JPY to 1.30 trillion JPY, lower than the projected 1.41 trillion JPY surplus. Consumer confidence was also weaker than expected as the index fell from 41.7 to 40.3 but the Economy Watchers sentiment index improved from 51.0 to 51.6, short of the projected 53.1 figure. Preliminary machine tool orders data is due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls resumed their selloff in recent trading sessions, as trade data from China reflected weaker imports and exports. This suggests a slowdown in Chinese demand, as well as a downturn in global trade. Earlier today, Australia showed a drop in NAB business confidence from 8 to 4, reflecting weaker optimism. Oil prices saw a sharp rebound yesterday but the downtrend remains intact, suggesting weaker Loonie performance.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Aug 12, 2015)

USD

The US dollar took advantage of the run in risk aversion in recent trading sessions, after the Chinese central bank announced a devaluation of its currency. Aside from that, data from the US economy came in stronger than expected, with the preliminary unit labor costs showing a 0.5% uptick for the previous quarter and preliminary non-farm productivity rising by 1.3%. JOLTS job openings data is lined up today, along with a speech by FOMC member Lockhart.

EUR

The euro staged a strong rally in yesterday’s trading sessions when the Greek government finally struck a deal for the third bailout. This can give the debt-ridden nation enough funds to avert a default on its next loan obligation to the ECB by August 20. Data from the euro zone was mixed, as the German ZEW economic sentiment figure showed a drop from 29.7 to 25.0 while the region’s index jumped from 42.7 to 47.6. There are no major reports lined up from the euro zone today.

GBP

The pound was unable to make any headway against the dollar but it managed to chalk up some gains against the commodity currencies. Medium-tier data from the UK showed a bit of a slowdown, particularly in the BRC retail sales monitor and the CB leading index. The jobs report is lined up for today and the claimant count change could show a 1.4K increase in joblessness while the unemployment rate could hold steady at 5.6%. The average earnings index is slated to fall back to 2.8% after rising to 3.2% in June.

CHF

The franc continued to tread lower against the euro and the dollar but managed to score wins against the comdolls. There have been no major reports out of Switzerland yesterday and none are due today, leaving euro zone events and risk sentiment as main drivers of franc price action.

JPY

The yen gave up more ground to the dollar as USDJPY is closing in on its previous year highs at 125.80. Only medium-tier reports have been released from Japan recently and these didn’t show any surprises. With that, the eyen could continue to react to risk sentiment and currency-specific data in the coming sessions.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave up a lot of ground when the PBOC announced that it is devaluing the yuan. While the central bank said that it’s just a one-time move, market watchers believe that more depreciation efforts could be in store since the PBOC seems to be worried about the weak export activity in China. In Australia, the NAB business confidence index slumped from 8 to 4 while the Westpac consumer sentiment reading showed a 7.8% gain. Chinese industrial production and retail sales figures are still up for release later today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Aug 13, 2015)

USD

The US dollar lost ground to its major counterparts when traders quickly booked profits after the PBOC’s yuan devaluation announcements. Some analysts are speculating that this could weigh on Fed rate hike prospects if it results to a decline in exports from other nations, particularly those shipping raw materials to China. US retail sales data is up for release today and traders are expecting to see a 0.4% rebound in core consumer spending and a 0.6% increase in headline retail sales. Initial jobless claims and import prices data are also on today’s docket.

EUR

The euro continued to advance against most of its rivals, as all seemed well in Greece. Data from the euro zone was weaker than expected though, with the region’s industrial production and Italian trade balance both missing expectations. For today, the German and French final CPI readings are due, along with the ECB minutes.

GBP

The pound initially sold off after the release of the UK jobs data, as the average earnings index showed a sharper than expected decline from 3.2% to 2.4% versus the projected 2.8% reading. However, the pound managed to regain ground upon seeing better than expected claimant count change data, which indicated a 4.9K drop in joblessness. Apart from that, the previous reading was revised to show a smaller increase in claimants. There are no reports due from the UK today.

CHF

The franc regained a bit of ground to the dollar and the euro but was still in a weak spot. Swiss ZEW economic expectations showed a nice recovery from -5.4 to +5.9, indicating potential improvements down the line. Swiss PPI is due today and a 0.2% decline in producer prices is eyed.

