Daily Market Outlook by Kate Curtis from Trader's Way

[katetrades]

Forex Major Currencies Outlook (Mar 14, 2017)

USD

The dollar is tossing and turning ahead of the FOMC statement this week and the lack of top-tier data yesterday kept price action subdued. US PPI figures are due today, with the headline reading expected to show a 0.1% uptick and the core figure projected to come in at 0.2%.

EUR

The euro gave back some of its recent gains when polls reflected a lead by French presidential candidate Le Pen once more. Draghi didn't talk about monetary policy plans in his latest testimony, choosing to highlight the need to ramp up production growth in the euro area instead. German ZEW economic sentiment data is due today, along with euro zone industrial production data.

GBP

There was a lot going on in the UK but the pound barely reacted to the news as it seemed to be pushed and pulled by opposing forces. For one, the House of Commons gave the green light for PM May to invoke Article 50 without giving lawmakers a larger say in the Brexit bill. Meanwhile, Scottish First Minister Sturgeon confirmed that she will seek permission to hold another referendum on independence by autumn 2018. Only the CB leading index is due from the UK today.

CHF

The franc clawed its way back against its peers as the lack of ECB dovishness meant lower odds of SNB intervention. There were no reports out of the Swiss economy yesterday and none are due today so traders could keep pricing in expectations for the upcoming SNB decision.

JPY

The yen had a mixed performance as the lack of top-tier data left pairs trading on country-specific events and market sentiment. Japanese tertiary industry activity fell flat instead of showing the projected 0.2% uptick. The BOJ decision is also coming up and traders might be positioning for this event.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were still in a weak spot, as traders are anticipating slower global demand for commodities once the Fed increases borrowing costs. Economic data from China was mixed, with retail sales falling short of estimates at 9.5% versus the projected 10.5% reading. Industrial production improved to 6.3% while fixed asset investment came in stronger than expected at 8.9% versus 8.2%.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Mar 15, 2017)

USD

The US dollar edged slightly higher against its peers as traders are pricing in expectations for a Fed rate hike in today's FOMC statement. Market watchers will also pay close attention to updated growth and inflation forecasts, as well as the tone of Yellen in the presser. These should provide clues on whether or not three rate hikes can be implemented this year. PPI readings came in stronger than expected with 0.3% gains for both headline and core figures.

EUR

The euro gave back more of its recent gains as political headlines became the main driver of price action again. Polls are showing a lead for Le Pen while the formal investigation on Fillon could dampen his odds of winning, perhaps even forcing him to quit the race. German ZEW economic sentiment and euro zone industrial production fell short of estimates, and Italian retail sales are due next.

GBP

The pound was off to a rough start but eventually recovered against its peers. There were no major reports out of the UK economy yesterday while today has the jobs report on tap. Claimant count could rise by 3.2K, erasing part of the earlier 4.6K drop, while the unemployment rate could stay unchanged at 4.8%. The average earnings index is expected to slide from 2.6% to 2.4%.

CHF

The franc advanced to the pound and the euro but gave up ground to the yen and dollar. There were no reports out of the Swiss economy yesterday while today has the PPI lined up. This is expected to show another 0.4% uptick and ease deflation concerns in the area.

JPY

The yen had a mixed performance as it reacted mostly to country-specific events. However, it's worth noting that rising US bond yields in anticipation of Fed rate hikes is dampening demand for Japanese bonds and the yen. Traders are also likely positioning or holding out for the BOJ statement later this week.

Commodity Currencies (AUD, NZD, CAD)

The comdolls held their ground even with dollar strength in recent trading as the crude oil market enjoyed a couple of positive updates. One was that the pickup in Saudi's production was merely taken to domestic refineries instead of being sold in the global market and that the API report showed a 0.5M reduction in stockpiles. The EIA crude oil inventory report is due next, along with the New Zealand GDP which might show a slower 0.7% growth figure.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Mar 16, 2017)

USD

The Fed hiked interest rates by 0.25% as expected but the dollar sold off as traders booked profits and bulls seemed unimpressed by the lack in conviction. Still, Yellen said that it makes sense to keep hiking at a gradual pace as the economy continues to show improvements, but added that they have yet to adjust to incoming data and fiscal policy reform. The dot plot forecast still indicated three rate hikes for the year but one voting member dissented in favor of keeping rates unchanged this time. Building permits and housing starts, along with the Philly Fed index and initial jobless claims, are due today.

EUR

The euro had a mixed performance as it took advantage of dollar weakness but gave up ground to the yen and commodity currencies. Italian retail sales and the region's unemployment rate came in stronger than expected but political headlines seemed to be the main driver of price action. Final CPI readings are due today and no changes to the headline and core readings are eyed.

