Daily Market Outlook by Kate Curtis from Trader's Way

[katetrades]

Forex Major Currencies Outlook (Sep 23, 2016)

USD

Economic data from the US came in mixed and the Greenback failed to establish a clear direction as well. Initial jobless claims and HPI beat expectations while existing home sales and the CB leading index fell short, leaving traders in limbo when it comes to December Fed rate hike expectations. For today, US flash manufacturing PMI data is due and a rise from 52.0 to 52.1 is eyed.

EUR

The shared currency also chalked up a mixed performance as it rallied then reversed to the dollar, strengthened against the yen, and caved to commodity currencies. There have been no major reports out of the region yesterday but the LTRO did show a smaller 45.3 billion EUR figure compared to the previous 399.3 billion EUR, reflecting weaker long-term loan demand. Euro zone flash PMI readings are due today and small declines in the manufacturing and services sectors of Germany and France are expected.

GBP

The pound managed to make a bit of a rebound from its continuous slide earlier in the week as BOE officials gave their testimonies yesterday. MPC members gave a bit of reassurance that Brexit fears may have been exaggerated, reducing expectations of additional easing for the next few months. There are no reports due from the UK today.

CHF

The franc was one of the stronger performers for the day as the Swiss currency seemed to rake in the risk-off flows. There were no reports out of the Swiss economy yesterday and none are due today so the franc might continue to depend on overall market sentiment.

JPY

The yen returned some of its recent wins as Japanese traders took off for the holiday yesterday. Earlier today, Japan reported a strong flash manufacturing PMI reading, which is up from 49.5 to 50.3 in September instead of falling to 49.3. The all industries activity index is up for release next and a slower 0.2% gain is eyed to follow the earlier 1.0% increase.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a mixed performance as risk appetite was all over the place. Canadian CPI and retail sales reports are up for release today and analysts are expecting to see small improvements. Headline CPI could come in at 0.1% while core CPI could post a 0.2% uptick. Headline retail sales might recover by 0.2% while core retail sales could post a 0.5% gain.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Sep 26, 2016)

USD

The US dollar was unable to hold on to its gains on Friday, as traders were disappointed to see the US flash manufacturing PMI fall from 52.0 to 51.4 instead of rising to 52.1. The new home sales report is due today and a drop from 658K to 598K is expected, keeping in line with the recent string of declines from the housing sector. FOMC member Tarullo also has a speech lined up.

EUR

The euro was stronger on Friday, thanks to mostly stronger than expected flash PMI readings. Only Germany's services sector printed a disappointment, weighing on the region's overall reading as well. The German Ifo business climate report is due today and a rise from 106.2 to 106.3 is expected. ECB Governor Draghi also has a speech lined up.

GBP

The pound managed to make a bit of a bounce on Friday even though there were no major reports out of the UK. Only the BBA mortgage approvals report is due today and a drop from 37.7K to 37.2K is expected, possibly forcing the pound to return some of its recent gains.

CHF

The franc advanced against its peers, likely taking its cue from upbeat euro zone PMI readings. There were no reports out of the Swiss economy on Friday and none are lined up today so the franc could trail the euro or be influenced by market sentiment.

JPY

The Japanese yen gave up a bit of ground against its rivals as profit-taking took place. Data from Japan came in better than expected, as the flash manufacturing PMI rose from 49.5 to 50.3 while the all industries activity index posted a 0.3% uptick. BOJ Governor Kuroda has a speech scheduled today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to benefit from dollar and yen weakness on Friday but were slightly weaker against the European currencies. The Loonie gave up a lot of ground when CPI and retail sales figures missed expectations. BOC Governor Poloz has a speech due today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Sep 27, 2016)

USD

The US dollar was barely able to take advantage of the risk-off moves in the market and the slightly stronger than expected US new home sales report. Traders seemed hesitant to hold on to the currency ahead of today's first set of US presidential debates, as the impact on opinion polls could have a huge say in overall risk sentiment. US CB consumer confidence data is due next and a slide from 101.1 to 98.6 is expected.

EUR

The euro got a boost from stronger than expected German Ifo business climate data, as the reading rose from 106.3 to 109.5. To top it off, ECB Governor Draghi reiterated in his testimony that the region is resilient even after the Brexit vote. German import prices data is due today and a 0.1% decline is eyed.

GBP

The pound managed to make a bit of a bounce against some of its counterparts even though there were no major reports out of the UK. BBA mortgage approvals was slightly weaker than expected at 37K versus the 37.2K estimate and the previous 37.7K figure. CBI realized sales data is due today and a drop from 9 to 8 in the index is expected.

