Daily Market Outlook by Kate Curtis from Trader's Way

[katetrades]

Forex Major Currencies Outlook (Mar 28, 2017)

USD

The US dollar found some relief on remarks indicating that Trump will take another shot at the healthcare bill and that the administration is aiming for August in terms of enacting tax reform. There were no reports out of the US economy yesterday, with only speeches by a couple of FOMC members on deck. CB consumer confidence is due and analysts are expecting a dip from 114.8 to 113.9 to reflect weaker optimism.

EUR

The euro continued to advance against its peers when data beat expectations once more. The German Ifo business climate index advanced from 111.1 to 112.3, outpacing the consensus at 111.2 to signal a much stronger pickup in optimism. There are no reports due from the euro zone today as the focus shifts to Brexit-related headlines.

GBP

The pound managed to score a few more wins even with the uncertainty surrounding UK PM May's plan to invoke Article 50 on March 29. There were no reports out of the UK economy yesterday and none are due today so Brexit-related headlines could drive pound price action.

CHF

The franc was mostly stuck in consolidation but it managed to squeeze out a few gains against the commodity currencies on risk-off flows. There were no reports out of the Swiss economy yesterday and none are due today so the same market factors could stay in play.

JPY

The yen continued to rake in gains against its higher-yielding rivals but gave up some ground to the dollar on renewed hopes of tax and healthcare reform. There were no reports out of the Japanese economy yesterday and there are none lined up today so currency-specific factors could push yen pairs around, along with risk sentiment.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were still the biggest losers in recent trading sessions as risk appetite remained weak. There has been a lot of talk on extending the OPEC deal until the end of the year but no official decision has been made yet. BOC Governor Poloz has a speech lined up and any effort to bolster confidence in the Canadian economy could provide some relief for the Loonie.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Mar 29, 2017)

USD

The dollar was able to get back on its feet upon seeing mostly stronger than expected reports. The CB consumer confidence index rose from 116.1 to 125.6 - its highest reading in more than 16 years. The Richmond manufacturing index also turned out higher than consensus as it rose from 17 to 22 instead of dipping to 16. Aside from that, Republicans have emphasized that they will continue to pursue healthcare reform, reviving market confidence in the Trump administration's plans. FOMC member Evans has a speech today and the US pending home sales report is due.

EUR

The euro gave up some ground as traders are now feeling the jitters ahead of the official start of the Brexit process. There were no reports out of the euro zone yesterday and only the German import prices figure is lined up today. Market watchers are likely to pay closer attention to the goings-on in the EU and overall market sentiment as clues on where to take the euro next.

GBP

The pound dropped sharply in the latter part of the London session and throughout the US session as traders are liquidating their positions to prepare for Brexit risks. A few statements and press conferences are lined up after UK PM May officially invokes Article 50 so there's a chance for big spikes in either direction. UK net lending to individuals and BBA mortgage approvals are also due today.

CHF

The franc was mostly weaker against its counterparts, except against the British pound. There were no reports out of the Swiss economy yesterday but SNB member Maechler had some jawboning remarks. Credit Suisse economic expectations for the Swiss economy are due today.

JPY

The yen was able to hold on to some of its recent gains as risk aversion stayed in play. There were no reports out of Japan yesterday while today's retail sales report printed a meager 0.1% uptick versus the projected 0.7% gain. Still, market sentiment could be the main driver for yen pairs today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to advance against European currencies but were still mostly weaker to the dollar and yen. BOC Governor Poloz didn't have any reassuring remarks for the Canadian economy as he mentioned that downside risks remain. US EIA crude oil inventories data is due today and a buildup of 1.2 million barrels is expected.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Mar 30, 2017)

USD

Dollar pairs were moving mostly sideways in the past few trading session as traders were on edge with the Brexit developments in Europe. Investors are also waiting for more clues from the Trump administration on their reform agenda. Data from the US economy has been stronger than expected with a 5.5% jump in pending home sales. Final GDP data is due today and a small upgrade from 1.9% to 2.0% is expected.

EUR

The euro tumbled across the board on Brexit jitters even as economic data came in stronger than expected. German import prices rose 0.7% versus the projected 0.4% uptick but this was still weaker compared to the earlier 0.9% gain. Spanish and German flash CPI readings are up for release today and a strong pickup in price levels could be enough to shore up the scared currency.

GBP

The pound managed to shield itself from huge losses as Brexit-related events went by without a hitch. Prime Minister May's letter to the EU was cordial and open to compromise while the response from Tusk was diplomatic as well. There are no major reports due from the UK today so traders could keep close tabs on the dialogue between the UK government and EU officials.