GBP

The pound barely got a boost from stronger than expected UK jobs data, even as the economy added 11.3K jobs in February versus the projected 3.2K reduction. The unemployment rate improved from 4.8% to 4.7% but the average earnings index slumped from 2.6% to 2.2%, lower than the 2.4% consensus, to hint that consumer spending would likely take a hit in the coming months. The BOE decision is scheduled today but not actual policy changes are eyed.

CHF

The franc also had a mixed performance as it reacted to country-specific events while traders are holding out for the SNB decision today. No actual policy changes are expected but the usual jawboning spiel could be in play as SNB foreign currency reserves increased recently.

JPY

The yen took advantage of dollar weakness and risk aversion to advance against its rivals. There were no major changes to policy in today's BOJ monetary policy announcement so yen bulls were able to rest easy. The press conference is still coming up next.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to get back on their feet, thanks to the dollar selloff and a reduction in EIA crude oil stockpiles. New Zealand reported 0.4% GDP growth in Q4 versus the projected 0.7% expansion and the earlier 1.1% growth figure. Australia's jobs data was weaker than expected as the economy lost 6.4K jobs versus the estimated 16.3K gain and the unemployment rate rose from 5.7% to 5.9%.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Mar 17, 2017)

USD

The US dollar had a mixed performance as it reacted to country-specific events, particularly in the European region. Data came in mixed as well, with initial jobless claims, housing starts, and the Philly Fed index beating expectations while building permits fell short. The preliminary UoM consumer sentiment index is due today and a rise from 96.3 to 97.1 is eyed.

EUR

The euro was off to a weak start on political headlines but it was able to get back on its feet when a couple of ECB officials had upbeat remarks. For Nowotny, the central bank might consider increasing the deposit rate before making adjustments to the benchmark rate and asset purchases. Meanwhile, Praet acknowledged the recent improvements in the economy but clarified that the ECB might not be ready to reduce easing yet. Final CPI readings were unchanged and only the region's trade balance is due today.

GBP

The pound shot higher after the BOE decision because, even though the central bank refrained from adjusting policy, the minutes revealed that Forbes voted for a hike. This signals a shift in the bias of the committee, although there's a lot of work to be done before any actual tightening move is implemented. There are no major reports due from the UK today.

CHF

The franc barely reacted to the SNB decision as the central bank refrained from making any major changes or big statements. There are still no reports due from Switzerland today so franc pairs could move to currency-specific events or data.

JPY

The yen's performance was also a mixed bag as it gave up ground to the European currencies but managed to stay afloat against the comdolls. The BOJ didn't announce any key changes in their policy decision and there are no reports due today so market sentiment could stay in play.

Commodity Currencies (AUD, NZD, CAD)

The comdolls edged slightly lower to the dollar and consolidated to the yen as traders appear to be waiting for the next big catalyst. Jobs data from Australia turned out weaker than expected as the economy lost 6.4K positions instead of gaining the projected 16.3K while the jobless rate rose from 5.7% to 5.9%. Canadian manufacturing sales data is due today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Mar 20, 2017

USD

The US dollar continued to retreat against most of its counterparts as traders kept booking profits off their recent long positions in reaction to a less hawkish than expected Fed announcement. There are no major reports due from the US economy today but President Trump has a speech lined up so additional volatility could be in the cards.

EUR

The euro gave up some ground as traders turned their attention to French election updates once more. Still, it's worth noting that a couple of ECB policymakers echoed the less dovish rhetoric of ECB head Draghi during the other week's ECB presser. German PPI is due today, along with a speech by German central bank head Weidmann. Another round of upbeat remarks on economic performance could renew euro strength.

GBP

The pound was able to hold on to some of its gains as traders shifted their stance when a BOE member recently voted to hike interest rates. There were no reports out of the UK on Friday while today has a speech by MPC member Haldane. Brexit updates are likely to be the main movers for the next few days as the government moves closer to invoking Article 50.

CHF

The franc moved mostly sideways on Friday after making a few big moves earlier in the week. The lack of ECB dovishness prevented the SNB from being overly dovish themselves, although Chairperson Jordan reiterated that they can still ease or intervene if needed. There are no reports due from the Swiss economy today.

JPY

The Japanese yen regained ground on Friday as bond yields continued to favor the currency. Japanese banks are closed for a holiday today, though, so volatility could be low and yen pairs could wait for clues from market sentiment instead.

