Daily Market Outlook by Kate Curtis from Trader's Way

[katetrades]

Forex Major Currencies Outlook (Jan 19, 2016)

USD

The US dollar had a pretty quiet trading day since there were no major reports released and traders were off on a holiday. For today, there are still no major reports lined up, which suggests that the US currency could take its cue from market sentiment and US equities.

EUR

The euro was stuck in consolidation against most of its peers yesterday since there were no major market catalysts. German final CPI and the euro zone current account balance are up for release today, with strong readings likely to keep the shared currency supported. Also lined up is Germany's ZEW economic sentiment index and the euro zone final CPI readings.

GBP

The pound could be in for a lot of volatility today since the UK is set to print its latest inflation reports. The headline CPI is expected to stay unchanged at 0.1% while the core CPI could also hold steady at 1.2%. Stronger than expected readings could give the pound a bit of a boost while weak data could lead traders to push back rate hike expectations further.

CHF

The franc was also in consolidation mode yesterday since traders are waiting for more clues from the market. Swiss PPI is up for release today and a 0.2% uptick in producer prices is expected, weaker compared to the previous 0.4% gain.

JPY

The yen was unable to make much headway against its higher-yielding peers when the risk-off flows weren't so strong yesterday. There have been no major reports out of Japan then and none are due today, keeping risk sentiment in play.

Commodity Currencies (AUD, NZD, CAD)

The comdolls held steady ahead of China's GDP release today then resumed their drop upon seeing slightly weaker than expected data. The actual reading came in at 6.8% versus the projected 6.9% rise while industrial production fell from 6.2% to 5.9%. Fixed asset investment and retail sales also weakened. In the next Asian trading session, New Zealand will have its GDT auction and any changes in dairy prices could lead to strong Kiwi moves. NZ quarterly CPI is also due and a 0.2% decline in price levels is expected.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jan 20, 2016)

USD

The US dollar was off to a weak start when risk-taking took place but soon regained the top spot when the market mood turned sour. There have been no major reports out of the US then, as the IMF's decision to lower global growth forecasts was one of the biggest reasons for the return in risk aversion. For today, US CPI and building permits data are up for release.

EUR

The euro managed to stay somewhat resilient in recent trading sessions, even taking advantage of the weakness in commodity currencies. Data from the region was mostly stronger than expected, as the current account balance beat expectations while the euro zone final CPI reading was unchanged. The German ZEW economic sentiment index fell from 18.1 to 10.2, higher than the estimated 8.2 figure. Only the German PPI is due from the euro zone today.

GBP

The pound was in for a carnage when BOE Governor Carney clarified that they're not ready to hike interest rates anytime soon. He explained that the slowdown in China is likely to weigh on global growth and inflation, adding that they have no timetable for tightening yet. UK inflation reports actually beat expectations, with the headline figure rising from 0.1% to 0.2% and the core figure climbing from 1.2% to 1.4%. UK jobs data is due today and a 4.1K increase in claimants is eyed while the average earnings index could slide from 2.4% to 2.1%.

CHF

The franc held its ground even as Swiss PPI came in weaker than expected with a 0.4% decline versus the projected 0.2% increase. The ZEW economic expectations index is due today and an improvement from the previous 16.6 figure might be positive for the franc.

JPY

The yen took advantage of the run in risk aversion at the start of the US trading session, as BOE Governor Carney's speech and the IMF downgrades hit the airwaves. There were no reports out of Japan yesterday and none are due today, which suggests that risk sentiment could continue to drive price action.

Commodity Currencies (AUD, NZD, CAD)

Data from China came in slightly weaker than expected but comdolls managed to stay afloat during the earlier trading sessions, only to give up ground when US traders returned to their desks. The IMF's downgrades on this year's and next year's growth forecasts weighed heavily on the commodity currencies since the agency highlighted the potential repercussions on exports. Also, New Zealand's dairy auction yielded a 1.4% drop in prices while their quarterly CPI showed a larger than expected 0.5% drop. In Australia, Westpac consumer sentiment fell by 3.5%. The BOC statement is due next and a 0.25% rate cut is eyed.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jan 21, 2016)

USD

The US dollar had a pretty volatile day, as it benefitted from risk aversion in the earlier trading sessions but gave up most of its gains later on. Data from the US was mostly weaker than expected, with both headline and core CPI missing forecasts. For today, only the natural gas storage and crude oil inventories numbers are due, although these might have a stronger impact on comdolls.

EUR

The euro had a mixed performance as it gave up ground to the yen and dollar but advanced against the commodity currencies. German PPI was weaker than expected with a 0.5% decline versus the projected 0.3% drop. The ECB statement is scheduled today and no easing announcements are expected, although traders are likely to pay close attention to any changes in rhetoric.

