Daily Market Outlook by Kate Curtis from Trader's Way

[katetrades]

Forex Major Currencies Outlook (July 29, 2016)

USD

The US dollar regained ground against its forex peers as risk aversion returned to the financial markets. Data from the US economy was slightly weaker than expected as the initial jobless claims landed at 266K versus the 261K forecast. The US advanced GDP reading is due today and a 2.6% figure is eyed, indicating a much faster pace of growth compared to the 1.1% expansion in the first quarter.

EUR

The euro suffered a sharp drop against its forex peers as new signs of uncertainty popped up in the euro zone. In Spain, the King asked Prime Minister Rajoy to hold a vote of confidence after the past elections failed to produce a majority government. In Italy, a group of large banks and lenders rejected the proposal to provide a cash injection for the country's third largest bank, putting downside pressure on the financial sector. Data from the euro zone, namely German CPI and unemployment change, came in stronger than expected. German retail sales, French consumer spending, Spanish flash CPI and GDP are due today. The region's flash CPI readings are also up for release.

GBP

The pound moved mostly sideways in recent trading sessions as UK data came in mixed. Nationwide HPI showed a larger than expected gain in house prices while the GfK consumer confidence index slumped from -9 to -12 instead of improving to the projected -7 figure. Net lending to individuals and mortgage approvals data are due today.

CHF

The franc regained ground across the board, scoring large gains to the dollar and euro. There were no major reports out of the Swiss economy yesterday and none are due today, which suggests that market sentiment in the region was likely responsible for the flight to safety.

JPY

The yen had a bout of volatility as traders anticipated the BOJ decision. Earlier in the day, the latest batch of Japanese economic reports printed mixed results so there's room for additional easing but the question is at what amount. An aggressive stimulus program could mean losses for the Japanese currency while a conservative figure could still keep it afloat. Household spending and retail sales both missed forecasts while inflation readings came in close to consensus.

Commodity Currencies (AUD, NZD, CAD)

The comdolls managed to hold on to some of their gains despite the bout of risk aversion yesterday, as the uncertainties were mostly concentrated in the European region. New Zealand's ANZ business confidence index fell from 20.2 to 16.0, indicating weaker optimism. Australia's quarterly PPI is due next and a 0.2% rebound is eyed. Canada will be releasing its monthly GDP reading and a 0.5% contraction is expected.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Aug 01, 2016)

USD

The US dollar gave up a lot of ground on Friday when its Q2 advanced GDP reading came in far below expectations. The report showed that the US economy grew by only 1.2% versus the projected 2.6% expansion, just slightly higher than the earlier 1.1% GDP figure. This doused hopes for a September Fed rate hike, causing the dollar to retreat. US ISM manufacturing PMI is due today and a dip from 53.2 to 53.1 is expected.

EUR

The euro took advantage of dollar weakness but gave up ground to the Japanese yen. Data from the euro zone came in mixed, as the Spanish flash CPI, French consumer spending, and French preliminary CPI missed expectations while German retail sales and euro zone flash core CPI beat expectations. The headline CPI reading for the region was better than expected at 0.2%. Final manufacturing PMI readings from the top euro zone economies are due today.

GBP

The pound advanced to the dollar but caved to the comdolls despite better than expected medium-tier reports from the UK. For today, the manufacturing PMI is up for release and no revisions to the initially reported 49.1 reading is expected.

CHF

The franc gained a lot of ground to the dollar and its European counterparts when risk aversion returned on Friday. Data from Switzerland was also better than expected as the KOF economic barometer rose from 102.6 to 102.7 instead of falling to 101.6. Swiss banks are closed for the holiday today.

JPY

The yen continued to rake in gains, thanks to risk aversion and a smaller than expected easing expansion from the BOJ. The central bank merely increased its ETF purchases instead of lowering rates further and pumping up their JGB buying operations. Earlier today, Japan's final manufacturing PMI was upgraded from 49.0 to 49.3 to show a slower pace of industry contraction.

