Daily Market Outlook by Kate Curtis from Trader's Way

[katetrades]

Forex Major Currencies Outlook (Dec 16, 2016)

USD

The US dollar continued to reign supreme against its counterparts as traders incorporated expectations of three more rate hikes next year. Economic data from the US also supported this upbeat outlook, with manufacturing indices posting impressive gains and CPI readings meeting expectations. US building permits and housing starts data are due today.

EUR

The euro slid to new lows to the dollar but managed to stay afloat against the yen. Flash manufacturing and services PMIs from the region came in mixed, reminding traders that the economy is still on shaky footing and that several risks remain. Euro zone final CPI readings and trade balance are lined up today.

GBP

The pound gave back some of its recent gains as the UK retail sales report simply came in line with expectations of a 0.2% uptick while the BOE was less upbeat than expected. MPC members voted unanimously to keep policy unchanged but warned that adjustments could be made either way, depending on Brexit risks. They added that growth and inflation are likely to be subdued next year.

CHF

The franc advanced against its European counterparts even though SNB officials reiterated that the currency remains overvalued. The lack of any action from the SNB probably drew buyers back to the safe-haven Swiss currency, although it still caved to dollar strength. There are no reports due from the Swiss economy today.

JPY

The yen struggled to regain ground as the Fed's decision to hike is weighing on bond yields in Japan. There are no reports due from Japan today but traders could start pricing in expectations for the BOJ decision early next week.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave up ground to the dollar but managed to stay afloat against the euro and the pound. Australia's jobs report was mixed, with a higher than expected employment change reading and an increase in the unemployment rate. Canadian manufacturing sales posted a 0.8% decline versus the projected 0.7% gain but BOC Governor Poloz turned the attention to the improvements in the property sector. There are no other reports due from the comdoll economies today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Dec 19, 2016)

USD

The US dollar returned some of its recent wins on Friday as traders booked profits before the end of the week. Economic data from the US was also weaker than expected, as building permits and housing starts came in below consensus. Only the flash services PMI is due today and a rise from 54.6 to 55.2 is eyed.

EUR

The euro made a bit of a bounce against its forex counterparts on Friday even though data came in mixed. The CPI readings were unchanged from the headline 0.6% estimate and the core 0.8% figure but the region's trade balance was weaker than expected. The German Ifo business climate index is up for release today and an improvement from 110.4 to 110.7 is expected.

GBP

The pound also chalked up some gains on Friday as the CBI industrial order expectations index improved from -3 to 0 instead of sinking to -5. There are no reports due from the UK economy today so pound traders could be extra sensitive to Brexit-related headlines.

CHF

The franc regained a bit of ground to the dollar, euro, and pound as traders probably breathed a sigh of relief after the SNB decision. There were no reports out of the Swiss economy then and none are due today so market sentiment could stay in play.

JPY

The yen also got back on its feet towards the end of the week, presumably on profit-taking and positioning ahead of this week's BOJ decision. Over the weekend, Japan reported a weaker than expected trade surplus of 0.54T JPY but this was actually spurred by a 4.3% gain in exports and a 3.4% increase in imports.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were still on weak footing towards the end of the week, as traders priced in the potential impact of the Fed's hike on commodity prices and global growth. Over the weekend, New Zealand reported an increase in its ANZ business confidence index from 20.5 to 21.7 and also an improvement in Westpac consumer sentiment. The Australian Treasury just released its mid-year economic and fiscal outlook while the RBA minutes are due tomorrow.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Dec 20, 2016)

USD

The US dollar regained ground against its peers even though the flash services PMI came in weaker than expected. The reading dipped from 54.6 to 53.4 instead of improving to 55.2 as business activity growth slowed. Fed head Yellen gave a few more positive remarks on the job market improvements in her recent testimony. There are no major reports due from the US economy today.