GBP

The pound was off to a weak start but soon recovered when the UK jobs figures came in mostly stronger than expected. Analysts expected claimants to rise by 4.1K but saw an increase of 4.3K in hiring instead. The jobless rate edged down from 5.2% to 5.1% but the average earnings index reflected a lack of wage growth as it fell from 2.4% to 2.0%. There are no major reports due from the UK today.

CHF

The franc gave up ground when the ZEW economic sentiment index fell from 16.6 to -3.0, indicating pessimism. There are no reports due from the Swiss economy today, which suggests that the franc could take its cue from the ECB announcement and euro price action.

JPY

The Japanese yen rallied in the earlier trading sessions when the risk-off environment was still in play. Talks of further BOJ easing also lifted the safe-haven currency but it had to return its winnings when sentiment improved later on. The Japanese all industries activity index is due today and a 0.7% decline is expected.

Commodity Currencies (AUD, NZD, CAD)

The comdolls made a strong recovery recently, especially after the BOC decided to keep rates unchanged at 0.50%. According to the official statement, risks to inflation remain balanced and the central bank is counting on the government's fiscal stimulus to help keep the economy afloat even without an additional rate cut. In Australia, inflation expectations fell from 4.0% to 3.6%. Crude oil inventories and natural gas storage numbers are due next.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jan 22, 2016)

USD

The US dollar was forced to return its wins before the end of the trading session when risk appetite picked up. Data from the US was mixed, as the Philly Fed index improved from -5.9 to -3.5 while initial jobless claims showed a larger than expected rise of 293K versus the projected 279K figure. Only the US flash manufacturing PMI and existing home sales are up for release today and both reports are slated to show improvements.

EUR

The euro suffered a sharp selloff during the press conference after the ECB statement, as Governor Draghi emphasized that they're willing to act if necessary. He admitted that the economy condition has worsened since December and that they don't have a shortage of monetary policy easing measures to use in March. Still, the shared currency regained ground when risk-on flows emerged at the end of the day. Euro zone PMI readings and another testimony by Draghi are lined up today.

GBP

The pound also gave up ground then quickly reversed its drop, as the currency took its cue from market sentiment. There have been no major reports out of the UK yesterday while today has the retail sales and public sector net borrowing report on tap. A 0.1% decline in consumer spending is eyed while the public deficit might narrow to 10.1 billion GBP from 13.6 billion GBP.

CHF

The franc initially gave up ground to the dollar but recouped its losses later on, even though there were no major releases from the Swiss economy. There are still no reports due from Switzerland today, although the euro zone PMIs might serve as catalysts for franc price action.

JPY

The yen was unable to hold on to its recent wins when risk appetite returned to the markets. Japan's all industries activity index showed a 1.0% decline, worse than the projected 0.7% drop, and their flash manufacturing PMI is due today. An improvement from 52.6 to 52.8 is eyed.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to rake in a lot of gains when risk-on flows emerged and oil prices rebounded. Crude oil inventories rose by 4 million barrels versus the projected 3.3 million gain, but WTI crude oil managed to bounce to the $30/barrel level. Canada's CPI and retail sales reports are up for release today, with a 0.4% drop in the headline CPI expected.

By Kate Curtis from Trader's Way

 

[TradersWay]

Forex Major Currencies Outlook (Jan 25, 2016)

USD

The US dollar gave up more of its recent gains on Friday, although it regained ground to the euro, yen, and franc. Data from the US economy was stronger than expected, as the flash manufacturing PMI rose from 51.2 to 52.7 versus the projected 51.5 figure. Existing home sales also rose from 4.76M to 5.46M. For today, there are no reports out of the US economy so risk sentiment might push dollar pairs around.


EUR

The euro resumed its slide against its peers, particularly the commodity currencies, when risk appetite kicked in. Data from the euro zone was mostly weaker than expected, with the German and French flash manufacturing PMI coming in weaker than expected. ECB Governor Draghi is set to give a testimony today and he might reiterate their easing bias while the German Ifo business climate index is slated to tick down from 108.7 to 108.5.


GBP

The pound was on strong footing last Friday that not even the downbeat retail sales report from the UK was enough to stop its rallies. Headline consumer spending fell by 1.0% but the public sector deficit narrowed to 6.9 billion GBP, giving the pound an additional boost. There are no major reports due from the UK today.


CHF


The franc followed the euro's footsteps and gave up ground to most of its rivals when risk appetite picked up. There were no reports out of the Swiss economy then and none are due today, leaving risk sentiment in play.


JPY

The yen gave up most of its gains for the week on Friday, with traders positioning ahead of potential BOJ easing this week. Japan's flash manufacturing PMI fell from 52.6 to 52.4 instead of improving to the estimated 52.8 figure but the trade surplus widened from 0.04T JPY to 0.06T JPY.


