Daily Market Outlook by Kate Curtis from Trader's Way

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Forex Major Currencies Outlook (July 01, 2016)

USD

The US dollar regained a bit of ground in the latter part of the US session as data came in mostly stronger than expected. Initial jobless claims landed at 268K while the Chicago PMI showed a return to industry expansion. The reading jumped from 49.3 to 56.8, outpacing the estimate at 50.3. Up ahead, the ISM manufacturing PMI is due and no change from the 51.3 previous reading is eyed.

EUR

The euro managed to hold on to some of its gains when the flash CPI readings beat expectations. Headline CPI came in at 0.1% instead of staying flat while core CPI came in at 0.9% versus the 0.8% consensus. The German unemployment change showed a 6K reduction in joblessness, slightly higher than the projected 5K drop. For today, final manufacturing PMI readings from the top euro zone economies are lined up.

GBP

The pound suffered a sharp drop when BOE Governor Carney confirmed that further easing is on the horizon. In his testimony, he mentioned that additional stimulus is likely in summer and that they're considering other easing options. The UK current account balance showed a larger than expected deficit while the final GDP reading was unchanged at 0.4%. UK manufacturing PMI is due today and a drop from 50.1 to 50.0 is expected.

CHF

The franc crawled slightly higher against its forex counterparts despite weaker than expected data from Switzerland. The KOF economic barometer reading rose from 101.8 to 102.4, lower than the projected 102.7 figure but still a again nonetheless. Swiss retail sales data is due today and an improvement from -1.9% to -1.7% is eyed.

JPY

The yen continued to give up ground to its forex peers as the threat of intervention weighed on the currency's gains. Earlier today, Japanese data came in mostly in line with expectations, with the household spending report coming in stronger than expected. The Tokyo core CPI showed a 0.5% drop in price levels and the national core CPI showed a 0.4% decline. Final manufacturing PMI and consumer confidence data are still due.

Commodity Currencies (AUD, NZD, CAD)

The comdolls managed to hold on to most of their wins, buoyed by positive data and rising commodity prices. The Canadian economy expanded by 0.1% in April as expected while underlying inflation reports showed strong gains. Chinese manufacturing PMI readings are due today and strong data could continue to keep risk appetite up, lifting comdolls even higher.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 04, 2016)

USD

The US dollar was mostly weaker than expected last Friday despite stronger than expected ISM manufacturing PMI data. The reading jumped from 51.3 to 53.2 instead of holding steady, indicating a much faster pace of industry growth. However, construction spending and ISM manufacturing prices came in much weaker than expected. US banks are closed for the Fourth of July holiday today.

EUR

The euro was stuck in consolidation on Friday despite mostly stronger than expected medium-tier data. Manufacturing PMI readings from its top economies either beat expectations or were revised higher while the Italian unemployment rate also came in better than expected. The Spanish unemployment change report and euro zone Sentix investor confidence data are due today.

GBP

The pound was still weaker against most of its forex peers even though the UK manufacturing PMI beat expectations. The index rose from 50.4 to 52.1 to show a faster pace of industry growth but traders seemed to shrug this off as they continued pricing in expectations for additional BOE easing. UK construction PMI is due today and a drop from 51.2 to 50.6 is expected.

CHF

The franc was unable to establish a clear trading direction even while the Swiss retail sales report came in slightly better than expected. Consumer spending was down 1.6% year-over-year compared to the estimated 1.7% decline and the previous 2.2% slump. There are no reports due from Switzerland today.

JPY

The yen barely budged on Friday as most of the Japanese economic reports came in line with consensus. The Tankan manufacturing index was unchanged at 6 instead of dropping to the projected reading of 4 while the non-manufacturing component dropped from 22 to 19 as expected. Consumer confidence improved from 40.9 to 41.8. There are no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls held on to their gains as commodity prices stayed supported. Data from China came in mostly in line with consensus, except for the Caixin manufacturing PMI which dropped from 49.2 to 48.6. Earlier today Australia reported a 5.2% drop in building approvals. No other major reports are due from the comdoll economies today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 05, 2016)

USD

The US dollar was stuck in consolidation against most of its forex counterparts since US banks were closed for the Fourth of July holiday. US factory orders data are up for release today and a 0.8% decline is eyed, following the previous 1.9% increase. FOMC member Dudley also has a speech lined up.

EUR

The euro struggled to hold on to its gains after data from the region came in mixed. The Spanish unemployment change report showed a stronger than expected 124.3K reduction in joblessness while the euro zone Sentix investor confidence figure slumped from 9.9 to 1.7, worse than the estimated drop to 8.1. Final services PMI readings are due today along with the euro zone retail sales report.

