Daily Market Outlook by Kate Curtis from Trader's Way

[katetrades]

Forex Major Currencies Outlook (June 17, 2016)

USD

The US dollar returned some of its recent wins when risk appetite appeared to return in the markets. Data from the US came in mixed, with the Philly Fed index showing a stronger than expected return to expansion and the initial jobless claims printing a larger than expected increase. Headline CPI fell to 0.2%, lower than the projected 0.3% figure, while core CPI was unchanged at 0.2% as expected. US building permits and housing starts are due today.

EUR

The euro regained ground against most of its counterparts, except for the British pound. Data from the euro zone came in line with expectations as the final CPI readings for the region were unchanged. The shared currency got a boost from rumors that the EU referendum might be postponed following the shooting of an MP in the UK, which has prompted PM Cameron to suspend Brexit campaigning temporarily. The Italian trade balance and euro zone current account balance are up for release.

GBP

The pound staged a strong rally when PM Cameron suspended Brexit campaigning today until the weekend, following the death of MP Jo Cox after she was attacked yesterday. UK retail sales beat expectations with a 0.9% gain versus the projected 0.3% uptick while the BOE kept interest rates unchanged as expected. There are no reports due from the UK economy today, leaving the pound sensitive to Brexit updates.

CHF

The franc gave up ground to its peers when European traders speculated that the Brexit vote might be pushed back or that the shooting of UK MP Jo Cox might convince voters to favor staying in the EU. The SNB kept interest rates unchanged as expected while noting that they continue to watch FX levels closely.

JPY

The yen had a strong rally earlier in the day as risk aversion was present but soon gave up its gains when risk-on moves returned. The BOJ kept monetary policy unchanged as expected and refrained from strongly jawboning the yen, although other government authorities have been more vocal. There are no reports due from the Japanese economy today, which means that market sentiment could push yen pairs around once more.

Commodity Currencies (AUD, NZD, CAD)

The comdolls took advantage of the risk rallies to advance against the dollar and yen. Australia's jobs report beat expectations with a 17.9K gain in hiring versus the projected 14.9K increase. Canada's CPI reports are up for release, with the headline figure likely to post a 0.5% gain and the core figure expected to show a 0.3% increase.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (June 20, 2016)

USD

The US dollar gave up ground to its counterparts and gapped down over the weekend as risk appetite appeared to pick up. Data from the US economy came in line with expectations on Friday and there are no major reports up for release today, keeping sentiment as the main driver of price action.

EUR

The euro recovered against most of its peers on Friday, even though data from the region came in mixed. For now, it appears that sentiment surrounding the EU referendum are driving euro pairs, with the latest polls suggesting that the "stay" camp won't go down without a fight. German PPI data is due today and a 0.4% increase in producer prices is eyed.

GBP

The pound posted some gains on Friday as traders likely booked profits off their shorts to avoid weekend risk. Over the weekend, the Rightmove HPI showed a 0.8% gain in house prices while some polls suggested a larger margin in favor of staying in the EU. There are no reports due from the UK today, leaving traders to price in expectations for the EU referendum on Thursday.

CHF

The franc returned some of its recent wins when risk appetite seemed to improve and traders booked profits ahead of the weekend. There were no reports out of the Swiss economy then and none are due today, which suggests that sentiment could push franc pairs around.

JPY

The yen lost a lot of ground since Friday when intervention rumors started popping up. Japanese government officials have been busy jawboning the currency after its strong rallies last week, likely prompting traders to lighten up their positions. Over the weekend, the Japanese trade balance showed a larger surplus of 0.27T JPY.

Commodity Currencies (AUD, NZD, CAD)

The comdolls posted gains on Friday thanks to a return in risk-taking. Data from Canada was mixed as the core CPI came in line with expectations of a 0.3% gain and the headline figure fell short with a 0.4% uptick versus the estimated 0.5% increase. Over the weekend, New Zealand reported a drop in its Westpac consumer sentiment index from 109.6 to 106.0. Only the Canadian wholesale sales report is due today.

By Kate Curtis from Trader's Way

 

[TradersWay]

Forex Major Currencies Outlook (June 21, 2016)

USD

The US dollar was mostly weaker against its rivals as risk appetite stayed in the markets for the most part of the day. There were no reports out of the US economy, leaving traders to react to risk sentiment. Fed head Yellen has a speech scheduled today and her remarks could set the tone for dollar price action.

EUR

The euro advanced against the dollar but was weaker to the pound. Data from Germany came in line with expectations as producer prices showed a 0.4% increase as expected. The German constitutional court ruling is scheduled today and their ruling on the ECB OMT could also have a significant impact on the euro. German ZEW economic sentiment data and a speech by Governor Draghi are also on the docket.