Commodity Currencies (AUD, NZD, CAD)

The comdolls took advantage of the pickup in commodity prices and risk appetite last Friday, advancing against their forex counterparts throughout the day. Data from Canada was mixed, with retail sales beating expectations and CPI falling short. In Australia, the NAB business confidence index fell from 5 to 3, indicating lower optimism.



By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jan 26, 2016)

USD

The US dollar regained ground in recent sessions when risk-off flows dominated price action. There have been no reports out of the US yesterday but the slump in oil prices was enough to send traders scurrying back to the safe-havens. The US flash services PMI, CB consumer confidence index, and Richmond manufacturing index are all due today.

EUR

The euro resumed its rallies, taking advantage of some of the risk-off flows even with downbeat data. Germany's Ifo business climate index fell from 108.6 to 107.3, worse than the estimated drop to 108.5. There are no major reports lined up from the euro zone today.

GBP

The pound retreated from its climb when the UK CBI industrial order expectations came in weaker than expected. The reading fell from -7 to -15, worse than the projected drop to -10. BOE Governor Carney is set to testify today and another round of cautious comments could weigh on the pound.

CHF

The franc was also able to profit from some of the risk-off flows in recent trading sessions, although that could change on today's release of the Swiss trade balance. Analysts are expecting to see a wider surplus of 3.33 billion CHF compared to the previous 3.14 billion CHF figure, but underlying import and export components might be more crucial in terms of determining the franc's reaction.

JPY

The yen gave up some ground on speculations of further BOJ easing later this week but was able to recoup its losses when risk aversion returned. There have been no major reports out of Japan, leaving traders to react to market sentiment or set their positions ahead of the BOJ statement.

Commodity Currencies (AUD, NZD, CAD)

The comdolls returned their recent wins when commodity prices tumbled, taking WTI crude oil below $30/barrel again. In Australia, the NAB business confidence index fell from 5 to 3 to indicate weaker optimism. In New Zealand, credit card spending picked up by 7.4%. No other reports are due from the comdoll economies today, keeping risk sentiment in play.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jan 27, 2016)

USD

The US dollar gave up ground when risk appetite picked up during the latter trading sessions once more, as oil prices made a strong rebound. Data from the US economy came in mixed, with the CB consumer confidence improving and beating expectations. However, the flash services PMI and Richmond manufacturing index showed declines. For today, the FOMC statement will be made and no monetary policy changes are expected. Still, traders could pay attention to any change in rhetoric and clues for a March hike.

EUR

The euro was barely able to take advantage of yen and dollar weakness, as the prospect of further ECB easing weighed on the shared currency. The German GfK consumer climate index is up for release today and a drop from 9.4 to 9.4 is eyed.

GBP

The pound suffered a sharp selloff when BOE Governor Carney reiterated his downbeat bias, citing that the central bank isn't ready to hike anytime soon and that negative rates might even be a possibility. Only the Nationwide HPI and BBA mortgage approvals figures are up for release today.

CHF

The franc experienced a sudden drop in recent trading, partly spurred by the weaker than expected Swiss trade balance. Traders speculated that the SNB might be slowly intervening in the forex markets to prepare for any additional ECB easing in March. The Swiss UBS consumption indicator is up for release today.

JPY

The yen was also in a weak spot when risk appetite returned to the financial markets towards the end of the European session. There have been no reports out of Japan recently and none are due today, leaving traders to price in their expectations for the BOJ statement.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to find support from the rebound in oil prices, even though data simply came in line with expectations. Australia's quarterly CPI landed at 0.4%, down from the previous 0.5% figure but higher than the projected 0.3% reading. Crude oil inventories data is due today, ahead of the FOMC and RBNZ interest rate statement.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jan 28, 2016)

USD

The US dollar had a volatile time during the FOMC statement, as the currency initially rallied but instantly gave back its gains. According to the Fed, they are monitoring the global financial and economic developments closely, removing the reference on balanced risks to their outlook. FOMC officials also reiterated that they would continue to tighten at a gradual pace. US durable goods orders and initial jobless claims are due today.

EUR

The euro was able to stay afloat in recent trading sessions, as the German GfK consumer climate index came in slightly better than expected. The reading held steady at 9.4 instead of dropping to 9.3. For today, German preliminary CPI and the Spanish unemployment rate data are due, with the former expected to show a 1% drop and the latter likely to print a drop from 21.2% to 21.1%.

GBP

The pound had a mixed performance as it took advantage of dollar weakness but caved against its other forex rivals. Data from the UK came in weaker than expected, as the Nationwide HPI came in at 0.3% versus 0.6% while BBA mortgage approvals fell to 44K. The UK preliminary GDP reading is due today and a 0.5% growth figure is eyed.

