Daily Market Outlook by Kate Curtis from Trader's Way

[katetrades]

Forex Major Currencies Outlook (Apr 21, 2016)

USD

The US dollar managed to take a break from its dive in yesterday's sessions, as risk aversion returned to the markets. Data from the US also came in stronger than expected, with existing home sales up from 5.07M to 5.33M. For today, the Philly Fed index and initial jobless claims are due. The index could fall from 12.4 to 8.1 while the jobs figure could show 265K claimants.

EUR

The euro gave up ground to most of its rivals when traders started pricing in dovish expectations for today's ECB statement. No actual changes are expected for now since the central bank just expanded their easing program in their earlier policy statement. Still, downbeat remarks and indications that they're willing to lower rates further could be bearish for the euro.

GBP

The pound was unable to sustain its climb when UK jobs data missed expectations. Claimants rose by 6.7K versus the projected 11.9K decline while the previous reading was revised to show a smaller drop in joblessness of 9.3K. The unemployment rate held steady at 5.1% as expected but the average earnings index fell from 2.1% to 1.8% instead of staying unchanged. UK retail sales data is due today and a 0.1% drop in consumer spending is eyed.

CHF

The franc gave up ground to the dollar and most of its rivals despite the improvement in Swizterland's ZEW economic sentiment index. The reading rose from 2.5 to 11.5 to indicate higher optimism, but traders appear to be lightening up on their franc holdings ahead of the ECB statement. Switzerland's trade balance is due today.

JPY

The yen was weaker against the dollar despite the lack of top-tier data from Japan. Risk appetite was present during the Asian trading session but was more subdued later on. There are no reports up for release from Japan today, keeping market sentiment in play.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were slightly weaker in recent sessions, although the Loonie was able to score a few more gains. US crude oil inventories rose by 2.1 million barrels, slightly lower than the estimate. Canada's wholesale sales report showed a 2.2% decline instead of the estimated 0.4% dip. Visitor arrivals in New Zealand rose by 4.1% while Australia's NAB business confidence index fell from 5 to 4 in Q1.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Apr 22, 2016)

USD

The US dollar was able to hold on to its gains and go for more when risk aversion extended its stay in the financial markets. Data from the US economy came in mixed, as the Philly Fed index fell from 12.4 to -1.6 instead of just dipping to 8.1 while initial jobless claims came in at 247K, lower than the projected 265K increase in joblessness. There are no major reports due from the US today so earnings data could play a role in dollar price action and market sentiment.

EUR

The euro had a volatile run even after the ECB decided to keep monetary policy unchanged as expected. Price spiked around during the ECB press conference when Draghi acknowledged a few signs of improvement but admitted that inflation might even turn negative. He emphasized that the central bank will employ all monetary tools if necessary. Euro zone PMI readings are up for release today and improvements are expected from the manufacturing and services sectors of France and Germany.

GBP

The pound was unable to hold on to its gains when the UK retail sales report came in weaker than expected. Consumer spending fell 1.3% instead of just 0.1% while the February figure was downgraded to show a larger decline of 0.5% from the initial 0.4% drop. Public sector borrowing fell from 6.3M GBP to 4.2M GBP, indicating some improvement in government debt. There are no reports due from the UK today.

CHF

The franc continued to lose ground against its peers when the Swiss trade balance printed a smaller than expected surplus of 2.16B CHF compared to the estimated 3.89B CHF surplus. In addition, the previous month's reading was downgraded. There are no major reports due from Switzerland today.

JPY

The yen was able to take advantage of the run in risk aversion yesterday, gaining ground against the dollar as well. Earlier today, the flash manufacturing PMI printed a weaker than expected result of 48.0 from the previous 49.1 reading. Analysts had expected a climb to 49.6. The tertiary industry activity figure is up for release and a 0.4% drop is eyed.

Commodity Currencies (AUD, NZD, CAD)

The comdolls returned some of their recent wins when crude oil prices retreated on the news that Libya is set to double its oil production upon the formation of a new government. Data from New Zealand showed improvements in credit card spending and job opportunities. Canadian CPI and retail sales figures are up for release today. Headline CPI could rise by 0.3% while core CPI could increase by 0.4%. Headline and core retail sales are expected to post 0.8% declines.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Apr 25, 2016)

USD

The US dollar was able to advance against most of its forex peers, except for the British pound. Data from the US was weaker than expected, as its flash manufacturing PMI fell from 51.5 to 50.8 instead of improving to the estimated 51.9 reading. For today, only the new home sales report is due and a rise from 512K to 521K is eyed.

