Daily Market Outlook by Kate Curtis from Trader's Way

Commercial Content Analysts
917

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

918

USD

The US dollar was off to a weak start for the week as risk appetite returned on the outcome of the French elections. Besides, data from the US was mostly weaker than expected on Friday as both flash manufacturing and services PMI printed weaker than expected results. For today, more speeches from dovish FOMC member Kashkhari are lined up.

EUR

The euro popped higher against its peers over the weekend as the first round of French elections left Macron and Le Pen going head to head in the next round in May. This could mean stronger odds of Macron beating Le Pen, thereby reducing odds of a Frexit. Flash manufacturing and services PMI from Germany and France turned out mixed on Friday while the German Ifo business climate index is due today.

GBP

The pound took its lead from the euro and also rallied on the results of the French elections. Apart from that, the UK currency is also riding on the bullish wave after the UK snap elections were announced. Only the Rightmove HPI and CBI industrial order expectations index are due today and strong readings could keep the currency afloat.

CHF

The franc was also able to advance against most of its major counterparts when the French election results were announced but it was no match to pound and euro strength. There were no reports out of the Swiss economy on Friday and none are due today so the currency could keep reacting to country-specific events.

JPY

The Japanese yen gave up a lot of ground over the weekend as risk appetite was off to a strong start this week. Data from Japan came in line with expectations on Friday and none are due today so the currency is extra sensitive to market sentiment.

Commodity Currencies (AUD, NZD, CAD)

The comdolls edged higher to the lower-yielding currencies but were left behind by the euro and pound. Canadian inflation reports came in mostly in line with expectations, except for the headline reading which posted a 0.2% uptick versus the projected 0.4% rise. New Zealand and Australia have bank holidays today.

By Kate Curtis from Trader’s Way

919

[B]USD[/B]

The US dollar regained ground on a strong equity market performance on expectations for Trump’s tax reform announcement on Wednesday. There were no major reports out of the US and markets seemed to shrug off cautious remarks from FOMC dissenter Kashkari. For today, US CB consumer confidence and new home sales data are due, along with the Richmond manufacturing index.

[B]EUR[/B]

The euro had a strong start for the week but gave up some of its gains and filled some gaps throughout the sessions that followed. German Ifo business climate data was better than expected as the reading rose from 112.4 to 112.9. Traders now seem to be turning their attention to the upcoming ECB statement, which could show that the central bank is reverting to its dovish stance. There are no reports due today.

[B]GBP[/B]

The pound also stalled from its climb as CBI industrial order expectations data disappointed. The index fell from 8 to 4 to reflect weaker growth instead of improving to the estimated reading at 9. UK public sector net borrowing data is up for release next and a larger deficit of 2.6 billion GBP is eyed.

[B]CHF[/B]

The franc failed to establish a clear direction in trading as it mostly reacted to currency-specific events. There are still no reports due from the Swiss economy today so the franc could be sensitive to market sentiment again.

[B]JPY[/B]

The yen regained some ground after gapping down against its peers over the weekend as risk aversion returned to the markets. There were no major reports out of Japan and none are due today so market sentiment could still be the main driving factor.

[B]Commodity Currencies (AUD, NZD, CAD)
[/B]
The comdolls resumed their weak stance when risk aversion returned to the markets. Canadian wholesale sales was weaker than expected with a 0.2% drop versus the projected 2.1% gain. There are no reports due from the comdoll economies today…

[I]By Kate Curtis from Trader’s Way[/I]

920

USD

The US dollar regained a bit of ground against its peers despite mixed reports from the US. Housing figures were generally better than expected but the Richmond manufacturing index dipped while CB consumer confidence also turned lower. Traders are now turning their focus to Trump’s upcoming tax reform announcement and this might cause volatility for the dollar as there are no other major catalysts on deck.

EUR

The euro resumed its climb as more polls indicated a widening lead for Macron versus Le Pen, thereby reducing odds of a Frexit. Medium-tier data from the euro zone also turned out mostly stronger than expected while a report from Reuters suggested that the ECB might remove references to downside risks in their upcoming policy statement. There are no major reports due from the euro zone today.

GBP

The pound also squeezed out some gains against most of its rivals, despite a larger than expected public deficit. The net borrowing figure came in at 4.4 billion GBP, higher than the projected reading at 2.1 billion GBP. There are no reports lined up from the UK economy for today.

CHF

The franc had a mixed performance as the lack of data from Switzerland left it reacting mostly to currency-specific events. Swiss UBS consumption indicator and Credit Suisse economic expectations data are up for release next.

