Daily Market Outlook by Kate Curtis from Trader's Way

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Forex Major Currencies Outlook (Nov 4, 2015)

USD

The US dollar had a mixed performance but was mostly in the green despite weak data. Factory orders slumped by 1.0% in September, worse than the expected 0.8% fall, while the IBD/TIPP economic optimism index slipped from 47.3 to 45.5. For today, the ADP non-farm employment change report is due and a 183K gain is expected. Also lined up are the ISM non-manufacturing PMI, US trade balance, and a speech by Fed head Yellen.

EUR

The euro resumed its slide in recent sessions as more ECB members hinted at further easing. There were no reports out of the euro zone yesterday while today has the final services PMI readings on tap, along with the euro zone PPI. Another sharp fall in producer prices could spell bleak prospects for consumer inflation, potentially spurring more losses for the shared currency.

GBP

The pound returned some of its recent gains when the construction PMI came in slightly below expectations. The consensus was for a decline from 59.9 to 58.9 but the actual reading landed at 58.8. The services PMI is due today and a climb from 53.3 to 54.6 is expected, possibly allowing the pound to regain ground.

CHF

The franc gave up its recent wins when SNB head Thomas Jordan began jawboning the currency once more. He pointed out that the franc is still trading at high levels, leading to speculations that the central bank might intervene sooner or later. There were no reports out of Switzerland yesterday and none are due today.

JPY

The yen advanced against most of its peers, except for the dollar and the pound, as risk appetite weakened. Japanese traders were out on a holiday yesterday but are back in action today, awaiting the release of the consumer confidence index which might rise from 40.6 to 41.1.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi suffered a sharp selloff when the dairy auction showed another fall in prices and the New Zealand jobs report turned out to be a disappointment. The economy lost 0.4% in employment for the previous quarter instead of posting the projected 0.4% gain while dairy prices slumped by 7.4%. In Australia, retail sales came in line with expectations of a 0.4% gain while the trade balance beat expectations at a deficit of 2.32 billion AUD. US crude oil inventories are lined up and the commodity price reaction could affect Loonie movements.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Nov 5, 2015)

USD

The US dollar was much stronger across the board, thanks to hawkish remarks from Fed Chairperson Yellen and support from FOMC members Brainard and Dudley. Yellen said that a December rate hike is a "live possibility" if upcoming data meets the FOMC's expectations. The ADP non-farm employment change came in line with expectations of a 180K gain while the ISM non-manufacturing PMI leaped from 56.9 to 59.1, with a strong improvement in its jobs index. Initial jobless claims and preliminary labor costs data are due today.

EUR

The euro dipped to new lows against the dollar and the yen, as risk aversion weighed on financial markets yesterday. Most economic figures from the euro zone came in stronger than expected yesterday, with the exception of the German services PMI which was downgraded from 55.2 to 54.5. German factory orders and euro zone retail sales are due today, along with another speech by ECB Governor Draghi.

GBP

The pound was able to enjoy a few gains in recent trading, as the UK services PMI beat expectations. The index climbed 53.3 to 54.9, outpacing the consensus at 54.6. Traders are still holding out for today's Super Thursday events, though, as the BOE will make its interest rate decision, release the MPC meeting minutes, and print the Inflation Report. Any changes in bias or economic forecasts could have a significant effect on pound price action.

CHF

The franc advanced against its currency rivals, as risk aversion settled in the financial markets. There were no reports out of Switzerland yesterday while today has the SECO consumer climate index and the Swiss CPI on tap. Price levels might fall flat again in October, weaker than the previous 0.1% uptick, with negative readings likely to spur talks of SNB intervention.

