Daily Market Outlook by Kate Curtis from Trader's Way

[katetrades]

Forex Major Currencies Outlook (Oct 20, 2015)

USD

The US dollar was off to a strong start for the week but wound up giving up some of its recent gains to its peers. FOMC member Brainard reiterated the risks of hiking interest rates too early in her latest testimony, reminding forex market watchers that the Fed liftoff might be delayed to next year. FOMC members Dudley and Powell are set to make speeches today, but the bigger mover could be Yellen's testimony. Any indication that they're willing to wait until next year to tighten might mean more dollar weakness.

EUR

The euro gave up ground to most of its peers as the ECB statement drew near. There have been no major reports out of the euro zone yesterday and only the current account balance is lined up today, leaving euro traders to price in expectations for the upcoming monetary policy decision, which might take the negative headline CPI for September into consideration.

GBP

The pound managed to hold its ground against the dollar and advance against some of its rivals despite the lack of top-tier data from the UK yesterday. BOE Governor Carney is set to give a speech today and his monetary policy bias could push the pound in a particular direction.

CHF

The franc continued to edge lower to the US dollar in recent trading sessions, as the currency has been taking its cue from the euro. The Swiss trade balance is up for release today and a smaller surplus of 2.51 billion CHF compared to the previous 2.86 billion CHF is expected.

JPY

The yen was also off to a good start like the Greenback but ended up returning its lead when risk appetite picked up. There were no reports out of Japan but it seemed that Chinese data was enough to spur risk-taking during the Asian trading session. There are still no reports due from Japan today, keeping market sentiment in play.

Commodity Currencies (AUD, NZD, CAD)

The comdolls advanced upon seeing the latest economic figures from China, as these indicated that the slowdown hasn't been so terrible yet. The GDP indicated 6.9% growth, stronger than the projected 6.8% figure, while industrial production and fixed asset investment missed expectations. The Kiwi also drew additional support from positive expectations ahead of the dairy auction today while the Loonie retreated after the federal election in Canada. Earlier today, the RBA minutes suggested that the central bank is in no rush to cut interest rates, adding a boost for the Aussie. Canadian wholesale sales data is due today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Oct 21, 2015)

USD

The US dollar regained ground against most of its peers in recent trading sessions when Fed head Yellen didn't exactly show any shift in her monetary policy bias. Other FOMC members reiterated that a liftoff is still possible this year but that it depends on how economic data turns out. Data from the US was mixed, as building permits fell short of expectations at 1.10M while housing starts came in better than expected at 1.21M. For today, data on crude oil inventories and a speech by FOMC member Powell are lined up.

EUR

The euro retreated against its peers when medium-tier data from the euro zone came in worse than expected. German PPI showed a 0.4% drop in price levels while the region's current account balance showed a much smaller surplus of 17.7 billion EUR. There are no reports lined up from the region today, leaving traders to price in expectations ahead of the ECB decision tomorrow.

GBP

The pound was stuck in consolidation against most of its peers, as traders are waiting for more clues from the UK economy. BOE Governor Carney had a testimony yesterday but barely shared any thoughts on his policy bias. He has another speech lined up today and more hints of what the central bank might do next could push the pound out of consolidation.

CHF

The franc had one of its more volatile days in yesterday's trading session, as the Swiss currency popped lower against the dollar. Swiss trade balance came in better than expected at a larger surplus of 3.05 billion CHF but the currency gave up ground when data from the euro zone came in weak. This could increase the odds of ECB easing, which might then lead the SNB to intervene in the forex market to keep the franc weak.

