Daily Market Outlook by Kate Curtis from Trader's Way

[katetrades]

Forex Major Currencies Outlook (Feb 16, 2016)

USD

The Greenback was mostly a counter currency in recent trading sessions, as US traders were off on a President's Day holiday. Only the Empire State manufacturing index is up for release today and a rise from -19.4 to -10.5 is expected.

EUR

The euro suffered a sharp drop when ECB head Draghi reiterated the possibility of additional ECB easing in March. He said that policymakers would study the impact of falling commodity prices on domestic inflation and the risks from the global financial turmoil. ZEW economic sentiment figures are up for release from Germany and the rest of euro zone today.

GBP

The pound was also sold off sharply after BOE member McCafferty admitted that negative rates could be a policy option for the central bank. Recall that McCafferty had previously been voting for rate hikes so his dovish tone represents a significant shift. UK CPI numbers are due today, with the headline figure expected to rise from 0.2% to 0.3% and the core figure expected to dip from 1.4% to 1.3%.

CHF

The franc gave up some of its recent wins on talks of additional ECB easing, as traders are generally wary of SNB intervention in case that happens. There were no reports out of Switzerland yesterday and none are due today.

JPY

The yen was still in a weak spot as risk appetite resumed in the markets. Data from Japan was also mostly weaker than expected, with the GDP showing a 0.4% contraction for Q4 and the industrial production figure downgraded to show a sharper 1.4% decline. Tertiary industry activity fell 0.6% instead of posting the estimated 0.1% uptick.

Commodity Currencies (AUD, NZD, CAD)

The Loonie continued to advance on stronger hopes of an OPEC deal to cut production, as Russia is set to meet with Saudi Arabia, Venezuela, and Qatar today. New Zealand's retail sales report came in closely in line with expectations, as headline consumer spending rose 1.2% while core consumer spending climbed 1.4%. In Australia, the RBA minutes failed to push AUD pairs lower, as the accommodative stance is already priced in. Canada's manufacturing sales and New Zealand's dairy auction are lined up next.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Feb 17, 2016)

USD

The US dollar was off to a strong start when risk appetite waned in the earlier trading sessions. However, the currency returned some of its wins when data from the economy missed expectations. The Empire State manufacturing index improved from -19.4 to -16.6, short of the consensus at -10.5. US PPI, building permits, and industrial production numbers are due today but traders are likely to hold out for the FOMC minutes, which might contain a few more downbeat remarks.

EUR

The euro advanced against most of its peers when data came in stronger than expected. The German ZEW index fell from 10.2 to 1.0, higher than the projected 0.1 reading, while the euro zone ZEW index slid from 22.7 to 13.6 instead of dropping all the way down to 10.3. There are no major reports due from the region today.

GBP

The pound suffered a sharp drop when UK CPI readings came in mixed. While the headline figure improved from 0.2% to 0.3% as expected, the core CPI fell from 1.4% to 1.2%, worse than the projected fall to 1.3%. UK jobs data is due today and a 2.9K increase in claimants is eyed, enough to bring the jobless rate down from 5.1% to 5.0%. However, traders are likely to pay closer attention to the projected fall in the average earnings index from 2.0% to 1.9%.

CHF

The franc was mostly stuck in consolidation since there were no major reports due from the Swiss economy. Today has the ZEW economic expectations index on tap and an improvement from the previous -3.0 reading could mean gains for the franc.

JPY

The yen was able to score huge wins against its rivals but ended up giving back some when risk sentiment improved. Data from Japan came in weaker than expected again, with core machinery orders rising 4.2% y/y instead of the estimated 4.6% growth.

Commodity Currencies (AUD, NZD, CAD)

The comdolls lost ground when Russia and OPEC failed to secure a solid agreement to freeze production, as Saudi Arabia agreed to participate only if other oil-producing nations agree to do so. New Zealand reported another fall in dairy prices of 2.8%, marking its fourth consecutive decline. Quarterly PPI numbers are due from New Zealand next.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Feb 18, 2016)

USD

The US dollar had a volatile run during the release of the FOMC minutes but was mostly unchanged against its counterparts, except for the commodity currencies. Fed officials highlighted the increased downside risks to growth and inflation but data released earlier in the day printed strong results, particularly for the PPI and industrial production figures. The Philly Fed index and initial jobless claims data are up for release today.

EUR

The euro gave up some ground in recent trading sessions as there were no major reports to keep it supported. Only the euro zone current account balance and ECB meeting minutes are up for release today, with dovish remarks from policymakers likely to weigh on the shared currency.