JPY

The yen advanced against the dollar and most of its forex peers, as profit-taking took place and risk aversion set in during the Asian session. Data from Japan was better than expected, with the industrial production figure upgraded and the tertiary industry activity index printing a higher than expected 0.3% uptick. Earlier today, however, the core machinery orders report printed a worse than expected 7.9% tumble.

Commodity Currencies (AUD, NZD, CAD)

The comdolls managed to recoup their losses after the Chinese central bank’s yuan devaluations, as traders closed out their recent positions. Data from China was mostly weaker than expected, with industrial production, retail sales, and fixed asset investment falling short of expectations. In Australia, the MI inflation expectations index improved from 3.4% to 3.7%. New Zealand retail sales are up for release in the late US session or early Asian trading session.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Aug 14, 2015)

USD

The US dollar regained ground in recent trading, as risk aversion seemed to set in the financial markets. Commodity prices have been falling to multi-year lows, triggering flight to safety. US retail sales figures came in line with expectations of a 0.4% increase in core retail sales and a 0.6% gain in headline consumer spending. US PPI, industrial production and capacity utilization, as well as the preliminary UoM consumer sentiment figure are lined up for today and strong data could reinforce speculations of a Fed rate hike in September.

EUR

The euro continued to advance against most of its forex rivals when Greece moved on to secure its third bailout. Medium-tier data from the euro zone came in line with expectations when France showed a -0.4% CPI reading and Germany printed a 0.2% uptick in price levels. Preliminary GDP readings are lined up for today, as well as euro zone final CPI data.

GBP

The pound resumed its climb against its peers even though there were no major reports released from the UK. There are still no reports lined up from the UK today, leaving risk sentiment as the main driver of pound price action.

CHF

The franc showed another round of losses in recent trading when the Swiss PPI showed a worse than expected 0.3% decline in producer prices versus the projected 0.2% dip. This could keep the SNB on intervention watch in an effort to ward off deflationary pressures. There are no reports due from Switzerland today.

JPY

The yen took advantage of the run in risk aversion to advance against most of its currency counterparts. However, data from Japan was actually weaker than expected, with core machinery orders showing a 7.9% drop versus the projected 5.3% decline. There are no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls suffered another round of losses yesterday when gold and oil fell to six-year lows. As it turns out, the yuan devaluation could mean weaker demand for both commodities in the local Chinese market, which might then weigh on prices. Data from New Zealand was weaker than expected, as the quarterly retail sales report showed a mere 0.1% uptick for both headline and core figures. Canadian manufacturing sales data is due today and a 2.3% increase is projected.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Aug 17, 2015)


USD


The US dollar had a mixed performance on Friday, as traders reacted mostly to currency-specific data and booked profits ahead of the weekend. US headline PPI came in better than expected with a 0.2% gain versus the expected 0.1% uptick while the core PPI showed a 0.3% increase. Capacity utilization was in line with consensus while industrial production was better than expected at 0.6%. The preliminary UoM consumer sentiment figure fell short of expectations at 92.9. For today, the Empire State manufacturing index is due and a climb from 3.9 to 5.0 is eyed.


EUR


The euro gave back some of its recent wins despite news that the third bailout package was passed by the Greek parliament and European creditors. This week, the event risks associated with this is the actual payment of the ECB deadline on August 20. Data from the euro zone was mostly weaker than expected on Friday, with the preliminary GDP readings from the top economies falling short of expectations. For today, only the euro zone trade balance is due.


GBP


The pound edged slightly higher in recent trading sessions, even though there were no major reports released from the UK. Earlier today, the Rightmove HPI showed a 0.8% decline in prices, leading to a bit of weakness for the pound. There are no other reports due from the UK today.


CHF


The Swiss franc could be in for more volatility than usual today with the Swiss retail sales up for release during the London trading session. After printing a 1.8% annualized decline during the previous release, a 0.6% drop is expected this time. Stronger than expected data could lead to a bit of gains for the franc while weak data could spur more losses.


JPY


The yen had a mixed performance as it mostly acted as a counter-currency on Friday. Earlier today, the Japanese GDP release showed a slightly better than expected result, although it still indicated a 0.4% contraction for Q2. No other reports are due from Japan today.


Commodity Currencies (AUD, NZD, CAD)


The comdolls were still in a weak spot last week due mostly to the drop in gold and oil prices. There were no reports released from Australia, New Zealand, and Canada then while today has the foreign securities purchases report from Canada. Further declines in oil and gold could weigh on their price action while a rebound could pave the way for some gains.