CHF

The franc has been depreciating against its peers, as the SNB is rumored to be intervening in the forex market ahead of potential ECB easing in March. Data from Switzerland showed an improvement, as the UBS consumption indicator rose from a downgraded 1.55 figure to 1.62. There are no reports due from the Swiss economy today.

JPY

The yen weakened against most of its counterparts ahead of Friday's BOJ statement, as the retail sales report missed expectations. Consumer spending fell by 1.1% instead of showing the projected 0.1% uptick. Tokyo core CPI, national core CPI, and household spending data are due next.

Commodity Currencies (AUD, NZD, CAD)

Oil and the Loonie managed to stay afloat despite the surge in US crude oil inventories, as other members of the OPEC seemed willing to attend an emergency meeting. The RBNZ kept rates unchanged at 2.50% as expected but kept the door open for further easing. In Australia, import prices slid 0.3% versus the projected 0.8% drop.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jan 29, 2016)

USD

The US dollar gave up more ground to its peers when US data came in mostly weaker than expected. Headline durable goods orders fell 4.4% while core durable goods orders dropped 1.2%. Pending home sales rose 0.1% only instead of showing the projected 1.0% gain. Advanced GDP data is due today and a 0.8% growth figure is eyed, although weaker than expected data could mean more losses for the dollar.

EUR

The euro was able to take advantage of dollar and yen weakness yesterday, as euro zone data came in slightly better than expected. The German preliminary CPI fell 0.8% as expected while the Spanish unemployment rate improved from 21.2% to 20.9%. Euro zone CPI estimates are due today, along with flash GDP readings from Spain and France.

GBP

The pound also gained ground when the UK preliminary GDP reading came in line with expectations of 0.5% growth. CBI realized sales data was weaker than expected, as the index fell from 19 to 16, worse than the estimated fall to 18. There are no major reports due from the UK economy today.

CHF

The franc erased some of its previous losses when risk appetite improved, even though there were no major reports out of the Swiss economy. There are still no reports due from Switzerland today but the euro zone's CPI estimates could revive SNB intervention speculations.

JPY

The yen lost ground on account of risk appetite and weak Japanese data. Household spending slumped by 4.4% year-over-year in December while the Tokyo core CPI printed a 0.1% decline. The national core CPI came in line with expectations of a 0.1% uptick while the unemployment rate held steady at 3.3%. Preliminary industrial production was also weaker than expected with a 1.4% slump. The BOJ decision is scheduled today, with some analysts expecting additional stimulus.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to squeeze out more gains on rumors of an OPEC emergency meeting for production cuts. Russia's oil minister said that Saudi had a proposal for countries to cut production by 5% but an OPEC official dismissed these rumors. In Australia, PPI data came in weaker than expected, hinting of weaker price pressures down the line. Canadian GDP and underlying inflation figures are up for release next.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Feb 01, 2016)

USD

The US dollar had a mixed performance as it advanced to the yen, euro, and pound but gave up ground to the commodity currencies. The US advanced GDP reading was slightly weaker than expected at 0.7% versus the projected 0.8% growth figure and the previous 2.0% expansion. However, the Chicago PMI came in stronger than expected and indicated a return to industry expansion. US personal income and spending data, along with the core PCE price index, are up for release today. The ISM manufacturing PMI is also lined up and a rise from 48.2 to 48.6 is expected.

EUR

The euro returned some of its recent forex wins, despite mixed data from the euro zone. German retail sales and Spanish flash CPI came in weaker than expected but the region's core CPI estimate improved to 1.0%. Final manufacturing PMI readings from its largest economies are due today, followed by a testimony from ECB head Draghi.

GBP

The pound suffered a sharp selloff before the markets closed on Friday, as traders probably priced in expectations of more dovish remarks in this week's BOE events. The Inflation Report, BOE statement, and MPC minutes are due on Thursday. UK manufacturing PMI and net lending to individuals figures are due today, along with mortgage approvals data.

CHF

The franc was also in a weak spot towards the end of last week's trading sessions, as traders lightened up on their positions. Swiss data was actually better than expected, as the KOF economic barometer rose from 96.8 to 100.3. The Swiss manufacturing PMI is due today and a drop from 52.1 to 51.0 is eyed.

JPY

The yen lost a lot of ground on Friday when the BOJ decided to implement negative deposit rates. Earlier today, Japan's manufacturing PMI reading was downgraded from 52.4 to 52.3 for January.

Commodity Currencies (AUD, NZD, CAD)

The comdolls took advantage of the yen selloff on Friday while also gaining ground on rising oil prices. Rumors of oil deals between Russia and OPEC nations propped prices up but these were dismissed by some Saudi officials. Earlier today, the Chinese official manufacturing PMI indicated a drop from 49.7 to 49.4 while the Caixin version showed an improvement from 48.2 to 48.4.

By Kate Curtis from Trader's Way