EUR

The euro resumed its slide to the dollar but advanced against the commodity currencies. The German Ifo business climate index improved from 110.4 to 111.0, higher than the projected 110.7 reading. German PPI and euro zone current account balance are up for release today.

GBP

The pound also had a mixed performance as there were no major reports out of the UK economy. Only the CBI realized sales index is up for release today and a drop from 26 to 20 is eyed, possibly leading to losses for sterling.

CHF

The franc slid to the dollar but advanced against the euro and the pound, even though there were no reports out of the Swiss economy recently. Today has the trade balance on tap and a larger surplus of 3.57B CHF is eyed compared to the earlier 2.68B CHF surprlus.

JPY

The yen advanced against most of its rivals in recent sessions as traders are anticipating no action from the BOJ. Still, any dovish remarks or downbeat comments on the economy could draw bears back to the game and allow yen pairs to resume their climb.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were no match to dollar strength and also caved against European currencies. Australia's CB leading index posted a 0.4% drop after previously indicating a 0.5% uptick while New Zealand reported a 0.1% dip in its food price index. New Zealand's GDT auction is coming up and another gain in dairy prices could lead to a bounce for the Kiwi.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Dec 21, 2016)

USD

The US dollar made a feeble attempt at regaining ground as there were no major reports to give it a boost yesterday. Only the existing home sales report is up for release today and a dip from 5.60M to 5.52M is expected.

EUR

The euro slumped against most of its counterparts as the terror attacks in Germany, Turkey and Switzerland weighed heavily on investor confidence in the region. Data from the euro zone was stronger than expected, as German PPI posted a 0.3% gain versus the projected 0.1% uptick while the current account balance showed a larger than expected 28.48 million EUR surplus.

GBP

The pound drew a bit of support from the stronger than expected CBI realized sales index, which jumped from 26 to 35 instead of falling to 20. Only the UK public sector net borrowing report is due today and a larger 11.5B GBP reading is eyed, compared to the earlier 4.3B GBP figure.

CHF

The franc was mostly stuck in consolidation even after the Swiss trade balance printed a larger than expected 3.64B CHF surplus versus the projected 3.57B CHF figure. This was also significantly larger than the earlier 2.66B CHF surplus. The SNB Quarterly Bulletin is due today.

JPY

The yen returned some of its recent gains to its counterparts after the BOJ refrained from making any policy changes. Still, it's worth noting that the central bank upgraded its growth outlook. Japan's all industries activity index is due today and a 0.1% uptick is eyed, slower compared to the earlier 0.2% gain.

Commodity Currencies (AUD, NZD, CAD)

The comdolls continued to slide on risk aversion but the Loonie managed to get a bit of a boost from stronger than expected Canadian manufacturing sales. The report printed a 1.1% gain versus the projected 0.3% uptick. In New Zealand, the GDT auction broke its positive streak with a 0.5% dip in dairy prices. US crude oil inventories and New Zealand's Q3 GDP reading are due next.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Dec 26, 2016)

USD

The dollar advanced steadily against its peers as the week drew to a close, as economic data from the US was slightly stronger than expected. New home sales rose from 563K to 592K versus the projected 575K figure while the UoM consumer sentiment index was upgraded from 98.0 to 98.2. There are no reports due from the US today as banks are closed for the holidays.

EUR

The euro had a mixed performance as it tried to stay afloat against the dollar and the yen but ended up sliding to the pound and commodity currencies. Euro zone data was stronger than expected, as the GfK German consumer climate index improved from 9.8 to 9.9 while French consumer spending saw a stronger than expected 0.4% gain.

GBP

The pound was mostly stuck in consolidation despite seeing stronger than expected UK economic reports. The current account deficit was smaller than expected at 25.5 billion GBP while the previous reading was upgraded to show a narrower shortfall as well. The final GDP reading was upgraded from 0.5% to 0.6% for Q3.