Commodity Currencies (AUD, NZD, CAD)

The comdolls staged a late recovery in the week but were able to end mostly in the green against the dollar. There are no major reports from the comdoll economies at the start of the week but market sentiment could still push these pairs around.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Mar 21, 2017)

USD

The dollar regained a bit of ground against its peers even though there were no major reports out of the US economy. Formerly dovish member Evans acknowledged that the economy is doing better and that three rate hikes are possible this year while dissenter Kashkari said that he's not opposed to tightening if data shows more improvement or inflation reaches the 2% target. FOMC member Dudley is set to give a speech today while the US will print its current account balance.

EUR

The euro was in a weak spot ahead of the French election debates but soon regained ground when the polls handed victory to Macron afterwards. German PPI turned out weaker than expected with a 0.2% uptick versus the projected 0.4% gain. There are no reports due from the euro zone today so election updates could influence price action.

GBP

The pound tossed and turned on rumors and confirmation that UK PM May will invoke Article 50 by March 29. This marks the official start of Brexit negotiations as EU officials have confirmed that they will respond swiftly. UK CPI reports are due today, with the headline figure slated to rise from 1.8% to 2.1% and the core figure expected to tick up from 1.6% to 1.7%. Keep in mind, however, that wage growth has lagged behind so strong gains in prices could dampen consumer spending later on.

CHF

The franc was unable to establish a clear direction in recent trading as it functioned mostly as a counter currency. Swiss trade balance and SECO economic forecasts are up for release today and positive readings could provide the currency some support.

JPY

The yen also reacted to country-specific events instead of establishing a clear direction of its own. There were no reports out of Japan yesterday since banks were closed for the holiday and none are due today, which suggests that market sentiment could be the main driver.

Commodity Currencies (AUD, NZD, CAD)

Comdolls gave back their recent gains to the dollar as risk aversion popped its head back in the markets. The RBA minutes indicated that policymakers were concerned about rising house prices and the HPI indicated a 4.1% gain in Q4 versus the projected 2.4% increase. Canadian retail sales figures are due next and both the headline and core figure are expecting strong rebounds. New Zealand is set to have its GDT index in the late US session.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Mar 22, 2017)

USD

The US dollar gave up ground to its counterparts as equity indices closed around 1% lower for the day. Only the current account balance was released and this showed a smaller deficit of $112 billion USD. Existing home sales data is due today and a fall to 5.59M is eyed, but this still isn't expected to have a huge impact on dollar action.

EUR

The euro advanced once more as another poll gave the lead to Macron versus other candidates like Le Pen and Fillon. There were no major reports out of the region yesterday but the improving sentiment and the change in monetary policy stance of the ECB continue to keep the shared currency supported. Euro zone current account balance is due today.

GBP

The pound also raked in gains after printing upbeat CPI readings. Headline CPI was up from 1.8% to 2.3%, outpacing the 2.1% forecast, while core CPI rose from 1.6% to 2.0% versus the 1.7% consensus. Underlying figures also beat expectations, except for the PPI input figure which fell 0.4%. There are no major reports from the UK today.

CHF

The franc moved mostly sideways as traders are still waiting for the next round of major catalysts. Swiss trade balance was weaker than expected at 3.11B CHF versus the projected 3.85B CHF surplus. There are no reports due from Switzerland today.

JPY

The yen managed to maintain its lead, even against the stronger European currencies, as risk aversion remained in play. Japan's trade balance turned out better than expected at 0.68T JPY versus the projected 0.55T JPY surplus. The all industries activity index posted a 0.1% uptick as expected.

Commodity Currencies (AUD, NZD, CAD)

Canada's retail sales reports turned out stronger than expected but the oil-related Loonie was unable to shake of the bearish vibes from oil prices. Even though Russia expressed willingness to cooperate with a potential extension of the output deal until the end of the year, the API report's larger than expected buildup of 4.53 million barrels in stockpiles brought oversupply concerns back in play. New Zealand reported a 1.7% rebound dairy prices during the latest auction but falling iron ore prices hit the Aussie hard. The RBNZ decision is coming up next.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Mar 23, 2017)

USD

The US dollar sank against its peers as the upcoming vote on the healthcare bill could prove to be a crucial moment for the Trump administration. Equities have been on the decline for the past few days as investors continue to doubt the administration's resolve, although economic data has been mostly in line with expectations. Initial jobless claims are due today, along with a speech by Yellen.

EUR

The euro was mostly weaker against its peers when news of a terror attack in London broke out. Euro zone current account balance turned out weaker than expected and there are no major reports due today so market sentiment could stay in play.

GBP

The pound got hit hard by reports of a terror attack in the Houses of Parliament towards the end of the London session. There have been no major reports out of the UK yesterday while today has the retail sales figure due. Weak wage growth combined with higher domestic inflation probably weighed on consumer spending but analysts are expecting to see a 0.4% rebound after the earlier 0.3% decline.

