Daily Market Outlook by Kate Curtis from Trader's Way

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Forex Major Currencies Outlook (Oct 21, 2016)

USD

Economic data from the US came in mixed, with initial jobless claims missing expectations and the existing home sales report printing upbeat results. The Philly Fed index posted a smaller than expected decline but still indicated a slowdown in the manufacturing industry. There are no major reports due from the US economy today.

EUR

The euro continued to tumble against its forex counterparts as traders were disappointed to find out that ECB policymakers hadn't planned on tapering QE yet. ECB Governor Draghi said that QE could extend past the March 2017 end-date, citing a weak inflation outlook and downside risks to growth. Euro zone business confidence data is due today, along with a speech by German President Weidmann.

GBP

The pound put up a fight against its forex rivals despite weaker than expected UK retail sales. The report showed a flat reading instead of the estimated 0.3% uptick. UK public sector net borrowing data is due today but market watchers could be more sensitive to Brexit headlines.

CHF

The franc underwent a volatile period during the ECB press conference as the Swiss currency took its cue from the euro. Swiss trade balance was stronger than expected at a surplus of 4.37B CHF from the earlier 3.01B CHF. There are no reports due from the Swiss economy today.

JPY

The yen was mostly weaker against its peers even though there were no major reports out of the Japanese economy. Earlier today, BOJ Governor Kuroda had a testimony but his remarks failed to inspire strong moves for the currency, leaving it vulnerable to market sentiment for the rest of the day.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were in a weak spot after Australia printed a dismal jobs report. Unemployment rose by 9.8K while labor force participation tanked. In New Zealand, visitor arrivals and credit card spending rebounded. Canada's CPI and retail sales figures are due today and improvements are expected on both fronts.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Oct 24, 2016)

USD

The US dollar was able to post gains against its counterparts on Friday even though there were no major US reports on deck. Only the US flash manufacturing PMI is lined up today and an uptick from 51.5 to 51.6 is eyed. Also on the schedule are speeches from FOMC members Dudley and Bullard.

EUR

The euro was in a weak spot on Friday even though there were no reports out of the region. Today has flash PMI readings from the manufacturing and services sectors of Germany and France, with small improvements eyed. These might be enough to bring the region's manufacturing PMI up from 52.6 to 52.7 and its services PMI up from 52.2 to 52.4.

GBP

The pound struggled to hold on to its recent gains after the UK public sector net borrowing figure came in at 10.1 billion GBP versus the projected 8.6 billion GBP figure. Only the CBI industrial order expectations report is lined up today and an improvement from -5 to -2 is expected.

CHF

The franc slid lower against most of its forex peers on Friday as the Swiss currency simply trailed the euro. There are no major reports lined up from the Swiss economy today so the franc could be influenced by the turnout of the euro zone PMI reports unless SNB head Jordan drops a bombshell during his testimony today.

JPY

The yen took advantage of weaker risk appetite on Friday to advance against its higher-yielding rivals. Over the weekend, Japan printed a stronger than expected trade balance, as the surplus came in at 0.35T JPY versus the projected 0.21T JPY figure. Earlier today, Japan's flash manufacturing PMI jumped from 50.4 to 51.7, higher than the estimated rise to 50.6.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave up a lot of their recent gains, as the Loonie broke past a key level against the US dollar when Canadian data came in weaker than expected. Headline retail sales fell 0.1% while core retail sales was flat. Headline CPI posted a 0.1% uptick versus the projected 0.2% gain while core CPI came in line with expectations of a 0.2% increase. Canada's wholesale sales is due today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Oct 25, 2016)

USD

The US dollar managed to squeeze out a few gains after the US flash manufacturing PMI jumped from 51.5 to 53.2 to show a faster pace of expansion compared to the estimated rise to 51.6. US CB consumer confidence data is due today and a fall from 104.1 to 101.5 is eyed. The Richmond manufacturing index is also due and an improvement from -8 to -5 is expected.

EUR

The euro was able to score gains across the board thanks to stronger than expected PMI readings. Only the French services PMI missed the mark but the rest of the industry reports from Germany and the euro zone beat estimates. German Ifo business climate data is due today and a small uptick is eyed but market watchers could pay closer attention to ECB head Draghi's testimony.

GBP

The pound struggled to stay afloat as the UK CBI industrial order expectations showed a surprise tumble from -5 to -17 instead of rising to -2. BOE Governor Carney has a testimony lined up today and any hints on monetary policy and Brexit action could spur sterling volatility.

CHF

The franc gave up some ground after SNB head Thomas Jordan reiterated that the currency remains significantly overvalued but said that housing market risks are materializing. There are no reports due from the Swiss economy today so risk sentiment could be the main driving force.