CHF

The franc reacted mostly to currency-specific events but gave up ground to its non-European counterparts. The Swiss UBS consumption indicator rose from 1.44 to 1.50 to indicate improvement in the sector and the KOF economic barometer is up for release today. A dip from 107.2 to 105.9 is eyed.

JPY

The Japanese yen managed to rake in gains on risk-off flows even though Japanese retail sales turned out weaker than expected. Retail sales ticked up by a measly 0.1% versus the projected 0.7% gain and the earlier 1.0% increase. There are no reports due from Japan today so market sentiment could keep pushing yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave up some ground on risk aversion but managed to edge higher against the European currencies. US crude oil inventories rose by 0.9 million barrels, lower than the projected buildup of 1.2 million barrels. Underlying inflation figures from Canada are up for release today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Mar 31, 2017)

USD

The US dollar regained a lot of ground after the final Q4 GDP reading was upgraded from 2.0% to 2.1% on stronger consumer spending and a couple more FOMC members supported the likelihood of seeing three rate hikes this year, allowing the Nasdaq to hit a record high as well. Dollar pairs had a volatile moment when news reports indicated that Trump still plans to penalize currency manipulators. The core PCE price index, as well as personal spending and income data, are lined up today. FOMC member Kashkari, who dissented against a rate hike this month, has a speech lined up.

EUR

The euro sank against its peers when preliminary CPI readings from Spain and Germany fell short of estimates. The former showed a 2.3% gain versus the projected 2.6% increase while the latter posted a 0.2% uptick versus the estimated 0.4% growth. Euro zone flash CPI estimates are due today so weak readings could undermine the ECB's shift to a less dovish stance. German retail sales, unemployment change, French preliminary CPI and consumer spending are lined up as well.

GBP

The pound regained ground against its peers on the lack of negative headlines pertaining to Brexit negotiations. UK net lending to individuals came in line with expectations but BBA mortgage approvals came up short. UK current account balance, which is slated to show a smaller deficit of 16.3 billion GBP, and revised Q4 GDP are lined up today but reports related to Brexit could be a bigger driver of price action.

CHF

The franc gave up ground against most of its peers but advanced against the euro. The KOF economic barometer improved from a downgraded 106.9 figure to 107.6 instead of dipping to 105.9. There are no reports due from the Swiss economy today so the franc could take its cue from market sentiment or euro zone reports.

JPY

The yen gave up some ground against its counterparts as dollar strength returned and US bond yields recovered. Risk appetite also picked up, leading traders to let go of their safe-haven yen holdings. Data from Japan came in mixed, with household spending down 3.8% versus the projected 1.6% drop and the Tokyo core CPI printed a 0.4% drop in price levels. The jobless rate improved from 3.0% to 2.8% while preliminary industrial production posted a stronger than expected 2.0% gain.

Commodity Currencies (AUD, NZD, CAD)

The comdolls took advantage of the pickup in risk appetite and advanced against the euro but these currencies were still weaker to the dollar. Chinese official manufacturing PMI improved from 51.6 to 51.8 while the non-manufacturing reading is up from 54.2 to 55.1 to reflect stronger industry expansion. Canadian monthly GDP is due and a 0.3% monthly growth figure is eyed.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Apr 03, 2017)

USD

The US dollar returned most of its recent gains to its forex counterparts as economic data turned out mixed. The core PCE price index was up 0.2% as expected while personal income rose by 0.4% as expected but personal spending was weaker at 0.1%. The Chicago PMI rose from 57.4 to 57.7 instead of dipping to 57.2 but the UoM consumer sentiment index was downgraded from 97.6 to 96.9. US ISM manufacturing PMI is due today and a drop from 57.7 to 57.2 is expected.

EUR

The euro was in free fall against its counterparts on Friday when data turned out mostly weaker than expected. Headline flash CPI slipped from 2.0% to 1.5% versus the 1.8% forecast while the core CPI dropped from 0.9% to 0.7% versus the 0.8% forecast. German retail sales and unemployment change data turned out stronger than expected but CPI, jobs, and spending data from France fell short of consensus. Final manufacturing PMI readings are lined up today.

GBP

The pound recovered against most of its forex peers at the end of the week on the lack of negative headlines pertaining to Brexit. The current account balance also turned out better than expected at a 12.1 billion GBP deficit from the earlier 25.7 billion GBP and the projected 16.3 billion GBP shortfall. The final GDP reading was unchanged at 0.7% as expected. UK manufacturing PMI is on today's docket and an improvement from 54.6 to 55.1 is expected.