CHF

The Swiss franc had a mixed performance as it reacted mostly to country-specific data and other headlines. The SNB Quarterly Bulletin was released but this didn't contain any surprises enough to move the franc. There are no major reports due from the Swiss economy today but SNB member Maechler has a speech lined up.

JPY

The yen was the big winner in recent trading sessions as it took advantage of risk-off flows and anti-dollar sentiment on concerns about the healthcare vote. There were no major reports out of Japan then and none are due today, but additional volatility is expected in the US session.

Commodity Currencies (AUD, NZD, CAD)

The comdolls lost a lot of ground on market jitters, both weighed by concerns ahead of the Obamacare vote and the risk aversion from the terror attack in London. The EIA report confirmed that stockpiles rose more than expected, keeping oil oversupply concerns in play. In New Zealand, the RBNZ kept rates on hold as expected but sounded less downbeat in brushing off the recent GDP disappointment and affirming that inflation could return to their target band in the medium-term.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Mar 24, 2017)

USD

The US dollar failed to establish a clear direction in recent trading sessions as Congress decided to delay the vote on the healthcare bill. They need 216 votes to gain a simple majority and get Obamacare repealed, but the Freedom Caucus is saying that they cannot make a decision based on the current form of the bill. Data turned out mixed, as initial jobless claims posted a slightly higher 258K increase while new home sales jumped from an upgraded 558K reading to 592K versus the projected 566K figure. Durable goods orders data are due but traders might pay closer attention to the goings-on in Congress.

EUR

The euro was able to benefit from risk-off flows, especially since election jitters appear to be fading. Euro zone consumer confidence improved from -6 to -5 but the GfK German consumer climate index fell from 10.0 to 9.8 instead of improving to the projected 10.1 reading. Flash PMI readings from Germany and France are lined up today, and more improvements could remind traders of the ECB's less dovish stance.

GBP

The pound was also able to stay afloat, thanks to stronger than expected UK retail sales data. Consumer spending advanced 1.4% versus the projected 0.4% gain but the earlier reading was downgraded to show 0.5% drop. There are no major reports due from the UK today so Brexit headlines could be the main driver for the pound.

CHF

The franc had a mixed performance as it reacted to mostly currency-specific data in the absence of top-tier data from Switzerland. It gained ground to the comdolls but was weaker against the Japanese yen as risk aversion was present. There are no reports due from Swizterland today.

JPY

The yen chalked up another strong trading day as it took advantage of the anti-dollar and risk-off market sentiment. Japanese flash manufacturing PMI fell from 53.3 to 52.6 versus the projected rise to 53.5 but the yen is banking on its safe-haven status so far. There are no other reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls shed a lot of ground to their peers as risk aversion extended its stay in the markets. Canadian CPI reports are up for release today, with the headline figure expected to fall from 0.9% to 0.2% and the core CPI slated to fall from 0.5% to 0.1%.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook(Mar 27, 2017)

USD

The US dollar is on weak footing after Congress decided to withdraw the healthcare bill, knowing that they didn't have enough votes to repeal Obamacare. This deals a huge blow of confidence to the Trump administration as investors start to doubt that they can push the rest of their agenda across. US headline durable goods orders came in stronger than expected with a 1.7% gain versus the projected 1.1% increase while the core figure came in line with estimates of a 0.4% uptick. FOMC member Kaplan has a speech lined up.

EUR

The euro extended its gains against its peers when PMI readings from Germany and France turned out stronger than expected and indicated a faster pace of industry expansion across the board. German Ifo business climate data is due today and an improvement from 111.0 to 111.2 is eyed.

GBP

The pound was also on strong footing last week after the UK printed strong CPI and retail sales figures. However, BBA mortgage approvals turned out weaker than expected at 42.6K versus 44.9K on Friday. There are no reports due from the UK today and the focus turns to the upcoming Article 50 date on March 29.

CHF

The franc had a mixed performance as it weakened to the yen and euro but advanced against comdolls and the dollar. There were no reports out of the Swiss economy last Friday and none are due today so market sentiment could push franc pairs around, along with country-specific events.

JPY

The yen was still the king of pips at the end of the week as it took advantage of risk-off flows and anti-dollar moves. Japanese manufacturing PMI turned out weaker than expected as it fell from 53.3 to 52.6 versus the 53.5 forecast. There are no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were mostly on weaker footing but managed to regain some ground to the dollar. Canadian CPI readings were mostly unchanged, with the headline figure up 0.2% and the core figure up 0.4%. There are no reports due from the comdoll economies today.

By Kate Curtis from Trader's Way