Commodity Currencies (AUD, NZD, CAD)

The comdolls took advantage of the declines in the dollar and managed to advance against the European currencies as well. Data from Canada was weaker than expected, as the economy contracted 0.6% versus the projected 0.5% drop in GDP for May. Underlying inflation data also missed expectations. Earlier today, China reported a fall in its official manufacturing PMI from 50.0 to 49.9 and an increase in its non-manufacturing PMI from 53.7 to 53.9.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Aug 02, 2016)

USD

The US dollar managed to score gains against the comdolls on weaker oil prices and rate cut expectations. Data from the US economy was weaker than expected, as the ISM manufacturing PMI slipped from 53.2 to 52.6 versus the projected dip to 53.1. The employment and prices components showed huge declines, suggesting a weaker NFP and lower CPI pressures. US core PCE price index, along with personal spending and income data, are due today.

EUR

The euro consolidated to the dollar but advanced to the commodity currencies despite mostly weaker manufacturing PMI readings from its top economies. Only the Spanish unemployment change report is due today and a 70K drop in joblessness is eyed.

GBP

The pound was mostly weaker against its counterparts as the manufacturing PMI showed an even sharper contraction. The figure was revised from the initially printed 49.1 reading to 48.2, signaling downside pressure on overall economic activity. Only the UK construction PMI is due today and another downgrade from 46.0 to 44.2 is expected.

CHF

The franc continued raking in gains against most of its rivals as risk aversion stayed in play. Swiss banks were closed for a holiday yesterday. The Swiss manufacturing PMI is due today and a rise from 51.6 to 51.9 is expected. Swiss retail sales are also lined up but a sharper decline of 2.0% is eyed.

JPY

The yen held on to its recent gains and even raked in wins against the comdolls. There were no reports out of the Japanese economy yesterday and there are none lined up today, which suggests that market sentiment could keep influencing price action of yen pairs.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were the weakest of the bunch as crude oil price declines and rate cut expectations weighed on risk sentiment and the higher-yielding currencies. Crude oil came close to the $40/barrel as traders are expecting to see another buildup in stockpiles and higher oil rig counts. Earlier today, trade balance and building approvals for Australia missed expectations, setting the stage for a possibly dovish RBA statement. Analysts are expecting a 0.25% cut but a decision to stand pat could simply increase rate cut expectations for the next statement. New Zealand's GDT auction is coming up in the next Asian session.


By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Aug , 03 2016)

USD

The US dollar lost a lot of ground to its forex peers in the New York trading session as risk appetite seemed to improve. Data from the US economy came in mixed, with personal income falling short of consensus and personal spending posting a slightly stronger figure. The core PCE price index came in line with expectations of a 0.1% uptick. The ADP non-farm employment change report is due today and a 171K gain is eyed. Also lined up today is the ISM non-manufacturing PMI which might show a fall from 56.5 to 56.0.

EUR

The euro took advantage of dollar weakness but was no match to yen strength. Data from the region came in stronger than expected as Spain reported a larger drop in joblessness while the PPI showed a 0.7% gain in prices versus the estimated 0.4% uptick. Services PMI readings and euro zone retail sales data are due today.

GBP

The pound enjoyed a strong rally across the board on a suspected short squeeze ahead of the BOE decision on Thursday. Data from the UK was slightly better than expected since the construction PMI came in at 45.9 versus the projected 44.4 figure, showing a smaller than expected contraction. UK services PMI is due today and no revision from the initial 47.4 estimate is eyed.

CHF

The franc gave up a lot of ground when the Swiss economy printed downbeat reports. Retail sales sank 3.9% on a year-over-year basis versus the estimated 2.0% drop while the SVME PMI tumbled from 51.6 to 50.1 instead of improving to the projected 51.9 figure. There are no reports due from the Swiss economy today.