JPY

The yen gave up ground against most of its currency counterparts, as traders seemed to favor the US dollar once more. Earlier today, Japan reported a weaker than expected trade balance, as the deficit was mostly unchanged at 0.36T JPY instead of shrinking to the projected 0.07T JPY shortfall. The country's all industries activity index is due today and might be in for a downside surprise since the tertiary industry activity index fell short.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were off to a good start, thanks to the RBA's relatively upbeat meeting minutes. However, the Kiwi was forced to retreat when the dairy auction revealed a 3.1% drop in prices, putting an end to the impressive streak of gains in the previous weeks. In Canada, wholesale sales data came in weaker than expected with a 0.1% decline versus the projected 0.2% uptick, setting the stage for a potential retail sales disappointment later this week. For today, the BOC is set to make its monetary policy decision and no actual changes are expected.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Oct 22, 2015)

USD

The US dollar advanced against most of its peers as risk aversion seemed to return to the financial markets. There have been no major reports out of the US economy yesterday while today has the initial jobless claims and existing home sales data on tap. The lack of any clear direction among dollar traders could leave the currency moving to the tune of risk sentiment for the rest of the day.

EUR

The euro could be in for a volatile day since the ECB is gearing up to make its policy statement. The central bank admitted that it is open to further easing in their previous statement, and data has fared much worse since. In particular, the headline CPI printed a 0.1% decline in price levels while figures from Germany were mostly disappointing. A dovish bias could send the euro selling off across the board while reassuring remarks could spur a relief rally.

GBP

The pound continued to consolidate against most of its peers, as traders are still waiting for the UK retail sales release. Data from the UK came in better than expected yesterday, as the public sector deficit was smaller than expected. The retail sales report is expected to show a 0.3% gain in spending versus the previous 0.2% uptick.

CHF

The franc took a pause from its recent selloff, as traders are awaiting the ECB rate statement. Even though no actual changes are expected for now, any hints of easing could prompt the SNB to intervene in the forex market to keep the franc weak.

JPY

The yen continued to give up ground against most of its peers when the Japanese all industries activity index showed a 0.2% drop as expected. Data from Japan has been reflecting a slowdown recently, increasing speculations of further easing from the BOJ. No other reports are due from Japan today, keeping risk sentiment in play.

Commodity Currencies (AUD, NZD, CAD)

The comdolls returned some of their recent wins after the downbeat NZ dairy trade auction and the BOC statement. Even though the Canadian central bank decided to keep monetary policy unchanged, they downgraded their growth forecasts for the next two years and reiterated that the oil slump could continue to weigh on investment and export activity. Canadian retail sales data is due today and a 0.2% increase in the core figure and a 0.1% uptick in the headline figure is eyed.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Oct 23, 2015)

USD

The US dollar regained ground against its peers when risk appetite tanked after the ECB statement. Data from the US came in better than expected, as the initial jobless claims showed a 259K figure versus the projected 266K reading while existing home sales beat expectations at 5.55M. Only the US flash manufacturing PMI is due today and a drop from 53.1 to 52.8 is eyed.

EUR

The euro suffered a sharp selloff across the board when ECB Governor Draghi admitted that they might increase their stimulus program soon. He noted the downside risks to growth and inflation, particularly the downturn in the emerging markets and the euro's appreciation. He also clarified that they are looking into a range of other options, which suggests that more deposit rate cuts or bond purchases could be announced. Euro zone flash PMI readings are lined up today and weak data from the top two nations could spell more euro declines.

GBP

The pound was able to advance in recent trading sessions, thanks to upbeat UK retail sales data. The report showed a 1.9% jump in consumer spending, outpacing the projected 0.3% growth. Although the previous report suffered a downgrade, traders paid closer attention to the stronger than expected report for September. There are no reports due from the UK today.

CHF

The franc also suffered a sharp selloff, thanks to the downbeat ECB statement. Even though there were no reports out of Switzerland, the currency retreated as traders speculated that the SNB might intervene to keep the franc weak against the euro and its other forex rivals in case the ECB announces more QE or a rate cut. There are no reports due from Switzerland today but the franc might still take its cue from the euro.

JPY

The yen had a mixed performance as it reacted mostly to risk sentiment, gaining ground against the euro but losing to the dollar and pound. There have been no reports out of Japan yesterday while today saw a stronger than expected flash manufacturing PMI reading. The index climbed from 51.0 to 52.5 this month, outpacing the consensus at 50.6.