JPY

The yen lost a lot of ground to its peers as risk appetite returned and weekend gaps were left unfilled. Japan is set to print its all industries activity index next and might show a 0.8% uptick, higher than the earlier 0.1% increase, but traders are likely to put more focus on market sentiment and bond yields with the Trump tax announcement coming up.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a mixed performance as they weakened to the dollar and European currencies but advanced to the yen. Trump talked tough on the Canadian lumber and dairy industry, weighing on the Loonie despite the pickup in crude oil. Australia’s quarterly CPI is due next and a 0.6% uptick is eyed while Canada is scheduled to print its retail sales figures next.

By Kate Curtis from Trader’s Way

921

USD

The dollar had a volatile run during the release of the Trump administration’s tax reform plan but ended the day mostly unchanged. Up ahead, US initial jobless claims, durable goods orders, and pending home sales data are due next, although traders could hold out for the advanced GDP release on Friday.

EUR

The euro continued to advance against its peers on strengthening expectations that Macron could win the French presidency. There were no reports released from the euro zone yesterday while today has the German preliminary CPI and GfK consumer climate index. Traders are expecting to see a 0.1% dip in German price levels and an improvement in the index from 9.8 to 9.9. The ECB statement is also coming up and less dovish remarks could extend the euro’s gains.

GBP

The pound also extended its gains against its rivals despite the lack of top-tier data from the UK. Only the CBI realized sales index is due today and a dip from 9 to 6 is eyed, but a stronger than expected result could assure traders of the resilience of the UK economy.

CHF

The franc had a mixed performance as it weakened to its European counterparts but strengthened against the rest of its peers. Data from Switzerland was mixed as the Swiss UBS consumption indicator improved from 1.45 to 1.50 while the Credit Suisse Economic Expectations index fell from 29.6 to 22.2. Swiss trade balance is due next and a smaller surplus of 3.01 billion CHF is expected.

JPY

The yen tossed and turned but ultimately recovered some of its losses after US bond yields failed to surge on the tax reform announcement. Earlier today, the BOJ refrained from making any adjustments in its monetary policy and interest rates as expected. BOJ Governor Kuroda’s press conference is still coming up.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were among the weakest performers, particularly the Loonie which was hit by mixed Canadian retail sales and warnings of a property bubble from the CHMC. Australia’s quarterly CPI also came in a notch below expectations at 0.6%. On a less downbeat note, crude oil inventories posted a larger than expected draw of 3.6 million barrels.

By Kate Curtis from Trader’s Way

922

USD

The dollar had a mixed performance as it mostly reacted to currency-specific events. It weakened to the pound and yen but advanced against the euro and comdolls. Durable goods orders figures came in below expectations, and so did pending home sales and the initial jobless claims. For today, the advanced GDP report is due and a slower growth figure of 1.3% is eyed compared to the previous period’s 2.1% gain. Chicago PMI and speeches by FOMC members Brainard and Harker are also lined up.

EUR

The euro advanced during the ECB statement as policymakers acknowledged that recent data is reflecting strong and continued growth. However, the shared currency retreated after Draghi admitted that underlying inflationary pressures remain subdued. He also said that interest rates could remain at current low levels even after QE ends and that they haven’t decided on their options in June. French and Spanish flash GDP data are due, along with French consumer spending and German retail sales figures.

GBP

The pound held on to its recent gains and went for more as the CBI realized sales figure jumped from 9 to 38 instead of falling to 6. This medium-tier leading indicator reflects the resilience of the UK economy even with Brexit uncertainties, shoring up demand for the pound. UK preliminary GDP is due today and a 0.4% expansion is eyed, slightly lower than the earlier 0.6% growth figure.

CHF

The franc was mostly stronger, except against the British pound. Swiss trade balance came in stronger than expected at a surplus of 3.10 billion CHF compared to the expected 3.01 billion CHF surplus but smaller than the earlier 3.12 billion CHF figure. The Swiss KOF economic barometer is due today and an uptick from 107.6 to 107.7 is eyed. SNB head Jordan also has a speech lined up.

JPY

The yen regained ground as pairs tested technical levels for the week. Economic data from Japan turned out mixed, with household spending and preliminary industrial production falling short of estimates and retail sales printing strong results. Inflation reports were mostly in line with estimates.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were generally weaker as risk aversion was in play and there were no major reports to give them a boost. New Zealand’s ANZ business confidence index dipped from 13 to 11 while Australia’s quarterly PPI was stronger than expected at 0.5% versus 0.3%. Canada’s monthly GDP is due today and a 0.1% uptick in growth is eyed.

By Kate Curtis from Trader’s Way

923

USD

The US dollar was mostly stronger against its rivals on Friday even after the US advanced GDP reading turned out weaker than expected. The economy grew by 0.7% in Q1, lower than the projected 1.3% reading and the earlier 2.1% growth figure. However, underlying data such as the GDP price index and employment cost index turned out stronger than expected while the Chicago PMI also beat expectations. Core PCE price index and ISM manufacturing PMI, along with personal income and spending data, are due today but traders could pay more attention to Treasury Secretary Mnuchin’s speech.

