Daily Market Outlook by Kate Curtis from Trader's Way

[katetrades]

Forex Major Currencies Outlook (Mar 14, 2018)

USD

The US dollar took some hits once more as Trump decided to fire Secretary of State Tillerson and could also sack other officials that disagree with him. He also reiterated plans to impose higher tariffs on China, reviving fears of a trade war. Data has been within expectations as both headline and core CPI posted 0.2% gains. Retail sales data is due today and slightly stronger gains for both headline and core versions are eyed.

EUR

The euro had a mixed round as it reacted mostly to its counterparts on the lack of major catalysts from the region. There are still no major reports lined up today, which suggests that the shared currency could exhibit more or less the same behavior.

GBP

The pound was on stronger footing in recent sessions even though there were no major reports out of the UK economy. EU head Juncker had some warnings for the British economy for choosing to exit the union but this was greeted by cheers from MPs as confirmed the Brexit date for 2019. There are no re-ports due from the UK today.

CHF

The franc was also sensitive to its counterparts price action but was able to score more gains when the dollar weakened. There were no reports out of the Swiss economy then and none are due today.

JPY

The yen was one of the top performers as it took advantage of dollar weakness and drew support from stronger calls for Abe’s resignation on the political scandal and alleged cover-up. Core machinery orders posted a stronger than expected 8.2% gain versus the estimated 5.3% increase while the BOJ minutes didn’t contain any surprises.

Commodity Currencies (AUD, NZD, CAD)

The Loonie was still in a weak spot, especially when BOC head Poloz sounded less inclined to dole out rate hikes in the coming months. Data from China was upbeat, with both industrial production and fixed asset investment beating estimates. New Zealand’s GDP report is due next and a 0.8% expansion is eyed, stronger than the earlier 0.6% growth figure.

By Kate Curtis from Trader’s Way

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Forex Major Currencies Outlook (Mar 15, 2018)

USD

The dollar dipped upon seeing downbeat retail sales data but soon rebounded. Headline retail sales fell 0.1% to mark consecutive monthly declines while the core reading posted a 0.2% uptick versus the esti-mated 0.4% gain. Headline PPI was better than expected at 0.2% while core PPI came in line with expec-tations. Fears of a trade war are still present and any updates on Trump’s appointments could continue to keep risk-taking in check. Empire State and Philly Fed manufacturing indices are due today.

EUR

The euro was weaker across the board as ECB members reiterated their cautious stance. Draghi repeated most of its remarks during the previous week’s ECB presser while Praet also mentioned that it’s too early to declare victory on the inflation front, casting doubts that the central bank could tighten soon. Only final CPI readings are due today and downward revisions could reinforce the less hawkish views.

GBP

Sterling was one of the better performing currencies, likely on account of upbeat data and fading Brexit concerns. There are no reports lined up from the UK economy today, so the pound could react more to its counterparts or be sensitive to market sentiment.

CHF

The franc was able to score some gains when risk aversion returned but traders were hesitant to buy up the dollar. There were no major reports out of the Swiss economy yesterday while today has the SNB decision on tap. No policy changes are expected but any jawboning could weigh on the franc.

JPY

The yen also advanced to most of its counterparts as risk-off vibes stayed in the financial markets. There were no major reports out of the Japanese economy yesterday and none are due today, which suggests that sentiment could still be the main driving factor.

Commodity Currencies (AUD, NZD, CAD)

The Loonie shrugged off the pickup in crude oil as traders still seem to be pricing in the BOC’s neutral stance. EIA crude oil inventories rose by 5 million barrels versus the estimated gain of 2.2 million barrels. New Zealand reported a lower than expected 0.6% GDP versus the estimated 0.8% expansion. There are no major reports lined up from these economies next.

By Kate Curtis from Trader’s Way

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Forex Major Currencies Outlook (Mar 16, 2018)

USD

The US dollar drew a lot of support from its peers in the New York session when medium-tier reports came in mostly stronger than expected. Initial jobless claims and the Empire State manufacturing index surpassed forecasts while the Philly Fed index missed. Industrial production, building permits and housing starts are due today.

EUR

The euro was still in a weak spot as ECB officials have been downplaying the idea of tightening as infla-tionary pressures have remained weak. There have been no major reports out of the euro zone yesterday while today has final CPI readings.

GBP

The pound gave up ground to the dollar and yen but managed to stay resilient against its other peers. There were no reports out of the UK yesterday while only the CB leading index is due today. Analysts expect to see a rebound from the earlier 0.2% dip.

CHF

The franc barely reacted to the SNB decision as traders shrugged off jawboning remarks from Chairperson Jordan. PPI also came in stronger than expected with a 0.3% uptick versus the estimated 0.2% gain. There are no reports due from the Swiss economy today.

JPY

The yen was the big winner in recent trading sessions as it took advantage of risk-off flows and the late news on Mueller’s subpoena into Russia-related Trump documents. Japanese industrial production data was downgraded from a 6.6% decline to a 6.8% drop, though.

Commodity Currencies (AUD, NZD, CAD)

The comdolls found themselves at the losing end of the latest trading sessions as fears of a trade war lingered. The Loonie took extra hits on weak housing starts data and the downgrade in the ADP employment figure for January. Canadian foreign security purchases and manufacturing sales are due next.

By Kate Curtis from Trader’s Way

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Forex Major Currencies Outlook (Mar 19, 2018)

USD

The US dollar was on strong footing until the end of the week as data came in mostly upbeat and supportive of an interest rate hike this week. There are no major reports due from the US economy today so sentiment and expectations for the FOMC statement could push the currency around.

EUR

The euro continued to slump to the pound, yen, and dollar but was stronger versus the commodity cur-rencies. The headline final CPI reading was downgraded from 1.2% to 1.1% instead of being unchanged as expected. Italian industrial production data is due today and a 0.5% dip is eyed. The region’s trade balance is also on the docket.

GBP

The pound extended its wins, except against the yen, even though there were no major reports from the UK economy. Only the Rightmove HPI is due today so traders could keep propping the currency higher, depending on Brexit updates and overall market sentiment.

CHF

The franc had a mixed round as it mostly reacted to its counterparts. There were no reports out of the Swiss economy last Friday and today has an empty schedule as well, which suggests that the franc could keep moving to the tune of market sentiment and its rivals.

JPY

The yen was the strongest performer as it took advantage of risk-off moves and outlasted the dollar. Japan’s industrial production figure was actually downgraded and the trade balance released over the weekend came in below consensus. There are no other reports due next so yen pairs could take their cues from sentiment and bond yields.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were stuck on the losing end until the end of the week as fears of more protectionism in the US could dampen demand for raw materials and commodities. Canada’s reports namely foreign securities purchases and manufacturing sales missed estimates. Australia’s CB leading index and New Zealand’s Westpac consumer sentiment data are due in the next Asian session.

By Kate Curtis from Trader’s Way

[katetrades]

Forex Major Currencies Outlook (Mar 20, 2018)

USD

The US dollar had a mixed round as there were no reports out on Monday and traders are pricing in expectations for the FOMC decision later this week. A 0.25% interest rate hike is widely expected and even more hawkish hints could lift the US currency. There are no reports due from the US economy today.

EUR

The euro got a strong boost when ECB sources reported that policymakers are starting to discuss the path of interest rate hikes. They reported that officials are comfortable with the idea of mid-2019 hike expectations and that they should think about the timing of their future tightening moves from there. Data from the euro zone actually came in weaker than expected but traders shrugged this off. ZEW economic sentiment figures from Germany and the entire region are due today.

GBP

The pound staged a strong rally on rumors of a Brexit deal and made another leg higher on confirmation. The EU and UK have reached an agreement on the post-Brexit transition period but also mentioned that issues surrounding the Irish border still need to be ironed out. The focus shifts back to fundamentals with UK CPI on tap and a dip from 3.0% to 2.8% for the headline figure eyed. The core figure could fall from 2.7% to 2.5%.

CHF

The franc had a mixed run as it caved to the European currencies then chalked up smaller losses to the rest. There were no reports out of the Swiss economy then while today has the trade balance and SECO economic forecasts. Positive readings could still keep the franc supported by risk appetite might wind up dampening its gains.

JPY

The yen gave up ground as risk appetite improved for the most part of the day. Japan printed weaker than expected trade balance over the weekend and the concerns surrounding PM Abe’s political scandal appear to be fading. There are no reports due from Japan today so sentiment could push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The comdolls chalked up some gains, except against their European peers. New Zealand’s Westpac con-sumer sentiment index improved from 107.4 to 111.2 while Australia reported a larger 1.0% gain in HPI for Q4. The RBA minutes revealed that the central bank is in no rush to hike. Canadian wholesale sales and the GDT auction are lined up next.