CHF

The franc held its ground against most of its peers until the end of the week despite a weaker than expected KOF economic barometer reading. The figure held steady at 102.2 instead of improving to the consensus at 103.1.

JPY

The yen was still in a weak spot for the most part, although it managed to chalk up some gains against the comdolls. There were no reports out of Japan then while today has household spending and CPI readings due.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were the weakest of the bunch as Canada reported a 0.3% monthly GDP contraction instead of the projected 0.1% uptick. There were no other reports out of New Zealand and Australia but the US-China tensions appear to be dampening confidence in their export industry.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Dec 27, 2016)

USD

Since most markets were still closed for the holidays, dollar action was relatively subdued throughout Monday. There were no major reports released and US equities squeezed out modest gains. Markets reopen today and the US will print its CB consumer confidence index and Richmond manufacturing index.

European Currencies (EUR, GBP, CHF)

The euro was on slightly weaker footing as the ECB told Italian bank Monte dei Paschi it needs 8.8 billion EUR to recapitalize. There are no reports due from the euro zone today, although markets are set to reopen as well. The pound traded mostly sideways and could continue to do so for today, as UK banks are still closed for the holidays. Franc trading could be filled with consolidation also.

JPY

The yen seems to have shrugged off the downbeat figures printed from Japan as risk aversion is propping the lower-yielding currency up. Household spending sank 1.5% on a year-over-year basis instead of rising by 0.2% while the unemployment rate rose from 3.0% to 3.1%. The Tokyo core CPI showed a 0.6% drop, worse than the projected 0.4% decline, while the national core CPI was down 0.4% versus the estimated 0.3% dip. BOJ core CPI and Japanese housing starts data are due next.

Commodity Currencies (AUD, NZD, CAD)

The comdolls weakened for the day as risk aversion seemed to be lingering in the markets. Tensions between China and Taiwan have dampened investor sentiment in the Asian region while concerns about Trump's trade renegotiation plans weighed on commodities as well. There are no reports due from the comdoll economies today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Dec 28, 2016)

USD

The US dollar advanced against most of its peers as risk aversion was in play and data from the US came in stronger than expected. The CB consumer confidence index rose from an upgraded 109.4 reading to 113.7 versus the 108.9 consensus while the Richmond manufacturing index improved from 4 to 8, outpacing the estimate at 5. Pending home sales data is due today and a 0.6% increase is expected.

EUR

The euro struggled to recover against the dollar but managed to score more wins to the commodity currencies. There were no reports out of the euro zone yesterday and none are due today, leaving traders to keep close tabs on other headlines from the region.

GBP

The pound was in a weak spot against most of its peers as there were no reports to keep it supported. UK banks were still closed for the holiday yesterday and are set to reopen today. BBA mortgage approvals data is due and a rise from 40.9K to 41.6K is expected.

JPY

The yen continued to advance against its peers despite weak inflation and household spending data from Japan. Yen pairs eventually made a bit of a bounce after retail sales beat expectations with a 1.7% year-over-year gain versus the estimated 0.9% uptick. Preliminary industrial production came in at 1.5%, short of the projected 1.8% rise. Housing starts also missed expectations with a 6.7% gain versus the projected 9.6% figure.

Commodity Currencies (AUD, NZD, CAD)

The comdolls weakened to the dollar and the yen as risk aversion extended its stay in the financial markets. There were no reports out of the comdoll economies recently and none are due today so risk sentiment could continue to drive price action.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Dec 29, 2016)

USD

Price action for dollar pairs was still subdued even as US data disappointed. Pending home sales slipped 2.5% instead of posting the projected 0.6% increase. Initial jobless claims, goods trade balance, and preliminary wholesale inventories are up for release today.

EUR

The euro continued to advance against its peers as traders seemed to shrug off Italian banking sector concerns. There were no reports out of the region yesterday while today has only a few low-tier figures lined up, namely private loans, M3 money supply, and the Italian 10-year bond auction.