JPY

The yen took advantage of the run in risk aversion yesterday, also boosted partly by stronger than expected Japanese consumer confidence data. There are no reports lined up from the Japanese economy today, which suggests that risk sentiment could keep pushing yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave up a lot of ground in yesterday's risk-off environment, as the prospect of Fed tightening weighed on commodity prices. Canada actually saw stronger than expected trade data, which indicated a 0.7% increase in export activity. US crude inventories were lower at 2.8 million barrels but this wasn't enough to boost oil prices. Canada's Ivey PMI is due today and a rise from 53.7 to 54.0.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Nov 9, 2015)


USD

The US dollar enjoyed a strong rally against its forex rivals on Friday, thanks to upbeat jobs data. The NFP report showed a 271K increase in hiring, much higher than the projected 179K figure and the previous 137K rise. This was enough to bring the jobless rate down from 5.1% to 5.0%. Average hourly earnings also reflected stronger wage growth at 0.4% versus the 0.2% forecast, adding to upside inflationary pressures as well. Only the labor market conditions index is due from the US today.


EUR

The euro caved to dollar strength on Friday but was slightly higher against some of its higher-yielding counterparts. Data from the euro zone was mostly weaker than expected, with Germany reporting a 1.1% slump in industrial production versus the projected 0.6% gain. German trade balance and euro zone Sentix investor confidence data are due today.


GBP

The pound was able to score some gains against its non-dollar peers, thanks to upbeat data from the UK. Manufacturing production was better than expected at 0.8% versus the projected 0.4% uptick but industrial production showed a 0.2% drop. The trade balance was also better than expected at a smaller deficit of 9.4 billion GBP compared to the previous 10.8 billion GBP shortfall.


CHF

The franc slid against the dollar but managed to hold on to some of its gains against its other forex counterparts when risk aversion set in. Swiss foreign currency reserves swelled from 541B CHF to 551B CHF, hinting that the SNB may have intervened to keep the franc weak. There are no reports due from the Swiss economy today.


JPY

The yen gave up ground to the dollar but managed to advance against its higher-yielding rivals. Japan's leading indicators fell short of expectations while BOJ Governor Kuroda spoke of the challenges to achieving price stability. Earlier today, Japan reported a 0.6% gain in average cash earnings, slightly higher than the projected 0.5% increase.


Commodity Currencies (AUD, NZD, CAD)

Comdolls gave up ground to the dollar due to the risk-off environment last Friday, as the prospect of Fed tightening means higher borrowing costs and therefore lower spending among consumers and businesses. Jobs figures from Canada beat expectations but underlying components indicated that the 44.4K rise in employment was mostly just a result of part-time hiring. Over the weekend, China printed a larger trade surplus spurred by a drop in exports and an even larger drop in imports.



By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Nov 10, 2015)

USD

The US dollar had a pretty quiet trading day, as traders calmed down from the NFP volatility. The currency managed to hold on to its lead against the euro and comdolls but weakened to the yen and pound. There were no major reports out of the US yesterday, although the medium-tier labor conditions index climbed from 1.3 to 1.6 in October.

EUR

The euro was still in a weak spot against its peers, as the German trade balance missed expectations. The Sentix investor confidence index posted a better than expected reading of 15.1 versus the projected 12.4 figure, up from the previous 11.7 reading. French and Italian industrial production numbers are up for release today.

GBP

The pound was one of the best performers yesterday, even though there were no reports out of the UK. Traders may have been pricing in positive expectations for the upcoming jobs release, with the claimant count change likely to print a mere 1.6K rise in joblessness. For today, there are still no reports due from the UK.

CHF

The franc followed in the euro's footsteps and weakened to most of its peers, although it managed to recoup its gains when risk aversion extended its stay. There were no reports out of Switzerland yesterday while today has the unemployment rate on tap.

JPY

The yen took advantage of the run in risk aversion, but it had trouble holding on to its lead since data from Japan has been mostly weak. The current account surplus shrank from 1.59T JPY to 0.78T JPY, worse than the projected drop to 1.50T JPY.