CHF

The franc was able to hold its ground to the dollar but was mostly weaker to its other counterparts. Profit-taking may have been happening as the end of the week, month, and quarter is approaching. There are no reports due from the Swiss economy today and SNB head Jordan's testimony yesterday didn't have any surprises.

JPY

The yen regained ground against its peers as risk aversion was present in the financial markets. Earlier today, the BOJ monetary policy meeting minutes spurred a bounce since it contained more details on why the central bank is making its adjustments. No other reports are due from Japan for the rest of the day.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi and Aussie took advantage of dollar weakness and also advanced against European currencies. The Loonie, on the other hand, was bogged down by the lack of a deal in the OPEC meeting and downbeat remarks from BOC Governor Poloz. There are no reports due from the comdoll economies today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Sep 28, 2016)

USD

The US dollar had a mixed performance across the board, although the currency was slightly supported by better than expected data. The flash services PMI climbed from 51.0 to 51.9, outpacing the estimate at 51.1, while the CB consumer confidence index improved from 101.8 to 104.1 instead of dropping to to projected 98.6 reading. For today, durable goods orders data are due, with analysts expecting to see a 1.0 drop in the headline figure and a 0.5% decline in the core reading. Fed head Yellen and FOMC member Bullard also have testimonies lined up.

EUR

The euro was mostly in recent trading sessions after Germany printed a sharper than expected fall in import prices. The report showed a 0.2% drop versus the estimated 0.1% dip, putting more pressure on domestic inflation. Germany's GfK consumer climate index is due today and no change from the earlier 10.2 reading is eyed.

GBP

The pound managed to bounce against most of its counterparts as traders were likely booking profits from the currency's slide earlier in the month. UK CBI realized sales was weaker than expected, as the index fell from +9 to -8 instead of just dipping to +8. There are no major reports lined up from the UK economy today.

CHF

The franc tried to hold steady to the dollar but weakened against most of its counterparts as risk appetite rebounded after the US presidential debates. The Swiss UBS consumption indicator is due today, along with the KOF economic barometer which could rise from 99.8 to 100.5.

JPY

The yen was off to a weak start but soon regained ground towards the latter sessions. There were no major reports out of Japan then and none are due today, which suggests that risk sentiment could be responsible for pushing the Japanese currency around.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a mixed performance, with the Aussie holding on to its gains on lower odds of an RBA cut and the Kiwi sliding lower on rate cut expectations. The Loonie had a volatile time after OPEC leaders suggested that they might not come up with an output deal just yet but noted that they're moving closer to an agreement. US crude oil inventories are up for release next.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Sep 29, 2016)

USD

The US dollar had a mixed performance as the slightly stronger than expected durable goods orders figures weren't enough to trigger a strong boost. Headline durable goods orders for August was flat instead of sliding by 1.0% while core durable goods orders fell 0.4% versus the estimated 0.5% drop. However, the July readings were downgraded significantly to show that activity wasn't as strong as initially reported. US initial jobless claims and final GDP results are due today, along with another speech by Fed head Yellen.

EUR

The euro managed to advance against the dollar and the yen but was no match to comdoll strength. Germany's GfK consumer climate index fell from 10.2 to 10.0 to show weaker optimism. For today, German and Spanish flash CPI readings are due. The German unemployment change report is also due today and a 5K drop in joblessness is eyed.

GBP

The pound continued to advance against most of its peers even though there were no major reports out of the UK economy. Today's schedule has the net lending to individuals and mortgage approvals report due.

CHF

The franc was still in a weak spot against its forex rivals even though Switzerland's UBS consumption indicator improved from 1.46 to 1.53. Today's schedule is empty for the Swiss economy so the franc could take its cue from euro zone data or market sentiment.

JPY

The yen was off to a weak start in the Asian session after Japan printed a weaker than expected retail sales report. Consumer spending was down 2.1% on a year-over-year basis versus the projected 1.7% drop and the previous 0.2% dip. BOJ Governor Kuroda has a speech lined up and dovish remarks could continue to push the currency down.

Commodity Currencies (AUD, NZD, CAD)

The Loonie cheered the positive outcome of the OPEC gathering in Algiers, as energy ministers agreed that they need to come up with a deal to cap production. For now, they will still discuss the size and scale of the program but the official deal won't be announced until their November meeting. US crude oil inventories were down 1.9 million barrels versus the estimated rise of 2.4 million barrels. There are no reports due from the comdoll economies today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Sep 30, 2016)

USD

The US dollar had a mixed performance, although it was mostly stronger across the board when risk aversion picked up. Data from the US economy was also mostly stronger than expected, with the exception of pending home sales for August. The final GDP reading was upgraded from 1.1% to 1.4% while initial jobless claims showed a smaller than expected tally. For today, personal spending and income numbers are due, along with the core PCE price index. The Chicago PMI and revised consumer sentiment data from the UoM are also lined up.