EUR

The euro held on to most of its recent gains as flash CPI readings from the region churned out upbeat results. The headline estimate rose from 1.5% to 1.9%, outpacing the 1.8% consensus, while the core reading climbed from an upgraded 0.3% reading to 0.8%. Medium-tier data from Germany and France fell short of estimates but Spain’s flash GDP reading was stronger than expected at 0.8%. Euro zone banks are closed for the Labor Day holiday today.

GBP

The pound was also able to stay afloat even after reports confirming that EU leaders agreed to take a tough stance on Brexit. UK preliminary GDP also came short of consensus with a 0.3% growth figure versus the projected 0.4% expansion. UK banks are also closed for the holiday today.

CHF

The franc was mostly weaker against its European counterparts but managed to advance on risk aversion. The Swiss KOF economic barometer reading fell from 107.2 to 106.0 instead of improving to the projected 107.7 reading. Swiss banks are closed for the holiday today but retail sales data is due and a 0.5% year-over-year uptick is eyed.

JPY

The yen regained some ground against its counterparts as Japanese data turned out mostly stronger than expected on Friday. Inflation reports were in line with estimates while retail sales and the jobless rate turned out better than expected. Household spending and preliminary industrial production fell short. There are no major reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The Aussie was off to a weak start as Chinese PMI readings printed over the weekend were below expectations. The manufacturing PMI dipped from 51.8 to 51.2 versus the projected fall to 51.7, reflecting a much slower pace of industry expansion than expected, while the non-manufacturing reading dropped from 55.1 to 54.0. In Canada, the monthly GDP reading showed a flat figure instead of the projected 0.1% uptick. No other top-tier reports are lined up for today.

By Kate Curtis from Trader’s Way

924

USD

The US dollar was unable to establish a clear direction in recent trading as the latest batch of reports fell short of estimates. Personal income posted a meager 0.2% uptick versus the projected 0.4% gain while personal spending was flat instead of rising by the estimated 0.2% reading. The ISM manufacturing PMI also dropped from 57.2 to 54.8 versus the estimated 56.6 figure. For today, only the total vehicle sales report is due.

EUR

The euro gave back some of its recent gains to the commodity currencies but kept advancing to the yen. Most European banks were closed for the holiday yesterday so the move was attributed to risk-taking. For today, final manufacturing PMI readings from the top economies are due and upbeat results could drive the shared currency higher.

GBP

The pound also retreated to the comdolls but managed to hold on to its gains against the yen and dollar. UK banks were closed for the holiday yesterday so there were no major reports released while today has the manufacturing PMI on tap. Analysts are expecting to see a dip from 54.2 to 54.0 but a higher than expected read could still push the UK currency higher.

CHF

The franc also had a mixed performance as it reacted mostly to currency-specific events. Swiss retail sales turned out much stronger than expected with a 2.1% year-over-year gain versus the estimated 0.5% uptick and the earlier 0.2% increase. Swiss manufacturing PMI is due today and a dip from 58.6 to 58.2 is eyed.

JPY

The yen was a big loser in recent trading sessions as risk appetite picked up. There were no major reports from Japan recently and the BOJ minutes didn’t contain much surprises. The BOJ core CPI is due next and a rise from 0.1% to 0.2% is expected.

Commodity Currencies (AUD, NZD, CAD)

The Aussie and Kiwi led the pack while the Loonie lagged on talks of higher oil production in Libya. However, the Aussie stalled from its climb when the Caixin manufacturing PMI dropped from 51.2 to 50.3 instead of improving to the estimated 51.4 reading. The RBA decision is due next and no changes to monetary policy is eyed while the quarterly jobs report from New Zealand is lined up for the late US session.

By Kate Curtis from Trader’s Way

925

USD

The US dollar chalked up a mixed performance on the lack of top-tier data from the US. Total vehicle sales was weaker than expected while reports released earlier in the week signaled a slowdown in the consumer sector. ADP non-farm employment change and ISM non-manufacturing PMI are lined up today, but the FOMC statement could lead to stronger movement for the dollar. No actual policy changes are expected but a change in their bias could influence dollar trends.

EUR

The euro held on to its gains against the yen but caved to comdoll strength. Medium-tier reports were mostly in line with expectations, save for the region’s unemployment rate which was unchanged at 9.5% instead of improving to the 9.4% consensus. Spanish and German unemployment change figures are lined up today, along with the region’s flash GDP reading which could show a slightly faster pace of growth at 0.5%.

GBP

The pound was able to advance, thanks to stronger than expected UK manufacturing PMI. Analysts expected to see a fall from 54.2 to 54.0 but the actual reading surged to 57.3 to reflect a much stronger pace of industry growth. Construction PMI is due today and a dip from 52.2 to 52.1 is eyed, although this report doesn’t normally trigger a large reaction from the pound.*

CHF

The franc gave up some ground when the Swiss manufacturing PMI turned out weaker than expected. The reading fell from 58.6 to 57.4 versus the estimated drop to 58.2 to reflect a slower pace of industry expansion. There are no reports due from Switzerland today so the franc could take its cue from euro zone reports or market sentiment.

