Daily Market Outlook by Kate Curtis from Trader's Way

[katetrades]

Forex Major Currencies Outlook (Mar 1, 2016)

USD

The US dollar wasn't able to establish a clear direction in recent sessions, as it simply reacted to other currencies' price action. Data from the US economy came in mostly weaker than expected, as the Chicago PMI fell from 55.6 to 47.6 while the pending home sales report printed a sharp 2.5% drop. For today, the US ISM manufacturing PMI is due and a rise from 48.2 to 48.5 is eyed.

EUR

The euro suffered a sharp tumble in recent sessions when the euro zone flash CPI readings missed expectations. The headline figure showed a 0.2% drop instead of the estimated flat reading while the core figure fell from 1.0% to 0.7%. Final PMI readings from the top economies are due today, along with the German unemployment change and euro zone unemployment rate.

GBP

The pound managed a quick bounce in recent trading, as traders likely booked profits off their previous short positions when UK medium-tier reports came in line with expectations. UK manufacturing PMI is due today and a drop from 52.9 to 52.3 is eyed.

CHF

The franc advanced against its forex counterparts when the Swiss KOF economic barometer beat expectations. The reading rose from an upgraded 100.4 figure to 102.4 instead of dipping to the projected 99.1 reading. Swiss retail sales data is due today and a 1.2% decline is eyed, a slight improvement from the previous 1.6% drop.

JPY

The yen continued to gain ground against its forex rivals as risk aversion was in play during the Asian session. Data from Japan was mixed, with retail sales down 0.1% and preliminary industrial production up by 3.7%. Household spending slumped 3.1% while the unemployment rate dipped from 3.3% to 3.2%.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were mostly stuck in consolidation ahead of this week's top-tier data. Reports from China fell short, as the official and Caixin PMI readings indicated a slower pace of growth in the services sector and a sharper contraction in the manufacturing industry. The RBA statement is up next and no rate changes are expected. As for New Zealand, the GDT auction could show if another fall in dairy prices was recorded.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Mar 2, 2016)

USD

The US dollar gave up some of its wins when risk appetite improved in the market. Data from the US economy was actually stronger than expected, as the ISM manufacturing PMI rose from 48.2 to 49.5, outpacing the consensus at 48.5. The ADP non-farm employment change report is due today and a 185K increase in hiring is expected, slower than the previous 205K gain.

EUR

The euro advanced against the dollar and yen but was no match to comdoll strength. Data from the region was mostly in line with expectations, with the unemployment rate improving from 10.4% to 10.3%. Only the Spanish unemployment change report is due today and a 0.2% increase in joblessness is expected.

GBP

The pound bounced back against the lower-yielding currencies but gave up ground to commodity currencies as risk appetite returned to the markets. Data from the UK was weaker than expected, as the manufacturing PMI fell from 52.9 to 50.8, worse than the projected drop to 52.3. The construction PMI is due today and an improvement from 55.0 to 55.5 is eyed.

CHF

The franc returned some of its recent gains even when data from Switzerland came in stronger than expected. Retail sales ticked up 0.2% versus the projected 1.2% drop while the manufacturing PMI rose from 50.0 to 51.6 instead of dropping to the estimated 49.6 figure. Swiss GDP data is due today and a 0.2% expansion is expected.

JPY

The yen was in a very weak spot when risk appetite returned yesterday. There were no major reports out of Japan yesterday and there are still no reports due today, leaving market sentiment in play.

Commodity Currencies (AUD, NZD, CAD)

The comdolls scored big wins against their forex counterparts when data came in strong and risk appetite returned. Canada's GDP showed a 0.2% expansion for December, higher than the projected 0.1% uptick, and New Zealand's GDT auction showed a 1.2% rebound in prices. Earlier today, Australia reported a 0.6% GDP reading for Q4 2015 while the previous figure was upgraded from 0.9% to 1.1%. Crude oil inventories data are due today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Mar 3, 2016)

USD

The US dollar weakened against most of its peers even though data from the US economy came in strong. Risk appetite came into play, leading traders out of the safe-haven dollar despite positive expectations for Friday's NFP. The ADP report showed a 214K gain in hiring versus the projected 185K increase but the previous reading was downgraded. Initial jobless claims and the ISM non-manufacturing PMI are lined up today.