By Kate Curtis from Trader’s Way

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Forex Major Currencies Outlook (Mar 21, 2018)

USD

The US dollar is slightly higher against its counterparts as traders appear to be pricing in positive expectations for the FOMC decision. There were no reports out of the US economy yesterday. A rate hike of 0.25% is widely expected, so traders will be keeping close tabs on the updated economic forecasts and dot plot of rate change projections. It will also be Powell’s first post-FOMC presser, so his views could set the tone for policy expectations in the months ahead.

EUR

The euro returned most of its recent gains to its peers as medium-tier reports turned out mostly weaker than expected. The German ZEW economic sentiment index fell from 17.8 to 5.1 while region’s reading fell from 29.3 to 13.4. There are no major reports due from the euro zone today, so the shared currency could be more sensitive to its counterparts or overall sentiment.

GBP

The pound also dipped against its peers when UK inflation reports disappointed. The headline figure slipped from 3.0% to 2.7% versus the estimated fall to 2.8% while core CPI dropped from 2.7% to 2.4% versus the 2.5% consensus. Jobs data is due from the UK today and the claimant count could show a 3.1K drop in joblessness. The average earnings index could rise from 2.5% to 2.6% to signal potentially stronger inflation and consumer spending.

CHF

The franc was mostly weaker against its peers as dollar strength returned and risk appetite was present. Economic data from Switzerland was better than expected, though, as the trade balance came in at 3.14 billion CHF versus the estimated 1.87 billion CHF surplus and the earlier 2.07 billion CHF. The SNB Quarterly Bulletin is due today.

JPY

The yen also returned some of its earlier gains as risk appetite improved and the dollar extended its gains. There were no major reports out of Japan yesterday and none are due today s banks are closed for the holiday. This suggests that dollar action and overall sentiment could push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The Loonie managed to take a break from its slide as oil prices picked up on geopolitical risks in Iran and Venezuela. Canadian wholesale sales also came in slightly better than expected with a 0.1% uptick. In New Zealand, the GDT auction yielded a 1.2% fall in dairy prices. The RBNZ decision is also coming up and a neutral statement is eyed.

By Kate Curtis from Trader’s Way

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Forex Major Currencies Outlook (Mar 22, 2018)

USD

The US dollar started sliding ahead of the FOMC statement and, save for a brief spike higher, resumed its drop until the end of the session. Although the Fed hiked interest rates by 0.25% as expected in their latest policy statement, dollar bulls seemed disappointed over the lack of changes in the dot plot. GDP forecasts for this year and the next were upgraded and a couple of CPI estimates also revised higher, but policymakers are still projecting three hikes this year versus expectations of four. Only medium-tier reports are due from the US next, namely the flash manufacturing and services PMIs.

EUR

The euro had a mixed run as it took advantage of dollar strength but caved to the pound and commodity currencies. There were no major reports out of the region then, which explains why the shared currency simply took its cues from its counterparts. Flash manufacturing and services PMIs are due next, and dips are eyed.

GBP

The pound continued to advance against most of its peers as positive Brexit developments are keeping the currency afloat. The UK jobs report printed mixed results as the claimant count change came in at 9.2K vs. -3.1K and the earlier reading was downgraded to show a smaller drop in joblessness. However, the average earnings index came in better than expected at 2.8% versus 2.6% and the previous reading enjoyed an upgrade. The unemployment rate beat expectations and landed at 4.3% as well. UK retail sales and the BOE decision are lined up next.

CHF

The franc had a mixed run as it also reacted mostly to its counterparts on the lack of top-tier data. The SNB Quarterly Bulletin contained some concerns on franc strength, which kept the currency’s gains in check. There are no reports due from Switzerland today.

JPY

The yen gained ground as it took safe-haven flows from the dollar but was mostly weaker to the higher-yielders. There were no reports out of Japan yesterday while today’s flash manufacturing PMI came in weaker than expected. The reading fell from 54.1 to 53.2 instead of improving to the estimated 54.3 fig-ure.

Commodity Currencies (AUD, NZD, CAD)

The Loonie drew some support from positive NAFTA updates as PM Trudeau and US negotiator Lighthizer expressed optimism about a deal. The RBNZ kept rates unchanged as expected and refrained from jawboning the Kiwi. Australia’s jobs report disappointed as employment change stood at 17.5K vs. 19.8K while the jobless rate rose to 5.6%. There are no other major reports due from the comdoll economies today.

By Kate Curtis from Trader’s Way

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Forex Major Currencies Outlook (Mar 23, 2018)

USD

The US dollar staged a strong rally when risk-off vibes returned on trade war jitters. However it was still weaker compared to the Japanese yen. Data was mostly in line with expectations, although the flash services PMI missed the consensus. Durable goods orders data are up for release today but the focus would likely be on the US tariffs. Trump signed a memorandum to impose higher tariffs on nearly $60 billion worth of Chinese goods from companies involved in U.S. intellectual property theft, spurring a sharp selloff in higher-yielding assets.

EUR

The euro tumbled as most of its PMI readings came in weaker than expected. Even the German Ifo busi-ness climate index fell from 115.4 to 114.7, but the current account balance of the region beat expecta-tions. There are no major reports due from the euro zone today so the shared currency could be more sensitive to market sentiment or its counterparts’ movements.

GBP

The pound got a boost from upbeat UK retail sales, which printed a 0.8% gain versus the estimated 0.4% uptick. The BOE decision was in line with expectations of no changes to interest rates or asset purchases, but the MPC minutes turned out hawkish since a couple of members voted to hike. MPC member Vlieghe has a speech coming up next.

CHF

The franc scored strong gains as risk aversion returned to the markets starting from the European ses-sion. The franc rally gained further traction during the New York session when fears of a trade war escalated. There were no reports out of the Swiss economy then and none are due today so sentiment could push franc pairs around.

JPY

The yen was also a big winner as it took advantage of risk-off moves and dollar weakness. Japan’s flash manufacturing PMI was actually weaker than expected while the national core CPI came in line with ex-pectations of a 1.0% figure. There are no other reports due from Japan so bond yields and sentiment could be the main driving factors.

Commodity Currencies (AUD, NZD, CAD)

The commodity currencies were worst-hit by trade war fears as their respective economies would be directly hit if tensions between the US and China heat up. However, the focus could switch back to Canadian fundamentals as CPI and retail sales figures are up for release. Weaker than expected reports, could drive the Loonie lower, especially if oil suffers another leg down.

By Kate Curtis from Trader’s Way

[katetrades]

Forex Major Currencies Outlook (Apr 11, 2018)

USD

The dollar drew some support to its lower-yielding rivals but caved to comdoll strength on signs of cooling tensions between China and the US. PPI figures beat expectations at 0.3% gains for both the core and headline figure, spurring positive expectations for the CPI release. The FOMC minutes are also up for release and could bring extra volatility for dollar pairs.

EUR

The euro was on weaker footing owing to downbeat data, with both Italian and French retail sales miss-ing expectations. However, the shared currency drew some support from ECB commentary as Coeure mentioned that the QE program could be wound down by the end of the year. ECB head Draghi has a speech coming up.

GBP

The pound was also supported by upbeat central bank commentary as hawkish member McCafferty said in an interview with Reuters that they shouldn’t take their time with tightening. There were no re-ports out of the UK then while today has manufacturing and industrial production numbers. A 0.2% up-tick is seen for the latter while the former could show a 0.4% increase.

CHF

The franc gave up ground as risk appetite improved in recent sessions. There were no reports out of the Swiss economy yesterday and none are due today so sentiment could continue to push franc pairs around.

JPY

The yen was also on weaker footing, particularly against the commodity currencies. Data from Japan was mostly upbeat as the core machinery orders report printed a 2.1% gain versus the estimated 2.6% slide. Looking ahead, yen pairs could take their cues from sentiment and bond yields.

Commodity Currencies (AUD, NZD, CAD)

The comdolls drew support from the conciliatory tone of both China and the US as leaders seemed more open to trade talks. Crude oil stayed supported on talks of $80 per barrel oil despite the surprise build in API stockpiles. Chinese CPI was weaker than expected while Australia reported a 0.6% drop in Westpac consumer sentiment, but this didn’t deter the Aussie from its climb. There are no major re-ports from the comdolls next.

By Kate Curtis from Trader’s Way

[katetrades]

Forex Major Currencies Outlook (Apr 12, 2018)

USD

The dollar drew some support during the release of the FOMC minutes, which turned out more hawkish than expected. Fed policymakers agreed that gradual rate hikes should be maintained as the economic outlook has improved in recent months and annual inflation could keep rising. However, CPI data hasn’t been so impressive as the headline figure posted a 0.1% dip instead of staying flat, keeping tightening doubts in play. Initial jobless claims and import prices data are due next.

EUR

The euro had a mixed run as it caved to the comdolls but advanced to the yen and dollar. Draghi also had some hawkish remarks to say as he expressed confidence that inflation will hit their targets soon, adding to upbeat remarks from other ECB officials earlier in the week. Italian retail sales beat expectations with a 0.4% uptick and the ECB minutes are due next.