JPY

The yen continued to slide lower against most of its peers on risk appetite. Japanese banks are closed for the holiday so liquidity is down. Yen pairs could react to changes in US bond yields following the release of leading jobs indicators, namely the ADP report and ISM non-manufacturing PMI, and the FOMC statement.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi led the pack in terms of gains when the GDT auction and quarterly jobs report yielded strong results. Dairy prices rose 3.6% to mark its fourth consecutive gain while employment rose by 1.2% in Q1 versus the 0.8% consensus. Crude oil dipped below $47.50 per barrel on talks of ending the conflict in Libya and Saudi Arabia entertaining the idea of $45/barrel Brent crude oil.*

By Kate Curtis from Trader’s Way

926

USD

Dollar bulls were back in the game, thanks to strong leading jobs indicators and an upbeat FOMC statement. Fed officials shrugged off the Q1 GDP miss and assessed that growth could continue at a moderate pace and that inflation is likely to hit its 2% target in the medium-term. The ADP jobs figure came in at 177K versus 175K while the ISM non-manufacturing PMI rose from 55.2 to 57.5, higher than the 56.1 consensus. Initial jobless claims, trade balance, factory orders, and preliminary non-farm productivity and unit labor costs are lined up today.

EUR

The euro gave up some ground to the dollar but continued to advance against the comdolls and yen. German unemployment change was better than expected at -15K versus -10K while the region’s flash GDP reading came in line with expectations of 0.5% growth. Spanish unemployment change and final services PMI readings are due today.

GBP

The pound was able to hold on to most of its recent gains after the construction PMI posted an upside surprise. Analysts expected the reading to dip from 52.2 to 52.1 but the actual figure landed at 53.1. The services PMI is due today and analysts are expecting to see a drop from 55.0 to 54.6 but an upside surprise might be in the cards.

CHF

The franc had another mixed performance as it weakened to the dollar and European currencies but advanced to the comdolls and yen. There were no reports out of the Swiss economy yesterday while the SECO consumer climate index is due today. A recovery from -3 to +3 is eyed, possibly lending more support to the Swiss currency.

JPY

The yen was the weakest performer of the bunch as risk-off traders favored the dollar again on rising bond yields and expectations of more Fed rate hikes. Japanese banks are still closed for the holiday so there are no reports due from Japan.

Commodity Currencies (AUD, NZD, CAD)

The comdolls slid to the dollar but managed to recover against the yen. Crude oil inventories fell by 0.9 million barrels versus the projected drop of 3.3 million barrels. Australia’s trade balance was weaker than expected at a surplus of 3.11 billion AUD versus the projected 3.33 billion AUD reading and the earlier 3.66 billion AUD surplus. China’s Caixin services PMI is down from 52.2 to 51.5. Canada’s trade balance and a speech by BOC Governor Poloz is lined up.

By Kate Curtis from Trader’s Way

927

USD

The US dollar had a mixed performance as it gave back some of its post-FOMC gains to the European currencies but managed to stay afloat against the comdolls. Medium-tier reports such as the Q1 unit labor costs and productivity turned out stronger than expected, along with initial jobless claims and Challenger job cuts figures. The NFP report is due today and an increase of 194K in hiring is eyed, much better than the earlier 98K increase.

EUR

The euro continued to rake in gains against its peers as most of the final services PMI readings enjoyed upgrades and the Spanish unemployment change report showed a larger than expected fall in joblessness. Euro zone retail sales also turned out better than expected with a 0.3% uptick. Only the retail PMI is due from the euro zone today but the shared currency could make another set of gains after the weekend’s French presidential elections.

GBP

The pound also extended its climb when the UK services PMI beat expectations. The reading rose from 55.0 to 55.8 to reflect a faster pace of industry growth instead of dipping to 54.6. There are no major reports due from the UK today so euro zone events and Brexit-related updates could push pound pairs around.

CHF

The franc regained ground to the dollar but was still weak against its other European rivals. The Swiss SECO consumer climate index fell from -3 to -8 instead of improving to the consensus at +3. Swiss foreign currency reserves data is due today and a large increase in holdings could be evidence of currency intervention.

JPY

The yen continued to bleed against most of its rivals as the pickup in US bond yields drew traders away from the Japanese currency. Japanese banks are still closed for the holiday so there have been no reports to boost the yen, which might keep reacting to US reports until the end of this week.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were among the weakest performers, led by the Aussie which is reeling from downbeat trade balance data and weak Chinese PMI. Australia’s trade surplus narrowed from 3.66 billion AUD to 3.11 billion AUD versus the projected fall to 3.33 billion AUD while Canada’s trade deficit narrowed from 1.1 billion CAD to 0.1 billion CAD instead of turning to a surplus of 0.3 billion CAD. New Zealand’s inflation expectations ticked up from 1.9% to 2.2% and Canada’s jobs figures are coming up.