By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Aug 18, 2015)

USD

The US dollar regained a bit of ground in yesterday’s trading sessions, despite weaker than expected data from the economy. The Empire State manufacturing index fell from 3.9 to -14.9 instead of rising to the projected 5.0 figure. Meanwhile, the NAHB housing index showed a pickup from 60 to 61, short of the estimated 62 reading. For today, building permits and housing starts data are due and traders are expecting to see a drop from 1.34M to 1.23M for the former and a rise from 1.17M to 1.19M for the latter.

EUR

The euro lost ground in recent trading when the IMF showed reluctance to be part of the third bailout for Greece. There have been no major reports out of the region yesterday and none are lined up today, indicating that Greek bailout updates could continue to set the tone for euro movements.

GBP

The pound was stuck in consolidation recently as traders are still waiting for the UK CPI to be released today. Another flat reading is expected for the headline CPI while the core CPI might show a 0.8% year-over-year increase. Producer prices are expected to chalk up a sharper 1.8% drop compared to the previous 1.3% slide, with additional downside bias due to the recent slump in oil prices. Stronger than expected data could give the pound a boost while weak readings could trigger a selloff.

CHF

The franc sold off against most of its peers when the Swiss retail sales data missed expectations. The report showed a 0.9% annualized slide, worse than the projected 0.6% drop but better than the previous 1.8% tumble. There are no reports lined up from the Swiss economy today, which suggests that risk sentiment and euro zone updates might affect the franc.

JPY

The yen continued to tread carefully against its forex counterparts after Japan showed a 0.4% contraction for Q2. Even though this was slightly better than the projected 0.5% decline in GDP, components of the report reflected declines in exports, investment, and consumer spending. There are no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls managed to keep their heads above water in recent trading as near-term support areas prevented further losses. Commodities are still looking weak, with oil and gold eyeing further downside. New Zealand will have its global dairy trade auction in the late US session and possibly show a small rebound in prices as Russia removed its ban on milk imports from the country. NZ PPI is also due and a 0.5% decline in input prices is expected.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Aug 19, 2015)

USD

The US dollar had a mixed performance as it functioned as a counter currency in recent trading sessions. Traders are probably reducing their positions ahead of the release of the FOMC minutes today, which could provide more clues on when the Fed might hike interest rates. Indications that they’re ready to hike in September could spur gains for the Greenback while cautious comments could push rate hike expectations further and lead to a selloff. US CPI readings are also due today and a 0.2% in the headline reading is eyed.

EUR

The euro was in a weak spot in recent trading sessions as the IMF still refused to get on board with the third Greek bailout. With that, Germany signaled that they’re willing to grant debt relief to help the Greek economy meet its budget targets. Note that Greece has a loan payment due to the ECB tomorrow and a higher chance of meeting this obligation could mean gains for the euro. Only the euro zone current account balance is due today.

GBP

The pound enjoyed strong gains after the UK CPI figures came in better than expected. Headline inflation landed back at 0.1% instead of holding steady at the projected flat reading while the core version of the report improved from 0.8% to 1.2%. Producer prices showed a 0.9% decline, half the projected 1.8% tumble, but house price inflation came in slightly weaker than expected. There are no reports due from the UK today.

CHF

The lack of data from Switzerland kept the franc in tight consolidation against the US dollar, possibly because traders are waiting for the FOMC minutes to be released and for the Greek bailout to fall through. There are still no reports due from Switzerland today but US and euro zone updates could push USDCHF around.

JPY

The yen advanced against most of its peers as risk appetite was weak yesterday. Earlier today, Japan reported a weaker than expected trade balance, showing a deficit of 0.37T JPY versus the projected 0.18T JPY shortfall. This suggests that exports have really weakened and that production could see a downturn later on. No other reports are lined up from Japan today, leaving risk sentiment at the helm.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi enjoyed a bit of volatility in the past few hours, thanks to the Global Dairy Trade auction and the quarterly PPI release. Dairy prices saw a 14.8% gain in the latest auction but this wasn’t enough to erase the declines seen in the past few month. PPI readings were also slightly better than expected but not enough to convince traders that New Zealand could withstand another fall in commodities. There are no other reports due from the comdoll economies but the US crude oil inventories report might affect oil prices and the Loonie.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Aug 20, 2015)