Commodity Currencies (AUD, NZD, CAD)

The comdolls started off on a weak foot, as the Chinese trade numbers still weighed on sentiment. In Australia, job advertisements picked up by 0.4% compared to the earlier 3.8% jump while Canada reported a 198K increase in housing starts. Earlier today, Australia printed its NAB business confidence index, which dipped from 5 to 2. Chinese CPI came in below expectations at 1.3% versus 1.5% while the PPI showed a 5.9% drop as expected.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Nov 11, 2015)

USD

The US dollar gave up some of its recent gains when medium-tier data came in weaker than expected. Import prices slumped 0.5% in October versus the projected 0.1% dip while the September figure was revised to show a sharper 0.6% decline. Wholesale inventories piled up by 0.5% instead of staying flat, hinting at a drop in demand. US banks are on holiday for Veterans Day today.


EUR

The euro resumed its slide against most of its forex peers but managed to stage a quick comeback during the latter sessions. Data from France and Italy were both unimpressive, reminding traders that the economic performance in the top economies in the region is weakening. A speech by Draghi is lined up today and traders are on the lookout for more easing hints.


GBP

The pound was mostly stuck in consolidation as traders are awaiting the release of the UK jobs data today. Analysts are expecting to see a 1.6K increase in claimants, slower than the previous 4.6K gain and enough to keep the jobless rate steady at 5.4%. The average earnings index could improve from 3.0% to 3.2%, indicating a faster pace of wage growth and possibly allowing the pound to recover.


CHF

The franc took its cue from the euro and erased some of its recent losses, buoyed partly by a steady unemployment rate at 3.4%. There are no reports due from the Swiss economy today, leaving the franc sensitive to counter currency data.


JPY

The yen was able to hold on to its recent gains as risk aversion stayed in play. Data from Japan was weaker than expected, with the current account balance printing a much smaller surplus of 0.78T JPY versus the projected 1.50T JPY figure. Japanese preliminary machine tool orders data is due today and a recovery from the earlier 19.1% slide could prop up the yen.


Commodity Currencies (AUD, NZD, CAD)

Comdolls didn't seem to be too happy about data from China, as the CPI fell from 1.6% to 1.3%, lower than the projected 1.5% figure. Producer prices slipped 5.9% as expected, putting additional downside pressure on consumer price levels later on. Chinese industrial production, fixed asset investment, and retail sales data are due today. Earlier on, the RBNZ Financial Stability Report provided some support for the Kiwi when officials assured that banks can withstand any risks from the slowing dairy sector and the booming home market.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Nov 12, 2015)

USD

The US dollar was in for a slow trading day, as banks were closed on Veterans' Day and there were no top-tier reports released. The preliminary UoM consumer sentiment index is due and a rise from 90.0 to 91.3 is eyed, with stronger than expected data likely to give the dollar an additional boost. Also lined up is a speech by Fed head Yellen.

EUR

The euro was still in a weak spot against its peers, although ECB officials appear undecided on what they want to do next with monetary policy. For some, the central bank doesn't necessarily need to act in December and lowering deposit rates further might no longer be so effective. Others believe in the importance of keeping policy accommodative. German and French CPI are due today, along with euro zone production data.

GBP

The pound drew some support from the UK jobs data, even though most of the headline figures missed expectations. Claimant count rose by 3.3K in October, larger than the projected 1.6K gain in joblessness, while the average earnings index held steady at 3.0% instead of improving to 3.2%. Still, underlying long-term employment indicators showed some improvement. There are no reports due from the UK today.

CHF

The franc barely had any direction in recent trading sessions since there were no major reports out of Switzerland. There are still no reports due from the Swiss economy today so the franc could be pushed around by market sentiment.

JPY

Japanese data came in mixed earlier today, with core machinery orders posting a stronger than expected 7.5% gain versus the projected 3.3% rebound and the PPI showing a sharper 3.8% decline compared to the estimated 3.5% drop. No other reports are due from Japan today, keeping risk sentiment in play.

Commodity Currencies (AUD, NZD, CAD)

The Aussie got a strong boost from stronger than expected jobs data in today's Asian session. The employment change figure showed a 58.6K increase in hiring versus the projected 14.8K gain, bringing the jobless rate down from 6.2% to 5.9%. There are no other reports due from the comdoll economies today.