By Kate Curtis from Trader’s Way

928

[B]USD[/B]

The Greenback didn’t post much gains on Friday even after economic data turned out stronger than expected. The NFP report indicated a 211K increase in hiring versus the projected 194K figure.
However, there were downward revisions to earlier reports. The jobless rate improved from 4.5% to 4.4% instead of rising to the estimated 4.6% reading while average hourly earnings increased 0.3% as expected. Only the labor market conditions index is due today and a rise from the earlier 0.4 figure could be bullish for the dollar.

[B]EUR[/B]

The euro gapped up again over the weekend as the French elections confirmed a clear win for Macron, which would mean stability for France and the euro zone. On Friday, euro zone retail PMI improved from 49.5 to 52.7 as well. German factory orders data is due today and a 0.7% uptick is eyed. Sentix investor confidence data is also lined up and an improvement from 23.9 to 25.3 is expected.

[B]GBP[/B]

The pound held on to most of its gains against its peers, except against the Loonie. There were no reports out of the UK economy on Friday but traders are still feeling optimistic after the industry PMI readings turned out stronger than expected. Halifax HPI is due today but traders could just price in expectations ahead of the BOE Super Thursday.

[B]CHF[/B]

The franc had a mixed run as it reacted mostly to currency-specific events. SNB foreign currency reserves ticked up from 683B CHF to 696B CHF, indicating that the central bank might be acting to keep the currency weak. There are no reports due from the Swiss economy today.

[B]JPY[/B]

The yen gapped down against the European currencies once more as risk-taking is present. However, these gaps were quickly filled as traders booked profits almost instantly. Japan’s consumer confidence index is due today and a rise from 43.9 to 44.3 to reflect a pickup in optimism is expected.

[B]Commodity Currencies (AUD, NZD, CAD)[/B]

The comdolls had a mixed run as the Aussie was still reeling from weaker iron ore prices while the Loonie was able to benefit from slightly stronger than expected data. Canada added 3.2K jobs in April versus the estimated 20K gain while the unemployment rate improved from 6.7% to 6.5%. The Ivey PMI climbed from 61.1 to 62.4, a notch up from the 62.3 consensus. Earlier today, Australia reported a surprise 13.4% slump in building approvals and China’s trade balance is due next.

[I]By Kate Curtis from Trader’s Way[/I]

929

USD

The US dollar regained ground as the Fed labor market conditions index saw an upgrade for the March report while traders turned their attention to Wall Street reform. The Treasury Committee headed by Mnuchin had a closed-door meeting to discuss the efficacy of the Volcker Rule as part of Trump’s order to conduct a review of the financial industry. Only medium-tier reports such as JOLTS job openings and final wholesale inventories are lined up today.

EUR

The euro returned its recent wins after the French elections as traders now turned their attention to the parliamentary election and whether or not Macron’s party can get majority of the seats. Data turned out stronger than expected with German factory orders up 1.0% versus the projected 0.7% gain, but this is slower than the previous 3.5% increase. Sentix investor confidence also beat expectations. German industrial production and trade balance, along with Italian retail sales, are up for release today.

GBP

The pound continued to advance against its peers even with no major reports out of the UK yesterday. Earlier today, the BRC retail sales monitor printed a strong 5.6% rebound from the earlier 1.0% decline. There are no other reports due today and traders seem to be gearing up for the BOE Super Thursday.

CHF

The franc had a mixed performance as it mostly reacted to currency-specific events in the absence of top-tier data from Switzerland. Only the Swiss jobless rate is due today and a drop from 3.3% to 3.2% is eyed so the franc might be able to gain a bit more support.

JPY

The yen caved under risk appetite, particularly to the European currencies. Japanese average cash earnings printed a surprise 0.4% drop versus the projected and earlier 0.4% uptick. Consumer confidence was also weaker than expected at 43.2 versus the 44.3 consensus and the earlier 43.9 figure. Japanese leading indicators is due next but the yen could stay sensitive to market sentiment and US bond yields.

Commodity Currencies (AUD, NZD, CAD)

The comdolls managed to make a bit of a rebound against their lower-yielding counterparts on a slight pickup in risk appetite or profit-taking. China’s trade balance printed stronger than expected headline results but the pickup in imports and exports fell short of estimates. Australia’s retail sales report churned out a 0.1% decline earlier today, setting a three-month streak of negative readings. Canadian building permits is due next.