GBP

The pound was able to keep up with its climb as a couple more Brexit surveys showed a lead in favor of those voting to stay in the EU. Today has the public sector borrowing figure and the CBI industrial order expectations data on tap, although traders could pay closer attention to Brexit surveys.

CHF

The franc was stuck in consolidation to the dollar and was mostly weaker against the euro, even though there were no reports out of the Swiss economy. Today has the Swiss trade balance due and a larger surplus of 2.88B CHF is eyed.

JPY

The yen was on stronger footing towards the end of the US session as traders likely booked profits off their recent shorts. Yen intervention rumors appear to have subsided, allowing traders to prop up the yen in times of risk aversion. There were no hints of actual central bank intervention in the BOJ minutes as well. The Japanese all industries activity index is due today and a 1.3% gain is eyed.

Commodity Currencies (AUD, NZD, CAD)

The comdolls continued to bank on risk appetite yesterday but were no match to yen strength. Earlier today, the RBA minutes didn't show any clues of when the central bank might cut interest rates again, allowing the Aussie to stay afloat. There are no other reports due from the comdoll economies for the rest of the day so risk sentiment could push these currencies around.

By Kate Curtis from Trader's Way

 

[TradersWay]

Forex Major Currencies Outlook (June 22, 2016)

USD

The US dollar regained ground against its peers despite mixed remarks from Fed Chairperson Yellen. She reiterated the need for a cautious approach in tightening, citing that policymakers will keep close tabs on jobs data to see if the slowdown was just transitory. She also added that the Fed has legal basis to implement negative rates if needed but downplayed the risk of a recession. US existing home sales data and another speech by Fed head Yellen are lined up today.

EUR

The euro suffered a sharp selloff after Draghi's testimony because the ECB head mentioned that "further stimulus is in the pipeline." Market watchers had been expecting him to reiterate that they're ready to use their monetary policy tools in the event of a Brexit but were surprised to see stronger dovish hints. Data from the region was stronger than expected, as the German ZEW economic sentiment index rose from 6.4 to 19.2 instead of falling to the projected 5.1 reading. There are no major reports due from the euro zone today.

GBP

The pound managed to hold on to some of its recent gains as more polls suggested a small lead in favor of staying in the EU. Brexit surveys and the BBC debates could continue to influence pound price action leading up to the referendum. There are no reports due from the UK economy today.

CHF

The franc consolidated to the dollar but was able to advance against the euro. Swiss trade balance beat expectations with a 3.79 billion CHF surplus versus the projected 2.88 billion CHF surplus. Swiss ZEW economic expectations are up for release today.

JPY

The yen managed to regain some ground during the latter trading sessions, as traders probably booked profits off their recent trades. Japan's all industries activity index came in line with expectations of a 1.3% gain. There are no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave back some of their recent wins when ECB head Draghi's speech inspired risk aversion. RBA minutes were less dovish than expected. There are no major reports lined up from the comdoll economies today, which means that risk sentiment could push these currencies around.

By Kate Curtis from Trader's Way

 

[TradersWay]

Forex Major Currencies Outlook (June 23, 2016)

USD

The US dollar gave up more ground in recent trading sessions as risk appetite appeared to improve. Data from the US came in line with expectations as existing home sales were up 5.53 million. Fed head Yellen didn't have much to add to her remarks from the previous day but she did clarify that the Fed has no emergency meeting scheduled after the EU referendum. US initial jobless claims and new home sales are due today.

EUR

The euro continued to advance against most of its peers, except for the British pound, as traders are likely lightening up on their short holdings ahead of the EU referendum. Data from the euro zone came in line with expectations yesterday as the consumer confidence index held steady at -7. Euro zone PMI readings are up for release today and small declines are eyed.

GBP

The pound is facing its much-anticipated Brexit vote starting in today's London session, leading up to tomorrow's Asian session before the official results will be announced. Expect additional volatility around these times as traders price in expectations, with a Brexit likely to mean sharp losses and a vote to remain likely to trigger a relief rally.

CHF

The franc chalked up small gains to the dollar but was weaker to the European currencies as traders might be bracing themselves for potential SNB intervention if the UK exits the EU. There were no reports out of Switzerland yesterday and none are due today.

JPY

The yen lost further ground when risk-taking was in play, with some Brexit polls still showing a small lead in favor of UK voters who want to stay in the EU. Japan's flash manufacturing PMI showed a small improvement from 47.7 to 47.8, lower than the projected climb to 48.2.

Commodity Currencies (AUD, NZD, CAD)

The Canadian retail sales report came in stronger than expected, with the headline figure up 0.9% and the core figure up 1.3%. There are no major reports due from the comdoll economies today, which suggests that risk sentiment and the outcome of the Brexit vote would play a huge role in price action.