GBP

The pound consolidated against its rivals as traders continued to wait for more updates from the UK. The construction PMI came in weaker than expected as it fell from 51.2 to 46.0, reflecting industry contraction. For today, the services PMI is due and a dip from 53.5 to 53.1 is eyed. BOE Governor Carney also has a speech scheduled.

CHF

The franc barely made any headway as traders are being careful of additional SNB intervention. There were no reports out of Switzerland then and none are due today so risk sentiment could push franc pairs around.

JPY

The yen gave up more ground on improving risk appetite as there were no reports out of Japan yesterday. There are still no reports lined up today so risk sentiment could stay in play.

Commodity Currencies (AUD, NZD, CAD)

The comdolls continued to advance led by the Loonie, even though data from Canada came in weaker than expected. The quarterly BOC Business Outlook Survey was also mostly downbeat, although it suggested a potential rebound in services and non-energy firms. In Australia, retail sales and trade balance figures missed expectations with a meager 0.2% uptick in consumer spending and a wider trade deficit of 2.22 million AUD. New Zealand has its GDT auction scheduled in the next Asian session.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 06, 2016)

USD

The US dollar was a big winner in yesterday's London and US sessions thanks to the run in risk aversion. Data from the US economy was actually weaker than expected, with factory orders down 1.0% versus the projected 0.8% drop, but traders preferred the safe-haven dollar over higher-yielding assets and currencies. The FOMC minutes are up for release today so more volatility is expected for dollar pairs.

EUR

The euro struggled to hold on to its gains and failed as risk-off vibes returned to the markets. Data from the euro zone was mostly better than expected while retail sales came in line with expectations of a 0.4% gain. ECB Governor Draghi is set to give a testimony today and might confirm that further easing will be put in place, although the lack of dovish remarks could prop up the shared currency.

GBP

The pound dropped to fresh record lows against the dollar on reports that three of the UK's top property funds are refusing withdrawal requests from investors. This comes after property speculators started liquidating their holdings as prices tanked after the Brexit decision. Fears of contagion and more financial stress are weighing on the pound, as well as the downbeat UK services PMI, even after BOE Governor Carney tried to reassure the markets in his presser after the release of their Financial Stability Report.

CHF

The franc weakened against its forex peers thanks to contagion fears in Europe and the lingering intervention threat from the SNB. There were no reports out of the Swiss economy yesterday and none are due today so risk sentiment could keep pushing franc pairs around.

JPY

The yen took advantage of the risk-off moves in the financial markets, even advancing against the US dollar. There were no reports out of Japan yesterday and none are due today so risk sentiment could play a rose in yen price action, as well as fears of intervention from the BOJ or Japanese government.

Commodity Currencies (AUD, NZD, CAD)

The comdolls returned their recent gains as risk-off vibes were back in the markets, weighing on commodity prices as well. Retail sales and trade balance figures from Australia missed expectations but the Aussie drew a bit of support from the RBA's decision to keep rates unchanged. In New Zealand, dairy prices were down 0.4% in the recent GDT auction. Canada has its trade balance due next.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 07, 2016)

USD

The US dollar returned some of its recent gains despite mixed data from the US. The trade balance showed a wider than expected deficit of $41.1 billion but the ISM non-manufacturing PMI showed a strong jump from 52.9 to 56.5. The FOMC minutes contained no surprises but it did reveal that policymakers shifted to a neutral stance even before the EU referendum. The ADP non-farm employment change report and Challenger job cuts data are due today, giving hints on how the NFP might turn out.

EUR

The euro advanced to some of its peers when ECB head Draghi refrained from making any additional dovish remarks. Still, German factory orders missed expectations and printed a flat reading instead of the projected 1.0% gain. For today, German industrial production and French trade balance are lined up. ECB minutes are also up for release.

GBP

The pound consolidated against the dollar and yen but was weaker to the comdolls as there were no major updates from the UK economy. More property funds are refusing client withdrawals, fueling speculations that additional financial stress could be seen. UK manufacturing production data is due today and a 1.2% drop is expected.

CHF

The franc was still stuck in consolidation as traders refrained from trading this currency for fear of additional SNB intervention. There were no reports out of the Swiss economy yesterday while today has Swiss CPI and foreign currency reserves data on tap.

JPY

The yen returned some of its recent wins when risk appetite somewhat improved. There were no reports out of the Japanese economy yesterday while today has a speech by Governor Kuroda. Risk sentiment could continue pushing yen pairs around as well.