By Kate Curtis from Trader’s Way

930

[B]USD[/B]

The dollar gained a bit of support even with a couple of weaker than expected medium-tier data. Final wholesale inventories ticked 0.2% higher instead of falling by 0.1% in March while the IBD/TIPP economic optimism index ticked lower on a weaker six-month outlook. A bit of risk aversion stemming from geopolitical conflict with North Korea kept the safe-haven currency supported. There are no major reports lined up today so political headlines could influence dollar movement.

[B]EUR[/B]

The euro extended its gains against most of its peers even with mixed data from the region. German industrial production fell 0.4% versus the projected 0.6% dip while the trade surplus narrowed from 21.2 billion EUR to 19.6 billion EUR. Italian retail sales was flat instead of posting the estimated 0.2% uptick. ECB head Draghi has a speech today and Italian and French industrial production numbers are due.

[B]GBP[/B]

The pound was one of the biggest winners in recent trading sessions as traders appear to be pricing in an upbeat BOE announcement on Thursday. There were no major reports out of the UK recently, but last week’s set indicated resilience among the business sectors since PMI turned out stronger than expected.

[B]CHF[/B]

The franc gave up some ground to its peers but managed to hold steady against the commodity currencies. The Swiss jobless rate was unchanged at 3.3% instead of improving to the projected 3.2% figure. There are no major reports due from Switzerland today.

[B]JPY[/B]

The yen was the biggest loser in the past sessions as the threats from North Korea weighed heavily on sentiment in the Asian region. According to the country’s ambassador to the UK, they are gearing up for another nuclear test and that they are prepared to attack the US if necessary. Japan’s leading indicators is due next and an improvement is eyed.

[B]Commodity Currencies (AUD, NZD, CAD)[/B]

The comdolls were stuck mostly in consolidation as traders are waiting for the next catalysts. The API reported its largest draw in stockpiles this year, lending some support for CAD. Chinese CPI was better than expected at 1.2% but PPI fell short of estimates at 6.4% versus 6.8%. EIA crude oil inventories and the RBNZ statement are due next. No actual rate changes are eyed from the RBNZ.

[I]By Kate Curtis from Trader’s Way[/I]

931

[B]USD[/B]

The Greenback remained mostly supported by upbeat medium-tier US data and a bit of risk aversion. Fed official Rosengren reiterated his view that three more rate hikes seem reasonable this year and even though he’s not a voting member, US markets and bond yields closed mostly higher on these remarks. US PPI and jobless claims are due next, providing a clue of how Friday’s CPI reports might turn out.
[B]
EUR[/B]

The euro returned some of its recent wins even with mostly strong reports from the region. French industrial production rose 2% versus the estimated 1.2% increase while Italian industrial production ticked 0.4% higher. ECB head Draghi’s remarks dampened the shared currency’s gains as he remained cautious about confirming a pickup in inflation and signaling tapering down the line. The ECB Economic Bulletin and EU economic forecasts are due next.

[B]GBP[/B]

Sterling remained one of the strongest performing currencies as traders are lining up their positions for the BOE Super Thursday. No actual policy changes are expected but many are expecting to hear optimistic remarks, especially since the latest batch of PMI readings have surprised to the upside. Any shift in bias could mean strong action for the pound as the minutes would also shed some light on how most policymakers are leaning.
[B]
CHF[/B]

The franc gave up some ground to most of its peers as there were no reports from Switzerland to give it a boost. Swiss CPI is due today and another 0.2% uptick is eyed, although a stronger than expected read could revive franc gains.*

[B]JPY[/B]

The yen continued to give up ground as traders moved their safe-haven holdings to the dollar on rising US bond yields. At the same time, tensions in North Korea are keeping a lid on the Asian currency’s rally. Bank lending came in at 3.0% in Japan, unchanged from the earlier reading instead of improving to the consensus at 3.2%.*

[B]Commodity Currencies (AUD, NZD, CAD)[/B]

The comdolls had a mixed performance as the Kiwi tanked after the RBNZ decision and a bit of jawboning. The Loonie raked in more gains as the EIA report showed a draw of 5.2 million barrels in stockpiles versus the projected reduction of 2 million barrels. Russia has also expressed willingness to join in the OPEC output deal if it is extended for another 6-9 months.

[I]By Kate Curtis from Trader’s Way[/I]

932

USD

The dollar chalked up a few wins earlier in the day but gave these back in the US session even with upbeat reports. Headline PPI ticked 0.5% higher while the core version of the report indicated a 0.45 gain versus the projected 0.2% uptick. For today, CPI and retail sales figures are due. Headline CPI is expected to post a 0.3% rebound while core CPI could advance by 0.2%. Headline retail sales could indicate a 0.6% increase while the core version could print a 0.5% uptick.