By Kate Curtis from Trader's Way

 

[TradersWay]

Forex Major Currencies Outlook (June 24, 2016)

USD

The US dollar scored strong gains on the heels of the EU referendum and better than expected US economic data. Both the initial jobless claims and flash manufacturing PMI beat expectations while new home sales fell short. Durable goods orders data are due today and the headline figure could post a 0.5% drop while the core figure could print a 0.1% increase. Still, risk sentiment might be the bigger driver of price action for dollar pairs for the rest of the week.

EUR

The euro suffered sharp declines as the EU referendum results appear to be hinting at a victory for the "leave" camp. This could bring a significant amount of uncertainty to the entire region, perhaps even convincing the ECB to ease monetary policy. Euro zone flash PMI readings came in mostly weaker than expected, signaling that the region is already on shaky footing ahead of a potential Brexit. German Ifo business climate data and the Italian retail sales report are due today.

GBP

The pound had a volatile time during the start of polling in the UK, as some surveys suggested a victory for the "remain" camp but early results from regions showed a lead by the "leave" camp. The gap has been growing in favor of leaving the EU as of this writing, leading to sharp declines for the UK currency in anticipation of increased uncertainty and a potential economic recession.

CHF

The franc has been advancing against most of its forex counterparts and acting as a safe-haven in the European region. There were no reports out of Switzerland yesterday and none are due today, keeping risk sentiment as the main driver of price action.

JPY

The yen was able to take advantage of the run in risk aversion during the EU referendum, as the Japanese currency acted as a safe-haven particularly for Asian markets which are seeing the first few results. There were no reports out of Japan yesterday and none are due today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls have been dropping on account of risk-off vibes in the financial markets, as a Brexit appears possible. Exiting the EU could mean negative economic repercussions not just for the UK but for the rest of the global economy, weighing on appetite for commodities. There are no reports due from the comdoll economies today so it could be all about risk sentiment.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (June 27, 2016)

USD

The US dollar drew a lot of support on Friday after the EU referendum results were announced, as the Brexit inspired risk-off moves. Data from the US economy was actually weaker than expected then, with durable goods orders falling short of expectations and the UoM consumer sentiment index suffering a downgrade. The US flash services PMI is due today but traders are likely to be more sensitive to market sentiment.

EUR

The euro suffered a sharp decline on Friday as the Brexit would also have negative repercussions on the euro zone economy. The German Ifo business climate index beat expectations by rising to 107.8 to 108.7 instead of dropping to the estimated 107.6 figure. There are no major reports due from the euro zone today but ECB head Draghi has a speech lined up and any hints of additional stimulus would mean more euro weakness.

GBP

The pound was the biggest loser on Friday after the Brexit was announced but it managed to recoup some of its losses as profit-taking took place. UK BBA mortgage approvals printed stronger than expected results but traders shrugged this off and focused on post-Brexit updates, such as UK Prime Minister David Cameron's resignation. Moving forward, the negotiations between the EU and the UK should be under the spotlight and have a strong impact on pound action.

CHF

The franc scored plenty of wins against its higher-yielding counterparts but gave most of these up when the SNB intervened in the markets and admitted to doing so. There are no reports due from the Swiss economy today but traders might be hesitant to buy up the franc in anticipation of further intervention efforts from the central bank.

JPY

The yen was a big winner during the Brexit announcement on Friday but also returned some of its wins when BOJ intervention speculations popped up. Recall that finance officials have been threatening to step in if the yen rallies to sharply and strongly, which was exactly what happened last week. There are no reports due from Japan today so market sentiment should stay in play.

Commodity Currencies (AUD, NZD, CAD)

The comdolls chalked up huge losses when risk aversion dawned after the EU referendum results were announced on Friday. Over the weekend, New Zealand printed a stronger than expected trade surplus of 358 million NZD, giving a bit of support for the Kiwi, while the Aussie is getting a boost from stronger gold prices. There are no reports due from the comdoll economies today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (June 28, 2016)

USD

The US dollar gapped up against most of its counterparts on Monday as risk aversion kicked into high gear. However, a lot of consolidation was seen for most dollar pairs as market participants waited for more clues. Data from the US economy was weaker than expected, with both the flash services PMI and goods trade balance missing expectations. The US final GDP reading for Q1 is due today and an upgrade from 0.8% to 1.0% is expected.

EUR

The euro trailed the pound in sliding against its forex rivals, as a slowdown in the UK would also have repercussions on the euro zone economy. The EU Economic Summit is scheduled today but ECB head Draghi and Fed Chairperson Yellen won't be attending.