GBP

The pound suffered a sharp selloff against its currency rivals even though the claimant count change came in better than expected. Joblessness fell by 14.8K versus the projected 2.9K decline while the previous reading enjoyed a positive revision. However, the jobless rate held steady at 5.1% while the average earnings index fell from 2.0% to 1.9% as expected.

CHF

The franc gave up more ground against its peers, as the Swiss ZEW economic expectations index slid from -3.0 to -5.9. The Swiss trade balance is due today and a wider surplus of 2.67 billion CHF compared to the earlier 2.54 billion CHF is expected. Also lined up are the Q3 and Q4 employment level data.

JPY

The Japanese yen lost ground to the commodity currencies when risk appetite improved. There were no reports out of Japan then but speculations of additional easing in their next policy statement continued to weigh on the Japanese currency.

Commodity Currencies (AUD, NZD, CAD)

The Canadian dollar continued to rally in hopes that a deal will be reached among oil producers soon. Iran has expressed support for the proposal to cap production but hasn't committed to participating. Earlier today, New Zealand printed a 1.2% decline in PPI input prices and a 0.8% drop in PPI output prices. Australia reported a 7.9K drop in hiring and an increase in the jobless rate from 5.8% to 6.0%.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Feb 19, 2016)

USD

The US dollar took advantage of the return in risk aversion in recent trading sessions, advancing against the commodity currencies. Data from the US economy was mostly stronger than expected, as the Philly Fed index improved from -3.5 to -2.8 while initial jobless claims landed at 262K to show stronger momentum in hiring growth. CPI reports are due today, with the headline figure expected to come in at -0.1% and the core figure projected to show a 0.2% gain.

EUR

The euro gave up ground to the dollar and yen but it was able to take advantage of comdoll weakness. The euro zone current account balance came in better than expected at a surplus of 25.5 billion EUR versus the projected 22.3 billion EUR surplus. Only the German PPI report is due today and a 0.3% decline is eyed.

GBP

The pound was also in a weak spot against the safe-havens but advanced against commodity currencies. There were no major reports out of the UK yesterday while today has the retail sales report due. A 0.8% rebound is expected but weaker than expected results might be possible since wage growth has been subdued.

CHF

The franc managed to advance against the euro but weakened to the dollar as risk appetite faded. Data from the Swiss economy was stronger than expected, with the trade surplus expanding from 2.59 billion CHF to 3.51 billion CHF. There are no reports due from Switzerland today.

JPY

The yen was the big winner in recent trading sessions, thanks to the return in risk aversion. There were no reports out of Japan yesterday while today has the all industries activity index on tap, with a 0.3% decline expected.

Commodity Currencies (AUD, NZD, CAD)

The comdolls chalked up losses to the yen and most of their currency counterparts when hopes of an oil production freeze deal fizzled. In addition, crude oil inventories showed another increase in stockpiles of 2.1 million barrels, reminding traders of the supply glut. Wholesale sales data from Canada came in strong with a 2.0% gain and retail sales reports are due today. The headline figure could show a 0.7% drop while the core figure could post a 0.5% decline. Canadian CPI figures are also lined up.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Feb 22, 2016)

USD

The US dollar drew some support from upbeat CPI readings but was hardly able to recover against the comdolls. The headline CPI showed a flat reading instead of falling by the projected 0.1% figure while core CPI rose 0.3% versus the projected 0.2% uptick. US flash manufacturing PMI is due today and a dip from 52.4 to 52.3 is eyed.

EUR

The euro gave up ground to most of its forex counterparts as data from the region came in weak. The German PPI revealed a 0.7% drop in producer prices while the region's consumer confidence index slipped from -6 to -9, worse than the projected fall to -7. Flash PMI readings from Germany and France are due today and signs of improvement could still keep the shared currency on its feet.

GBP

The pound staged a strong rally towards the end of the week when UK Prime Minister David Cameron announced that they drafted a deal with the EU. However, this is still up for referendum by June so the pound gapped lower against its counterparts on the increased uncertainty. UK retail sales beat expectations with a 2.3% gain but the previous reading suffered a sharp downgrade. Only the CBI industrial orders expectations data is due today.

CHF

The franc regained a bit of ground on Friday despite the lack of top-tier data from Switzerland. Today has the PPI report due and a 0.2% drop in producer price levels is eyed.

JPY

The yen regained ground on Friday as traders booked profits off the previous risk rallies. Earlier today, Japan printed a weaker than expected manufacturing PMI of 50.2, worse than the projected fall from 52.3 to 52.0. Risk flows and speculations of additional BOJ easing could continue to push yen pairs around today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls managed to hold their ground in recent sessions since there were no weak reports to weigh them down. Canada's readings came in mixed, with CPI figures printing stronger than expected results and retail sales missing expectations. New Zealand credit card spending rose 8.9%, following the previous 7.4% rise.