GBP

The pound took hits on weaker than expected manufacturing and industrial production data. The former showed a 0.2% drop versus the estimated 0.2% gain while the previous reading was downgraded. The latter posted a meager 0.1% uptick versus the 0.4% consensus. MPC member Broadbent has a speech lined up and the BOE Credit Conditions Survey is due.

CHF

The franc gave up ground as risk appetite returned on cooling trade tensions but the lower-yielding currency managed to draw a bit of support from geopolitical tensions in Syria. There are no reports due from the Swiss economy today so sentiment could keep pushing franc pairs around.

JPY

The yen also drew some support from geopolitical risks but was still no match to comdoll strength on easing trade war jitters. BOJ Governor Kuroda maintained an optimistic view on inflation in his latest testimony and the lack of other top-tier catalysts could keep risk sentiment in play.

Commodity Currencies (AUD, NZD, CAD)

The Loonie was among the top performers as it was boosted by risk appetite and higher crude oil. Tensions in Syria spurred speculations of supply outages in the Middle East, which propped price up despite the surprise build in US stockpiles. Australia’s MI inflation expectations and home loans data were slightly weaker. Canada’s NHPI and New Zealand’s Business NZ manufacturing index are lined up next.

By Kate Curtis from Trader’s Way

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Forex Major Currencies Outlook (Apr 13, 2018)

USD

The US currency was able to draw a bid in recent sessions thanks mostly to improving investor senti-ment on cooling geopolitical risks from China and Syria. Still, it’s worth noting that a source reported that the US is targeting eight zones in Syria. US preliminary UoM consumer sentiment and inflation ex-pectations are lined up today and these could allow the Greenback to extend its climb if the numbers turn out stronger than expected.

EUR

The euro returned some of its recent gains, likely on profit-taking from the recent surge stemming from hawkish ECB commentary. Improved risk sentiment also dampened demand for the currency, which typically enjoys some safe-haven demand. The ECB minutes were also failed to give the shared currency a boost. German final CPI and the region’s trade balance are due next.

GBP

The pound was able to hold its ground in recent sessions thanks to upbeat remarks from Brexit minis-ter Davis. He noted that both sides are aiming to iron out the details by October, which lessens the un-certainty for businesses. There are no major reports due from the UK today so Brexit updates could drive pound pairs around.

CHF

The franc lost ground as risk appetite returned to financial markets on easing geopolitical tensions. There were no reports to support the Swiss currency yesterday and none are due today so sentiment could stay in play.

JPY

The yen was also in a weak spot on improving risk appetite and rising US bond yields. There were no reports to prop up the yen yesterday and none are lined up today so sentiment could push yen pairs around until the end of the trading week.

Commodity Currencies (AUD, NZD, CAD)

The comdolls continued to rake in gains on improving risk sentiment thanks to easing concerns about a trade war with China and a military strike in Syria. Crude oil dipped slightly in anticipation of an in-crease in oil rig counts but the Loonie managed to hold its ground. China reported a surprise trade def-icit of 30 billion CNY, weighing slightly on AUD and NZD in the Asian session.

By Kate Curtis from Trader’s Way

[katetrades]

Forex Major Currencies Outlook (Apr 17, 2018)

USD

The dollar barely reacted to upbeat retail sales data as traders remained doubtful about Fed tightening plans and worried about geopolitical risks. Headline retail sales rose 0.6% versus the 0.4% consensus while the core reading posted a 0.2% gain as expected. The Empire State manufacturing index and NAHB housing index both came in below expectations. Industrial production data is due today, along with building permits and housing starts.

EUR

The euro regained some ground against some of its rivals late in the day but couldn’t establish a clear direction on the lack of top-tier reports. Today’s release of ZEW economic sentiment figures from Germany and the entire region could lead to more sustained moves. The former could see a drop from 5.1 to -0.8 while the latter could slide from 13.4 to 7.4.

GBP

The pound was the top-performer of the day as it was lifted by hawkish BOE expectations. The UK jobs report is due today and larger increase of 13.3K in joblessness compared to the earlier reading. Traders would likely pay closer attention to the average earnings index which could tick up from 2.8% to 3.0% and boost inflation expectations.

CHF

The franc was still in a weak spot as PPI came in below expectations. Producer prices fell 0.2% instead of posting the expected 0.4% uptick. There are no reports due from the Swiss economy today so sentiment could push franc pairs around.

JPY

The yen was also on weaker footing as risk appetite and dollar support remained in play. There were no major reports out of Japan then and none are due today so sentiment could continue to push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The comdolls returned some of their recent wins on news of another airstrike in Syria. Data from China was also mostly weaker than expected, with industrial production falling from 7.2% to 6.0% and fixed asset investment dipping from 7.9% to 7.5%. GDP came in line with expectations while retail sales was stronger than expected at a 10.1% year-over-year gain. New Zealand has its GDT auction lined up next.

By Kate Curtis from Trader’s Way

[katetrades]

Forex Major Currencies Outlook (Apr 18, 2018)

USD

The US dollar has been able to regain some ground recently thanks to strong medium-tier data and a pickup in bond yields on cooling geopolitical risks. Industrial production and capacity utilization beat expectations, as well as building permits and housing starts. FOMC members have also dropped some optimistic remarks on economic growth and inflation, as well as the labor market.

EUR

The euro returned some of its recent gains as ZEW economic sentiment readings fell short. Germany’s ZEW reading tumbled from 5.1 to -8.2, way worse than the estimated -0.8 figure. The region’s reading fell from 13.4 to 1.9 versus the 7.4 forecast. Final CPI readings are due next but no changes are eyed.

GBP

The pound also returned some of its winnings when the average earnings index fell short of estimates. Claimant count was better than expected at an 11.6K gain in joblessness versus the estimated 13.3K figure while the earlier reading enjoyed an upgrade. UK CPI is due next and stronger figures could revive BOE tightening hopes and sterling rallies.

CHF

The franc was one of the weaker performers as the improvement in risk appetite and the rise in US bond yields dampened demand for this lower-yielding currency. There were no reports out of the Swiss economy then and none are due today so sentiment could push franc pairs around.

JPY

The yen was also in a weak spot thanks to the pickup in risk-taking and dollar demand. There were no major reports out of Japan then and none are due today, which suggests that yen pairs could take their cues from geopolitical risks or the lack thereof.

Commodity Currencies (AUD, NZD, CAD)

The Loonie extended its gains on another round of oil rallies stemming from a reduction in API stockpiles. This could lead to a similar drop in EIA crude oil inventories data, easing oversupply concerns. New Zealand has its CPI report due next and a 0.4% gain in price levels is eyed. The BOC has its rate statement lined up, along with a presser by Governor Poloz which could contain more upbeat remarks.

By Kate Curtis from Trader’s Way

[katetrades]

Forex Major Currencies Outlook (Apr 19, 2018)

USD

The dollar scored another winning day thanks to higher US bond yields. Optimistic remarks from Fed officials, along with improved sentiment from the Beige Book, revived rate hike expectations even as some medium-tier reports previously missed expectations. Initial jobless claims and the Philly Fed index are due next.

EUR

The euro struggled to hold its ground as ECB tightening hopes dipped on the downgrade in final headline CPI. The figure was lowered from 1.4% to 1.3% instead of being unchanged as expected. There are no major reports due from the region today so the shared currency could be more sensitive to risk flows and its counterparts’ movements.

GBP

The pound took a hit when UK CPI disappointed, following through on the reaction from the weaker average earnings index earlier in the week. The headline figure fell from 2.7% to 2.5% instead of holding steady while the core figure dipped from 2.4% to 2.3%. UK retail sales is due next and a 0.5% drop in consumer spending is eyed.

CHF

The franc continued to slide lower as traders renewed their demand for the dollar versus other lower-yielding currencies. The improvement in risk appetite also took its toll on the Swiss currency. There were no reports out of Switzerland then and none are due today, so sentiment could remain in play.

JPY

The yen was also in a weak spot as dollar demand picked up on account of higher US bond yields. There were no reports out of Japan then and none are due today, so sentiment could push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The Loonie slumped hard after the BOC was considerably less upbeat than expected. The central bank kept rates unchanged at 1.25% but did not signal any eagerness to hike again anytime soon, citing trade risks as a source of uncertainty. In Australia, the headline unemployment change came in weaker than expected at 4.9K versus 20.3K for March while the earlier reading was downgraded to -6.3K. There are no major reports due from the comdoll economies in the next sessions.

By Kate Curtis from Trader’s Way

[katetrades]

Forex Major Currencies Outlook (Oct 15 – Oct 19)

USD

Treasury yields are pushing the dollar up. 10 Year Treasury yields are trading near the highest levels since March, 2011.