EUR

The euro resumed its slide to the dollar and pound but was stronger against the Japanese yen. Flash PMI readings from the manufacturing and services sectors of France and Germany came in mixed while the region's overall readings met expectations. The German Ifo business climate index is due today and a rise from 106.7 to 107.1 is expected.

GBP

The pound managed to hold on to most of its gains to the dollar and advance to the euro, as anti-Brexit remarks appear to be increasing the odds that voters might decide to stay in the EU. There were no reports out of the UK then while the CBI industrial orders expectations report is due today.

CHF

The franc gave up further ground to the dollar but was in a weak spot against the Japanese yen. There were no reports out from Switzerland then and none are due today so the Swissy might simply act as a counter currency.

JPY

The yen gave up a lot of ground to its peers when traders started speculating about additional BOJ easing this week. There were no reports out of Japan on Friday but yen pairs scored hundreds of pips in gains with market watchers predicting that the recent quakes could mean more stimulus. There are no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a mixed performance as they retreated to the dollar but took advantage of yen weakness. Data from Canada came in stronger than expected, as CPI and retail sales figures beat expectations. Australian and New Zealand banks are closed for the holiday today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Apr 26, 2016)

USD

Dollar pairs were in consolidation due to the lack of top-tier data and positioning ahead of the FOMC statement. New home sales came in weaker than expected with a decline from 519K to 511K. US CB consumer confidence data is due today and a drop from 96.2 to 95.8 is eyed. Also lined up today is the flash services PMI and the Richmond manufacturing index, along with the durable goods orders figures.

EUR

The euro made a bit of a recovery in recent sessions despite weaker than expected data. The German Ifo business climate index fell from 106.7 to 106.6 instead of improving to the projected 107.1 figure. There are no reports due from the euro zone today.

GBP

The pound was able to hold on to its gains as voters appear to be digesting the anti-Brexit comments from top officials lately. Data from the UK was also better than expected, as the CBI industrial orders expectations index rose from -14 to -11 instead of sliding to the projected -17 figure. There are no reports due from the UK today but MPC member Cunliffe has a testimony lined up.

CHF

The franc chalked up some gains even though there were no reports out of Switzerland. There are still no reports due from the Swiss economy today, keeping the franc as a counter currency that's sensitive to country-specific events or market sentiment.

JPY

The yen regained ground on Monday after gapping lower over the weekend, as PM Abe shared his plan to create an additional budget for earthquake rebuilding efforts. This lessens the pressure on the BOJ to dole out stimulus in their announcement later this week, although the fact remains that the Japanese economy is very weak and the yen's appreciation is hurting inflation. There are no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls managed a late recovery as Australian and New Zealand banks reopened after the Monday holiday. There are no reports due from the comdoll economies today but BOC Governor Poloz has a couple of speeches scheduled.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Apr 27, 2016)

USD

The US dollar retreated to most of its forex peers on downbeat data released yesterday. Headline durable goods orders were up 0.8% versus the projected 1.9% gain while core durable goods orders fell 0.2% instead of showing the estimated 0.6% rise. The flash services PMI improved to 52.1 but fell short of expectations at 52.3 while the Richmond manufacturing index slid from 22 to 14. The FOMC is set to announce their monetary policy decision later today and no actual changes are expected but traders are waiting to find out if a June rate hike is still in the cards.

EUR

The euro had a mixed performance as it rallied then reversed to the dollar, advanced against the yen, and weakened to the pound. There were no major reports out of the euro zone then, which explains why the shared currency simply reacted to country-specific events and market sentiment. German import prices and the German GfK consumer climate index are due today.

GBP

The pound was still one of the strongest performers but it gave up a bit of ground upon seeing the latest ICM poll results, which indicated that 46% of those included in the survey are voting for a Brexit. The UK preliminary GDP reading is up for release today and a 0.4% growth figure is eyed, lower than the previous 0.6% expansion.

CHF

The franc took advantage of dollar weakness but was still mostly weaker against its other counterparts. There have been no major reports out of Switzerland yesterday while today has the UBS consumption indicator on tap. A reading higher than the previous 1.53 figure could give the Swiss currency a boost.

JPY

The yen continued to lag against its forex rivals as traders keep pricing in expectations for additional easing or dovish remarks from the BOJ statement this week. There were no reports out of Japan yesterday while today has the all industries activity index on tap. Analysts are expecting to see a 1.3% decline after the report previously printed a 2.0% gain.