EUR

The euro managed to advance against the lower-yielding currencies but was still in a weak spot against the comdolls. Data from the euro zone was mostly weaker than expected, as Spain reported a higher increase in unemployment while the region's PPI showed a sharper than expected drop. Final services PMI readings from its top economies and euro zone retail sales data are due today.

GBP

The pound was able to score some gains even though the UK printed another downbeat PMI reading. The construction PMI fell from 55.0 to 54.2 in February versus the projected gain to 55.5. For today, the services PMI is due and a drop from 55.6 to 55.1 is eyed and a weak reading might spur losses for the British currency.

CHF

The franc was able to rake in a few gains when the Swiss GDP beat expectations. The economy grew 0.4% in Q4 2015, higher than the projected 0.2% figure and the previous 0.1% contraction. There are no reports up for release from Switzerland today, keeping risk sentiment in play.

JPY

The Japanese yen chalked up another losing day when risk appetite remained in the financial markets. There were no reports out of Japan yesterday and there are no catalysts lined up today, which suggests that another risk-on day might spur more losses for the yen.

Commodity Currencies (AUD, NZD, CAD)

The Aussie carried on with its climb following a strong GDP release. The report showed that the Australian economy grew 0.6% in Q4 2015 versus expectations of a 0.5% expansion. Crude oil inventories showed another strong buildup in stockpiles, temporarily weighing on prices, but the slowdown in production led to a quick boost. Australia's trade balance beat expectations with a smaller than expected 2.94 billion AUD deficit and a 1% gain exports.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Mar 4, 2016)

USD

The US dollar gave up more ground against its peers when data came in weaker than expected. Initial jobless claims stood at 278K versus the expected 271K figure while both non-farm productivity and unit labor costs saw downgrades. The ISM non-manufacturing PMI dipped from 53.5 to 53.4, higher than the projected 53.2 reading, but the employment component landed in contraction. The NFP report is due today and a 195K increase in hiring is eyed.

EUR

The euro took advantage of dollar weakness and was able to score some wins against some of its higher-yielding peers. Data from the euro zone was mostly in line with expectations, with the retail sales report even printing a stronger than expected 0.4% uptick. Only the retail PMI reading is due from the euro zone today.

GBP

The pound refused to back down even with downbeat services PMI data, as traders are probably easing up on their Brexit fears. The report showed a drop from 55.6 to 52.7, worse than the estimated fall to 55.1 to show a slowdown in industry growth. There are no reports due from the UK today.

CHF

The franc advanced to the dollar in recent trading sessions, even though there were no major reports out of Switzerland. There are still no reports lined up for today so the franc could take its cue from market sentiment or euro price action.

JPY

The Japanese yen was still in a weak spot but its drop was slightly slower compared to previous days. Data from Japan came in better than expected today, as average cash earnings rose 0.4% versus the projected 0.2% uptick. Risk sentiment could push yen pairs around for the rest of the day ahead of the NFP release.

Commodity Currencies (AUD, NZD, CAD)

The comdolls carried on with their rallies, led mostly by the Aussie on the heels of upbeat trade balance data. The report showed a smaller deficit, thanks to a 1% gain in exports. For today, however, the retail sales release churned out a weaker than expected gain of 0.3% versus the estimated 0.4% rise. Canada's Ivey PMI is due later today and a drop from 66.0 to 58.2 is eyed.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Mar 7, 2016)

USD

The US dollar gave up ground despite stronger than expected NFP data. The economy added 242K jobs in February versus the projected 195K increase while the previous reading was upgraded from 151K to 172. However, average hourly earnings fell 0.1% instead of posting the projected 0.2% uptick. There are no major reports due from the US economy today but a couple of Fed officials (Brainard and Fischer) are set to give speeches.

EUR

The euro took advantage of dollar and yen weakness, even though there were no major reports out of the euro zone. The retail PMI showed a small gain from 48.9 to 50.1, reflecting a return to industry expansion. German factory orders and euro zone Sentix investor confidence data are up for release today and another set of strong figures could spur euro rallies.

GBP

The pound advanced against the dollar and yen but was no match to comdoll strength on Friday. There were no major reports released from the UK then and there are no reports due today, although MPC member Haldane has a testimony lined up.

CHF

The franc had a volatile trading day as it struggled to hold on to its gains against the dollar. There were no reports out of Switzerland then while today has the Swiss foreign currency reserves data on tap, possibly indicating whether or not the SNB has been intervening in the markets.