Commodity Currencies (AUD, NZD, CAD)

Comdolls regained ground in the latter trading sessions as risk appetite improved. Data from Canada was weaker than expected as the trade deficit widened in May and was downgraded in the previous month. Still, the report showed a pickup in volumes for energy imports and exports, suggesting that the industry may be turning a corner. Canadian building permits and Ivey PMI numbers are due today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 08, 2016)

USD

The US dollar advanced against its forex counterparts when the leading jobs indicators hinted at an upside surprise for the NFP. The ADP non-farm employment change report showed a 172K gain versus the projected 158K increase and the previous 168K rise. Analysts are expecting to see a 175K gain in hiring for the NFP report and an increase in the jobless rate from 4.7% to 4.8%. Revisions to previous reports could also have a strong impact on dollar action.

EUR

The euro slumped against its forex peers as the ECB minutes acknowledged the potential repercussions from a Brexit. German industrial production was weaker than expected with a 1.3% slump versus the projected 0.1% uptick. Only the German trade balance and French industrial production numbers are due from the euro zone today.

GBP

The pound tried to limit its losses and drew a bit of support from better than expected UK manufacturing production numbers. Manufacturing production fell 0.5% versus the estimated 1.0% decline while industrial production showed a smaller than expected drop as well. Only the goods trade balance is due from the UK today.

CHF

The franc gave up ground to its counterparts once more after the foreign currency reserves showed a gain from 602 billion CHF to 609 billion CHF. Swiss CPI was slightly better than expected at 0.1% instead of the estimated flat reading. The Swiss jobless rate is due today and no change from the previous 3.5% figure is eyed.

JPY

The yen was mostly stronger in recent trading sessions as risk aversion stayed in the financial markets. Data from Japan came in mostly weaker than expected today, with the current account balance and average cash earnings falling short of consensus.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi was one of the leading performers for the day after an RBNZ official said that lowering rates further would lead to financial instability. Meanwhile, the Australian dollar suffered after the S&P downgraded the country's sovereign debt rating on political uncertainty. Canada released mixed reports, with a strong Ivey PMI and a downbeat building permits figure, and the jobs report is up next. Analysts are expecting to see a 5.5K gain in hiring and a rise in the jobless rate.


By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 11, 2016)

USD

The US dollar regained ground against its forex peers on Friday, thanks to much stronger than expected jobs data. The US economy added 287K jobs in June, outpacing the projected 175K gain, while the previous reading was downgraded from 38K to 11K. Average hourly earnings was lower than expected with a mere 0.1% uptick while the unemployment rate rose from 4.7% to 4.9%. There are no reports due from the US economy today but FOMC member George has a testimony lined up.

EUR

The euro was mostly weaker on Friday, as medium-tier euro zone data fell short of expectations. The German trade surplus narrowed from 24.1 billion EUR to 22.2 billion EUR while French industrial production showed a 0.5% drop versus the projected 0.4% decline. Only the Italian industrial production report is due today.

GBP

The pound struggled to hold its ground on Friday as selling pressure seemed exhausted. There were no major reports out of the UK on Friday and traders continued to focus on Brexit-related updates, the latest of which included a rejection to redo the EU referendum vote. There are no reports due from the UK economy today.

CHF

The franc was mostly weaker against its peers since the threat of SNB intervention weighed on the currency's gains. The Swiss jobless rate improved to 3.3% while the previous month's figure enjoyed a positive revision. There are no reports due from the Swiss economy today.

JPY

The yen regained some ground against its higher-yielding counterparts but was weaker to the dollar after the NFP release. Earlier today, Japan's core machinery orders report printed a worse than expected 1.4% slide versus the estimated 3.1% gain. Preliminary machine tool orders data is due next.

Commodity Currencies (AUD, NZD, CAD)

The comdolls put up a strong fight against the dollar and most of their currency counterparts at the end of last week. Canada saw a 0.7K reduction in jobs but its jobless rate fell from 6.9% to 6.8% instead of rising to the estimated 7.0% figure. Over the weekend, Chinese CPI and PPI indicated weaker price pressures. No other reports are due from the comdoll economies today but Australian election updates could push AUD pairs around.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 12, 2016)

USD

The US dollar regained some ground against its peers when traders dumped their yen holdings in search of other safe-havens. The US labor market conditions index showed an improvement and FOMC member George acknowledged the strong rebound in June hiring during her testimony. More FOMC members have speeches later today and the US JOLTS job openings report is up for release.

EUR

The euro regained ground as sentiment improved in the European region. Data was actually weaker than expected as Italian industrial production shrank by 0.6% instead of showing the projected 0.1% uptick. German final CPI and WPI are up for release today.

GBP

The pound staged a strong rally as David Cameron will be tendering his resignation on Wednesday to make room for new PM Theresa May after rival Andrea Leadsom withdrew from the race. There were no reports out of the UK economy yesterday while today has a speech by BOE Governor Carney who might set the tone for the upcoming BOE statement.