Commodity Currencies (AUD, NZD, CAD)

The comdolls continued to take advantage of dollar and yen weakness but were no match to pound strength. Data from New Zealand was weaker than expected, as the trade surplus fell short of estimates. In Australia, the quarterly CPI is due and a 0.3% gain in price levels is eyed. Crude oil inventories data is lined up ahead of the RBNZ rate decision in the late US session.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Apr 29, 2016)

USD

The US dollar gave up more ground to its peers when the US advance GDP turned out to be a disappointment. The economy grew by only 0.5% in the first quarter versus the projected 0.7% expansion. This marks the weakest pace of quarterly growth in two years. Initial jobless claims was slightly better than expected. For today the core PCE price index, personal spending and income, and Chicago PMI are up for release.

EUR

The euro was able to take advantage of dollar weakness but it was no match to its other counterparts. Data from the euro zone came in mixed. The German preliminary CPI printed a 0.2% decline as expected while the Spanish flash CPI showed a sharper than expected drop of 1.1% versus the projected 0.7% dip. Meanwhile, the German unemployment change report showed a 16K drop in joblessness instead of the estimated 1K rise. Euro zone flash CPI estimates, French preliminary GDP and CPI, German retail sales, and the Spanish flash GDP are up for release today.

GBP

The pound advanced against most of its rivals except for the Japanese yen. There were no major reports out of the UK yesterday and only medium-tier reports are lined up today. These include the net lending to individuals and mortgage approvals figures.

CHF

The franc carried on with its climb to the dollar but lost ground to the yen. There were no reports out of Switzerland yesterday while today has the KOF economic barometer due. Analysts are expecting a climb from 102.5 to 102.9. Also scheduled today is a speech from SNB Chairman Thomas Jordan.

JPY

The yen was unstoppable in its rallies after the BOJ refrained from making any monetary policy changes. This turned out very disappointing for market participants who were counting on some form of easing, such as negative lending rates. Japanese banks are closed for the holiday today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls held their ground to the dollar but caved to yen strength. The RBNZ also kept interest rates on hold but gave a downbeat outlook and reiterated that further Kiwi declines might be appropriate. Australian PPI and private sector credit are up for release in today's Asian session while the Canadian monthly GDP is due later on. Chinese PMI readings are scheduled for release over the weekend.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (May 2, 2015)

USD

The US dollar chalked up a mixed performance on Friday, as it advanced to the comdolls but gave up ground to the euro, franc, and yen. Data from the US was also mixed, with the core PCE price index and employment cost index coming in line with expectations. The Chicago PMI and revised UoM consumer sentiment figure both fell short. Personal income rose 0.4% while personal spending rose by 0.1% only. The ISM manufacturing PMI is due today and a drop from 51.8 to 51.6 is eyed.

EUR

The euro managed to advance against most of its rivals despite downbeat data from the euro zone. The headline CPI estimate fell from 1.0% to 0.8% versus expectations at 0.9% while the core figure showed a 0.2% decline. However, the preliminary GDP beat expectations at 0.6%. Other medium-tier reports from the region's top economies came in stronger than expected, except for the German retail sales report which showed a 1.1% drop. Final manufacturing PMIs from its top economies are due today. ECB head Draghi has a speech lined up.

GBP

The pound gave up ground to its peers on mostly weaker than expected UK data. Net lending to individuals beat expectations while M4 money supply and mortgage approvals came up short. UK banks are closed for the May Day holiday today.

CHF

The franc lost further ground to the yen but managed to advance to the dollar. The KOF economic barometer fell from 102.8 to 102.7 versus expectations at 102.9. The Swiss manufacturing PMI is due today and a rise from 53.2 to 53.6 is eyed.

JPY

The yen continued to rally against its forex peers, chalking up another strong set of gains after the BOJ statement the previous day. There were no reports out of Japan on Friday as banks were closed on a holiday then while the final manufacturing PMI is due today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a mixed performance, as the Aussie lagged while the Kiwi advanced. Canada's monthly GDP reading showed a 0.1% contraction for February as expected. Over the weekend, the Chinese official manufacturing PMI showed a drop from 50.2 to 50.1 while the non-manufacturing PMI fell from 53.8 to 53.5. There are no major reports due from the comdoll economies today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (May 03, 2016)

USD

The US dollar gave up ground to most of its peers when data came in below expectations. The ISM manufacturing PMI slid from 51.8 to 50.8 in April, lower than the estimated drop to 51.6. The employment and prices components showed decent gains but the headline figure was dragged lower by weaker inventories, deliveries, and production. There are no major reports lined up from the US today.

EUR

The euro continued to advance against its peers as data came in mostly in line with expectations. Spain's manufacturing PMI even beat the forecast at 53.5 versus 53.0 to show a stronger pace of growth. Only the region's PPI is up for release from the euro zone today and a 0.1% uptick is eyed.

GBP

The pound gave up some ground to its peers as UK banks were closed for the holiday. UK manufacturing PMI is due today and a climb from 51.0 to 51.3 is eyed, indicating stronger industry expansion.

