Daily Market Outlook by Kate Curtis from Trader's Way

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Forex Major Currencies Outlook (July 2, 2015)

USD

The US dollar managed to advance against most of its major counterparts, as risk aversion stayed in the financial markets. Data from the US also came in better than expected, setting the stage for an upside surprise in the NFP. The ADP non-farm employment change figure showed a 237K gain in hiring, higher than the projected 219K figure and the previous 203K increase. However, Challenger job cuts showed a 42.7% rise, reflecting an increase in layoffs. Meanwhile the ISM manufacturing PMI came in slightly better than expected at 53.5 versus the projected 53.2 reading, up from the previous 53.4 figure. The NFP could show a 230K increase in hiring, slower than the previous 280K gain, but probably enough to bring the jobless rate down from 5.5% to 5.4%.

EUR

The euro resumed its selloff to some of its major counterparts, as EU officials confirmed that Greece is in arrears with the IMF and that it risks getting thrown out of the euro zone if another set of bailout funds isn’t unlocked. Data from the euro zone came in mostly in line with expectations but traders declined to buy up the shared currency ahead of the Greek referendum this weekend. Spanish unemployment change data is due today and a larger decline in joblessness is eyed, along with the release of the ECB meeting minutes.

GBP

The pound continued to sell off against some of its rivals after the UK printed a disappointing manufacturing PMI reading. The figure fell from 51.9 to 51.4 in June instead of improving to the projected 52.6 reading. The construction PMI is up for release today but it might not have such a strong impact on pound price action.

CHF

The franc took its cue from the euro and sold off against most of its counterparts, with traders worrying about debt contagion in Europe. Swiss manufacturing PMI came in line with expectations of a climb from 49.4 to 50.0, which reflects industry expansion. There are no reports due from Switzerland today.

JPY

The yen advanced to most of its rivals, except for the US dollar, when risk aversion extended its stay in the markets. Japan’s Tankan survey printed improvements for the manufacturing and non-manufacturing sectors, confirming that the BOJ isn’t likely to increase its stimulus anytime soon. No reports are due from Japan today, leaving risk sentiment at the driver’s seat of price action.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi suffered another sharp selloff when the dairy trade auction showed a decline in prices. This was followed by the ANZ report indicating a 3.1% decline in commodity prices for New Zealand and a downward revision in the previous month’s data. Australia printed a larger than expected trade deficit of 2.75 billion AUD and reported a downgrade in the previous month’s trade balance. There are no other reports lined up from the comdoll economies today.

By Kate Curtis from Trader's Way

 

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Forex Major Currencies Outlook (July 3, 2015)

USD

The US dollar suffered a sharp selloff against its forex rivals in recent trading, thanks to weaker than expected NFP data. The report showed a 223K increase in hiring versus the projected 231K figure while average hourly earnings showed a flat reading. The jobless rate improved from 5.5% to 5.3% but this was just a result of a sharp drop in the participation rate and a reduction in the labor force. Underlying data such as the U6 and long-term unemployment showed gradual improvements, but the weak headline figures still convinced most traders to delay rate hike projections for December. US banks are closed for the Fourth of July long weekend holiday today.

EUR

The euro managed to regain a bit of ground to the US dollar and the commodity currencies, thanks to bleak economic data from those economies. Opinion polls ahead of the Greek referendum this weekend show mixed results but most are indicating that the actual vote could come down to the wire. Spanish unemployment change data was weaker than expected yesterday while today has the euro zone retail sales on tap.

GBP

The pound managed to draw some support from stronger than expected construction PMI, as the reading jumped from 55.9 to 58.1 in June. Today, the services PMI is up for release and it might have a stronger impact on pound action since the sector contributes a larger share to overall economic growth. The reading is expected to climb from 56.5 to 57.4 in June.

CHF

The franc continued to advance in recent trading, despite the lack of top-tier data from Switzerland. Traders might take their cues from the results of the Greek referendum over the weekend, although franc-buying might be limited due to the SNB’s pledge to keep the currency weak.

JPY

The yen gave up a bit of ground in recent trading as risk appetite managed to return to the markets and traders booked profits ahead of the weekend event risk. There have been no economic reports released from Japan yesterday and none are due today, leaving market sentiment in the driver’s seat.

Commodity Currencies (AUD, NZD, CAD)

The Australian dollar was weighed down by weaker than expected retail sales data from Australia, as the country reported a 0.3% uptick in consumer spending versus the projected 0.5% gain. To top it off, the previous report was downgraded to show a 0.1% decline in consumer spending. Chinese equities are on the decline today, prompting calls for further PBOC easing. No other reports are lined up from the comdoll economies for the rest of the day.

