Daily Market Outlook by Kate Curtis from Trader's Way

[katetrades]

Forex Major Currencies Outlook (Sep 09, 2016)

USD

The US dollar regained ground against its peers when risk appetite weakened after the ECB statement. Data from the US came in better than expected at 259K versus the projected 264K reading while consumer credit rose to 17.7 billion USD. US wholesale sales data is due today, along with a speech by FOMC member Rosengren.

EUR

The euro rebounded strongly after the ECB refrained from adding stimulus and Governor Draghi sounded less dovish than expected. According to the central bank head, he doesn't see the need for more easing just yet but that policymakers will continue to monitor the markets. The ECB even upgraded its growth forecast for the year and kept its inflation estimate unchanged. German and French trade balance are up for release today, along with the French industrial production report.

GBP

The pound had a mixed performance as it weakened to the dollar and euro but managed to advance against the commodity currencies as risk appetite weakened. There were no reports out of the UK economy yesterday while today has the goods trade balance, consumer inflation expectations, and construction output report due. Stronger than expected data could reinforce pound gains.

CHF

The franc stalled in its rally against the dollar and the euro despite the lack of top-tier reports from the Swiss economy. The Swiss jobless rate is due today and no change from the previous 3.3% figure is eyed.

JPY

The yen resumed its slide against most of its major counterparts despite the improvement in the country's Economy Watchers Sentiment index from 45.1 to 45.6. Traders seem to be back to pricing in easing expectations from the BOJ or booking profits from the recent rallies.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave up their recent wins when risk sentiment turned sour after the ECB refrained from easing. Data from Australia and China showed healthy trade activity, which could continue to keep the higher-yielding currencies supported later on. Also, the US crude oil inventories report showed a large draw in stockpiles. Data from Canada turned out weaker than expected but the Loonie could have a chance to recover if its jobs figures beat expectations today. The employment change report could show a 10.6K gain in hiring, rebounding from the earlier 31.2K drop.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Sep 12, 2016)

USD

The US dollar tossed and turned on Friday as traders tried to price in odds of a Fed rate hike for this month or December. There were no major reports out of the US economy then while today has only a speech by FOMC member Brainard lined up. Dovish remarks could continue to dampen September hike expectations while reassuring comments could keep December tightening in play.

EUR

The euro managed to regain ground against most of its peers towards the end of the week despite weaker than expected medium-tier data from the region. Germany's trade balance and the French industrial production report both missed expectations. Only Italy's quarterly unemployment rate is due from the euro zone today.

GBP

The pound was still reeling from the BOE Inflation Report hearings at the end of the week as traders readjusted their biases for the BOE statement later this week. UK goods trade balance came in line with expectations at a deficit of 11.8 billion GBP compared to the earlier 12.9 billion GBP shortfall. The CB leading index is due today.

CHF

The franc gave up some of its recent gains on Friday when the Swiss jobless rate rose from 3.3% to 3.4% once more. There are no reports due from the Swiss economy today so franc pairs could hold steady ahead of the SNB decision later this week.

JPY

The yen sold off against its peers once more despite the tertiary industry activity index coming in line with expectations at 0.3%. Over the weekend, Japan reported a stronger than expected 4.9% rebound in core machinery orders. Preliminary machine tool orders data are due today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were mostly weaker on Friday as risk aversion was in the markets. China printed a weaker than expected CPI of 1.3%, down from the earlier 1.8% figure, after Australia printed a 4.2% slump in home loans. Canada showed a larger than expected 26.2K gain in hiring versus the projected 16.0K gain but the jobless rate rose from 6.9% to 7.0%.

By Kate Curtis from Trader’s Way

 

[katetrades]

Forex Major Currencies Outlook (Sep 13, 2016)

USD

The US dollar returned its recent wins when FOMC member Brainard expressed a stronger degree of caution in her testimony. She cited that there's a need to exercise prudence before hiking and that she'd rather wait for stronger evidence of a rebound in consumer spending and inflation before voting to tighten. She also mentioned vulnerabilities to external risks from China and emerging economies, as well as Japan and Europe. There are no major reports due from the US economy today.

EUR

The euro was mostly weaker in the latter trading sessions even though medium-tier data came in line with expectations. Today has the Italian industrial production and German final CPI readings due, although these might not have such a strong impact on the shared currency. Later on, ECB Governor Draghi has a speech lined up ahead of the release of the ZEW economic sentiment figures.

GBP

The pound regained a bit of ground against its rivals as the UK CB leading index improved from -0.3% to 0.0%. Traders are also likely positioning for the UK CPI release today since the headline figure is slated to rise from 0.6% to 0.7% while the core figure could climb from 1.3% to 1.4%.