JPY

The yen had a mixed performance since it functioned mostly as a counter currency. Japanese data was stronger than expected, easing fears of additional stimulus from the BOJ in their policy meeting next week. There are no reports due from Japan today so risk sentiment could push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were slightly weaker in recent trading sessions, although the Loonie bounced back after BOC Governor Poloz backpedaled on his stimulus hints. He even hinted that they might stay on put for the next 18 months to assess other economic uncertainties before making adjustments. There are no reports due from the comdoll economies today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Oct 26, 2016)

USD

The US dollar advanced against the euro and the pound even as data from the US came in mixed. The CB consumer confidence index fell from a downgraded 103.5 figure to 98.6, worse than the estimated fall to 101.5, while the Richmond manufacturing index rose from 46.7 to 51.3. US flash services PMI and new home sales data are up for release today.

EUR

The euro suffered a sharp selloff when ECB Governor Draghi reiterated that stimulus measures will stay in place until the region hits its inflation targets. Data from Germany was stronger than expected, as its Ifo business climate index jumped from 109.5 to 110.5, higher than the estimated rise to 109.6. Germany's GfK consumer climate index is due, along with import prices and Italian retail sales data.

GBP

The pound sold off in anticipation of dovish remarks from BOE Governor Carney but was able to bounce back when the central bank head acknowledged that the depreciating currency would be positive for inflation. This led market watchers to speculate that the UK central bank won't need to adjust policy soon. UK preliminary GDP data is due today and a 0.3% growth figure is eyed, slower than the earlier 0.7% gain, but an upside surprise could be seen.

CHF

The franc had a mixed performance as the lack of top-tier data from Switzerland kept it sensitive to country-specific data. The UBS consumption indicator is up for release today and an improvement from the earlier 1.53 reading could spark gains for the Swiss currency.

JPY

The yen was mostly weaker against its peers as risk appetite kept higher-yielders supported. There were no major reports out of Japan then and none are due today so risk sentiment could keep pushing yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The Aussie got a boost from stronger than expected Australian CPI, with price levels picking up 0.7% versus the estimated 0.5% gain. The trimmed mean CPI came in line with estimates of a 0.4% increase, which might be enough to keep the RBA in its neutral stance. US crude oil inventories data is due and a draw in stockpiles could be positive for the oil-related Loonie, which has been weighed down by reports that Russia and Iraq are unwilling to participate in an output deal.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Oct 27, 2016)

USD

The US dollar regained a bit of ground against its peers when most of its medium-tier releases came in better than expected. Flash services PMI jumped from an upgraded 52.3 figure to 54.8, outpacing the consensus at 52.4. The goods trade balance showed a smaller deficit, likely making a positive contribution to Q3 GDP. Preliminary wholesale inventories ticked higher to show a slight dip in demand while new home sales increased. Pending home sales, initial jobless claims, and durable goods orders data are lined up today.

EUR

The euro got another blow when sources close to the ECB shared that the central bank is considering some adjustments to its QE program, apart from extending it past the March 2017 end-date. These could involve less restrictions on the availability and size of bond purchases, which could further boost liquidity and inflation in the region. Data from the region fell short of estimates, with the German GfK consumer climate index down from 10.0 to 9.7 instead of improving to 10.1 and Italian retail sales lower by 0.1% instead of showing the projected 0.2% uptick.

GBP

The pound was able to recover against its peers as traders seem to be positioning for an upside GDP surprise. BBA mortgage approvals also came in better than expected at 38.3K versus 37.3K. The preliminary Q3 GDP could show a 0.3% growth figure, slower than the earlier 0.7% reading, but a stronger than expected result could be printed. CBI realized sales data is also due and a rise from -8 to -2 is expected.

CHF

The franc had a mixed performance as it functioned more as a counter currency instead of establishing its own direction. The UBS consumption indicator is due today and an improvement from the earlier 1.53 reading could be positive for the Swiss currency.

JPY

The yen also had a mixed performance since it simply reacted to country-specific factors when there were no reports out of Japan. There are still no major reports lined up for today so market sentiment could push yen pairs around ahead of Japan's consumer spending and inflation releases on Friday.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were in a weak spot even as the US EIA report showed a reduction in crude oil stockpiles of 0.6 million barrels. Australia printed a sharper than expected 1.0% fall in import prices versus the estimated 0.7% drop while New Zealand showed a much wider trade deficit spurred by a 5.7% drop in exports. 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 (Oct 28, 2016)

USD

The US dollar resumed its climb against its peers, thanks to strong gains in US bond yields and mostly upbeat medium-tier data. Headline durable goods orders fell 0.1% instead of rising by 0.1% while core durable goods orders came in line with estimates of a 0.2% gain. Initial jobless claims stood at 258K versus 261K while pending home sales posted a 1.5% gain, higher than the estimated 1.2% increase. US advanced GDP data is due today and a 2.5% expansion is projected.