By Kate Curtis from Trader's Way

 

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Forex Major Currencies Outlook (July 6, 2015)

USD

The US dollar was off to a running start this week as risk aversion settled in the markets. Greeks voted against the current bailout proposal, which involves further austerity measures. There were no reports released from the US on Friday since markets were closed ahead of the Fourth of July weekend. Today, the ISM non-manufacturing PMI is up for release and a climb from 55.7 to 56.2 is expected.

EUR

Euro pairs gapped lower against their forex counterparts in today’s trading after the Greek referendum resulted in a “No” vote for austerity and the current bailout proposal. German factory orders and euro zone Sentix investor confidence data are up for release today and weak readings could lead to sharper euro declines.

GBP

The pound was also on weak footing last week and at the start of this week, despite stronger than expected services PMI from the UK. Today, there are no major reports lined up from the UK, which suggests that the pound could take its cue from overall market sentiment.

CHF

The franc followed in the euro’s footsteps and sold off against its forex counterparts ahead of more uncertainty in Greece. Swiss CPI is up for release today and a mere 0.1% uptick in price levels might be seen. Apart from that, updates on the Greek debt talks could continue to push franc pairs around.

JPY

The yen took advantage of the run in risk aversion as it advanced against its currency rivals. There have been no reports released from Japan recently, but the selloff in the Chinese equity market has led investors to move their funds to the safe-haven yen.

Commodity Currencies (AUD, NZD, CAD)

The comdolls sold off at the start of the week, following the sharp decline in oil prices last week. Iran pledged to double its oil production once the EU sanctions are lifted, putting additional pressure on crude oil and other commodities. Aside from that, the selloff in the Chinese stock market has been weighing on the Aussie and Kiwi.

By Kate Curtis from Trader's Way

 

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Forex Major Currencies Outlook (July 7, 2015)

USD

The US dollar stayed supported at the start of the week after most of its currency counterparts were able to fill the gap from the weekend. Data from the US came in weaker than expected, as the ISM non-manufacturing PMI climbed from 55.7 to 56.0, short of the projected 56.5 figure. For today, the trade balance and JOLTS job openings data is due and a wider deficit and lower job opportunities figures are eyed, which might lead the dollar to give back its recent gains.

EUR

The euro was still in weak footing early on, as Greek Finance Minister Varoufakis announced his resignation and the referendum was confirmed to have ended in a “No” vote to austerity and the bailout. EU officials will have another summit today to discuss Plan B for Greece, but the lack of a resolution could keep weighing on the euro. Data from the euro zone was mixed, as German factory orders showed a 0.2% decline instead of staying flat while the Sentix investor confidence reading improved from 17.1 to 18.5.

GBP

The pound was also in a weak spot, despite the lack of top-tier data from the UK. For today, the UK manufacturing production figure is up for release and a 0.1% rebound from the previous 0.4% decline is expected. Industrial production data is also due and a 0.2% dip is eyed.

CHF

The franc took its cue from the euro and showed losses to most of its currency counterparts. Swiss CPI came in line with expectations of a 0.1% gain while the unemployment rate and foreign currency reserves data are up for release today. No changes in the 3.3% jobless rate is expected while the foreign currency reserves figure could indicate if the SNB is actively intervening in the market to keep the franc weak.

JPY

The yen took advantage of the run in risk aversion in yesterday’s trading sessions, as it advanced against most of its rivals after the gaps were filled. Japan’s leading indicators fell from 106.4% to 106.2% and no reports are lined up today, leaving risk sentiment responsible for most of the yen’s movement.

Commodity Currencies (AUD, NZD, CAD)

Falling commodity prices and the downturn in China’s stock market have been weighing on the comdolls for the past few days, and it didn’t help that Canada’s Ivey PMI missed expectations. The figure fell from 62.3 to 55.9, lower than the projected drop to 56.2. The RBA is set to make its policy statement today and no actual changes are expected but officials could continue to jawbone the currency. Canada’s trade balance is also due today.