By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Feb 23, 2016)

USD

The US dollar gave up ground against the commodity currencies and the yen but advanced to the euro and pound. The US flash manufacturing PMI came in weaker than expected, falling from 52.4 to 51.0, worse than the projected dip to 52.3. US existing home sales and CB consumer confidence data are up for release today and another round of downbeat data could spur more dollar weakness.

EUR

The euro was also in a weak spot as Brexit fears influenced demand for the shared currency. PMI readings from the euro zone also came in mostly weaker than expected, with only the French flash manufacturing PMI beating the consensus. The German Ifo business climate index is up for release today and a drop from 107.3 to 107.0 is eyed.

GBP

The pound was the weakest currency of the bunch as Brexit concerns brought more uncertainty. As it turns out, Cameron's EU deal failed to draw support from his business advisory group and even the mayor of London himself. For today, the Inflation Report hearings are scheduled, although Brexit headlines might continue to influence pound price action.

CHF

The franc advanced to the euro but gave up ground to the dollar when Swiss data disappointed. The PPI showed a 0.4% fall in producer prices, worse than the projected 0.2% decline. SNB head Thomas Jordan is set to give a testimony today and jawboning might drive the franc lower.

JPY

The yen took advantage of the selloff among European currencies, as talks of an RRR cut in China also supported demand for the safe-haven Asian currency. Data was actually weaker than expected, as the flash manufacturing PMI slid from 52.3 to 50.2 versus the projected 52.0 figure.

Commodity Currencies (AUD, NZD, CAD)

The comdolls carried on with their strong rebound, particularly against European currencies. Data has been mixed, with New Zealand reporting an 8.9% jump in credit card spending and Australia showing a 0.2% drop in its CB leading index. There are no reports due from the comdoll economies today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Feb 24, 2016)

USD

The US dollar was able to recover against the higher-yielding currencies yesterday as risk-off flows were seen. Data from the US economy came in mixed, with the CB consumer confidence index falling from 97.8 to 92.2 versus the projected 97.4 figure and existing home sales rising to 5.47M, outpacing the consensus at 5.37M. US new home sales and crude oil inventories are up for release today.

EUR

The euro recovered against the comdolls but was still in a generally weak spot since data from the region missed expectations. Germany reported a drop in its Ifo business climate from 107.3 to 105.7, worse than the estimated fall to 107.0. There are no reports due from the euro zone today.

GBP

The pound was still weighed down by Brexit fears but managed to pop slightly higher against commodity currencies. The BOE Inflation Report hearings simply reiterated what had already been said in the BOE statement and MPC minutes, although Carney clarified that they aren't likely to lower rates below zero. Only the CBI realized sales index is due today.

CHF

The franc staged a strong rally after SNB head Thomas Jordan mentioned that it would be difficult for them to employ unconventional policy tools endlessly. Market watchers took this as a sign that the SNB isn't likely to lower rates much deeper into negative territory even though the ECB is mulling further easing. The Swiss UBS consumption indicator is due today.

JPY

The yen carried on with its climb, albeit at a slower pace than usual, as risk aversion weighed on the comdolls. There have been no major reports out of Japan, although the Brexit and crude oil concerns are working in the yen's favor.

Commodity Currencies (AUD, NZD, CAD)

The comdolls weakened across the board when Iran's oil minister pointed out that it would be unreasonable to expect them to cap production. Saudi's oil minister also mentioned that they have no plans of cutting output while the API report indicated a buildup of 7.1 million barrels. The US crude oil inventories report is due today and an increase of 2.1 million barrels is eyed. Earlier today, Australia's construction work done and wage price index both missed expectations.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Feb 25, 2016)

USD

The US dollar was in a weak spot due to a pickup in risk appetite and weaker than expected US data. The flash services PMI fell from 53.2 to 49.8, its lowest reading in 28 months, versus the projected rise to 53.4. New home sales sank from 544K to 494K, worse than the estimated drop to 522K. Durable goods orders data and initial jobless claims are due today. Headline durable goods orders might show a 3.0% rebound while core durable goods orders could print a 0.2% uptick.

EUR

The euro struggled to regain ground, although it did manage to post some gains against its counterparts. There were no major reports out of the euro zone but Brexit fears in the region are weighing on the shared currency. Final CPI readings are due today and no revisions are expected.

GBP

The pound was still a big loser despite the risk rallies, as money flowed out of the UK on Brexit concerns. Data from the UK was also weaker than expected, with the CBI realized sales index falling from 16 to 10. The UK second GDP estimate is due today and no changes are expected from the 0.5% estimate.