USD

The US dollar suffered a sharp selloff after the release of the CPI and FOMC minutes since both seemed to show that a September rate hike might be pushed back further. Headline and core inflation showed feeble 0.1% gains, lower than the consensus of 0.2% increases in both reports. Meanwhile, the FOMC minutes showed that policymakers are seeing improvements in the labor market but are concerned that inflation could still weaken. Nonetheless, one FOMC member was willing to hike rates in July but was fine with waiting for additional data anyway. For today, initial jobless claims, existing home sales, and Philly Fed index are due.

EUR

The euro managed to soar against its forex rivals when the German parliament voted in favor of the bailout plan for Greece. Recall that Germany was only willing to get on board if the IMF would also be supportive of the bailout, and the latter has required some form of debt relief. This suggests that Greece can be able to meet its upcoming loan obligation to the ECB this week and might be able to work towards achieving its budget targets sooner or later. There are no major reports due from the euro zone today.

GBP

The pound edged slightly higher in recent trading sessions, but there were no reports released from the UK yesterday. Traders are still probably keeping the currency supported due to the stronger than expected inflation reports the other day. For today, the UK retail sales report is due and a 0.4% rebound from the previous 0.2% decline is expected.

CHF

The franc regained ground to the dollar, thanks to positive updates from Greece and the less hawkish FOMC minutes. There have been no reports released from Switzerland yesterday while today has the trade balance on tap. Analysts are expecting to see a smaller trade surplus of 2.59 billion CHF compared to the previous 3.51 billion CHF.

JPY

The yen advanced against most of its peers in recent trading, spurred mostly by the USDJPY selloff after the FOMC minutes were released. Data from Japan has been weaker than expected, with the trade balance reflecting a larger than expected fall in exports and the all industries activity index posting a meager 0.3% gain. There are no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls managed to hold on to their gains to the dollar but were mostly weaker against their other forex peers. Gold enjoyed a small rebound yesterday after the FOMC minutes were released, but the Aussie barely benefitted from this. Crude oil inventories showed an oversupply, driving prices down along with the Canadian dollar. Canadian wholesale sales data is due today and a 1.0% gain is eyed.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Aug 21, 2015)

USD

The US dollar gave up ground to its forex rivals despite stronger than expected data from the economy. Existing home sales jumped from 5.48M to 5.59M while the Philly Fed index improved from 5.7 to 8.3. Initial jobless claims was worse than expected at 277K versus the projected 272K figure and the previous 273K reading. For today, only the flash manufacturing PMI is lined up and a climb from 53.8 to 53.9 is eyed.

EUR

The euro made a strong ascent across the board when Greece finally received its third set of bailout funds and made its loan repayment to the ECB. Greek Prime Minister Alex Tsipras announced his resignation and called for an early election, which might prompt political trouble in the country and lead to a lack of momentum in implementing economic reforms. For now, the shared currency is still drawing support from the release of the third bailout and might be pushed around by the flash manufacturing and services PMIs from Germany and France.

GBP

The pound was weighed down by weaker than expected UK retail sales, which indicated a mere 0.1% uptick instead of the projected 0.4% increase. On a positive note, the previous reading was revised from -0.2% to -0.1%. Only the public sector net borrowing report is due today and a 2.3 billion GBP surplus is eyed, which might be positive for the pound.

CHF

The franc advanced against the dollar after Switzerland printed a better than expected trade balance for July. The surplus widened from 3.51 billion CHF to 3.74 billion CHF, reflecting an improvement in trade activity. No reports are due from Switzerland today but the franc could take its cue from the euro zone data.

JPY

The yen was able to advance against most of its counterparts, except for the euro, as risk aversion supported the lower-yielding currency. There have been no reports released from Japan yesterday while today had the flash manufacturing PMI lined up. The report showed a climb from 51.2 to 51.9, slightly lower than the projected 52.1 figure.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were still under selling pressure, despite stronger than expected wholesale sales data from Canada. The report showed a 1.3% gain versus the projected 1.0% rebound, suggesting better than expected retail sales data for today. The headline figure is slated to show a 0.2% uptick while the core figure could show a 0.6% gain. Also due from Canada are its CPI readings.

By Kate Curtis from Trader's Way