CHF

The franc lost ground to its forex peers despite the lack of top-tier data from Switzerland. There are still no reports due from the Swiss economy today so the franc could continue to take its cue from market sentiment and European region updates.

JPY

The yen lost a lot of ground when Japanese PM Shinzo Abe ordered the preparation of an economic stimulus package. This led traders to speculate that the BOJ might also be pushed to increase easing now that Abe's political party has secured the majority of the Upper House seats and could carry on with "Abenomics." Japan's PPI showed a sharper than expected 4.2% drop in produce prices and the tertiary industry activity report is due next.

Commodity Currencies (AUD, NZD, CAD)

The comdolls took advantage of the yen selloff but were slightly weaker to the dollar. Canadian housing starts beat expectations at 218K versus 192K while Australia's NAB business confidence index improved from 3 to 6. There are no other reports due from the comdoll economies for the rest of the day.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 13, 2016)

USD

The US dollar gave up ground against its forex peers earlier on in the week as risk appetite returned to the markets. However, traders seem to be booking profits off their recent dollar shorts. Data from the US economy came in mixed, as the JOLTS job openings report showed fewer than expected hiring opportunities while wholesale inventories suggested a rise in demand. FOMC member Bullard noted that he doesn't see the risk of recession in the US and that stimulus might not be necessary. The Fed Beige Book is up for release next.

EUR

The euro had a mixed performance as it advanced to the yen but gave up ground to the dollar, pound, comdolls. Data from the euro zone was slightly better than expected but traders appear to be more focused on the Italian banking crisis and the possibility of contagion. French final CPI and euro zone industrial production reports are due today.

GBP

The pound continued to advance against most of its peers, thanks to the improving political landscape in the UK. BOE Governor Carney didn't drop any dovish clues in his latest testimony, leading traders to lighten up on their pound shorts ahead of the central bank statement on Thursday.

CHF

The franc lost further ground to its peers despite the lack of data from Switzerland. Traders seem to have shifted to a short bias on the Swiss currency after the SNB confirmed that they had intervened in the currency markets recently. There are still no reports due from the Swiss economy today.

JPY

The yen carried on with another day of declines as traders continued to speculate about additional easing efforts from the central bank and government. Data from Japan was mostly in line with expectations as the PPI was down 4.2% year-over-year while tertiary industry activity fell 0.7%. Japan's revised industrial production report is due next.

Commodity Currencies (AUD, NZD, CAD)

The comdolls took advantage of the pickup in risk-taking during recent trading sessions, advancing against the European currencies and the yen. Westpac consumer sentiment in Australia fell 3.0% this month, following the previous 1.0% decline. China's trade balance is up for release next and the BOC will make its monetary policy decision in the upcoming US session. US crude oil inventories data is also due.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 14, 2016)

USD

The US dollar regained a bit of ground against its forex peers as risk aversion returned to the markets. Data from the US economy was mixed yesterday, as the Fed Beige Book indicated that most districts saw modest economic growth and a pickup in consumer spending. Import prices posted a smaller than expected 0.2% uptick versus the projected 0.6% climb. Initial jobless claims and PPI are up for release today.

EUR

The euro consolidated to the dollar and was mostly weaker against its other forex rivals as data from the euro zone missed expectations. Industrial production sank by 1.2% versus the projected 0.8% drop while the French final CPI posted a feeble 0.1% gain. There are no reports due from the euro zone today.

GBP

The pound resumed its drop against its forex peers as traders booked profits on Theresa May's PM appointment. Traders are also positioning ahead of the BOE statement today, during which the UK central bank might cut interest rates from 0.5% to 0.25%. Still, some believe that the BOE might hold its fire for now and wait until next month to ease, possibly triggering a relief rally for the currency.

CHF

The franc had a mixed performance as it functioned mostly as a countercurrency. There were no reports out of the Swiss economy yesterday while today has the PPI on tap. Producer prices could show a 0.2% increase, slower than the previous 0.4% gain.

JPY

The yen paused from its dive as traders probably booked profits at key levels. Japan's industrial production report suffered a downgrade to show a 2.6% year-over-year slide versus the projected upgrade from -2.3% to -2.2%. There are no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls paused from their climb as risk-taking weakened. The BOC kept rates unchanged as expected but downgraded growth forecasts for this year and the next. Earlier today, Australia printed a smaller than expected rise in hiring of 7.9K versus the estimated 10.1K growth while the jobless rate rose from 5.7% to 5.8% as expected. There are no major reports lined up from the comdoll economies for the rest of the day.

By Kate Curtis from Trader's Way