EUR

The euro recouped most of its recent losses as traders likely booked profits off their shorts on upbeat data. The Spanish unemployment rate improved from 20% to 18.9%, much better than the estimated 19.3% reading. Preliminary GDP and CPI readings from Germany, France, and Spain are lined up today so strong readings are likely to drive the euro higher while weak results could force it to retreat again.

GBP

The pound also regained a bit of ground but was unable to sustain its climb even after the preliminary Q3 UK GDP came in better than expected. The economy expanded by 0.5% in Q3 even after the Brexit referendum while the earlier figure was upgraded to 0.7% growth. There are no reports due from the UK economy today.

CHF

The franc barely made much headway against its peers, except against the Japanese yen. The Swiss UBS consumption indicator rose from 1.53 to 1.59 to reflect a bit of improvement. Swiss KOF economic barometer is due today and a rise from 101.3 to 101.8 is eyed.

JPY

The yen gave up ground when economic data from Japan beat expectations, presumably due to the pickup in risk appetite it caused. Household spending is down 2.1% on a year-over-year basis, better than the projected 2.6% decline and the previous 4.6% drop. Tokyo core CPI came in at -0.4% versus the projected 0.5% dip while national core CPI came in line with estimates of a 0.5% decline. BOJ core CPI is still due next.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were the weaker performers of the day, giving up ground to the dollar and European currencies. Australian import prices posted a steeper 1.0% decline compared to the estimated 0.7% drop while PPI rose 0.3% versus the estimated 0.6% gain. Crude oil ticked slightly higher after Saudi Arabia reportedly proposed a 4% output cut to Russia. There are no other reports due from the comdoll economies today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Oct 31, 2016)

USD

The US dollar rallied then reversed on Friday, as traders reacted to a stronger than expected GDP reading then booked profits quickly. The US economy grew by 2.9% in Q3, outpacing the consensus of 2.5%, while the price index for the same period also posted a stronger than expected 1.5% increase. Meanwhile, the UoM sentiment figure was downgraded from 87.9 to 87.2 to show weaker optimism. Today has the core PCE price index, along with personal spending and income data, lined up.

EUR

The euro was able to keep up its climb until the end of the week even as data came in mixed. French CPI and consumer spending fell short of estimates but Germany and Spain reported stronger than expected inflation figures. Euro zone CPI estimates are up for release today and the headline reading is slated to rise from 0.4% to 0.5% while the core figure could hold steady at 0.8%. German retail sales and Italian CPI are also due.

GBP

The pound gave up some of its recent gains since there were no reports to give the UK currency support on Friday. The GfK consumer climate index ticked down a couple of notches from -1 to -3 to show more pessimism. Today has mortgage approvals and net lending to individuals data lined up.

CHF

The franc recouped a lot of its losses at the end of Friday's New York session on profit-taking. Swiss data was also stronger than expected, as the KOF economic barometer rose from 101.6 to 104.7, higher than the estimate at 101.8. There are no reports due from Switzerland today so the franc could trail the euro or react to market sentiment.

JPY

The yen was off to a weak start after reports released over the weekend came in below estimates. Industrial production was flat in September versus the projected 0.9% gain while retail sales fell 1.9% on a year-over-year basis versus the projected 1.7% slump. Housing starts data is still up for release next.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were mostly weaker for the day as strong US GDP reinforced projections of higher borrowing costs, which could then weigh on global demand. Australia's PPI was also weaker than expected at 0.3% versus 0.6%. Earlier today New Zealand reported a drop in its ANZ business confidence index from 27.9 to 24.5. Australia's MI inflation gauge fell from 0.4% to 0.2% while its private sector credit posted another 0.4% gain as expected.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Nov 01, 2016)

USD

The US dollar returned some of its recent gains as traders booked profits at the end of the month. Economic data from the US came in line with estimates, except for the Chicago PMI which showed a sharper decline and a slower pace of expansion. The core PCE price index was up 0.1% as expected, personal spending rose 0.5%, and personal income increased by 0.3%. The ISM manufacturing PMI is due today and a rise from 51.5 to 51.8 is expected.

EUR

The euro held on to its recent wins when euro zone data came in mostly in line with estimates. The headline CPI flash reading stood at 0.5% while the core figure held steady at 0.8% as expected. The region's flash GDP estimate came in at 0.3% but Italy's preliminary CPI reading came in short. French and Italian banks are closed for the holiday today so lower liquidity is expected during the European session.

GBP

The pound was able to advance after BOE Governor Carney confirmed that he would be staying in office for three more years, easing fears that he might step down in the middle of Brexit negotiations. UK net lending to individuals and mortgage approvals came in line with expectations. The manufacturing PMI is due today and a fall from 55.4 to 54.6 is eyed.