JPY

The yen continued to lose ground as risk appetite improved in the markets. Average cash earnings in Japan showed a stronger than expected 0.4% gain versus the projected 0.2% uptick. Today has a speech by BOJ Governor Kuroda lined up.

Commodity Currencies (AUD, NZD, CAD)

The Canadian dollar posted strong gains at the end of the week, thanks to climbing crude oil prices on falling US rig counts. The Australian dollar was in close second as it found strong support from mostly upbeat reports released earlier in the week. Earlier today, the ANZ job advertisements report showed a 1.2% decline in openings, hinting at weaker prospects down the line.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Mar 08, 2016)

USD

The US dollar had another losing day, as there were no major reports to give it any support yesterday. FOMC officials Fischer and Brainard highlighted the pickup in inflation seen recently, citing that the outlook seems positive. However, the labor market conditions showed a drop from -0.8 to -2.4 to indicate weaker prospects, possibly due to falling wages. Only the NFIB small business index is due from the US today.

EUR

The euro managed a quick recovery in recent trading sessions, even though data from the region was weak. The Sentix investor confidence index fell from 6.0 to 5.5 instead of rising to the projected 8.8 figure. German industrial production data is due today and a 0.6% rebound is eyed.

GBP

The pound continued to advance against most of its forex rivals, as Brexit fears eased. There were no major reports out of the UK yesterday and none are due today, although BOE Governor Carney's speech could bring volatility to pound pairs.

CHF

The franc took advantage of dollar weakness but was no match to euro strength yesterday. Swiss foreign currency reserves fell from 575B CHF to 571B CHF, indicating no evidence of currency intervention. The Swiss jobless rate is due today and a rise from 3.4% to 3.5% is eyed.

JPY

The yen regained some ground against its forex counterparts when the Japanese GDP reading was upgraded to show a smaller 0.3% contraction from the initially reported 0.4% drop in growth. Consumer confidence data and the Economy Watchers sentiment index are up for release next.

Commodity Currencies (AUD, NZD, CAD)

The Loonie continued to rally on the heels of rising crude oil prices, as the EIA projected a decline in production for April. However, the Kiwi and Aussie had to retreat earlier today when the Chinese trade balance missed expectations. The report showed a smaller surplus of 210B USD versus the projected 339B USD figure.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Mar 09, 2016)

USD

The US dollar regained ground in yesterday's trading session when risk aversion returned. Data from the US economy was weaker than expected, as the NFIB small business index fell from 93.9 to 92.9 to indicate weakening conditions. Wholesale inventories and crude oil inventories data are due today.

EUR

The euro was in a weak spot in recent trading sessions, as traders are probably pricing in additional easing measures from the ECB. Data from the euro zone was mostly in line with expectations, with German industrial production even coming in better than consensus at its 3.3% gain. There are no major reports due from the euro zone today.

GBP

The pound gave up ground when a UK newspaper confirmed that the Queen is backing a Brexit. There were no major reports out of the UK yesterday, although BOE Governor Carney's speech did lead some analysts to push back rate hike expectations later into 2017. UK manufacturing production data is due today and a 0.2% rebound is eyed.

CHF

The franc was no match to dollar strength even though data from Switzerland was actually better than expected. The Swiss CPI showed a 0.2% gain in price levels versus the projected 0.1% drop. There are no reports due from the Swiss economy today.

JPY

The yen regained ground when traders pared their riskier holdings, even though data from Japan was weaker than expected. The consumer confidence index fell from 42.5 to 40.1 while the Economy Watchers index fell from 46.6 to 44.6. Preliminary machine tool orders data is due today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls retreated upon seeing downbeat trade balance data from China, as this was caused by double-digit declines in both imports and exports. Rising oil stockpiles as reported by the API also weighed on crude oil and the Loonie. The BOC and RBNZ are set to give their monetary policy statements today, with the former expected to give a neutral statement and the latter likely to ease or sound dovish.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Mar 10, 2016)

USD

The US dollar got back on its feet in recent trading sessions, advancing to the European currencies and Japanese yen. It gave up some ground to the Aussie and Loonie but also rallied against the Kiwi after the RBNZ statement. There were no reports out of the US economy yesterday, leaving it to act mostly as a counter currency. For today, initial jobless claims and natural gas storage data are lined up.

EUR

The euro resumed its slump against most of its counterparts as there were no reports from the euro zone to prop it up. Traders are probably positioning ahead of today's ECB statement as well, with Draghi expected to announce a large expansion to their current quantitative easing program. Another deposit rate cut deeper into negative territory is also expected.