CHF

The franc was able to take advantage of dollar and euro weakness even as there were no releases from the Swiss economy. Today has the Swiss PPI due and a 0.2% drop in producer prices is eyed, although franc action might take its cue from top-tier euro zone data.

JPY

The yen regained ground against its peers after Japan's BSI manufacturing index showed an impressive rise from -11.1 to +2.9 to show a return to industry growth. To top it off, dollar weakness drew traders back to the yen as a safe-haven alternative. There are no other reports due from Japan today but risk appetite could influence yen movements.

Commodity Currencies (AUD, NZD, CAD)

The comdolls took advantage of dollar weakness and were able to hold on to their gains after Chinese data came in slightly better than expected. Industrial production is up from 6.0% to 6.3% while retail sales improved to 10.6% instead of holding steady at 10.2%. New Zealand's current account balance is due next.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Sep 14, 2016)

USD

The US dollar regained ground against its peers when risk aversion came back in the financial markets. There have been no major reports out of the US but traders seem to be pricing in the possibility of a Fed rate hike for the FOMC meeting next week. US crude oil inventories and import prices data are up for release next.

EUR

The euro was weaker against the dollar and yen but it managed to advance against the higher-yielding commodity currencies. Data from the euro zone was weaker than expected, as the German ZEW economic sentiment index held steady at 0.5 instead of improving to the projected 2.8 figure while the region's reading ticked up to 5.4, short of the 6.7 consensus. Only the euro zone industrial production report is scheduled today and a 0.8% decline is expected.

GBP

The pound slid against its forex rivals after the UK CPI reports disappointed. Headline inflation was unchanged at 0.6% instead of rising to the projected 0.7% figure while core inflation was also steady at 1.3%. PPI input prices posted a meager 0.2% uptick versus the projected 0.6% increase. UK jobs data is due today and a 1.7K increase in claimants is expected for August while the average earnings index likely slid from 2.4% to 2.1% for the three-month period ending in July.

CHF

The franc returned its recent gains to the dollar but was able to advance against the pound and the yen. Swiss PPI was weaker than expected with a 0.3% drop, sharper than the estimated 0.2% dip and the previous 0.1% decline. ZEW economic expectations data is up for release next.

JPY

Yen pairs had a volatile run after the Nikkei reported that BOJ policymakers are considering lowering interest rates further into negative territory while counteracting this move with a reduction in JGB purchases. Still, a BOJ official said that these are still up for discussion and that the debates would proceed cautiously. Japan's revised industrial production report is scheduled for release today but no changes to the flat reading are eyed.

Commodity Currencies (AUD, NZD, CAD)

The comdolls sold off sharply against their peers when risk aversion returned to the markets. Data from China came in stronger than expected earlier in the day but the upbeat mood wasn't sustained as Europe started printing downbeat reports and Fed rate hike expectations weighed on sentiment. New Zealand printed a larger than expected current account deficit and is set to print its Q2 GDP next, likely reporting a 1.1% growth figure.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Sep 15, 2016)

USD

The US dollar returned some of its recent wins as traders probably closed positions ahead of today's major catalysts. From the US alone, we've got retail sales, PPI, Philly Fed index, initial jobless claims, industrial production, and the current account balance. Headline retail sales could fall by 0.1% while core retail sales could increase by 0.3%. Headline PPI and core PPI are both expected to print 0.1% gains.

EUR

The euro was able to take advantage of dollar weakness and managed to hold on to most of its recent wins, except against the yen. Euro zone industrial production turned out weaker than expected with a 1.1% slump versus the projected 0.8% decline. Final CPI readings are due today and no revisions to the initial estimates are eyed.

GBP

The pound managed to score some wins despite mixed jobs data. The number of claimants rose by 2.4K in August versus the estimated 1.7K increase in joblessness, but the average earnings index came in better than expected at 2.3% versus 2.1% for the three-month period ending in July. The BOE interest rate decision is scheduled for today and no changes to the benchmark rate or asset purchase program are eyed, although MPC members are expected to stay dovish.

CHF

The pound was able to regain ground when the Swiss ZEW economic expectations index rose from -2.8 to +2.7 to indicate a return to optimism. The SNB rate decision is scheduled today and no major adjustments are eyed, even though a bit of the usual jawboning is expected from Chairman Jordan.