Currently, FED fund rates have priced in a 74.6% chance of a rate hike. This probability is expected to grow more in the next month as long as the FED continues with its monetary policies and rhetoric. Rate hike expectations should provide some backing to the dollar.
Individual stocks and indices encountered losses the previous Wednesday when President Trump remarked that FED policy is too aggressive. This may end up politicizing FED and halt or slow down their rate hike rhetoric. President Trump characterized drops in stocks as a correction.
Markets have completely shifted focus to wages and inflation, so this Tuesday’s Core PCE will be carefully observed for determining the future course of the USD and FED monetary policy in general. CPI data on previous the Thursday came at 2.3% YoY vs 2.4% YoY expected.
This week we wait for data concerning consumption, inflation, building permits and oil stock change. The Fed prefers PCE as an indicator of its success in managing inflation as the Core PCE is considerably less volatile than the CPI measure of inflation.
Key events for USD:

Monday:

• ---- Retail Sales (MoM)
• ---- Retail Sales ex Autos (MoM)

Tuesday:

• ---- Core Personal Consumption Expenditures (QoQ)

​
Wednesday:

• ---- Building Permits (MoM)
• ---- Building Permits Change
• ---- EIA Crude Oil Stocks change USD
  ​

EUR

Main concerns in the Euro zone surround the Italian budget. The deadline for presenting the budget is October 15th. The Italian government pushes for 2.4% budget deficit and takes a firm stand. It is unlikely that the EU will accept the Italian budget although the Italian government may reduce the 2020 and 2021 budget deficit targets to below 2.2% and 2.0% respectively. Additionally, the S&P will deliver its decision about rating of Italian bonds on 26 October while Moody’s plans to do it by the end of October. A downgrade in rating of Italian bonds will have a negative impact on the value of the EUR.
The German government has reduced its 2018 growth forecast to 1.8%, down from 2.3%. Its 2019 growth forecast will be cut to 1.8% from 2.1% and 2020 growth is expected to come in at 1.8%, with2018 inflation seen at 1.8%, 2019 inflation at 2.0% and 2020 inflation at 1.9%
This week we will have data surrounding investor optimism and inflation.
Key events for EUR:

Tuesday:

• ---- ZEW Survey - Economic Sentiment Link (EUR/GER)* ​

Wednesday:

• ---- EU Brexit Summit
• ---- Consumer Price Index (YoY)
• ---- Consumer Price Index – Core (YoY)

Thursday:

• ---- EU Brexit Summit
  ​

GBP

Recent talks about striking an agreement between Britain and EU officials have been positive and thus optimism towards a Brexit deal prevails in the markets. During the EU Brexit Summit on October 17-18, both parties will look towards making a deal by the end of November. This is giving the pound a nice boost as it continues to strengthen across the markets. Even if there is no substantial progress made during the Summit, the pound will still be underpinned. The key risk for the pound is within the UK, and its concerns of whether Theresa May can win over enough parliamentary votes for her Brexit proposals.
BOE chief economist Andy Haldane has reiterated that the BOE is on course for one rate hike per year. This course will be maintained as long as the Brexit situation remains stable.
This week we will see data about inflation in the UK, consumption as well as wage growth.
Key events for GBP:

Tuesday:

• ---- Average Earnings including Bonus (3Mo/Yr)
• ---- Average Earnings excluding Bonus (3Mo/Yr)

Wednesday:

• ---- EU Brexit Summit
• ---- Consumer Price Index (YoY)
• ---- Core Consumer Price Index (YoY)

Thursday:

• ---- EU Brexit Summit
• ---- Retail Sales (MoM)
• ---- Retail Sales (YoY) GBP
  ​

AUD

Fears of US- China trade war wage on AUD as China is Australia’s leading trading partner. News about US- China relations can have impact on AUD. Additionally data from China regarding the Chinese economy will have impact on AUD.Reserve Bank of Australia Deputy Head of Economic Analysis Department, Merylin Coombs stated that they expect GDP growth in the next year to be slightly above 3% and that tightening of the labour market will produce growth in wages and inflation.
This week’s RBA Meeting’s Minutes will show us more information aboutthe course of the RBA’s monetary policy, data regarding Unemployment in Australia and GDP data from China.
Key events for AUD:

Tuesday:

• ---- RBA Meeting’s Minute

Thursday:

• ---- Employment change
• ---- Participation Rate
• ---- Unemployment Rate

Friday:

• ---- GDP (MoM) (Chinese GDP)
• ---- GDP (YoY) (Chinese GDP)
  ​

NZD

The Reserve Bank of New Zealand have left the official cash rate (OCR) at 1.75%, as expected, and have issued no change for monetary policy. In a brief press statement accompanying the OCR decision (Official Cash Rate), it was stated that they expect to keep the OCR unchanged into 2020, that Employment is around a sustainable level, that consumer price inflation remains below the 2 percent mid-point of their target and that lower the New Zealand dollar exchange rate is expected to support demand for exports.
This week we will have data concerning inflation in New Zealand as well as the GDT Price Index, which will show changes in price of Dairy, New Zealand’s top export.
Key events for NZD:

Monday:

• ---- Consumer Price Index (QoQ)
• ---- Consumer Price Index (YoY)

Tuesday:

• ---- GDT Price Index
  ​

CAD

In the past week CAD has experienced positive effects after the signing of USMCA deal. CAD was stronger across the markets, however falling oil prices have hampered loonie. Oil is Canadas largest export and as such CAD is very sensitive to changes in oil prices.
This week we will get data about consumption in Canada as well as inflation.
Key events for CAD:

Friday:

• ---- Retail Sales (MoM)
• ---- Retail Sales ex Autos (MoM)
• ---- Bank of Canada Consumer Price Index Core (YoY)
  ​

JPY

Risk off sentiment that is currently prevailing in the markets can shift focus on JPY which is traditionally considered as a risk aversion currency. Higher yields and trade tensions have caused stock markets to close lower in the previous week, which in turn increased the attractiveness of JPY.
This week we will get data about Exports, Imports and Trade Balance as well as data about inflation.
Key events for JPY:

Thursday:

• ---- Exports (YoY)
• ---- Imports (YoY)
• ---- Merchandise Trade Balance Total

Friday:

• ---- National Consumer Price Index (YoY)
• ---- National CPI Ex Food, Energy (YoY)
  ​

CHF

This week we will see data surrounding Exports, Imports and Trade Balance
Key events for CHF:

Thursday:

• ---- Imports (MoM)
• ---- Exports (MoM)
• ---- Trade Balance CHF
  ​

[TradersWay]

Forex Major Currencies Outlook (Oct 22 – Oct 26)

USD

Retail sales in the US came in worse than expected, however the control group, which represents the total industry sales that are used to prepare the estimates of PCE for most goods, showed an increase to 0.5%. This increase can positively influence the FED’s preferred inflation measure PCE.

Budget deficit has soared up in the first 11 months of the fiscal year by almost a third compared to the same period last year. Government spending has surged up to 7% while revenues rose 1%. US debt load is now at $21.5 trillion. A soaring budget deficit is something to pay attention to as it can have serious negative impacts on the USD in the long term.

Data regarding US JOLTS job openings came in at 7136K vs 6900K as expected which is a new record high for JOLTS and illustrates the strength of the job market.

The Atlanta Fed’s latest estimate for the US 3Q GDP is set at 3.9%, that is a downgrade from the previous level of 4%.

The hawkish tone from Fed’s Powell during Wednesday’s FOMC Meeting Minutes strengthened the expectations for at least three rate hikes in 2019 along with the December 2018 rate hike.

This week we will have data regarding Durable Goods; they are part of Personal Consumption Expenditures and as such will have an impact on the GDP figure that will be announced on Friday.

Important events for USD:

Wednesday:
* ---- New Home Sales m/m
* ---- FED Beige Book

Thursday:

• ---- Durable Goods Orders m/m
• ---- Core Durable Goods Orders m/m
• ---- Goods Trade Balance
• ---- Initial Jobless Claims
• ---- Pending Home Sales m/m
• ---- Pending Home Sales y/y

Friday:

• ---- GDP q/q
• ---- Core PCE Price Index q/q

EUR

President of the ECB Mario Draghi stated in a statement at the IMFC meeting that the Euro Area economy continues the expand in a broad-based manner - across sectors and countries – and according to the latest economic indicators, this growth will continue. The unemployment rate has dropped to the lowest levels since 2008. Underlying inflation is expected to pick up towards the end of the year which would lead to a gradual increase over the medium term to projected levels of close to (but below) 2%. Significant monetary policy stimulus is still needed.

ZEW economic sentiment came lower both for Germany and for the EU. Investors’ outlook was damaged by intensifying trade disputes between US and China as well as the dangers of a “hard Brexit”.

Final CPI in the Eurozone came in at +2.1% y/y, final core CPI at +0.9% y/y and CPI m/m at 0.5% as expected.

This week on Friday we expect a review of Italy’s credit rating by S&P Global Ratings and by Moody’s near the end of the month. Currently the Italian rating is just two levels above junk status and a downgrade will result in further pressure on Italian assets and the euro. This will be a key risk factor to look out for in the week ahead.