EUR

The euro continued to retreat against its peers as traders booked profits after ECB Governor Draghi recently shared a cautious outlook for the region. There were also no major reports to give the shared currency a boost yesterday while today has German preliminary GDP and final CPI data on tap. Euro zone industrial production is also due and a 0.3% rebound is eyed.*

GBP

The pound returned most of its recent gains as traders were disappointed to find out that the BOE was not as hawkish as expected. The central bank kept monetary policy unchanged for the time being but cautioned that Brexit risks could weigh on the consumer sector as wage growth could have trouble keeping up with rising price levels. There are no reports due from the UK today.

CHF

The franc was stuck in consolidation as the Swiss CPI simply came in line with expectations of a 0.2% uptick. There are no reports due from the Swiss economy today so more sideways action could be seen or the franc could be sensitive to market sentiment.

JPY

The yen was able to regain ground against the dollar and European currencies even as Japan’s medium-tier reports came in mixed. Bank lending and current account balance printed weaker than expected results but the Economy Watchers Sentiment index improved from 47.4 to 48.1. There are no reports due from Japan today so yen pairs could take their cue from US bond yields.

Commodity Currencies (AUD, NZD, CAD)

The comdolls managed to hold on to their gains even after the OPEC monthly report projected higher output from non-OPEC members and kept its demand forecast unchanged. There are no major reports due from the comdoll economies today but New Zealand has its quarterly retail sales numbers due over the weekend.

By Kate Curtis from Trader’s Way

933

[B]USD[/B]

The dollar gave back some of its gains earlier in the week when Friday’s set of reports turned out disappointing. Headline CPI came in at 0.2% versus 0.3% while core CPI printed a meager 0.1% uptick. Headline retail sales increased 0.4% versus 0.6% while core retail sales advanced by 0.3% versus 0.5% to signal that the consumer sector is not that strong yet. Only the Empire State manufacturing index is due today and a rise from 5.2 to 7.2 is eyed.

[B]EUR[/B]

The euro was able to advance against most of its counterparts on Friday as European traders moved their holdings away from the pound on a disappointing UK Super Thursday. German preliminary GDP came in line with expectations of a 0.6% expansion while euro zone industrial production was slightly weaker than expected. There are no reports due from the region today.

[B]GBP[/B]

The pound was still in a weak spot after the BOE Super Thursday disappointed earlier in the week. There were no reports out of the UK on Friday and none are due today, but UK PM May has a testimony due and any Brexit-related remarks could push pound pairs around.

[B]CHF[/B]

The franc managed to gain ground against most of its rivals as the pound weakened and a bit of risk aversion returned. There were no reports out of the Swiss economy then and today has the PPI due. Analysts are expecting to see a flat reading after the earlier 0.1% uptick.

[B]JPY[/B]

The yen regained some ground as traders moved out of the dollar on disappointing CPI and retail sales figures from the US. Japan’s PPI turned out stronger than expected with a 2.1% gain versus the estimated 1.8% increase. There are no other reports due from Japan today so market sentiment could push yen pairs around.

[B]Commodity Currencies (AUD, NZD, CAD)[/B]

The comdolls were mostly weaker for the day, although the Kiwi managed to put up a fight on stronger than expected quarterly retail sales data printed over the weekend. The headline figure rose 1.5% versus the projected 1.1% gain while the core reading increased by 1.2% versus the 0.9% consensus.
[I]
By Kate Curtis from Trader’s Way[/I]

934

USD

The dollar was slightly weaker for the day after the Empire State manufacturing index slid from 5.2 to -1.0 instead of improving to 7.2. Underlying data showed declines in new orders and shipments, casting some doubt on June rate hike forecasts. Building permits and housing starts, along with industrial production and capacity utilization, are lined up from the US today and another batch of weak results could undermine dollar strength.

EUR

The euro resumed its climb against most of its counterparts as more signs of political stability have been emerging in the region. There were no reports out of the euro zone yesterday so traders are looking to the odds of Merkel winning the German elections. For today, German ZEW economic sentiment and euro zone flash GDP data are due with another 0.5% growth figure expected.

GBP

The pound was slightly weaker for the day as Prime Minister May’s Facebook Live event provided little assurance for bulls. Instead, traders are now exercising some caution ahead of the top-tier data releases such as the CPI, jobs figures, and retail sales. Inflation reports are expected to show more upside, with headline CPI likely to advance from 2.3% to 2.6% and the core reading expected to climb from 1.8% to 2.2%.

CHF

The franc was able to benefit from risk-off flows in recent trading sessions as traders remained reluctant to buy the dollar and yen. However, Swiss PPI turned out weaker than expected with a 0.2% drop versus the projected flat reading and the earlier 0.1% uptick. There are no reports due from the Swiss economy today so market sentiment and currency-specific flows could be the main drivers.

JPY

The yen was on slightly weaker footing as traders are keeping close tabs on the North Korea situation. Japanese PPI was stronger than expected at 2.1% versus 1.8% and today has the tertiary industry activity index due. An uptick of 0.1% is expected, slower than the earlier 0.2% increase.