JPY

The yen was able to take advantage of the risk-off flows in the markets as BOJ policymakers refrained from commenting on what they might announce or discuss in their policy statement next week. Japan's industrial production reading was revised to show a 0.4% drop from the initially reported flat reading.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a mixed performance, as the Aussie consolidated, the Kiwi advanced, and the Loonie lagged. US oil inventories showed a surprise draw of 0.6 million barrels but Loonie traders were still anticipating a buildup in output later on. New Zealand's economy expanded by 0.9% in Q2, short of the estimated 1.1% growth figure, but the previous reading was upgraded from 0.7% to 0.9%. Australia's jobs report is due next and a 15.2K increase in hiring is eyed.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Sep 16, 2016)

USD

The US dollar slumped after seeing mostly downbeat economic data, as this could seal the deal for the Fed to sit on its hands next week. Headline retail sales fell 0.3% versus the estimated 0.1% dip while core retail sales dropped 0.1% instead of gaining 0.3%. Headline PPI and the Empire State manufacturing index also fell short of estimates while the Philly Fed index posted a higher than expected climb. CPI and consumer sentiment figures are due next.

EUR

The euro held steady to the dollar but gave up ground to some of its other counterparts when risk appetite improved. Final CPI readings from the region showed no revision from the 0.2% headline and 0.8% core readings. There are no reports due from the euro zone today.

GBP

The pound enjoyed additional volatility during the BOE decision and release of the MPC minutes but ended mostly unchanged against its peers. The central bank kept policy unchanged as expected in a unanimous vote since they just increased stimulus in their previous month's statement. The pound also drew a bit of support from the smaller than expected drop in UK retail sales of 0.2% versus the estimated 0.4% slide.

CHF

The franc popped slightly higher during the SNB statement but the lack of dovishness allowed it to regain ground. There are no reports due from the Swiss economy today.

JPY

The yen was able to hold on to its recent gains and chalk up a bit more even as risk appetite improved in the latter part of the trading day. There have been no reports out of the Japanese economy then and none are due today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls took advantage of the pickup in risk appetite, even as data from Australia came in below expectations. The economy lost 3.9K jobs in August instead of reporting the estimated 15.2K gain. The jobless rate fell but mostly due to weaker labor force participation, reflecting weaker confidence in job prospects. Canadian manufacturing sales and foreign securities purchases are lined up today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Sep 19, 2016)

USD

The US dollar staged a late rally on Friday when CPI readings beat expectations and revived hawkish hopes for this week's FOMC statement. Headline CPI showed a 0.2% gain versus the projected 0.1% uptick while the core reading showed a 0.3% increase versus the estimated 0.2% rise. The UoM preliminary consumer sentiment index came in short of expectations, though, as the September reading was unchanged from the downgraded 89.9 August figure. There are no major reports due from the US economy today.

EUR

The euro gave up ground against most of its peers at the end of the week even though there were no major reports from the euro zone. Today has the euro zone current account balance and the German Buba monthly report on tap, likely affecting market sentiment for the euro in the absence of other top-tier data.

GBP

The pound made a sharp selloff on Friday even though there were no major releases from the UK. There are still no reports up for release today so overall risk sentiment could be responsible for pushing the pound around today.

CHF

The Swiss franc returned most of its recent wins to the dollar but managed to take advantage of the weakness in the euro and the pound. There were no reports out of the Swiss economy on Friday and none are due today so consolidation could be seen among the franc pairs.

JPY

The yen regained ground as risk aversion seemed to dominate the markets on Friday. Traders are also likely lightening up on their yen positions ahead of this week's BOJ interest rate statement. Japanese banks are closed for the holiday today so liquidity could be light.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were weighed down both by the declines in commodity prices and in risk appetite but they managed to advance against their European counterparts. Canadian data came in below expectations while crude oil prices slid. Over the weekend, New Zealand reported a rise in its Westpac consumer sentiment index from 106.0 to 108.0. There are no reports due from these economies today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Sep 20, 2016)

USD

The US dollar was off to a weak start on Monday but soon regained ground during the US session. There were no major reports printed, although the stronger than expected NAHB housing market index may have led to a few gains. US building permits and housing starts are lined up for today but these might not have a lasting impact since traders are holding out for the FOMC decision.

EUR

The euro continued to weaken against its peers, except for the British pound and Swiss franc. The current account surplus narrowed from 29.5 billion EUR to 21.0 billion EUR, lower than the projected 27.2 billion EUR figure. Only the German PPI is up for release today and a 0.1% uptick in producer prices is eyed.

GBP

The pound was still one of the weakest performers for the day as traders continued to mull the impact of the Brexit on the UK economy. Last Friday, UK Chancellor Hammond noted that they risk losing access to the single European market if they push for immigration reforms in the Brexit negotiations.