CHF

The franc was stuck in consolidation against the dollar and euro, but it gave up ground to the comdolls and Japanese yen. There were no major reports out of Switzerland then so the franc was reacting to country-specific events. Today has the retail sales report and manufacturing PMI due, with the former slated to show a smaller 0.8% drop and the latter expected to rise from 57.8 to 58.2.

JPY

The yen continued to take advantage of anti-USD and safe-haven flows at the end of the week. Japanese reports turned out mixed as household spending is down 3.8% year-over-year versus the projected 1.6% drop while preliminary industrial production turned out stronger than expected. Today, the Tankan survey printed mixed results as the manufacturing component improved from 10 to 12 versus the estimated reading of 14 while the non-manufacturing component rose from 18 to 20, outpacing the consensus at 19.

Commodity Currencies (AUD, NZD, CAD)

The comdolls managed to advance against the euro but were still mostly weaker to the dollar and yen as risk aversion remained present. Chinese official manufacturing PMI climbed from 51.6 to 51.8 while the non-manufacturing component improved from 54.2 to 55.1. Over the weekend, the Caixin manufacturing PMI dipped from 51.7 to 51.2. Australian retail sales and building approvals data are due next.

By Kate Curtis from Trader's Way

 

[waker240]

Concise and informative, thanks!

 

[katetrades]

Forex Major Currencies Outlook (Apr 04, 2017)

USD

The US dollar was mostly confined to ranges at the start of the week but gave up ground to the yen on weaker bond yields. Economic data came in line with expectations as the ISM manufacturing PMI fell from 57.7 to 57.2 as expected. The sub-index for prices advanced from 68.0 to 70.5, outpacing the consensus at 68.5, while the employment component also increased. US factory orders and trade balance are due next.

EUR

The euro held on to its current levels as medium-tier reports came in mostly in line with expectations. The region's PPI printed a flat reading while unemployment ticked down from 9.6% to 9.5% as expected. Spanish unemployment change data and euro zone retail sales are due today.

GBP

The pound gave up some ground after the UK manufacturing PMI fell short of expectations. The reading slipped from 54.5 to 54.2 to reflect a slower pace of industry expansion instead of improving to the projected 55.1 figure. Construction PMI is due next and no change to the previous 52.5 figure is eyed.

CHF

The franc had another mixed performance as it reacted mostly to currency-specific events despite stronger than expected data from Switzerland. Retail sales increased by 0.6% year-over-year instead of chalking up the projected 0.8% drop while the previous reading was upgraded. The manufacturing PMI improved from 57.8 to 58.6. There are no reports due from the Swiss economy today.

JPY

The Japanese yen was the big winner of the latter trading sessions as it took advantage of risk-off flows from the terrorist attack in Russia and dollar weakness on lower US bond yields. Japan's Tankan survey printed improvements for both manufacturing and non-manufacturing components, although the former fell short of estimates. The BOJ's core CPI is due next.

Commodity Currencies (AUD, NZD, CAD)

The Loonie was one of the weaker performers of the day as the BOC Business Outlook Survey failed to give much support. The Aussie also turned lower on downbeat RBA expectations after retail sales turned out weaker than expected. Earlier today, the trade balance printed a larger than expected surplus of 3.57B AUD versus the projected 1.75B AUD surplus. The RBA statement is coming up next.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Apr 05, 2017)

USD

The US dollar had a mixed performance as it weakened to the yen but consolidated against most of its counterparts. Economic data was stronger than expected as the trade deficit narrowed on higher imports while factory orders ticked up by 1.0%. FOMC minutes, ISM non-manufacturing PMI, and ADP non-farm employment change are all lined up today and these could carry a lot of weight in terms of influencing Fed rate hike expectations.

EUR

The shared currency was off to a weak start but was able to recoup some of its losses. Data from the euro zone, namely the Spanish unemployment change and euro zone retail sales, turned out stronger than expected. Final services PMI readings are up for release today.

GBP

The pound was still one of the weaker performers of the day as the UK construction PMI dipped from 52.5 to 52.2 instead of holding steady as expected. The services PMI is due today and an improvement from 53.3 to 53.5 is eyed, although another unexpected fall could mean more losses for the UK currency.

CHF

The franc had a mixed performance as it consolidated to the dollar, lost ground to the euro, but held on to its gains versus the pound. There were no reports out of the Swiss economy yesterday and none are due today, which suggests that country-specific events could continue to stay in play.