GBP

The pound also struggled to establish a clear direction in recent trading as UK data missed expectations. BBA mortgage approvals came in at 40.7K, down from the earlier 40.8K figure and short of the estimated 41.6K reading. Nationwide HPI is up for release today and a 0.2% uptick in house prices is eyed.

JPY

Yen pairs moved mostly sideways as Japan paused from releasing downbeat data. Recent reports have been mostly in the red, although retail sales reflected a stronger than expected 1.7% rise versus the 0.9% consensus. There are no reports due from Japan today so market sentiment could be in play.

Commodity Currencies (AUD, NZD, CAD)

The comdolls continued to reel from risk aversion as there were no upbeat reports to save the day. US crude oil inventories data is due today and a draw of 1.3 million barrels is eyed, easing fears of an oversupply and boosting prices. Australia is set to print its private sector credit data next.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jan 02, 2017)

USD

The US dollar gave up ground against most of its major counterparts early in the year as traders are probably bracing for some adjustments ahead of Trump's inauguration. US banks are still closed for the holiday today so liquidity could be thin and dollar pairs could be sensitive to market sentiment.

EUR

The euro regained some ground against most of its rivals so far even as there have been no reports from the region. Final manufacturing PMI readings from its top economies are lined up today and any improvements could allow the shared currency to hold on to its recent wins.

GBP

The pound was able to recover against some of its peers as well even though UK banks are closed for today. Traders are gearing up for more top-tier catalysts due later on, such as the PMI readings from the manufacturing, services, and construction sectors.

CHF

The franc had a volatile time at the end of 2016 as traders likely booked profits off their positions then. Swiss banks are closed for the holiday today so market sentiment could push franc pairs around.

JPY

The yen gave up some of its recent gains to start the year as Japanese banks were closed for the holidays. Traders are also pricing in their reaction to last week's disappointing reports from Japan, with many speculating that the BOJ would need to ramp up its easing efforts.

Commodity Currencies (AUD, NZD, CAD)

The comdolls are struggling to regain ground against the dollar but remain mostly weak, especially China reported declines in its manufacturing and non-manufacturing PMI over the weekend. The former fell from 51.7 to 51.4 while the latter dipped from 54.7 to 54.5.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jan 03, 2017)

USD

The US dollar had no trouble advancing against its peers even as US markets were still closed for the holiday. Markets reopen today and the ISM manufacturing PMI is up for release. A climb from 53.2 to 53.7 is eyed and traders will pay special attention to the jobs component as a preview of Friday's NFP report.

EUR

The euro resumed its slump against most of its major counterparts even after Spain and Italy printed stronger than expected manufacturing PMI readings. Germany's PMI was upgraded from 55.5 to 55.6 while the French manufacturing PMI was unchanged at 53.5. German unemployment change data and preliminary CPI readings from Germany and France are lined up today.

GBP

The pound is still in a weak spot as traders seem to be positioning for Brexit-related uncertainties throughout the quarter. There were no reports out of the UK economy yesterday while today has the manufacturing PMI on tap. A dip from 53.4 to 53.3 is expected, reflecting a slower pace of industry growth.

CHF

The franc was off to a weak start against the dollar but managed to chalk up some gains against its European rivals. Swiss manufacturing PMI is also due today and a fall from 56.6 to 56.1 is expected.

JPY

The yen had a mixed performance as it held on to its gains versus the euro and pound but gave up ground to the dollar and commodity currencies. There have been no reports out of Japan yesterday and none are due today since banks are still closed for the holiday.

Commodity Currencies (AUD, NZD, CAD)

The comdolls are regaining ground on the heels of stronger than expected Caixin manufacturing PMI from China. The index rose from 50.9 to 51.9 instead of holding steady, reflecting a faster pace of industry expansion. Australia's AIG manufacturing index advanced from 54.2 to 55.4. New Zealand has its GDT auction coming up next.

By Kate Curtis from Trader's Way