Commodity Currencies (AUD, NZD, CAD)

The comdolls managed to make a bit of a comeback, as expectations of additional easing from the ECB eased fears of a deeper global economic slowdown. Data from Canada came in mixed, with the core retail sales posting a flat reading and the headline figure indicating a stronger than expected 0.5% gain. Canada's inflation figures are due today, with the headline CPI set to show a 0.1% drop and the core figure likely to show a 0.3% uptick.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Oct 26, 2015)

US

The US dollar advanced against most of its peers on Friday, as the surprise rate cut by the Chinese central bank spurred a bit of risk aversion. In addition, data from the US was better than expected since the flash manufacturing PMI climbed from 53.0 to 54.1 instead of falling to the projected 52.8 reading. For today, US new home sales data is due and a drop from 552K to 546K is eyed.

EUR

The euro took a break from its sharp selloff when the PBOC decided to ease monetary policy and ease some of the uncertainties in the global market. PMI readings from the euro zone were also mostly better than expected, with the manufacturing and services data from France beating analysts' projections. The German Ifo business climate index is due today and a drop from 108.5 to 108.1 is eyed.

GBP

The pound held on to some of its wins despite the lack of top-tier data from the UK, as the reports released earlier in the week spelled positive prospects for the UK economy. Only the BBA mortgage approvals report and CBI industrial order expectations are up for release today.

CHF

The franc continued to drop against its peers, as traders speculated that any easing moves from the ECB would be accompanied by intervention from the SNB. There were no reports out of Switzerland on Friday and none are due today.

JPY

The yen had a mixed performance as it mostly reacted to market sentiment instead of establishing its own direction. The Japanese flash manufacturing PMI came in better than expected at 52.5, up from the previous 51.0 figure. There are no reports due from the Japanese economy today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls initially sold off upon hearing more interest rate cuts from China but recovered strongly, as traders predicted that the easing moves might spur trade activity and boost commodity prices. Canadian CPI readings were weaker than expected, as the headline CPI showed a 0.2% decline while the core reading indicated a slower than expected 0.2% uptick. New Zealand's trade balance is up for release in the next Asian session, with the deficit expected to narrow.

By Kate Curtis from Trader's Way

 

[TradersWay]

Forex Major Currencies Outlook (Oct 27, 2015)

USD

The US dollar had a mixed performance, as it reacted mostly to risk sentiment and a bit of profit-taking from the recent strong moves. New home sales data from the US was weaker than expected, as the figure landed at 468K while the previous reading was downgraded to 529K. US CB consumer confidence and flash services PMI are lined up for today, along with durable goods orders data.


EUR

The euro continued to weaken against most of its peers, although some signs of retracement have popped up. Data from the euro zone was actually better than expected, with most of the PMI readings from Germany and France surprising to the upside. Only euro zone data on M3 money supply and private loans are up for release today.


GBP

The pound was able to advance in yesterday's trading sessions, despite weaker than expected BBA mortgage approvals data from the UK. For today, the preliminary GDP reading is up for release and a 0.6% growth figure is eyed. Stronger than expected data could allow the pound to extend its rallies, as this would remind traders that the BOE is still on track to hike rates sometime next year.


CHF


The franc was in a weak spot against most of its peers even though there were no major reports out of Switzerland. The increased odds of additional ECB easing suggests that the SNB might be looking into forex intervention once more in order to make sure the franc stays weak. No reports are due from Switzerland today.


JPY


The yen was able to rake in some gains in recent trading sessions, as risk appetite appeared to weaken. There have been no major reports out of Japan but most economic figures came in the red yesterday, keeping risk aversion in play. There are still no reports due from the country today, which suggests that yen pairs might be sensitive to market sentiment.


Commodity Currencies (AUD, NZD, CAD)


The comdolls returned some of their recent wins after the PBOC rate cuts, as traders were unsure whether or not these easing efforts could translate to stronger growth prospects. Data from New Zealand was worse than expected, as the trade balance indicated a wider deficit for September and a downgrade in the August report.There are no major reports lined up from the comdoll economies today.