In Italy’s budget plan proposal submitted on October 15th, the goal is to cut debt-to-GDP ratio by 4.5% in 3 years. Italy’s Finance Minister Tria stated that growth estimates in budget are conservative. The European Commission has a days to make their concerns known to Italy (October 22nd). European Commission has up to a week to reject Italy’s submission (October 29th). If the budget proposal is rejected, Italy will have up to 3 weeks to come up with a new budget proposal.

This week we will see data regarding business conditions in the manufacturing sector for the EU, France and Germany as well as the ECB Interest Rate Decision and press conference afterward.

Important events for EUR:

Wednesday:

• ---- Markit Manufacturing PMI (EU, France and Germany)

Thursday:

• ---- ECB Deposit Facility Rate Decision
• ---- ECB Interest Rate Decision
• ---- ECB Monetary Policy Press Conference

GBP

Average earnings have beaten expectations coming in at 3.1% excluding bonuses - the highest reading since 2009 - and 2.7% including bonuses which will give pound a nice underpin and certainly satisfy BOE. Positive data may give reason to BOE for a rate hike sooner than expected. Currently, the market has priced in a rate hike not before May 2019. A recent dovish shift suggests that a rate hike is expected to come later, with August 2019 as most likely.

Inflation data from UK came in softer than expected with CPI coming in at +2.4% vs +2.6% y/y expected and CPI core coming in at +1.9% vs +2.0% y/y expected. Slowdown in inflation should not have a big impact on GBP. A second rate hike for the year, which already had a little probability of happening, is now taken off the table. Additionally, inflation softening combined with high wage growth will relieve pressure on household incomes.

This week we will have data regarding UK Finance Mortgage Approvals which is a leading indicator of the UK’s Housing Market.

Important events for GBP:

Wednesday:

• ---- UK Finance Mortgage Approvals

AUD

RBA Financial Stability Review stated that the RBA is satisfied with the domestic situation and sees risks mainly offshore stating that trade tensions and slowdown in China could affect the global economy and start a global economic downturn. The level of household debt is high but does not appear to be a large risk to the financial system. Debt levels could be a risk if they cause households to cut back on consumption.

RBA October minutes were published last week and it was stated that RBA should continue holding rates at the current level as a source of stability. The next move in rates will most likely be a raise, however there is no necessity for such a move in the near-term. The modest fall in the AUD has helped domestic economic growth. Recent economic data points to a solid growth of GDP in Q3. Employment has risen strongly in the month of August, however average earnings are still weak which exerts downward pressure on inflation. Global growth is seen as solid for the next couple of years.

Previous week employment data came mixed. Employment change rose 5.6k which was a miss from 15.0 k expected and participation rate fell to 65.4% vs 65.7% as expected, but the unemployment rate fell to 5.0%. An unemployment rate of 5.0% is RBA’s estimate of full employment so we can expect some hawkishness in the RBA rhetoric in the future.

This week we will get more information regarding RBA view on employment figures and their impact on the Australian economy as a whole.

Important events for AUD:

Monday:

• ---- RBA Deputy Governor Debelle Speech

Tuesday:

• ---- RBA Deputy Governor Debelle Speech

​
NZD

Inflation data for NZD came higher than expected which immediately discarded any talks about rate cuts for NZD. Higher than expected numbers were caused by the rising oil prices while there was no growth in the “core” inflation. Later during the day RBNZ released information about one of its preferred inflation measures - the sectoral factor model - and data came unchanged, indicating no growth in the “core” inflation.

GDT auction came in at -0.3%. This marks the 10th month in a row of falling or flat dairy prices. Almost 95% of dairy products produced in New Zealand are exported. Therefore, a decrease in the GDT Price Index ultimately affects the exchange rate of the New Zealand dollar and can lead to its weakening.

This week we will have data regarding Trade Balance as well as Exports and Imports.

Important events for NZD:

Thursday:

• ---- Trade Balance m/m
• ---- Trade Balance y/y
• ---- Exports
• ---- Imports

CAD

Previous week was very good for the Canadian Dollar. Business Outlook Survey summarized: “Responses to the autumn Business Outlook Survey indicate that near term business prospects continue to be robust. Strong demand and elevated capacity pressures support firm’s investment and employment intentions”. Strengthening of the Canadian dollar across the markets can lead to a hawkish Bank of Canada rate statement this week.

Canada’s CPI came in at +2.2% y/y vs + 2.7% expected with prior at +2.8%. This is a big miss in the data and markets immediately reacted with CAD weakness. However core inflation numbers came in at around 2.0% (Core common +1.9% vs 2.0% prior; Core median +2.0% vs +2.1% prior; Core trim +2.1% vs +2.2% prior ) which is in line with BOC’s target.

Retail sales came in at -0.1% m/m vs +0.3% expected with prior revised down to +0.2%. Retail sales ex Autos m/m came in at -0.4% vs +0.1% expected with prior revised down to +0.8%. These are weaker data in line with the softer CPI data.

Softer numbers ease pressure from BOC to deliver a hawkish message at Wednesday’s meeting although the rate hike is still priced in as a virtual certainty. There is less certainty however surrounding back-to-back hikes in December while odds of another hike in December are around 68%.

This week Bank of Canada will take the central stage with an interest rate decision, Monetary Policy Report and a press conference later on.

Important events for CAD:

Monday:

• ---- Wholesale Trade m/m

Wednesday:

• ---- BoC Interest Rate Decision
• ---- BoC Rate Statement
• ---- BoC Monetary Policy Report
• ---- BoC Monetary Policy Report Press Conference
• ---- EIA Crude Oil Stocks Change

JPY

During the IMF summit BOJ Governor Kuroda stated his satisfaction with FED rate hikes characterizing them as good for global economy. BOJ is taking longer to achieve its projected inflation target of 2%. Additionally Kuroda stated to a branch manager meeting that Japan’s economy is expected to continue expanding moderately and that BOJ will continue with monetary base expansion until inflation stably exceeds the 2% mark. BOJ will keep short and long-term interest rates at the current very low levels for an extended period.

National CPI came at 1.2% y/y vs 1.3% expected, prior 1.3%. National CPI excluding Food, Energy came in at 0.4% y/y as expected; the prior was 0.4%. These data points are well below the BOJ inflation target of 2%.

This week we will have data regarding Nikkei Manufacturing PMI, Corporate Services Price and inflation.

Important events for JPY:

Wednesday:

• ---- Nikkei Manufacturing PMI

Thursday:

• ---- Bank of Japan (BoJ) Corporate Services Price Index y/y

​_Friday_:

• ---- Tokyo CPI y/y
• ---- Tokyo CPI excl. Food and Energy y/y
• ---- Tokyo Core CPI y/y

CHF

Swiss Governor Jordan reiterated SNB’s stances in his interview on SRF radio. He mentioned the fragile situation in the markets as well as the pledge of SNB to intervene if needed. He also stated that there are no signs of overheating in the economy, therefore it is appropriate to leave the policies unchanged. Additionally, he stated that FED is making the correct moves.

Trade balance for Switzerland came in at CHF 2.43 billion vs CHF 2.13 billion prior (revised to 2.08 billion). Both monthly export (-0.8% m/m vs +0.6%; revised to -0.3%) and monthly import (-0.4% m/m vs -2.8%; revised to -2.5%) figures are down which is not a good sign, but it is not alarming at this point.

[TradersWay]

Forex Major Currencies Outlook (Oct 29th – Nov 2nd)

USD

New home sales for September came in at 553K vs 625K expected. This is a much weaker reading than anticipated and comes as combination of slowly rising wages, higher rates and affordability.

FED’s Mester stated that fundamentals of the US economy are strong and that there are no signs of a pending US recession. Inflation expectations have been very stable and recent US inflation readings have been categorized as pretty good. She sees the labor market as strong which in turn could bring prices up. Forecast for the FED funds rate is 3% in the long run. In her view GDP will top 3% this year and unemployment will be below 3.5% by the end of 2019. She is considered a hawk member and her comments are in line with that.

FED’s Beige Book for the month of October 2018 states that economic activity expanded with growth modest to moderate. Consumer prices rose at a modest to moderate pace while consumer spending rose at a modest pace. Wage growth was viewed mostly as modest to moderate. Manufacturers raised prices due to raw materials tariffs.

First reading of the US GDP 3Q QoQ annualized came in at 3.5% vs 3.3% estimate. Personal Consumption which contributes up to 70% of GDP came in at 4.0% vs 3.3% as expected. That is the best reading since 2014. Consumption contributed +2.69%, Investment contributed +2.03% and Government spending contributed +0.56%. On the other hand Net Exports were -1.78% which is the largest drag on GDP in the last 33 years. Trade war and strengthening USD has led to increase in import and decrease in export for the United States.

This week will be data heavy for USD. We will have data concerning PCE, FED’s preferred inflation metric, data regarding personal income and spending, manufacturing PMI and on Friday NFP and employment data along with Trade Balance data. NFP is expected to come in at 164k vs 134k previously. Headline data will provoke a knee-jerk reaction but strong emphasis should be paid on Participation Rate and Average Hourly Earnings.