By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Nov 16, 2015)

USD

The US dollar pared most of its gains for the weak when retail sales figures missed expectations. The headline figure posted a meager 0.1% uptick versus the projected 0.3% gain while the core version of the report showed a 0.2% increase instead of the estimated 0.4% rise. Headline producer prices fell 0.4% instead of rising by 0.2% while the core PPI showed a 0.3% drop instead of the projected 0.1% rise. Only the Empire State manufacturing index is due from the US economy today.

EUR

The euro suffered a sharp selloff on Friday following the attacks in Paris. Data from the euro zone was also mostly weaker than expected, as the region expanded only 0.3% in Q3 versus expectations of 0.4% growth. German and French preliminary GDP readings came in line with expectations of a 0.3% expansion. For today, the final euro zone CPI readings are due and downgrades could weigh on the shared currency.

GBP

The pound followed suit with its European counterparts after the terror attacks in France, as there were no major reports to keep the British currency supported. There are still no reports up for release from the UK today, which suggests that risk sentiment could stay in play.

CHF

The franc was also in a weak spot last Friday, even though the Swiss PPI came in better than expected. Producer prices increased 0.2% instead of falling by the projected 0.2% in October, but the Swiss currency was more sensitive to downbeat euro zone data. There are no reports out of Switzerland today.

JPY

The yen advanced on risk aversion towards the end of last week but gave up some of its gains earlier in Monday's trading when Japan's GDP reading confirmed that the country is back in recession. The economy shrank by 0.2% in Q3 after contracting by 0.3% in the previous quarter, setting the stage for a potentially dovish BOJ statement later on in the week.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were dragged down by weak commodity prices, as oil reacted to forecasts by the International Energy Agency that oil demand will still be weak next year. Over the weekend, New Zealand print its retail sales figures and showed a mixed picture, with headline data beating expectations and the core reading falling short. Canadian manufacturing sales and foreign securities purchases data are due today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Nov 17, 2015)

USD

The US dollar was off to a slow start in the week but soon regained ground as risk aversion set in. US equities were able to recover from their Friday slump, adding further support for the US currency. Data was weaker than expected, as the Empire State manufacturing index rose from -11.4 to -10.7 only, short of the projected -5.3 figure. US CPI readings are due today, with both the headline and core figures slated to post 0.2% upticks. Also due are reports on industrial production and capacity utilization.

EUR

The euro broke to fresh lows against the US dollar in the wake of the terrorist attacks in Paris. Policymakers have said that it's too early to quantify the losses and speculate if it will impact monetary policy. Data from the euro zone was stronger than expected though, with the headline CPI revised from 0.0% to 0.1% and the core CPI upgraded from 1.0% to 1.1%. German ZEW data is due today and a rise from 1.9 to 6.7 is eyed.

GBP

The pound managed to put up a strong fight against its forex peers, as traders appear to have positive expectations ahead of the UK CPI release. Analysts expect to see another 0.1% decline in headline CPI and a steady core CPI at 1.0%, with stronger than expected data likely to renew calls for BOE tightening and give the pound a boost.

CHF

The franc followed in the euro's footsteps since there were no reports out of the Swiss economy. There are still no reports due from Switzerland today, which suggests that the franc could keep tracking the euro that is sliding against its peers.

JPY

The yen was unable to take advantage of the run in risk aversion as Japan's latest GDP report showed a contraction and confirmed that the country is back in recession. There are no reports due from Japan today, which suggests that yen traders might stay hesitant to pile on their long positions.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were tossed around by risk sentiment, with the Loonie managing a bit of recovery during the late US session on speculations of lower oil output due to the US airstrikes in ISIS-controlled oil fields near Syria. Data from Canada was actually weaker than expected, with manufacturing sales slumping 1.5% and foreign securities purchases also posting a decline. RBA minutes and New Zealand quarterly inflation expectations data are up next.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Nov 18, 2015)

USD

The US dollar was directionless in recent trading sessions, as mixed reports and the looming release of the FOMC minutes prevented traders from taking on large positions. US headline CPI showed a 0.2% gain as expected while the core version of the report also printed a 0.2% increase. Industrial production dropped by 0.2% in October against expectations of a 0.1% rise while capacity utilization eased to 77.5%. Dollar pairs could be in for consolidation ahead of the FOMC minutes and additional volatility is expected during its actual release.