By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Oct 28, 2015)

USD

The US dollar was all over the place in recent trading sessions, as it functioned as a counter currency. Data from the US economy came in mostly weaker than expected, with core durable goods data, flash services PMI, and the CB consumer confidence index landing short of consensus. Traders might've also booked profits ahead of the FOMC statement later today, as this could spark huge moves across dollar pairs.

EUR

The euro struggled to keep its head above water yesterday since there were no reports to neither give it a boost nor push it lower. For today, the German import prices data and GfK consumer climate index are up for release, with another batch of weak readings likely to allow the selloff to resume.

GBP

The pound was in a bit of a weak spot yesterday since the UK printed a weaker than expected preliminary GDP reading. The economy expanded only 0.5% in Q3, slower than the estimated 0.6% growth and the previous 0.7% expansion. There are no reports due from the UK today.

CHF

The franc was able to hold its ground in recent trading sessions, as the lack of top-tier data kept both gains and losses in check. There are still no reports due from the Swiss economy today, leaving market sentiment in control of price action among the franc pairs.

JPY

The yen stayed strong yesterday since risk appetite appeared to weaken. Earlier today, data from Japan showed a 0.2% decline in retail sales instead of the estimated 0.4% uptick, setting the stage for weaker reports later this week. No other reports are lined up for today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave up ground earlier when Australia printed a bleak CPI reading of 0.5% versus the projected 0.7% figure for Q3. The RBNZ statement is coming up next, just after the FOMC decision, and no interest rate changes are expected for now. Reassuring remarks from Governor Wheeler might also be enough to keep the Kiwi afloat.

By Kate Curtis from Trader's Way

 

[TradersWay]

Forex Major Currencies Outlook (Oct 30, 2015)

USD

The US dollar calmed down from its post-FOMC rallies as traders focused on other top-tier data. Besides, the US preliminary GDP reading came in below expectations at just 1.2% growth versus the projected 1.5% expansion. Pending home sales showed a surprise 2.3% decline instead of the expected 1.1% gain. For today, data on personal spending and income are due, along with the core PCE price index.



EUR

The euro struggled to regain a bit of ground in recent trading sessions when data came in mixed. Germany showed a flat preliminary CPI reading, better than the projected 0.1% drop, while Spain showed a worse than expected 0.7% fall in price levels. Germany also reported a larger than expected 5K decline in joblessness, which might mean positive prospects for today's retail sales release. Traders are likely to pay closer attention to the euro zone CPI estimates, as another negative reading could spur more losses for the shared currency.



GBP

The pound bounced back to action in yesterday's sessions, thanks to upbeat figures on net lending to individuals. Mortgage approvals and CBI realized sales data both disappointed though. For today, there are no reports due from the UK, rendering the pound sensitive to market sentiment and euro zone data.



CHF

The franc made a bit of recovery in recent trading sessions, as traders probably booked their recent profits. There were no reports out of Switzerland yesterday while today has the KOF economic barometer on tap, although franc traders might pay closer attention to euro zone data and the odds of further ECB easing.



JPY

The yen consolidated against its peers ahead of today's BOJ statement, although the latest batch of data suggests that the central bank might sound downbeat. Household spending slipped by 0.4% following the previous retail sales disappointment, while both Tokyo and national core CPI figures came in negative. Any signs that the BOJ is willing to expand its easing program could spur yen losses.



Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to regain a bit of ground in latter sessions, as weak data from the US cast doubts on Fed tightening and put risk appetite back on the table. Earlier today, Australia reported stronger than expected PPI readings, spelling positive prospects for its inflation trends and easing fears of another RBA rate cut. The Canadian monthly GDP is up for release and a 0.1% uptick is eyed.



By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Nov 2, 2015)

USD

The US dollar gave up ground on Friday since most economic figures came in weak. The personal spending and income data indicated a mere 0.1% uptick instead of the projected 0.2% gain while the core PCE price index also logged in a 0.1% increase versus the estimated 0.2% rise. The Chicago PMI came in better than expected at 56.2 versus 49.5 but the UoM consumer sentiment index was lowered from 92.1 to 90.0. The US ISM manu PMI is due today and a drop from 50.2 to 50.0 is eyed.