Important events for USD:

Monday:

• ---- Core PCE Price Index m/m
• ---- Core PCE Price Index y/y
• ---- PCE Price Index m/m
• ---- PCE Price Index y/y
• ---- Personal Spending m/m
• ---- Personal Income m/m

Wednesday:

• ---- ADP Nonfarm Employment Change
• ---- Employment Wages q/q

Thursday:

• ---- Markit Manufacturing PMI
• ---- ISM Manufacturing PMI

Friday:

• ---- Nonfarm Payrolls
• ---- Unemployment Rate
• ---- Participation Rate
• ---- Average Hourly Earnings m/m
• ---- Average Hourly Earnings y/y
• ---- Trade Balance

EUR

Moody’s cut Italy’s credit rating on Friday 19th down to Baa3, that is a one level downgrade and still one level above junk level, but gave it a stable outlook meaning that the chance for another downgrade is low in the near future. S&P will give it’s assessment of Italy’s credit rating on Friday 26th. Current rating is BBB with a stable outlook.

EU has declined the Italian budget proposal with a 2.4% budget deficit as expected. EU Dombrovskis stated that there will be 3 weeks of intensive dialogue with Italy concerning the new budget; the ball is in Italy’s court. The1 Italian Government keeps reiterating that there is no “Plan B” for the budget.

PMI readings last week were very disappointing. Germany’s release came in at 52.3 vs 53.4 as expected. The manufacturing print fell down to a 28-month low while services came in at 53.6 vs 55.5 as expected and failed to offset the negativity by also falling down as the first batch of Q4 data comes in. France’s prints came in mixed but the industrial print also slumped to a 25-month low coming in at 51.2 vs 52.4 as expected.

ECB’s Draghi stated in his speech that incoming data have been weaker than anticipated, that significant stimulus is still needed in order to raise inflation close to but below 2% over the medium-term and that net asset purchases will continue until the end of the year.

ECB published results of its survey of professional forecasters 2018 growth seen at 2.0%, down from 2.2%; 2019 growth at 1.8%, down from 1.9%; 2020 growth at 1.6%, unchanged.

Inflation is seen averaging 1.7% in 2018, 2019, 2020 which is unchanged. Core inflation seen at 1.1% for 2018, down from 1.2%; Core inflation seen at 1.4% for 2019, down from 1.5% and Core inflation seen at 1.7% for 2020 which is unchanged. These downgrades are in line with recent data from EU and reflect current market sentiment towards the EU economy. Those projections however are not enough to move ECB from its path.

This week we will have data regarding GDP, sentiment, confidence and Business Climate and inflation in the Eurozone as well as Manufacturing PMI for EU as a whole.

Important events for EUR:

Tuesday:

• ---- GDP q/q
• ---- GDP y/y
• ---- Business Climate Indicator
• ---- Industrial Confidence Indicator
• ---- Services Sentiment Indicator
• ---- Economic Sentiment Indicator
• ---- Consumer Confidence Index

Wednesday:

• ---- Core CPI y/y
• ---- CPI y/y
• ---- Unemployment Rate

Friday:

• ---- Markit Manufacturing PMI

GBP

UK PM Theresa May has survived a meeting of the 1922 Committee and she remains a Prime Minister for now. There was no confidence vote but reports continue to point to over 40 votes of no confidence waiting in the wings - 48 are required to trigger a leadership contest. The domestic political situation is still not safe for PM May and a leadership challenge/vote of no confidence could occur at any time. If a no confidence vote is called, all serving Conservative MPs will be able to cast a vote for/against PM May. For Theresa May to be ousted, a simple majority of 159MPs would be needed. It is important to note that after a no vote is triggered it cannot be triggered again for another year, so PM May’s opponents are carefully looking to strike at the right moment and not miss the chance.

Time is slowly ticking away for the Brexit deal. But the UK and EU still have another chance for a deal, at an EU summit on the 13th and 14th of December. This could be a fall-back option to reach an agreement.

This week’s headline will be the BoE Interest Rate Decision followed by Meeting Minutes from MPC and lastly a speech given by BoE Governor Carney.

Important events for GBP:

Monday:

• ---- Annual Budget

Thursday:

• ---- Markit/CIPS Manufacturing PMI
• ---- BoE Inflation Report
• ---- BoE MPC Meeting Minutes
• ---- BoE Interest Rate Decision
• ---- BoE MPC Vote Cut
• ---- BoE MPC Vote Hike
• ---- BoE MPC Vote Unchanged
• ---- BoE Governor Carney Speech

AUD

After last weekend’s election in Wentworth prime minister Scott Morrison lost majority in the parliament and now has a minority government. Hung parliaments can work however they present a great deal of uncertainty, and if it is one thing markets don’t like that is uncertainty. The drops in value of AUD have been welcomed by the Deputy Governor Guy Debelle. Further falls in AUD will be welcomed by the RBA and they are not going to respond to drops by any push to increase interest rates. The falling house prices and the high levels of household debt means that the Australian consumer is under pressure.

Fitch has confirmed Australia’s credit rating at AAA and gave it a stable outlook. They expect that GDP will be +3.3% for the year 2018 and then +2.8% and +2.7% for years 2019 and 2020 respectively.

This week we will have a plethora of data from Australia. We will receive data on the housing market, inflation data (including weighted median CPI and trimmed mean CPI), trade balance, consumption and data regarding prices of domestically produced goods.

Important events for AUD:

Tuesday:

• ---- Building Approvals m/m
• ---- Private House Approvals m/m
• ---- RBA Assistant Governor Bullock Speech

Wednesday:

• ---- CPI q/q
• ---- CPI y/y
• ---- RBA Weighted Median CPI q/q
• ---- RBA Weighted Median CPI y/y
• ---- RBA Trimmed Mean CPI q/q
• ---- RBA Trimmed Mean CPI y/y
• ---- RBA Private Sector Credit m/m
• ---- CNY Manufacturing PMI
• ---- CNY Non-Manufacturing PMI

Thursday:

• ---- Exports m/m
• ---- Imports m/m
• ---- Trade Balance

Friday:

• ---- Retail Sales m/m
• ---- Retail Sales q/q
• ---- PPI q/q
• ---- PPI y/y

NZD

Trade balance for New Zealand in the month of September came in at -$1560m vs -$1365m as expected. Exports have risen to $4.33B vs $4.20B as expected but imports have also risen to $5.89B vs $5.60B as expected. Growing trade deficit is not a good sign, but rising exports give some relief.

This week we have a rather light calendar coming from New Zealand. There will be data on the housing market as well as Business Confidence and Activity Outlook.

Important events for NZD:

Tuesday:

• ---- Building Consents m/m

Wednesday:

• ---- ANZ Business Confidence
• ---- ANZ Activity Outlook

CAD

Bank of Canada has rates interest rate by 25bp to 1.75% as expected. From the rate statement it could be assumed that they see the need for rates to turn to a neutral stance. They expect GDP to be 2.1% for years 2018 and 2019 before slowing to 1.9% for the year 2020. They have also stated that economy is near capacity and that future pace of rates depends on how well economy adjusts. Inflation has slipped to 2.2% in September but it is due to Summer spikes, it is expected that inflation remains at 2% during 2019 and all through 2020. Higher rates are needed in order for the inflation target to be achieved. BOC has acknowledged the impact that US-China trade war has on global growth and commodity prices however they stated that the global economic outlook remains solid and that global financial conditions remain accommodative.

BOC has removed the reference to “gradually” pace rate hikes, which is seen by the market as a sign the pace of rate hikes will pick up. The percentage of a back-to-back hike in December is up to 23% compared to 17% only a day ago. The odds of a hike in January are up to 70% from 67% previously.

This week there will be a lot of data coming in from Canada which can confirm hawkish stance from BOC. We will start the week with speech from Governer Poloz, then data comes out regarding GDP m/m followed by Industrial Product Price Index and Raw Material Price Index. There will be data regarding manufacturing PMI and at the end of the week we have data regarding employment and trade balance.

Important events for CAD:

Tuesday:

• ---- BOC Govenror Poloz Speach

Wednesday:

• ---- GDP m/m
• ---- IPPI m/m
• ---- IPPI y/y
• ---- RMPI m/m
• ---- RMPI y/y
• ---- EIA Crude Oil Stocks Change

Thursday:

• ---- Markit Manufacturing PMI

Friday:

• ---- Employment Change
• ---- Unemployment Rate
• ---- Participation Rate
• ---- Imports
• ---- Exports
• ---- Trade Balance

JPY

In his speech on Friday October 19th BOJ governor Kuroda stated that exports are on the rising trend, inflation will gradually increase toward the target of 2%, necessity of maintaining the easing programme as well as that rise in consumer prices as a trend remains on a weak note. Tokyo CPI data came in at +1.5% y/y as expected and Tokyo Core CPI came in at +1.0% as expected.