CHF

The franc was barely able to establish any clear direction in recent trading since there were no economic reports out of the Swiss economy. Swiss retail sales and manufacturing PMI data are due today, with the former expected to show a 2.3% year-over-year drop and the latter projected to rise from 53.2 to 53.9.

JPY

The yen was stuck in consolidation as traders are holding out for the BOJ decision. No actual changes are expected for the time being, although officials are expected to provide more details on the shift in their monetary policy framework. Dovish remarks could keep a lid on yen gains while upbeat comments could allow the Japanese currency to recover.

Commodity Currencies (AUD, NZD, CAD)

The Loonie gave up ground when crude oil prices fell on reports of record high OPEC output and a buildup in inventories. Earlier today, Chinese PMI readings came in mostly better than expected. Canada is set to print its monthly GDP reading and might show a bleak 0.2% expansion while New Zealand has its quarterly jobs report due.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Nov 02, 2016)

USD

The US dollar gave up a lot of its recent gains as election-related uncertainties weighed on US markets. Polls continued to show a narrowing lead for Clinton over Trump as the FBI investigation into her private email server is hurting her credibility. Data came in mostly in line with expectations, as the ISM manufacturing PMI advanced from 51.5 to 51.9 while the jobs component returned to showing expansion. Today has the FOMC statement lined up and hawkish remarks could keep the US currency afloat.

EUR

The euro took advantage of dollar weakness and was able to advance against most of its rivals, except against the franc. French and Italian banks were closed for the holiday and there were no euro zone reports released. Today has the final manufacturing PMI readings due, along with the German unemployment change. Analysts are expecting to see a flat reading for October.

GBP

The pound also weakened against its forex peers as the UK manufacturing PMI slumped from 55.5 to 54.3, lower than the 54.6 consensus. Today has the construction PMI due and a slide from 52.3 to 51.9 is expected, although traders might hold out ahead of the BOE decision tomorrow.

CHF

The franc was one of the top performers for the day as traders seemed to transfer their safe-haven holdings out of the dollar and onto the franc. SNB head Jordan attempted to jawbone the currency to no avail, with franc bulls unwilling to stop unless actual intervention is seen. Swiss retail sales came in line with expectations of a 2.3% year-over-year drop while the manufacturing PMI beat expectations by rising from 53.2 to 54.7 versus the 53.9 forecast.

JPY

Yen pairs were mostly stuck in consolidation as traders couldn't get a clear direction after the BOJ refrained from boosting stimulus again. Central bank officials had a dovish outlook, citing that risks to growth and inflation were tilted to the downside. There are no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi was one of the strongest performers, thanks to upbeat jobs data and the 11.4% jump in dairy prices during the GDT auction. Quarterly employment change rose 1.4% while the jobless rate fell from 5.0% to 4.9%, indicating that a potential RBNZ rate cut might be their last one for a long while. In Australia, the currency got a boost from a slightly hawkish RBA statement and PMI improvements in China. US crude oil inventories are due next and a draw in stockpiles could support the Loonie.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Nov 03, 2016)

USD

The US dollar continued to slide against its peers as stock indices closed lower on election jitters. The FOMC kept interest rates on hold as expected, making some slight revisions in their rhetoric but still keeping December rate hike expectations in play. The ADP non-farm employment change missed the mark and showed a 147K reading versus the projected 166K increase. ISM non-manufacturing PMI is due today and a fall from 57.1 to 56.2 is expected.

EUR

The euro advanced against its counterparts as data from the region was mostly stronger than expected. Spanish and French manufacturing PMI beat expectations while the indices from Italy and the rest of the euro zone came up short. Germany reported a 13K drop in joblessness instead of printing a flat reading. Spanish and Italian jobs data are lined up for today.

GBP

The pound also regained ground as traders likely booked short positions ahead of today's BOE statement. The construction PMI beat expectations with a rise from 52.3 to 52.6 instead of the projected drop to 51.9. No actual policy changes are expected from the BOE today but any change in rhetoric could spur strong moves for pound pairs.

CHF

The franc returned some of its recent gains to the euro and pound, as traders were concerned about potential SNB intervention at these levels. Today has the Swiss SECO consumer climate index due and a rise from -15 to -13 is eyed.

JPY

The yen rallied against most of its forex peers as risk aversion still lingered in the financial markets. Japanese banks are closed for the holiday today so there are no major reports due.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a mixed performance as the Aussie advanced while the Loonie lagged. US crude oil inventories rose by 14.4 million barrels versus the estimated buildup of 1.6 million barrels. Australia's trade balance showed a smaller than expected deficit buoyed by a 2% gain in exports. There are no other reports due from the comdoll economies today.

By Kate Curtis from Trader's Way