GBP

The pound struggled to hold on to its recent gains as UK data came in mixed. Manufacturing production showed a stronger than expected 0.7% gain versus the projected 0.2% uptick while industrial production showed a weaker than expected 0.3% gain. There are no reports lined up from the UK economy today.

CHF

The franc was stuck in consolidation as traders are also awaiting the ECB statement. Although SNB head Jordan admitted that deposit rates can only go so low, market watchers are still wary of currency intervention in case the franc appreciates too much.

JPY

The yen regained ground against the higher-yielding currencies but weakened to the dollar. Japan's preliminary machine tool orders showed a sharper 22.6% decline compared to the previous 17.2% drop, reflecting weaker business conditions. There are no reports lined up from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The Loonie drew support from a relatively optimistic BOC statement and their decision to keep rates unchanged. Meanwhile, the RBNZ decided to cut interest rates by 0.25%, pushing the Kiwi much lower against its peers. The Aussie was able to get a boost from upbeat Chinese CPI, which jumped from 1.8% to 2.3% instead of holding steady as expected.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Mar 11, 2016)

USD

The US dollar weakened yesterday as the ECB stimulus expansion brought risk appetite back to the financial markets. Only the initial jobless claims report was released from the US then and it showed a better than expected 259K reading versus the projected 272K figure. Data on US import prices is up for release today and a 0.7% decline is eyed.

EUR

The euro had a volatile time during the ECB statement, as the announcement of rate cuts and an expansion of the QE program from 60 billion EUR to 80 billion EUR in monthly asset purchases initially triggered a sharp drop. However, the shared currency quickly reversed these losses during the press conference that followed since Draghi mentioned that they have no plans to cut rates again in the near future. German final CPI and Italian industrial production data are due today.

GBP

The pound scored a few gains as it took advantage of the risk-on mood that followed the ECB statement. There were no major reports out of the UK then while today has the trade balance, construction output, and consumer inflation expectations data on tap.

CHF

The franc took its cue from the euro and initially sold off then rallied after the ECB statement. There were no reports out of the Swiss economy then and there aren't any lined up for today, which suggests that it could continue to trail the euro's price action.

JPY

The yen had a mixed performance as it consolidated to the dollar but gave up ground to higher-yielding currencies. Earlier today Japan reported a sharp drop in its BSI manufacturing index from 3.8 to -7.9 instead of improving to 4.2 to indicate industry contraction.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to take advantage of risk rallies but caved to the euro and franc. The Loonie was also under a bit of selling pressure as headlines indicated that Iran might not participate in the upcoming meeting among oil-producing nations. Canada's jobs report is up for release next and a 10.2K rebound in hiring is eyed.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Mar 14, 2016)

USD

The US dollar gave up ground on Friday when risk appetite returned to the financial markets. There were no major reports out of the US then but the medium-tier import prices data showed a smaller 0.3% decline compared to the projected 0.7% drop. There are no major reports lined up from the US economy today, leaving traders to price in expectations for the FOMC statement later in the week.

EUR

The euro regained ground to the dollar but weakened to the commodity currencies. Only the Italian industrial production report was released from the region then and it showed a stronger than expected 1.9% gain. Euro zone industrial production data is due today and a 1.7% rebound is eyed.

GBP

The pound was also able to score gains against the dollar, yen, and euro. Medium-tier reports from the UK came in mostly in line with expectations and there are no reports up for release for today.

CHF

The franc carried on with its climb against the dollar despite the lack of top-tier data from Switzerland then. There are still no reports due from the Swiss economy today so the franc might be driven by market sentiment.

JPY

The yen was in a weak spot as risk-taking took place. There were no reports out of the Japanese economy then and none are due today, which means that yen pairs could be sensitive to risk sentiment and positioning ahead of tomorrow's BOJ statement.

Commodity Currencies (AUD, NZD, CAD)

The comdolls raked in strong gains on Friday, driven mostly by the pickup in crude oil. As it turns out, US oil rig counts have fallen again, leading to speculations of lower production levels and upward pressure on prices. Canada printed a weaker than expected jobs report as it lost 2.3K jobs in February and saw the jobless rate rise to 7.3%. Over the weekend, data from China came in mixed as industrial production and retail sales fell short of forecasts while fixed asset investment turned out better than expected.

By Kate Curtis from Trader's Way