BOJ has stated their financial systems is maintaining stability as a whole. Banks have sufficient capital and capacity for absorbing loses. BOJ statements suggest that they can continue with their current easing policies.

Preliminary Nikkei Manufacturing PMI data came in at 53.1 vs 52.5 prior. This is the highest value since April. Also, this represents the 26th consecutive months where the reading is above 50. Manufacturing sector continues to give a nice boost to Japanese economy.

This week we will get information about consumption in Japan via Retail Sales as well as data about labor market via Unemployment Rate and Jobs to Applicants Ratio.

Important events for JPY:

Monday:

• ---- Retail Sales m/m
• ---- Retail Sales y/y

Tuesday:

• ---- Unemployment Rate
• ---- Jobs to Applicants Ratio

Wednesday:

• ---- Industrial Production m/m
• ---- Industrial Production y/y
• ---- BoJ Monetary Policy Statement
• ---- BoJ Outlook Report
• ---- BoJ Interest Rate Decision
• ---- BoJ Press Conference
• ---- Consumer Confidence Index

Thursday:

• ---- Nikkei Manufacturing PMI
• ---- 10-Year JGB Auction

CHF

Switzerland’s September M3 money supply came in at +2.3% vs +2.5% y/y prior. This data is considered low tier and does not have a huge impact on CHF, however it represents a general gauge of broad money in Switzerland’s economy.

This week we will have data on inflation and consumption from Switzerland along with a survey of Consumer Climate and composite economic outlook for the next six months in the form of the KOF Economic Barometer. SNB Chairman Jordan will also give a speech on the impact of protectionism on monetary policy.

Important events for CHF:

Tuesday:

• ---- KOF Economic Barometer

Wednesday:

• ---- SNB Chairman Jordan Speech

Thursday:

• ---- Consumer Climate
• ---- CPI m/m
• ---- CPI y/y

Friday:

• ---- Retail Sales y/y

[TradersWay]

USD

PCE Core for September came in at +2% y/y as expected. Core PCE came in at +0.2% m/m vs +0.1% as expected. Personal income came in a bit softer at +0.2% vs +0.4% expected. Inflation continues along FED’s preferred path, but sluggish personal income growth gives reason for concern.

ADP Employment data for the month of October came in at 227k vs 189k. That is yet another strong month for US employment signalling a very strong labor market. Additionally, the US Q3 employment cost index came in at +0.8% vs +0.7% as expected. Wages rose 3.1% y/y which is the biggest jump in the last 10 years. FED will be very happy with this wage related data and can view them as a clear sign to proceed with their rate hike policies.

NFP figures came in at 250k vs 200k as expected. Unemployment stayed at 3.7% as expected while both participation rate and average hourly earnings y/y beat the expectations. Participation rate came in at 62.9% while the average hourly earnings y/y came in at 3.1%. Additional strong labor reports coming in from the US will keep FED on rate hiking path. The implied odds of a rate hike in December rose to 80% from 74%.

Trade balance data came in at -$54.0B vas -53.6B as expected. The trade deficit is getting bigger and is slowly approaching a 10 year-high. US-China Sept goods trade deficit $40.24B vs $38.57B previous month which is a record high. Small positives from this report are that Exports rose 1.5% and that overall trading volume has increased.

This week the most important event is the Mid-Term Elections on November 6th. It is expected that Democrats will take the House and Republicans will retain the Senate. This scenario is priced in by the market. If the Democrats lose the House, the dollar will rally on the assumption that president Trump will become even more aggressive, with another tax cut and more deregulation. We will have Rate Decision, rate hike is expected in December, however the FOMC Statement may provide us with more information on monetary policy. On Friday we will have PPI data.

Important events for USD:

Monday:

• ---- Markit Services PMI
• ---- Markit Composite PMI
• ---- ISM Non-Manufacturing PMI
• ---- ISM Non-Manufacturing Employment

Tuesday:

• ---- Mid-Term Elections

Thursday:

• ---- Fed Interest Rate Decision
• ---- FOMC Statement

Friday:

• ---- PPI m/m
• ---- PPI y/y
• ---- Core PPI m/m
• ---- Core PPI y/y

EUR

Last Friday S&P kept Italy’s rating at BBB but they lowered the outlook from stable to negative. Affirmation of this rating helped Italian bonds rally on Monday which in turn is helping to lift sentiment in equities in the region as well. The 5y-5y inflation swap is one of the key gauges used by markets on long-term Eurozone inflation expectations; it is ECB president Dragghi’s preferred inflation measure and has fallen to 1.6575%, the lowest it has been in almost a year thus adding more worries for the EUR.

Flash GDP for Q3 in the Eurozone came in at +0.2% m/m vs +0.4% m/m as expected and +1.7% y/y vs +1.8% y/y as expected. Economic, Industrial and Services confidence as well as Business Climate indicator came in weaker than expected. Eurozone economic growth has slowed to its weakest since Q4 of 2014.

Unemployment in the Eurozone came in at 8.1% as expected which further shows tightening of the labor market. Eurozone CPI came in at +2.2% y/y vs +2.1% y/y as expected and Core CPI came in at +1.1% y/y vs 1.0% y/y as expected. Inflation came a bit better than expected but still below the targeted level of 2%.

This week there will be meetings in the Eurozone that may shine light on how the leaders view the weaker-than-expected data from the Eurozone. Also, we will see additional data in terms of services, changes in prices of manufactured goods (PPI) and consumption (Retail Sales).

Important events for EUR:

Monday:

• ---- Eurogroup Meeting

Tuesday:

• ---- Economic and Financial Affairs Council Meeting
• ---- Markit Services PMI
• ---- Markit Composite PMI
• ---- PPI m/m
• ---- PPI y/y

Wednesday:

• ---- Retail Sales m/m
• ---- Retail Sales y/y

GBP

Fitch has affirmed UK’s credit rating at AA with a negative outlook because of the uncertainty around the Brexit process. Manufacturing PMI for the month of October came in at 51.1 vs 53.0 as expected with prior reading revised to 53.6. This reading is weakest since July 2016. New orders and employment fell for the first time after the Brexit vote.

BOE left the bank rate unchanged at 0.75% and all 9 members of the MPC voted for no change in the rate as expected. The tone of the statement was hawkish as they foresee CPI at 2.1% over 1 and 2 -year horizon and at 2.0% over 3-year horizon.

Secretary of state for exiting the European Union Dominic Raab implied that he expects a Brexit deal to be done by November 21st. There is a talk that a deal on financial services has been struck between EU and UK. The report said that UK Financial services companies will have continued access to European markets after the Brexit. Financial services represent an important part of UK’s economy. This has given GBP a very nice boost. BOE Governor Carney stated that “no deal, no transition” is unlikely, but we must prepare.

This week we will expect more news on the Brexit process and confirmation whether a deal on financial services has been struck. Additionally, we will have data on housing, industrial and manufacturing production as well as trade balance and value of company’s expenditure in the private sector. On Friday we will receive information about GDP.

Important events for GBP:

Monday:

• ---- Markit/CIPS Services PMI

Wednesday:

• ---- Halifax HPI m/m
• ---- Halifax HPI y/y

Friday:

• ---- Industrial Production m/m
• ---- Industrial Production y/y
• ---- Manufacturing Production m/m
• ---- Manufacturing Production y/y
• ---- Trade Balance
• ---- Trade Balance Non-EU
• ---- Business Investment q/q
• ---- Business Investment y/y
• ---- GDP q/q
• ---- GDP y/y

AUD

CPI data for Q3 came in at 0.4% q/q vs 0.5% q/q as expected and 1.9% y/y as expected. Trimmed mean CPI came in at 0.4% q/q and 1.9% as expected. A bit softer reading of CPI weighed down on AUD in the markets and it will give a headache to RBA whose core mandate is to maintain a trimmed mean inflation between 2 and 3%. The main problem for inflation in AUD is the housing market which again came in weaker than expected in September. Building approvals came in at 3.3% m/m vs 3.8% m/m expected and -14.0% y/y vs -9.0% y/y.

Trade Balance for month of September came in at A$3017M vs A$1700M as expected. Exports rose 1% and imports fell 1% compared to the last month. Export prices rose 3.7% vs 2.2% as expected while import prices rose to 1.9% vs 1.0% as expected.

PPI q.q for Q3 came in at 0.8% vs 0.3% in Q2. This is a very healthy rise compared to the previous quarter and it helped AUD in its big leap against the USD at the end of the previous week along with positive talks between Presidents Xi and Trump on US – China trade war.

This week’s events are headlined by the RBA Interest Rate Decision. Rates should stay on hold, however RBA Rate Statement and RBA Monetary Policy Statement can provide us with more information on RBA’s views regarding recent AUD strength and whether there is a need for them to act. There will also be data on the Home Loans in Australia as well as data regarding Trade Balance, inflation and changes in prices of manufactured goods from China.