By Kate Curtis from Trader's Way

 

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Forex Major Currencies Outlook (July 8, 2015)

USD

The US dollar was able to benefit from risk-off flows once more, as the EU Summit resulted in an ultimatum for Greece to accept the bailout proposal or exit the euro zone. Apart from that, the selloff in the Chinese stock market has been weighing heavily on risk sentiment, supporting lower-yielding currencies like USD. Data from the US economy came in line with expectations, as the trade deficit widened slightly. For today, the release of the FOMC minutes could pose a significant event risk for dollar trades, as cautious comments could dash hopes of a September rate hike.

EUR

The euro was under heavy selling pressure following the EU Summit, as talks between the Greek government officials and its creditors broke down once more. Greece has been given a five-day deadline to agree to the bailout or to leave the euro zone, which could mean more weakness for the shared currency. There are no reports lined up from the euro zone today, leaving traders to keep focusing on updates from Greece.

GBP

The pound joined the rest of its European peers in selling off strongly against the dollar and other safe-havens, as risk aversion extended its stay in the financial markets. Data from the UK came in mixed, as manufacturing production slipped by 0.6% while industrial production showed a stronger than expected 0.4% gain. The UK government annual budget release is scheduled today.

CHF

The franc also sold off in recent trading, even though data from Switzerland was mostly unchanged from previous months. The franc followed in the euro’s footsteps, as the shared currency continued to be dragged lower by Greece. There are no reports lined up from Switzerland today.

JPY

The yen was able to take advantage of the pickup in risk aversion, even though Prime Minister Abe suggested that another round of BOJ stimulus could be added prior to another sales tax hike. Earlier today, Japan printed a stronger than expected current account balance of 1.64T JPY versus the projected 1.32T JPY surplus. No other reports are lined up from Japan, leaving risk sentiment as the main driver of price action for yen pairs.

Commodity Currencies (AUD, NZD, CAD)

The comdolls suffered more hurt from another wave of risk sentiment, especially since Chinese equities resumed their slide in today’s Asian trading session. Yesterday, the RBA decided to keep interest rates on hold but reiterated the negative impact of falling commodity prices. Canada printed a weaker than expected trade deficit of 3.3 billion CAD versus the projected 2.6 billion CAD shortfall. Canadian building permits and US crude oil inventories could push the Loonie around today.

By Kate Curtis from Trader's Way

 

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Forex Major Currencies Outlook (July 9, 2015)

USD

The US dollar gave back some of its recent gains to its counterparts when the FOMC minutes contained no clear indication that the Fed was ready to hike in September. In fact, the minutes showed a lot of concern when it comes to Greece and potential risks to domestic growth. US initial jobless claims data are up for release today and a speech by FOMC member Brainard is lined up.

EUR

The euro managed to recover some of its recent losses, as traders warmed up to the idea of a Grexit. There have been no reports released from the euro zone yesterday while today has only the German trade balance on tap. Updates from Greece could continue to direct the shared currency’s movement, along with risk flows.

GBP

The pound continued to sell off against most of its forex rivals, despite better than expected Halifax HPI data. The government’s budget release didn’t rattle pound traders so much while the upcoming BOE statement might also be a non-event. No changes to interest rates and asset purchases are expected, although BOE officials could start expressing their concerns about Greece.

CHF

The franc also regained a bit of ground in recent trading, possibly due to profit-taking and the dollar’s slide. There have been no reports released from Switzerland yesterday and none are due today, leaving the franc to take its cue from risk sentiment.

JPY

The yen gave back some of its recent gains when risk appetite seemed to return to the markets. Chinese equities halted their slide, but this was probably spurred by the temporary closure of some exchanges and the injection of a 260 billion CNY fund from a government-owned entity. Data from Japan was mixed, as the current account balance beat expectations while the Economy Watchers sentiment index showed a decline. Core machinery orders showed a better than expected 0.6% gain in today’s release.

Commodity Currencies (AUD, NZD, CAD)

The Aussie took a break from its recent slide, thanks to better than expected jobs data from Australia. The economy added 7.3K jobs in June instead of showing a 2.1K decline in hiring while the jobless rate came in at 6.0% versus the projected 6.1% figure. Yesterday, Canada reported a 14.5% slide in building permits and led to a Loonie selloff. Canadian housing starts are up for release later today.

By Kate Curtis from Trader's Way

 

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Forex Major Currencies Outlook (July 10, 2015)

USD

The US dollar returned most of its recent gains in yesterday’s trading sessions when risk appetite started to improve. News that the Greek government is gearing up to submit a revised economic reform plan lowered the odds of a Grexit while the recovery in Chinese equities also prevented further capital flight. Initial jobless claims came in worse than expected at a reading of 297K versus the projected 274K figure. For today, Fed Chairperson Yellen is set to give a speech and possibly push dollar pairs around.