JPY

The yen continued to hold on to its gains and go for more after the Japanese government announced its 28T JPY economic stimulus plan. There were no other reports out from the Japanese economy then and none are due today so risk sentiment could push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The comdolls regained ground yesterday despite weaker commodity prices and the RBA's decision to cut interest rates by 0.25%. In New Zealand, the GDT auction yielded a 6.6% gain in dairy prices. Crude oil inventories data is due today and a draw of 1.6 million barrels is eyed, likely to spur a quick bounce in oil and the Loonie.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Aug 04, 2016)

USD

The US dollar regained ground against its forex counterparts, thanks to slightly stronger data. The final services PMI was upgraded from 50.9 to 51.4 to indicate a faster pace of expansion than initially reported. However, the ISM non-manufacturing PMI fell short of expectations when it dropped from 56.5 to 55.5 versus the projected dip to 56.0. For today, the initial jobless claims report is due along with the US factory orders report.

EUR

The euro was mostly weaker against its peers despite mixed data from the region. Spain's services PMI missed expectations while Italy's services PMI printed stronger than expected results. Final services PMI readings from Germany and France didn't have any revisions while the region's retail sales stayed flat as expected. There are no major reports due from the euro zone today.

GBP

The pound was able to stay afloat when the services PMI didn't undergo any revisions from its initially reported 47.4 figure. Pound pairs could be due for additional volatility today as the BOE will make its policy decision. An interest rate cut of 0.25% is widely expected, with some even expecting higher bond purchases from the central bank. Updated growth and inflation forecasts are also due.

CHF

The franc returned some of its recent gains as there were no reports out of Switzerland yesterday. Today the SECO consumer climate index is due and a fall from -15 to -16 is expected. Other than that, risk sentiment could be the main driver of franc price action.

JPY

The yen slowly edged higher against some of its forex rivals as there were no new catalysts from Japan. There are still no reports lined up from the Japanese economy today so slow price action could be in the cards unless there are any announcements from the Japanese government or any changes in market sentiment.

Commodity Currencies (AUD, NZD, CAD)

The Loonie was able to rake in some gains after the US crude oil inventories report showed a buildup in crude oil stockpiles offset by a slump in gasoline supplies. In New Zealand, the ANZ commodity price index fell from 3.7% to 2.0%. Australia reported a meager 0.1% uptick in retail sales versus the projected 0.3% gain. There are no other reports due from the comdoll economies for today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Aug 05, 2016)

USD

The US dollar had a mixed performance as it advanced against the European currencies but was mostly weaker against the commodity currencies. Data from the US economy was also mixed, as initial jobless claims stood at 269K versus the projected 265K figure and the previous 266K reading while factory orders showed a smaller than expected 1.5% drop versus the estimated 1.8% slide. The US NFP report is due today and a 180K rise in hiring is eyed, slower than the earlier 271K increase, while the jobless rate could fall from 4.9% to 4.8%.

EUR

The euro sold off to most of its counterparts except for the pound after the BOE decision. Euro zone retail PMI improved from 48.5 to 48.9 to show a slower pace of contraction in the industry. German factory orders and French trade balance are up for release today.

GBP

The pound suffered a sharp selloff against its rivals when the BOE cut interest rates and increased its bond purchases. The vote to cut rates by 0.25% was unanimous but the vote to increase stimulus from 375 billion GBP to 435 billion GBP was 6-3. Only the Halifax HPI is due from the UK today and a 0.1% drop in house prices is eyed.

CHF

The franc lost ground to some of its peers, except for the pound. The Swiss SECO consumer climate held steady at -15 instead of falling to the projected -16 figure. For today, the Swiss foreign currency reserves report is due and this might show some clues on whether or not the SNB is intervening in the forex market to keep the franc weak.

JPY

The yen returned some of its recent wins when risk appetite improved in the financial markets. There were no reports out of Japan yesterday, giving traders a chance to book profits off their recent positions. Japan's average cash earnings report printed a stronger than expected 1.3% increase.