EUR

The euro suffered a brief selloff when news of Deutsche Bank clients withdrawing funds hit the newswires. Still, the shared currency managed to take a piece out of the safe-haven flows in the region as equities tanked. Data from the region was mostly stronger than expected, with German and Spanish flash CPI readings beating expectations and Germany's unemployment change report printing a surprise 1K rise in joblessness instead of the estimated 5K drop. German retail sales and French preliminary CPI numbers are lined up today but the Deutsche Bank story could prove to be a bigger mover.

GBP

The pound trailed the euro in sliding against its peers in the wake of the Deutsche Bank news, as banking troubles in Europe could take a huge hit on London's financial sector. UK net lending to individuals was stronger than expected at $4.5 billion GBP. UK final GDP and current account balance numbers are due today.

CHF

The franc was the big winner for the day as the Swiss currency was the safe-haven of choice in Europe. There were no reports out of the Swiss economy yesterday while today has the KOF economic barometer due and a rise from 99.8 to 100.5 is eyed. More updates on the Deutsche Bank story could impact the franc, although profit-taking could also be in the cards at the end of the month and quarter.

JPY

The yen was also the beneficiary of safe-haven flows but it caved to franc strength. Earlier today, Japan printed weaker than expected readings for inflation and consumer spending. Household spending slipped 4.6% versus the estimated 2.1% drop while the Tokyo and national core CPI posted 0.5% declines versus the projected drops of 0.4%. The unemployment rate ticked higher but preliminary industrial production beat expectations.

Commodity Currencies (AUD, NZD, CAD)

The comdolls took a huge hit from the run in risk aversion, even giving up ground to the euro and the pound as traders sought lower-yielding currencies. There were no major reports out of the comdoll economies yesterday and the Loonie seems to have let go of its post-OPEC gains. China's Caixin flash manufacturing PMI is lined up ahead of Canada's monthly GDP reading. Chinese official PMI readings are due over the weekend.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Oct 03, 2016)

USD

The US dollar struggled to find a clear direction on Friday and took a bit of a hit on profit-taking at the end of the month and quarter. Economic data from the US came in mixed last Friday, as Chicago PMI and the revised consumer sentiment index from the UoM beat expectations. The core PCE price index and personal income reading came in line with expectations while personal spending fell short. The ISM manufacturing PMI is due today and a rise from 49.4 to 50.4 is expected.

EUR

The euro was able to recover slightly after the Deutsche Bank news sparked weakness earlier in the week. Euro zone data came in mixed, with French consumer spending and CPI beating expectations while the core CPI flash estimate fell short. Final manufacturing PMI readings are due from its top economies today and significant downgrades could mean losses for the shared currency.

GBP

The pound was off to a weak start this week as it gapped down to its counterparts after UK PM Theresa May signaled that they will invoke Article 50 by the first quarter of next year. UK current account balance, final GDP and revised business investment numbers all beat expectations on Friday. UK manufacturing PMI is due today and a dip from 53.3 to 52.1 is eyed.

CHF

The franc lost ground to some of its peers as risk appetite made a quick recovery at the end of the week. Data from Switzerland was better than expected as the KOF economic barometer rose from 99.7 to 101.3, outpacing the consensus at 100.5 Swiss retail sales data is due today and a 1.6% year-over-year drop is eyed, marking an improvement from the earlier 2.2% slide.

JPY

The yen was still the weakest performer on Friday as BOJ core CPI missed expectations, confirming that the central bank is likely to add stimulus. Over the weekend, the Tankan report was released, with the manufacturing component unchanged at 6 instead of improving to 7 and the non-manufacturing component down from 19 to 18 as expected. There are no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were off to a weak start this week as risk aversion seems to be returning. Over the weekend, Chinese PMI readings came in line with expectations, as the manufacturing PMI held steady at 50.4 while the non-manufacturing PMI rose from 53.5 to 53.7. Australia's MI inflation gauge rose from 0.2% to 0.4%. There are no other reports due from the comdoll economies for today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Oct 04, 2016)

USD

The US dollar was able to get a boost from upbeat ISM manufacturing PMI data, as the reading rose from 49.4 to 51.5 to reflect a return to industry expansion. The jobs component also showed a gain but was still indicating contraction, albeit at a slower pace compared to the previous month. There are no major reports from the US economy today.

EUR

The euro was mostly weaker against its peers, except against the pound and the yen. Economic data from the euro zone was mostly stronger than expected but the shared currency appeared to have gotten weighed down by the idea that the UK could leave the single market. Euro zone PPI and Spanish unemployment change data are due today.