EUR

The euro had a positive day when the Greek government made an effort to revise their reform proposal to be more in tune with their creditors’ demands. Data from the euro zone came in better than expected, with Germany printing a larger trade surplus. For today, French and Italian industrial production figures are due but the market focus could be on the updates leading up to the end of the Greek five-day ultimatum.

GBP

The pound was still generally weaker compared to most of its forex counterparts despite the pickup in risk appetite yesterday. The BOE didn’t make any monetary policy changes as expected while today has the trade balance and construction output figures on tap.

CHF

The franc regained ground against its forex rivals, as it followed in the euro’s footsteps. There have been no reports released from Switzerland yesterday and there are no reports lined up for today, leaving the franc dependent on euro trade flows again.

JPY

The yen gave up its recent wins when risk aversion retreated in the markets. Positive developments in China and Greece eased some of the fears in the markets while weak PPI figures from Japan also spurred yen weakness. Producer prices fell by 2.4% versus the projected 2.2% decline year-over-year in June. No other reports are due from Japan, which means that yen pairs could continue to move to the tune of risk sentiment.

Commodity Currencies (AUD, NZD, CAD)

The comdolls saw a strong recovery in the past trading sessions as higher-yielding currencies took advantage of risk appetite. Data from Australia came in better than expected, as the economy added 7.3K jobs in June versus the projected 2.1K decline. Chinese CPI also came in better than expected at 1.4% versus the projected climb from 1.2% to 1.3%. Earlier today, Australia reported a 6.1% slump in home loans. Later on Canada is set to print its jobs figures and possibly show a 9K drop in hiring.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 13, 2015)

USD

The US dollar opened higher against most of its forex counterparts upon finding out that there has been no deal struck over the weekend between Greece and its creditors just yet. Data from the US was weaker than expected last Friday, as wholesale inventories showed a 0.8% figure versus the projected 0.3% reading, reflecting oversupply. There are no major reports lined up from the US economy today, as risk sentiment could be responsible for the dollar’s price action.

EUR

The euro gapped down against its forex rivals when Greece was unable to get its reform plans approved. More meetings are scheduled for the rest of the week and the lack of any resolution could keep bearish pressure on the euro. Data from the euro zone came in mixed on Friday, as the French industrial production fell short of expectations with a 0.4% gain while the Italian industrial production figure showed a stronger than expected 0.9% increase. No reports are lined up from the region today, with the focus mostly on the Eurogroup meetings.

GBP

The pound resumed its selloff to most of its currency counterparts, despite the stronger than expected trade balance release from the UK last Friday. The deficit narrowed from 9.4 billion GBP to 8.0 billion GBP, reflecting an improvement in trade activity. The BOE credit conditions report is up for release today and this should provide a picture of borrowing activity in the economy.

CHF

The franc followed in the euro’s footsteps and sold off against most of its rivals when the Greek debt talks failed to put an end to the current crisis. There were no reports from Switzerland then and none are due today, indicating that Greek updates could continue to push franc pairs around.

JPY

The yen continued to give up ground against its rivals when data from Japan came in mixed earlier today. This allowed yen pairs to quickly fill the gaps from the weekend. The industrial production figure saw a small upgrade from -2.2% to -2.1% but the tertiary industry activity index printed a worse than expected 0.7% drop instead of the projected 0.2% dip.

Commodity Currencies (AUD, NZD, CAD)

The comdolls drew a bit of support from better than expected export figures from China, even though the headline trade balance showed a smaller than expected surplus. Imports also logged in a 6.7% decline, suggesting weaker demand for raw materials and commodities. There are no reports lined up from Australia, New Zealand, and Canada today.

By Kate Curtis from Trader's Way

 

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Forex Major Currencies Outlook (July 14, 2015)

USD

The US dollar regained ground against most of its forex counterparts when risk aversion popped its head back in the markets yesterday. Even with a Greek bailout deal in the works, traders still don’t seem to be buying into the idea that this could stabilize the financial situation in the region. There were no reports released from the US economy then while today has the retail sales figures on tap. The headline figure could show a 0.2% uptick while the core figure could show a 0.7% gain, weaker than the previous 1.2% increase in headline retail sales and 1.0% rise in core retail sales. Stronger than expected data could still keep the dollar supported.