Commodity Currencies (AUD, NZD, CAD)

The comdolls took advantage of the pickup in risk appetite to recover against the safe-haven currencies and even chalk up gains against the European currencies. Crude oil prices continued to recover as the US natural gas storage report showed a reduction in supply. Canada's jobs report is due today and a 10.2K increase in hiring is eyed but the jobless rate is slated to rise from 6.8% to 6.9%.


By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (August 08, 2016)

USD

The US dollar popped higher on Friday, thanks to stronger than expected NFP data. The economy added 255K jobs in July versus the projected 180K increase. In addition, the June figure was upgraded from 287K to 292K but the jobless rate was unchanged at 4.9% instead of falling to the projected 4.8% figure. There are no major reports due from the US economy today.

EUR

The euro slumped to the dollar and commodity currencies but managed to hold steady to the pound and yen. Data from the euro zone came in mixed as German factory orders posted a weaker than expected 0.4% drop while the French trade balance showed a smaller than expected deficit. Euro zone Sentix investor confidence data and German industrial production data are due today.

GBP

The pound was still mostly weaker against its peers on Friday as traders are still reeling from the BOE's decision to expand its easing program. In addition, UK house prices saw a sharper than expected 1.0% fall versus the projected 0.1% dip according to Halifax. There are no reports due from the UK economy today.

CHF

The franc lost ground to most of its forex rivals on Friday after the Swiss foreign currency reserves showed a rise from 609 billion CHF to 615 billion CHF, suggesting that monetary authorities might be interfering to weaken the franc in the forex market. Swiss CPI is due today and a 0.5% decline in price levels is eyed.

JPY

The yen weakened against most of its forex counterparts on Friday as traders moved their funds to the dollar. Over the weekend, Japan printed a better than expected trade balance of 1.65T JPY. There are no reports due from Japan today so yen pairs could be sensitive to market sentiment.

Commodity Currencies (AUD, NZD, CAD)

The Canadian dollar gave up ground on Friday as jobs data from Canada came in way below expectations. The economy lost 31.2K jobs in July versus the projected 10.2K gain while the jobless rate rose from 6.8% to 6.9%. Canada's Ivey PMI rose from 51.7 to 57.0 to indicate a faster pace of industry growth. Earlier today, ANZ reported a decline of 0.8% in Australian job advertisements. China's trade balance showed a larger than expected surplus, keeping the Aussie supported for now.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Aug 09, 2016)

USD

The US dollar had a mixed performance since there were no major catalysts from the US economy yesterday. Only the Fed labor market conditions index was printed and it reflected the first positive reading for the year, assuring market watchers that an employment rebound is taking place. US preliminary non-farm productivity and unit labor costs data are up for release today.

EUR

The euro was mostly weaker against its peers even though there were no major reports out of the region. German industrial production came in line with estimates of a 0.8% gain while today has the trade balance up for release.

GBP

The pound resumed its slide to most of its major counterparts as traders seem to be pricing in weaker manufacturing production data due today. A flat reading is expected to follow the previous 0.5% drop but a larger than expected decline could mean sharper pound losses.

CHF

The franc sank to the dollar but managed to hold on to its gains against its other currency rivals. Swiss CPI came in better than expected with a 0.4% drop in price levels versus the estimated 0.5% decline. The Swiss jobless rate is due today and no change from the 3.3% reading is eyed.

JPY

The yen also had a mixed performance but was mostly weaker on risk appetite, except against the pound. Japan's Economy Watchers Sentiment index showed a rise from 41.2 to 45.1 versus the projected 42.6 reading. There are no major reports due from Japan today so risk sentiment could be the main driver for yen pairs.