GBP

The pound was the weakest performer for the day as Brexit jitters continued to weigh on the currency. Data from the UK was actually better than expected, as the manufacturing PMI rose from 53.4 to 55.4 to reflect a faster pace of industry growth. Construction PMI is due today and a dip from 49.2 to 49.1 could be seen.

CHF

The franc gave up ground to the dollar but was able to take advantage of the selloff in the European currencies and the Japanese yen. Swiss retail sales missed expectations as it posted a 3.0% drop versus the projected 1.6% fall. There are no reports due from the Swiss economy today.

JPY

The Japanese yen seems to be losing traction as bears are now trying to push for upside breakouts in yen pairs. Data from Japan came in weak over the weekend while today has the consumer confidence index due. A decline from 42.0 to 41.8 is expected.

Commodity Currencies (AUD, NZD, CAD)

The comdolls still managed to hold on to their gains to the dollar and push for new lows against the pound. Australian building approvals showed a smaller than expected 1.8% fall versus the projected 5.8% slump. New Zealand's Global Dairy Trade auction is coming up in the next Asian session.


By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Oct 05, 2016)

USD

The US dollar continued to advance against its peers even though there were no major reports out of the US economy. News that the ECB could be ready to taper its QE program before its conclusion drove risk aversion back in the markets on the prospect of reduced stimulus. For today, the ADP non-farm employment change report is due and a weaker gain of 166K compared to the earlier 177K reading is eyed. Also lined up today is the ISM non-manufacturing PMI, which might show a climb from 51.4 to 53.1.

EUR

The euro made a strong rally when unnamed ECB officials were quoted saying that policymakers are close to reaching a consensus on QE tapering before the program's end-date on March 2017. ECB Governor Draghi refused to comment on these speculations and denied that any discussions had taken place. Euro zone retail sales and services PMIs from its top economies are due today.

GBP

The pound carried on with its slide as investors continued to price in the repercussions for the UK in case it does leave the single market. Data was actually better than expected, as the construction PMI rose from 49.2 to 52.3 instead of dipping to 49.1. The services PMI is due today and a drop from 52.9 to 52.1 is expected, although traders could still shrug off any stronger than expected figures.

CHF

The franc was in a weak spot to the dollar and euro but took advantage of pound weakness. There were no reports out of Switzerland yesterday and none are due today, leaving the franc functioning as a counter currency.

JPY

The yen was also one of the weaker performers of the day as stronger odds of a Fed rate hike drove traders away from the lower-yielding yen and onto the dollar. Yen bulls seem to be running out of energy in pushing for downside breaks of the lows in yen pairs, despite stronger than expected consumer confidence data. There are no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were no match to dollar strength, although the Aussie managed to hold on to some of its wins after the RBA kept rates unchanged. The Kiwi was the weakest of the bunch after the GDT auction showed a 3% decline in milk prices. Australia retail sales, Canadian trade balance, and US crude oil inventories are lined up for today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Oct 06, 2016)

USD

The Greenback was able to squeeze out more gains after US data came in mostly upbeat. The ISM non-manufacturing PMI jumped from 51.4 to 57.1, higher than the consensus at 53.1, and indicated a strong gain in its jobs component. However, the ADP non-farm employment change figure came in at 154K only, short of the estimated 166K figure and the previous 175K increase. Factory orders surprised with a 0.2% uptick instead of the estimated 0.4% drop. US initial jobless claims and Challenger job cuts are due today.

EUR

The euro struggled to hold on to its recent gains after ECB officials downplayed the idea of tapering. Data was somewhat weaker than expected as services PMI readings from Spain and France came in below consensus. German factory orders data is due today, along with the minutes of the latest ECB meeting.

GBP

The pound was still one of the weakest performers for the day, even as the UK services PMI showed a smaller than expected fall from 52.9 to 52.6 versus the projected drop to 52.1. There are no major reports due from the UK economy today, which might give bears time to book profits or keep Brexit jitters in play.

CHF

The franc advanced to the dollar but sold off sharply against the euro in what some speculate to be a form of mild intervention from the SNB. There were no reports out of the Swiss economy yesterday while today has the CPI due. Analysts are expecting to see a 0.2% rebound in price levels.

JPY

The yen continued to sell off against its peers as bulls appear to be reducing their holdings and transferring to the dollar instead. There were no major reports out of Japan yesterday and none are due today so risk sentiment could still be the main driving force for yen pairs.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi and Aussie were somewhat weaker for the day while the Loonie got a boost from the rally in crude oil. The US EIA reported a draw of 3.3 million barrels from crude oil stockpiles, marking its fifth weekly drop in a row and easing fears of an oversupply. Australia's trade balance beat expectations by printing a smaller deficit as both imports and exports rose. There are no other reports due from the comdolls today.

By Kate Curtis from Trader's Way