EUR

The euro managed to recover slightly, thanks to a flat headline CPI estimate for the region. Analysts had been expecting to see another negative reading, which would've been enough to confirm additional ECB easing. Other medium-tier reports also beat expectations, with the jobless rate dropping from 10.9% to 10.8% and the core CPI landing at 1.0%, but the consumer spending data from Germany and France fell short. Final manufacturing PMI readings are due from the euro zone nations today.

GBP

The pound was able to hold on to its recent gains despite weaker than expected data from the UK. The GfK consumer confidence index dipped from 3 to 2 instead of improving to the projected 4 reading. The UK manufacturing PMI is due today and a drop from 51.5 to 51.3 is expected.

CHF

The franc made a quick rebound on Friday, even as the KOF economic barometer missed expectations. The reading came in at 99.8 versus the projected 100.1 figure while the previous reading was downgraded to 100.3. Swiss retail sales data is due today and a 0.2% rebound is eyed.

JPY

The yen recovered against its peers when the BOJ refrained from easing policy further. The central bank didn't appear too concerned about the slump in the Japanese economy, with one policymaker still voting to taper asset purchases. Japanese household spending and housing starts both missed expectations but today's flash manu PMI came in strong at 52.4 versus 52.1.

Commodity Currencies (AUD, NZD, CAD)

The comdolls appear to be off to a good start, even though reports from China released over the weekend weren't so impressive. The official manufacturing PMI held steady at 49.8 instead of improving to 50.0 while the non-manufacturing PMI fell from 53.4 to 53.1. However, the Caixin PMI climbed from 47.2 to 48.3, outpacing the consensus at 47.7. No reports are due from the comdoll economies today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Nov 3, 2015)

USD

The US dollar struggled to hold on to its recent gains when the ISM manufacturing PMI was released. The index fell from 50.2 to 50.1 in October, slightly higher than the projected 50.0 figure. However, the employment component indicated a contraction, spurring downbeat expectations for the NFP release. US factory orders data is due today and a 0.8% decline is eyed, following the previous 1.7% drop.

EUR

The euro suffered another round of losses when an ECB member noted that the French economy is growing slower than expected and that further easing in December remains a possibility. Final PMI readings from the region came in better than expected but weren't enough to keep the shared currency afloat. The Spanish unemployment change report is due today and a 70.3K increase in joblessness is expected.

GBP

The pound had a volatile trading day but was able to rake in some gains, thanks to the upbeat manufacturing PMI. The figure climbed from 51.8 to 55.5 in October, reflecting a stronger pace of industry expansion. For today, the construction PMI is due and a drop from 59.9 to 58.9 is eyed, although this might not have such a huge impact on pound movement.

CHF

The franc was in the same weak spot as the euro, as increased odds of ECB easing could spur SNB intervention. Swiss retail sales came in line with expectations of a 0.2% gain while the manufacturing PMI beat expectations by rising from 49.5 to 50.7, outpacing the consensus at 50.2. There are no reports due from Switzerland today.

JPY

The yen edged lower against its peers when risk appetite appeared to improve and traders continued to speculate about potential BOJ easing. Japan's final manufacturing PMI was downgraded from 52.5 to 52.4, still higher than the projected 52.1 figure. Japanese banks are closed for the holiday today, which means that there are no reports due.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to take advantage of the pickup in risk appetite yesterday after Chinese PMI readings didn't turn out so bad. In fact, the Caixin report showed a climb from 47.2 to 48.3, indicating a slower pace of contraction. Earlier today, the RBA statement gave the Aussie another boost when they decided to keep rates on hold at 2.00%. New Zealand is set to have its Global Dairy Trade auction and release its quarterly jobs data in the late US session, with analysts expecting to see a 0.4% rise in employment.

By Kate Curtis from Trader's Way