CHF

The franc regained ground to the dollar, continued to advance against the pound, and gave up ground to the euro. There were no reports out of the Swiss economy, leaving the franc to act as a countercurrency. Swiss SECO economic forecasts are up for release today, along with the trade balance which might show a wider 3.27 billion CHF surplus.

JPY

The yen benefitted from the lack of risk appetite in the markets, although traders might also be pricing in ahead of a possible BOJ disappointment. Reports have been giving mixed signals, with dovish hints from BOJ Governor Kuroda and the lack of conviction from other policymakers. Japanese banks will reopen from their Monday holiday today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls tossed and turned through out the day as the risk switch was flipped on and off. Crude oil had a bit of a boost on hopes of an oil production cap during the Algiers OPEC gathering but the commodity soon returned its gains. Australia reported a 0.4% increase in its CB leading index, up from the earlier 0.3% reading. RBA meeting minutes are due next and New Zealand will have its GDT auction in the next Asian session.

By Kate Curtis from Trader’s Way

 

[katetrades]

Forex Major Currencies Outlook (Sep 21, 2016)

USD

The US dollar had a mixed performance as traders refrained from pushing it in a general direction ahead of today's FOMC statement. Building permits and housing starts fell short of expectations but analysts remarked that this could just be a temporary pullback. Market watchers are still divided on whether the Fed would hike rates or not, as the latter scenario could keep risk-taking in play while the former could lead to a flight to safety.

EUR

The euro was weaker across the board as Brexit jitters continued to weigh on the currency. There have been no major reports out of the region yesterday and none are due today, which suggests that risk sentiment could be the main driving force for euro pairs.

GBP

The pound was also one of the bigger losers for the day as traders priced in potential weakness and central bank dovishness in anticipation of Brexit risks. There were no reports out of the UK yesterday while today has public sector net borrowing and the BOE Quarterly Bulletin due.

CHF

The franc had a volatile run to the dollar but ended higher against its European rivals. Data from Switzerland fell short of expectations as the trade surplus stood at 3.02B CHF versus the estimated 3.27B CHF figure. The SNB Quarterly Bulletin is up for release today.

JPY

The yen raked in gains in a risk-off environment as traders were reluctant to put money in the safe-haven dollar. Still, the upcoming BOJ statement could change the yen's behavior as additional rate cuts and bond purchases are eyed. Anything disappointing could allow the yen to hold on to its gains and go for more.

Commodity Currencies (AUD, NZD, CAD)

The comdolls recouped some of their previous losses despite weaker than expected quarterly HPI from Australia. The RBA minutes were not as dovish as expected while the New Zealand GDT auction yielded a 1.7% gain in prices. The RBNZ decision is lined up after the FOMC statement but no actual changes are expected.

By Kate Curtis from Trader’s Way

 

[katetrades]

Forex Major Currencies Outlook (Sep 22, 2016)

USD

The US dollar gave up ground when bulls were disappointed to find out that the Fed still kept interest rates at <0.50% for now. Still, Fed officials kept the door open for a December hike by highlighting the improvements in hiring and spending, explaining that the case for tightening has strengthened. Yellen noted that they will continue to monitor labor market improvements before gauging if a hike in November or December is due. US existing home sales and CB leading index are on tap for today.

EUR

The euro continued to sink against its forex peers, except against the US dollar. There have been no major reports out of the region yesterday, as it appears that the downbeat outlook for the UK and European trade activity from last week is still weighing on the shared currency. ECB Governor Draghi has a testimony lined up for today and the euro zone consumer confidence index is up for release.

GBP

The pound made a quick bounce to the dollar but was still weaker across the board. UK public sector net borrowing data beat expectations but returned to a deficit of 10.1 billion GBP. UK CBI industrial order expectations data and speeches by MPC members Carney and Cunliffe are lined up today.

CHF

The franc regained ground to the dollar and European currencies but caved to yen strength. There have been no major reports out of the Swiss economy yesterday and none are due today, keeping the franc acting as a counter currency and likely chalking up another mixed performance.

JPY

The yen had a bit of a selloff after the BOJ's decision to shift from inflation-targeting to targeting the yield curve. It also unveiled plans to launch more aggressive easing efforts but weren't enough to keep yen bears in play. Japanese banks are closed for the holiday today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls took advantage of dollar weakness as low borrowing costs for much longer could keep global growth supported. The Kiwi had a brief dip after the RBNZ sat on its hands but hinted that further policy easing would be made. Meanwhile, the Loonie bounced slightly on the US EIA report, which showed a draw in crude oil stockpiles. New RBA Governor Lowe has a speech lined up today.

By Kate Curtis from Trader’s Way