Commodity Currencies (AUD, NZD, CAD)

The comdolls struggled to hold on to their gains but the Loonie got a bit of a boost on the rumored OPEC meeting for September. Qatar's oil minister also noted that a rebound in demand is expected to be seen in the second half of the year. CPI data from China beat expectations, keeping the Aussie supported, while RBNZ rate cut expectations are still weighing on the Kiwi.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Aug 10, 2016)

USD

The US dollar was off to a good start for the day but wound up erasing its wins when traders booked their post-NFP positions. Preliminary non-farm productivity fell 0.5% versus the projected 0.5% increase while unit labor costs rose 2.0% versus the estimated 1.8% gain. US JOLTS job openings data is due today but might not have much of an impact since the official NFP report was already printed.

EUR

The euro took advantage of dollar weakness but was still no match to comdoll strength. Data from the euro zone was weaker than expected since Germany reported a smaller trade surplus of 21.7 billion EUR versus the projected 23.2 billion EUR figure and the previous 22.1 billion EUR surplus. Only the French industrial production report is due today and a 0.3% rebound is eyed.

GBP

The pound suffered a sharp selloff when the UK goods trade balance missed expectations at a deficit of 12.4 billion GBP for June. To top it off, the previous reading was downgraded to show a wider deficit. BOE official McCafferty mentioned in an op-ed piece that the central bank could lower rates further if economic activity slows. There are no reports due from the UK economy today.

CHF

The franc regained ground to the dollar but was mostly weaker against its other rivals. The Swiss jobless rate was unchanged at 3.3% as expected but traders seemed to be paying more attention to overall market sentiment. There are no reports due from Switzerland today.

JPY

The yen regained ground as it took advantage of dollar weakness but was mostly steady against the comdolls. Japanese core machinery orders jumped 8.3% versus the estimated 3.4% increase while PPI showed a slightly smaller than expected 3.9% fall versus the estimated 4.0% decline. Japanese tertiary industry activity data is due next and a 0.3% rebound is expected.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were the biggest beneficiaries of dollar weakness and risk appetite yesterday. The Loonie got a slight boost from the oil rally that took place after the EIA upgraded its 2016 demand forecast. In Australia, the Westpac consumer sentiment index showed a 2.0% increase, recovering from the earlier 3.0% slide. Home loans rose only 1.2% versus the estimated 2.4% gain, suggesting that the housing sector is starting to cool. The RBNZ decision is coming up in the late US session and a 0.25% cut is eyed.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Aug 11, 2016)

USD

The US dollar was unable to make much headway against its counterparts despite stronger than expected jobs data. The JOLTS job openings report showed a 5.62 million figure, up from the earlier 5.51 million reading and the 5.52 million consensus. Initial jobless claims and import prices are up for release today but traders seem to be reacting to market sentiment or waiting for the retail sales data on Friday.

EUR

The euro advanced to the dollar and pound, but was still weaker to the yen and commodity currencies. France reported a 0.8% drop in industrial production instead of the estimated 0.3% uptick. France's final CPI and Italy's trade balance are up for release today.

GBP

The pound continued to slide lower against its counterparts as traders are adjusting their positions after the BOE's decision to expand its bond purchase program. There were no reports out of the UK economy yesterday and none are due today so the ongoing trends could carry on.

CHF

The franc was stronger across the board despite the lack of top-tier data from Switzerland. It appears as though the Swiss currency is benefitting from safe-haven flows in Europe and anti-dollar sentiment. There are still no reports due from Switzerland today.

JPY

The yen regained ground against its peers as traders continued to favor the Japanese currency against the dollar. Tertiary industry activity rose 0.8% versus the projected 0.3% uptick. There are no reports due from Japan today since banks are closed for the holiday.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to hold on to their gains despite the fall in crude oil prices and the RBNZ's decision to cut interest rates by 0.25%. This decision came in line with market expectations, as many market watchers were also disappointed to find out that the central bank wasn't more dovish. Oil inventories were up by 1.1 million barrels instead of showing the estimated drop of 1.3 million barrels. Australia's MI inflation expectations were down from 3.7% to 3.5%.

By Kate Curtis from Trader's Way