GBP

The pound resumed its slide across the board after Fitch and S&P announced downgrades to the UK credit rating, citing uncertainties from the Brexit and potential declines in trade, investment, public finances, and political continuity. UK CBI realized sales data is due today but traders are likely to focus on Brexit-related updates.

CHF

The franc was also in a weak spot following the SNB's decision to step in the currency markets. Although the franc is usually treated as a safe-haven in the European region, traders are hesitant to buy up the Swiss currency in anticipation of additional SNB intervention.

JPY

The yen sprang back to life in the latter trading sessions as risk aversion continued to dominate price action. There were no reports out of Japan recently and none are due today, although talks of intervention and stimulus could also prevent the yen from rallying further.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave up ground on risk aversion but managed to limit their losses thanks to rising gold and silver prices. There were no reports out of the comdoll economies yesterday and none are due today, keeping risk sentiment as the main driver of price action.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (June 29, 2016)

USD

The US dollar regained a bit of ground in the past few hours as the recovery in risk appetite failed to gain much traction. The final US GDP reading for the first quarter of the year was upgraded from 0.8% to 1.1%, higher than the forecast at 1.0%. Meanwhile, US CB consumer confidence rose higher than expected but the Richmond manufacturing index showed a steeper contraction. Core PCE price index, personal spending and income, and pending home sales are due today.

EUR

The euro had a bit of a rebound in recent sessions but soon returned its intraday wins. German import prices showed a stronger than expected 0.9% gain but remarks from EU officials during their Economic Summit suggested that they're also worried about the region's future as well. German GfK consumer climate and preliminary CPI are due today, along with the Spanish flash CPI.

GBP

The pound tried to fill in the gaps over the weekend but failed as risk aversion returned. UK CBI realized sales fell from 7 to 4 instead of improving to the estimated 9 reading. UK Nationwide HPI, net lending to individuals, and mortgage approvals are due today but updates from UK officials could play a greater role in price action.

CHF

The franc continued to advance as traders shifted their biases after the SNB admitted to intervening in the currency markets recently. There were no reports out of the Swiss economy yesterday but a central bank official defended their recent moves.

JPY

The yen consolidated against most of its peers as Japanese officials continued to discuss the possibility of additional stimulus. Earlier today, Japan's retail sales report printed weaker than expected results. Consumer spending fell 1.9% year-over-year versus the estimated 1.6% drop.

Commodity Currencies (AUD, NZD, CAD)

The Loonie got a bit of a boost from stronger crude oil prices while the Aussie and Kiwi trailed behind. There were no major reports from these economies as the currencies took their cue from risk sentiment. Only the Australian HIA new home sales data is due today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (June 30, 2016)

USD

The US dollar gave up some ground but managed to pare some of its losses as risk appetite stayed in the markets. Data from the US came in line with expectations, as the core PCE price index was up 0.2% as expected while personal spending rose 0.4% even as personal income was slightly weaker than expected at 0.2% versus the consensus at 0.3%. Initial jobless claims and Chicago PMI are up for release today.

EUR

The euro was able to extend its rallies against most of its peers as traders continued to bank on smooth negotiations between the EU and the UK. German preliminary CPI came in line with expectations of a 0.1% uptick while Spanish flash CPI was stronger than expected with a 0.8% decline versus the projected 1.0% drop. Euro zone flash CPI estimates are due today and these should also provide guidance on whether the ECB might dole out more stimulus or not.

GBP

The pound had another winning day, thanks to strong UK data and hopes that the government can negotiate a good post-Brexit trade agreement. Net lending to individuals rose to 4.3 billion GBP and mortgage approvals came in at 67K versus the 65K consensus. UK current account balance and final GDP data is due today.

CHF

The franc continued to tread carefully as traders have been wary of additional SNB intervention. The Swiss UBS consumption indicator showed a gain from 1.24 to 1.35. Today has the KOF economic barometer on tap and a dip from 102.9 to 102.7 is expected.

JPY

The yen returned some of its recent wins as risk appetite was in play. To top it off, Japanese retail sales came in weaker than expected with a 1.9% decline versus the projected 1.6% drop. Japanese preliminary industrial production data is due today and a 0.1% dip is eyed.

Commodity Currencies (AUD, NZD, CAD)

The Loonie was another strong performer yesterday, lifted by a larger than expected reduction in stockpiles. US crude oil inventories fell by 4.1 million barrels, larger than the estimated reduction of 2.3 million barrels. In Australia, HIA new home sales dropped by 4.4%. New Zealand building consents and ANZ business confidence figures are lined up, along with Australian private sector credit data. Later on Canada will print its monthly GDP and a 0.1% expansion is expected.

By Kate Curtis from Trader's Way