JPY

The yen retreated against some of its peers as US bond yields recovered. There were no major reports out of the Japanese economy yesterday and none are due today so risk sentiment and bond yields could continue to push yen pairs around, particularly in reaction to top-tier US releases.

Commodity Currencies (AUD, NZD, CAD)

The comdolls recovered slightly against the yen but were still generally weaker to the dollar. Australia printed a larger than expected trade surplus but the RBA decision was less upbeat as it highlighted the weakness in hiring. Canada's trade balance was also weaker than expected as it printed a 1 billion CAD deficit. New Zealand reported a 1.6% rebound in dairy prices during the latest GDT auction. Crude oil inventories data is lined up next.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Apr 06, 2017)

USD

The US dollar was in a weak spot against its peers as the FOMC minutes focused on the idea of adjusting the balance sheet and the fact that fiscal stimulus might not take effect until next year, something that was underscored by Speaker Paul Ryan who said that tax reform could take longer than the healthcare overhaul. Data came in mixed, as the ADP non-farm employment change reading came in at 263K versus 184K while the ISM non-manufacturing PMI dipped from 57.6 to 55.2

EUR

The euro had a mixed performance as it reacted mostly to currency-specific events. Economic data turned out mostly weaker than expected as the final services PMI readings were downgraded. German factory orders data is due today, along with the ECB meeting minutes.

GBP

The pound rebounded against its peers as the UK services PMI climbed from 53.3 to 55.0, higher than the consensus at 53.5. Only the housing equity withdrawal report is lined up next and UK manufacturing production and a speech by BOE Governor Carney are lined up on Friday.

CHF

The franc also had a mixed performance as it functioned mostly as a counter currency. There were no reports out of the Swiss economy yesterday and only the CPI is up for release today. A 0.2% uptick is eyed, slower than the earlier 0.5% increase.

JPY

The Japanese yen gave up some gains against its counterparts earlier in the day but later on resumed their climb as US bond yields declined. The Japanese consumer confidence index is still up for release and a climb from 43.1 to 43.5 is expected.

Commodity Currencies (AUD, NZD, CAD)

The comdolls slid lower to the yen and the European currencies as risk aversion remained in play. Crude oil inventories increased by 1.6 million barrels instead of falling by 0.1 million barrels. The Chinese Caixin services PMI dropped from 52.6 to 52.2 instead of improving to the 53.2 consensus. Canadian building permits is due next.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Apr 07, 2017)

USD

The US dollar was mostly stuck in consolidation against its peers as traders appear to be waiting for the NFP report and for geopolitical risks to subside. The Challenger job cuts report showed a 17% increase in March while initial jobless claims dropped to 234K versus the projected 251K figure. The NFP could show an increase of 174K in hiring, which should be enough to keep the unemployment rate unchanged at 4.7%.

EUR

The euro gave up some ground after ECB Governor Draghi admitted that they may have been too early to call the pickup in inflation. A couple of policymakers echoed this sentiment in the ECB meeting minutes. German factory orders came in line with estimates of a 3.4% gain and industrial production and trade balance data are due today. French trade balance and industrial production are also up for release.

GBP

The pound shed some ground as Brexit jitters resurfaced, with traders worrying that neither the UK nor the EU will soften their stance during the negotiations. UK manufacturing and industrial production reports are lined up today. The former could show a 0.3% gain while the latter is slated to post a 0.2% uptick. The goods trade balance is also due, along with the UK Halifax HPI.

CHF

The franc had another mixed day as the lack of catalysts from Switzerland left the currency reacting to country-specific events. The Swiss jobless rate is due today and no change from the earlier 3.3% reading is eyed. SNB foreign currency reserves data is also on the docket, possibly providing clues as to whether the central bank is intervening or not.

JPY

The yen kicked higher in the Asian session as headlines revealed that the US launched airstrikes on Syria in response to the chemical attack earlier this week. Japanese average cash earnings rose 0.4% versus the projected 0.5% gain while the earlier reading was downgraded to 0.3%.

Commodity Currencies (AUD, NZD, CAD)

The commodity currencies turned lower as risk aversion peeked back in the markets on news of the US military response to Syria. Canadian building permits slid 2.5% and the jobs report is up for release next. Analysts are expecting to see a 5.7K increase in hiring and an uptick in the jobless rate to 6.7%. Canada's Ivey PMI is also due and a recovery from 55.0 to 56.3 is eyed.

By Kate Curtis from Trader's Way