EUR

The euro didn’t seem to be too happy about Greece’s revised reform proposal, as this could end up being too strict on austerity and putting the debt-ridden nation much deeper in recession. The German ZEW economic sentiment index is due today and it could show a drop from 31.5 to 30.6 for July while the region’s figure could fall from 53.7 to 51.1. Further developments on the Greek bailout deal could continue to push euro pairs around.

GBP

The pound managed to score a few gains then retreat in recent trading sessions, as there were no top-tier economic releases from the UK yesterday. Today has the UK CPI and BOE Inflation Report hearings on tap and these might spur additional volatility for pound pairs. The headline CPI is expected to fall from 0.1% to 0.0% while the core CPI could stand its ground at 0.9%. BOE Governor Carney also has a speech lined up and if he reiterates his confidence in the UK economic outlook, the pound might be in for more gains.

CHF

The franc was also in a weak spot recently and even chalked up losses to the euro, as traders were cautious about another SNB intervention. Swiss PPI is up for release today and market participants are expecting to see a 0.2% rebound from the previous 0.8% decline. Apart from that, Greek debt updates could also spur moves among franc pairs.

JPY

The yen posted losses in earlier trading sessions but regained ground as risk aversion returned later on. Data from Japan was mixed, with the industrial production report showing a small upgrade and the tertiary industry index missing expectations with its 0.7% drop. No reports are lined up from Japan today, keeping risk sentiment in play.

Commodity Currencies (AUD, NZD, CAD)

The comdolls weakened to the dollar in recent trading session, as commodity prices resumed their slump. The Aussie managed to score some gains earlier today though, after Australia printed an improvement in its NAB business confidence index. There are no other reports lined up from the comdoll economies today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 15, 2015)

USD

The US dollar returned most of its recent wins when the US retail sales figures fell short of expectations. The headline figure showed a 0.3% decline while the core version of the report showed a 0.1% dip when analysts were expecting to see a 0.2% increase and a 0.7% gain respectively. Apart from that, the previous month’s readings were downgraded to show a 0.8% increase in core retail sales and a 1.0% rise in headline retail sales from the previous 1.0% and 1.2% readings. Import prices were also weaker than expected with a 0.1% decline versus the projected 0.1% uptick. For today, industrial production and PPI data are up for release, along with the Empire State manufacturing index. Fed Chairperson Janet Yellen’s speech might also spur additional volatility among dollar pairs in the US session.

EUR

The euro regained a bit of ground to the dollar but was still weaker against most of its other forex counterparts, as the Greek bailout proposal seems to be encountering trouble in parliament. In addition, potential political trouble could also make it more difficult for the to achieve its debt targets, which might put it back in a default position once the funds run out. Data from the euro zone was weaker than expected, with the German ZEW index falling from 31.5 to 29.7 and the euro zone ZEW dropping from 53.7 to 42.7, mostly due to the Greek debt issue. The Greek parliament should pass legislation to enact reforms required in the bailout deal within the day but further conflict could keep euro pairs weak.

GBP

The pound enjoyed a strong boost from hawkish BOE Inflation Report hearings, as Governor Carney said that they are moving closer to hiking interest rates. This is a much more upbeat outlook compared to their previous assessment that the next move is likely to be a rate hike, although they didn’t confirm when this might take place. CPI figures were weaker than expected though, as the headline reading fell from 0.1% to 0.0% while the core figure dipped from 0.9% to 0.8%. PPI was also weaker than expected, as it recorded a sharper drop in input prices due to the fall in crude oil and petroleum products. The jobs figures are due today and a 8.9K decline in claimant count is eyed, along with an increase from 2.7% to 3.3% in average earnings.

CHF

The franc was in a weak spot after the Swiss PPI fell short of expectations and logged in a 0.1% dip instead of the projected 0.2% rebound. Only the ZEW economic expectations index is up for release today and an improvement from the previous 0.1 reading might be enough to keep the currency afloat.

JPY

The yen gave up ground against most of its forex counterparts when risk appetite stayed in the markets. There have been no reports released from Japan then while today had the BOJ statement on tap. No actual policy changes have been announced.

Commodity Currencies (AUD, NZD, CAD)

The comdolls regained a bit of ground in recent trading, although oil prices have been on the decline after the Iran nuclear deal was passed. The country has pledged to double its oil production, which might mean more declines in prices later on. Today, the BOC will make its monetary policy statement and some analysts are expecting an interest rate cut. Later on, New Zealand will have its dairy trade auction while the quarterly CPI will be released.

By Kate Curtis from Trader's Way