Commodity Currencies (AUD, NZD, CAD)

The Loonie got a bit of a boost on talks between Saudi Arabia and Russia. Energy ministers from both nations agreed to support an extended output deal until March 2018 in order to keep prices afloat. However, weaker risk appetite remains in play after China printed weak industrial production, retail sales, and fixed asset investment reports. New Zealand’s GDT auction and quarterly producer prices data are due next.

By Kate Curtis from Trader’s Way

935

USD

The US dollar gave up some ground to its peers as equity indices and bond yields slid lower on national security issues with the Trump administration. Economic data has been mixed, with building permits and housing starts falling short of estimates while industrial production and capacity utilization reflected optimism in the business sector. There are no major reports due from the US economy today so the focus could remain on developments in Washington regarding the intelligence leak to Russia.

EUR

The euro was able to cash in on mostly stronger than expected medium-tier data. The region’s flash GDP reading came in line with expectations of 0.5% growth while Germany’s ZEW economic sentiment showed a weaker than expected climb from 19.5 to 20.6 versus the consensus at 22.3. Euro zone trade balance and the region’s ZEW index came in better than expected. The Italian trade balance and euro zone final CPI readings are lined up today.

GBP

The pound had a volatile run as it initially rallied on stronger than expected UK CPI then gave up ground when traders realized the repercussions on consumer spending. Headline CPI advanced from 2.3% to 2.7% while core CPI rose from 1.8% to 2.4% to suggest that purchasing power could weaken. Jobs data is due next and a drop in claimants is eyed, although the focus is likely on the average earnings index and whether or not wage growth could stay in pace with rising price levels.

CHF

The franc was the big winner for the day as it took the lion’s share of risk-off flows from the dollar and the yen. There were no reports out of the Swiss economy and none are due today but the currency could continue to benefit if market uncertainties remain in play.

JPY

The yen was also able to squeeze out some gains to the dollar and its higher-yielding peers as US bond yields weakened. However, data from Japan has been far from impressive since the core machinery orders figure came in at 1.4% versus the projected 2.6% increase and the earlier 1.5% gain. Revised industrial production data is due next and no change to the preliminary 2.1% decline is expected.

Commodity Currencies (AUD, NZD, CAD)

The comdolls weakened to the euro, franc, and yen but managed to hold steady against the pound and the dollar. New Zealand quarterly PPI input and output prices turned out stronger than expected while the GDT auction yielded a 3.2% gain in dairy prices. API data revealed a buildup in inventories and the EIA data due today is expected to print a draw of 2.5 million barrels.

By Kate Curtis from Trader’s Way

936

USD

The dollar was barely able to benefit from risk-off flows as concerns about the Trump administration remained in the spotlight. The US Justice Department ordered an official investigation on the alleged information leak to Russia so market watchers are worried that this could delay fiscal reforms. There were no major reports out of the US economy yesterday while today has initial jobless claims and the Philly Fed index.

EUR

The euro extended its climb against most of its major counterparts as medium-tier data turned out upbeat. Final CPI readings were unchanged from their flash figures, which indicated gains over the previous month. Italian trade balance showed a much wider surplus of 5.42 billion EUR compared to the consensus at 1.97 billion EUR. There are no major reports due from the region today.

GBP

The pound was able to hold on to most of its wins when UK jobs data came in better than expected. Claimant count change was at 19.4K in April, although the earlier reading showed a downgrade to 33.5K in joblessness. Even so, the unemployment rate improved from 4.7% to 4.6% while the average earnings index rose from 2.3% to 2.4% as expected to reflect wage growth. UK retail sales is due today and a 1.2% rebound from the earlier 1.8% drop is eyed.

CHF

The franc was able to rally again on risk aversion but stopped short of its climb when SNB head Jordan reiterated that they’re ready to intervene in the currency market if necessary. There were no reports out of the Swiss economy yesterday and none are due today so market sentiment could dictate franc price action.

JPY

The yen was the biggest winner for the day as it took advantage of both anti-dollar price flows and risk aversion. Earlier today, Japan also printed stronger than expected GDP growth of 0.5% versus the estimated 0.4% expansion and the earlier 0.3% uptick. However, the preliminary GDP price index reflected a steeper drop of 0.8% versus the estimated 0.7% decline.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave up a lot of ground as risk aversion was still in play yesterday. However, the Aussie made a bit of a bounce on stronger than expected jobs data, as the employment change figure came in at 37.4K versus the 4.5K consensus while the unemployment rate improved from 5.9% to 5.7%. EIA crude oil inventories were down 1.8 million barrels versus 2.5 million barrels but still enough to ease some oversupply concerns. Canadian foreign securities purchases and NZ visitor arrivals data are due next.

By Kate Curtis from Trader’s Way