CHF

The franc advanced to most of its rivals, buoyed by strong Swiss manufacturing PMI. The index rose from 53.2 to 54.7 versus the consensus at 53.6 to show a faster pace of expansion. However, Swiss retail sales showed a 1.3% year-over-year decline instead of the projected 0.3% uptick while the previous reading was downgraded. In addition, SNB head Jordan reiterated that the currency remains overvalued.

JPY

The yen pulled back in the earlier trading sessions but resumed its climb later on. The final manufacturing PMI was upgraded from 48.0 to 48.2, ushering in a bit of risk appetite in the Asian session. However, the lower-yielding currency took advantage of dollar weakness and advanced to most of its counterparts for the rest of the day. Japanese banks are closed on a holiday today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls regained ground on dollar weakness but were still no match to yen strength. Australian building approvals and the RBA decision are the main event risks for the Aussie today while New Zealand has the GDT auction and the quarterly jobs report due in the late US session or early Asian session the next day. Hiring could rise by 0.6% but the jobless rate is slated to rise from 5.3% to 5.5%.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (May 04, 2016)

USD

The US dollar made a strong recovery in recent sessions, although there were no reports out of the US economy then. The ADP non-farm employment change report is up for release today and a 205K gain is eyed, slightly higher than the previous 200K increase. Due later on are the quarterly preliminary non-farm productivity and unit labor costs, as well as the US trade balance and ISM non-manufacturing PMI.

EUR

The euro returned some of its recent gains to the dollar but managed to hold on to its wins against the pound and commodity currencies. There were no major reports out of the region but the EU economic forecasts did contain a few upbeat notes. Final services PMI readings from the region's top economies are due today, along with the Spanish unemployment change report.

GBP

The pound lost a lot of ground in recent sessions as the UK manufacturing PMI fell from 50.7 to 49.2, reflecting industry contraction, instead of rising to the estimated 51.3 figure. The construction PMI is up for release today and a dip from 54.2 to 54.1 is eyed, although another weak result could spur more losses.

CHF

The franc returned some of its recent wins to the dollar and its other counterparts when the SECO consumer climate slipped from -14 to -15 instead of improving to -12. There are no major reports lined up from the Swiss economy today so the franc could take its cue from the euro.

JPY

Yen pairs made a quick pullback towards the end of the US session, although there were no clear catalysts for the sharp move. Japanese banks were closed on a holiday yesterday and are still closed today so market sentiment could push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The comdolls chalked up large losses to the dollar, particularly the Loonie which was dragged down by a 2% drop in oil prices. In New Zealand, the GDT auction showed a 1.4% drop in dairy prices. Their quarterly jobs report indicated a 1.2% gain in hiring for Q1 but the unemployment rate rose from 5.4% to 5.7% as the working-age population grew. There are no major reports due from the comdoll economies for the rest of the day.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (May 05, 2016)

USD

The US dollar was able to regain ground in recent sessions, even though data from the US came in mixed. The ADP non-farm employment change printed a meager 156K gain in hiring versus the projected 205K increase, suggesting a possible downside surprise for the NFP. On the other hand, the ISM non-manufacturing PMI rose from 54.5 to 55.7, higher than the consensus at 54.7. For today, initial jobless claims are up for release and a 261K reading is eyed.

EUR

The euro consolidated to the dollar and yen but was able to advance against commodity currencies when euro zone data came in mostly in line with expectations. German final services PMI and Italian services PMI both beat expectations but euro zone retail sales fell 0.5% instead of printing the estimated 0.1% uptick. Euro zone banks are closed in observance of Ascension Day today.

GBP

The pound was in a weak spot against most of its forex rivals as the UK construction PMI came in weaker than expected. The reading fell from 54.2 to 52.0 to indicate a much slower pace of industry growth. For today, the services PMI is due and a drop from 53.7 to 53.6 is expected, with another downbeat result likely to push the pound lower.

CHF

The franc returned some of its recent wins despite the lack of top-tier reports from Switzerland. There are no reports lined up from the Swiss economy today since banks are closed in observance of Ascension Day.

JPY

The yen was slightly weaker against its forex peers since Japanese traders were out on a holiday. There are no reports up for release from the Japanese economy today which means that risk sentiment could drive yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The Loonie was one of the weakest performers as the forest fires in Alberta led to the shutdown of some oil operations in the area. US crude oil inventories rose 2.8 million barrels, which suggests that oversupply concerns are still present. Australian retail sales showed a 0.4% uptick versus the projected 0.3% gain while the trade deficit narrowed from 3.04 billion AUD to 2.16 billion AUD, driven by a 4% gain in exports.

By Kate Curtis from Trader's Way