EUR

The euro slid lower against its peers once more, as news reports revealed that another potential terror attack in Germany was foiled. Police are saying that a van full of explosives was found outside a soccer stadium where a match between Germany and Netherlands was to be held. The event was cancelled, keeping traders on edge with all the uncertainty in the region. Data from the euro zone was mixed, as the German ZEW index rose from 1.9 to 10.4 while the region's index fell from 30.1 to 28.3.

GBP

The pound managed to outperform its rivals when CPI readings came in line with expectations. The October CPI reading showed a 0.1% drop as expected but the core CPI climbed to 1.1% instead of holding steady at 1.0%. There are no reports due from the UK economy today.

CHF

The franc moved up to its highs following the SNB's decision to scrap the franc peg earlier this year. There were no reports out of the Swiss economy but the rising likelihood of further ECB easing put traders on intervention watch. Swiss ZEW economic expectations data is due today and an improvement from the previous 18.3 reading could allow the currency to stay afloat.

JPY

The yen managed to score some gains against its rivals as risk aversion extended its stay, but traders appear hesitant to buy the Japanese currency due to the country's recession and the upcoming BOJ statement. There were no reports out of Japan yesterday and none are due today.

Commodity Currencies (AUD, NZD, CAD)

The Aussie drew support from the RBA minutes, which confirmed that the central bank is less dovish these days. Meanwhile the Loonie was able to stay supported by rising oil prices, as traders price in a drop in production and supply due to the tension in Syria. On the other hand, the Kiwi was in a weak spot after the GDT auction showed a 7.9% fall in dairy prices, signaling that the industry slowdown isn't over. Australian quarterly wage index and New Zealand's PPI numbers are up for release next.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Nov 19, 2015)

USD

The FOMC minutes confirmed the likelihood of a Fed rate hike in December but the dollar barely advanced after the release, as expectations have been priced in for quite some time already. The transcript showed that most policymakers agreed that the US economy can achieve the conditions necessary to warrant a rate hike next month but cautioned that the next tightening moves would be gradual. For today, initial jobless claims and the Philly Fed index are up for release.

EUR

The euro managed to make a bit of a bounce to the dollar, as traders probably booked profits off key levels. There were no reports from the region yesterday, leaving the shared currency under pressure by ongoing uncertainty in France. The euro zone current account balance and ECB monetary policy meeting accounts are due next.

GBP

The pound continued to move sideways, as there were no major reports out of the UK. Today has the retail sales figure on tap and a 0.4% decline is expected for October, following the previous 1.9% jump. Positive or stronger than expected data could allow the pound to break higher or resume its climb against its forex peers.

CHF

The franc barely made any headway in either direction, as traders are probably waiting for more catalysts. Swiss ZEW economic expectations dropped from 18.3 to 0.0, reflecting a downturn in optimism. Today has the Swiss trade balance due and a larger surplus of 3.18 billion CHF from the earlier 3.05 billion CHF is eyed.

JPY

The yen made small gains in yesterday's sessions, with risk aversion in play. Traders are taking it easy with their yen positions ahead of the BOJ interest rate statement today, as the central bank might shift to a dovish stance now that the country's GDP indicated a return to recession. Any easing announcements could spur huge losses for the Japanese currency, particularly against the dollar which is eyeing a likely Fed rate hike in December.

Commodity Currencies (AUD, NZD, CAD)

The Loonie continued to rake in more gains as oil prices staged another strong bounce. In New Zealand, PPI readings beat expectations, with input prices up 1.6% versus the projected 0.1% uptick and output prices up 1.3%. There are no other reports due from the comdoll economies for the rest of the day, keeping market sentiment and commodity price movements in control of price action.

By Kate Curtis from Trader's Way