CHF

The franc carried on with its climb as the preferred safe-haven in the European region, especially with EUR and GBP weakening. Also, the increase in the Swiss UBS consumption indicator from 1.61 to 1.66 spurred demand for the franc. There are no reports due from Switzerland today.

JPY

The yen returned some of its recent wins when risk appetite returned to the markets. There were no reports out of Japan then and traders might also be booking profits ahead of the CPI releases on Friday.

Commodity Currencies (AUD, NZD, CAD)

The Loonie was a big beneficiary of the rebound in risk-taking spurred by crude oil rallies. The US oil inventories report showed a larger buildup of 3.1 million barrels versus the projected 2 million increase but this was still lower compared to the API figure of 7.1 million barrels. In New Zealand, visitor arrivals rebounded by 2.9%. Australia's private capital expenditure data is due next and a 3.1% decline is eyed.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Feb 26, 2016)

USD

The US dollar gave up some ground to its higher-yielding peers as risk appetite improved yesterday. Data from the US came in mostly stronger than expected, with the headline durable goods orders showing a 4.9% rebound from the previous 3.0% decline and the core durable goods orders figure showing a 1.8% increase versus the estimated 0.2% uptick. Initial jobless claims landed at 272K as expected. US preliminary GDP is due today and a downgrade from 0.7% to 0.4% is eyed. Personal income and spending, along with the core PCE price index, are also lined up.

EUR

The euro tried to hold steady against the dollar and managed to advance against the yen while losing ground to commodity currencies. The final headline CPI for the euro zone was downgraded from 0.4% to 0.3% while the core CPI was unchanged at 1.0%. Preliminary CPI readings from France and Germany are due today, along with French consumer spending data.

GBP

The pound was still the biggest loser of the pack, as downbeat UK business investment data weighed on the currency. Even though the GDP reading was unchanged at 0.5%, the preliminary business investment report showed a 2.1% slide versus the projected 0.6% gain. There are no reports due from the UK today but BOE Governor Carney has a testimony scheduled.

CHF

The franc managed to hold on to its gains, thanks to European traders seeking other safe-haven alternatives in the region. There were no reports out of the Swiss economy and SNB head Jordan's recent remarks suggesting a lower likelihood of more negative deposit rates is keeping the currency supported.

JPY

The yen returned some of its latest wins when risk sentiment improved and Japanese CPI readings were released. Tokyo showed a 0.1% drop in core price levels while the national level printed a flat reading. No other reports are due from Japan today, which suggests that sentiment could keep pushing yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The comdolls ignored the slump in Chinese equities in the earlier part of the day, focusing on the rebound in oil later on. Reports that OPEC and non-OPEC nations have another meeting in March kept hopes up that a deal to cap production will be made. New Zealand's trade balance showed a surplus of 8 million NZD versus expectations of a 250 million NZD deficit.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Feb 29, 2016)

USD

The US dollar had a strong run on Friday, thanks to an upbeat GDP release. The preliminary reading showed an upward revision from 0.7% to 1.0% instead of being downgraded to 0.4% as expected. Personal spending and income both ticked up by 0.5%. For today, the Chicago PMI and pending home sales reports are due.

EUR

The euro broke lower to the dollar but managed to advance against most of its comdoll peers when risk aversion stayed in play. Data from the euro zone was mostly weaker than expected, with German preliminary CPI missing expectations of a 0.6% gain and coming in at 0.4%. Both the French and Spanish preliminary CPI readings also fell short while the French consumer spending report came in line with estimates of a 0.6% increase. German retail sales and euro zone CPI estimates are due today.

GBP

The pound resumed its slide as IMF head Lagarde warned of the repercussions of a Brexit. There were no major reports out of the UK on Friday, leaving investors to price in potential financial and economic uncertainty. UK net lending to individuals and mortgage approvals data are due next.

CHF

The franc managed to advance against the euro but lost ground to the dollar on Friday. There were no major reports out of Switzerland then while today has the KOF economic barometer on tap. Analysts are expecting to see a dip from 100.3 to 99.1, which might spur franc weakness.

JPY

The yen took advantage of the risk-off flows last Friday, although its gains were still limited. Data from Japan came in mixed, with the Tokyo core CPI and BOJ core CPI missing expectations and the national core CPI coming in slightly stronger than expected. Earlier today, Japan printed a 0.1% drop in retail sales and a 3.7% jump in preliminary industrial production.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi and Aussie slumped against their peers when risk aversion kicked in but the Loonie managed to hold on to its wins in anticipation of a deal to cap oil production. New Zealand's ANZ business confidence index dropped from 23.0 to 7.1 while building consents fell 8.9%. In Australia, company operating profits fell 2.8% versus the projected 1.7% drop. The Canadian current account balance is due next.

By Kate Curtis from Trader's Way