Important events for AUD:

Tuesday:

• ---- RBA Interest Rate Decision
• ---- RBA Rate Statement

Thursday:

• ---- Trade Balance (China)
• ---- Imports (China)
• ---- Exports (China)

Friday:

• ---- RBA Monetary Policy Statement
• ---- Home Loans m/m
• ---- CPI m/m (China)
• ---- CPI y/y (China)
• ---- PPI y/y (China)

NZD

This week we have not had many data coming from New Zealand but NZD strengthened significantly against the USD on the back of AUD’s rise. The ANZ business confidence for the month of October came in at -37.1 versus -38.3 last month while the activity outlook came in at 7.4 vs 7.8 from last month.

Headlining this week will be the RBNZ Interest Rate Decision followed by Rate Statement, Monetary Policy Statement and Press Conference. RBNZ released its statement in August stating that it was going to keep rates lower for longer. However, since then the data has been pretty good so the Statement and Press Conference will show whether they are prepared to reverse their dovish stance. Additionally, there will be data on Commodity Price Index, GDT auction and employment.

Important events for NZD:

Monday:

• ---- ANZ Commodity Price Index m/m

Tuesday:

• ---- GDT Price Index
• ---- Unemployment Rate
• ---- Participation Rate
• ---- Employment Change q/q

Wednesday:

• ---- RBNZ Interest Rate Decision
• ---- RBNZ Rate Statement
• ---- RBNZ Monetary Policy Statement
• ---- RBNZ Press Conference

CAD

BOC governor Poloz has reiterated the need for rates to rise to neutral. Canada’s economy is operating at near capacity according to him and policy remains stimulative. Senior Deputy Governor Wilkins said that policy will be data-dependent and that income growth will strengthen to the 3 - 4 % range. Incomes will grow along with interest rates according to her and she sees this period as best for raising rates. Hawkish statements by both Governor Poloz and Deputy Wilkins.

Canadian GDP came in at 0.1% m/m vs 0.0% m/m as expected. Year over year GDP data came in at 2.5% vs 2.4% as expected. Mining, quarrying and oil and gas extraction sectors led the way with +0.9% while Manufacturing dropped down -0.6%.

Employment change in Canada for the month of October came in at 11.2k vs 15.0k as expected. The unemployment rate fell to 5.8% vs 5.9% as expected. Participation came in at 65.2% vs 65.4% prior month. A big miss was in hourly earnings for permanent employees - it came in at 1.9% y/y vs 2.3% y/y as expected. This soft report overall will have negative impact on CAD. Trade balance for the month of September came in at -$0.42B vs +$0.20B as expected. Not high impact data but it adds to the worries about CAD.

This week we will have a speech from Governor Poloz as well as housing data.

Important events for CAD:

Monday:

• ---- BoC Governor Poloz Speach

Tuesday:

• ---- Building Permits m/m

Wednesday:

• ---- Ivey PMI
• ---- EIA Crude Oil Stocks Change

Thursday:

• ---- CHMC Housing Starts
• ---- New Housing Price Index m/m

JPY

Unemployment rate for the month of September came in at 2.3% vs 2.4% as expected. This is the lowest unemployment rate since October, 1992. Job to applicant ratio came in at 1.64 vs 1.63 as expected. Industrial production for the month of September came in at -1.1%m/m vs -0.3% m/m expected and -2.9% y/y vs -2.1% as expected.

The Bank of Japan keeps monetary policy remains steady as expected and maintains a short term interest rate target at -0.1%. Median core CPI forecast for 2018/19 at 0.9% vs 1.1% in July; median core CPI forecast for 2019/20 at 1.4% vs 1.5% in July; median core CPI forecast for 2000/21 at 1.5% vs 1.6% in July; median real GDP forecast for 2018/19 at 1.4% vs 1.5% in July; median real GDP forecast for 2019/20 at 0.8% as in July; median real GDP forecast for 2020/21 at 0.8% as in July. Downgrades on Core CPI show that inflation target of 2% is still out of reach for the Japanese economy. BOJ Governor Kuroda stated that impact of US – China trade has not had a big impact on Japanese economy thus far.

This week we will have Monetary Policy Meeting Minutes as well as a speech from governor Kuroda for more information regarding monetary policy. We will also have information about household spending as well as Current Account.

Important events for JPY:

Monday:

• ---- BoJ Monetary Policy Meeting Minutes
• ---- BoJ Governor Kuroda Speach
• ---- Nikkei Services PMI

Tuesday:

• ---- Household Spending y/y
• ---- Household Spending m/m

Thursday:

• ---- Current Account
• ---- Adjusted Current Account

CHF

KOF leading indicator, which measures overall economic activity in the Swiss economy, came in at 100.1 vs 101.0 expected. The Swiss Franc continues to trade at levels which SNB sees as very comfortable at the moment.

CPI data came in at 0.2% m/m vs 0.1% as expected and 1.1% y/y as expected with prior reading showing 1.0% y/y. Core CPI came in at 0.4% vs 0.5% as expected with prior reading showing 0.4%. This is a slight improvement to headline CPI reading compared to the previous month but the core measurement remained steady. Manufacturing PMI data came in at 57.4 vs 58.7 as expected with the prior reading showing 59.7. This is lowest reading since July 2017 and shows a slow down in factory activity. Retail sales for the month of September came in at -2.7% y/y vs -0.1% y/y as expected.

This week’s data from Switzerland will concern employment.

Important events for CHF:

Thursday:

• ---- Unemployment rate

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Forex Major Currencies Outlook (Nov 12 – Nov 16)

USD

Democrats have taken the control of the House of the Representatives for the first time since 2010. Republicans have retained the control of Senate as was expected. A divided Congress will present a hindrance for president Trump and his legislative actions. There may be strong opposition from Democrats in the House regarding further fiscal stimulus and tax reforms.

FED has kept interest rate at 2 – 2.25% as expected. The FOMC statement had a hawkish tone. Strength of labour market was emphasized as well as the strongest wage growth in the past decade. Based on their tone, the market is expecting a rate hike at December’s meeting of 25bp with about 80% being priced in. The only change in the FOMC statement is that Business Investment is now described as moderate, which as a downgrade from the stable as was stated in September’s meeting.

This week we will get data regarding inflation (CPI) and real earnings m/m, on Thursday we will have data regarding consumption in USA (Retail Sales), data from Philadelphia Fed regarding Manufacturing and Employment and data on Business Inventories, while on Friday we will have data regarding Industrial production.

Important events for USD:

Tuesday:

• ---- Federal Budget Balance

Wednesday:

• ---- CPI m/m
• ---- CPI y/y
• ---- Core CPI m/m
• ---- Core CPI y/y
• ---- Real Earnings m/m

Thursday:

• ---- Retail Sales m/m
• ---- Core Retail Sales m/m
• ---- Retail Control m/m
• ---- Philadelphia Fed Manufacturing Index
• ---- Philadelphia Fed Employment
• ---- Business Inventories m/m

Friday:

• ---- Fed Industrial Production m/m

EUR

Italy will have to send a new budget draft by November 13th. EU’s Moscovici stated that he expects a strong, precise answer from Italy on budget by November 13th. He stated that further steps will depend on Italy’s response and reiterated that EU’s fiscal rules must be respected. He also added that sanctions can be applied if there is no compromise. Italy insists that maximum deficit will be 2.4% while EU sees it at 2.9%.

Final services PMI for the month of October came in at 53.7 vs 53.3 preliminarily and Composite PMI came in at 53.1 vs 52.7 preliminarily. Spain led the way and was followed by Germany. Data from France was a bit weaker and Italy’s PMI came below 50, indicating contraction. This is a mildly bullish data that can signal ECB that they are on the right track with their policies.

This week we will have information about the economic sentiment in the EU, GDP flash release for Q3, data on Industrial Production and Trade balance and finally on Friday inflation data will be out.

Important events for EUR:

Tuesday:

• ---- ZEW Economic Sentiment Indicator

Wednesday:

• ---- Industrial Production m/m
• ---- Industrial Production y/y
• ---- GDP q/q
• ---- GDP y/y

Thursday:

• ---- Trade Balance

Friday:

• ---- CPI m/m
• ---- CPI y/y
• ---- Core CPI m/m
• ---- Core CPI y/y

GBP

The Brexit saga continues to dominate news coming from the UK. After Cabinet’s meeting on Tuesday PM May’s spokesman expressed his confidence that the deal will be reached and that Britain will aim to reach a deal as soon as possible but not at any cost. BBC has obtained a document in which it states that on November 19 the withdrawal agreement and future framework will be put to parliament by way of a statement from Raab.

Preliminary GDP data for Q3 came in at 0.6% q/q as expected compared to 0.4% q/q for the Q2, 1.5% y/y as expected and 0.0% m/m vs 0.6% m/m as expected. Total business investment came in at -1.9% y/y vs -0.1% y/y as expected. Private investment continues to be a drag on the UK economy. Private consumption came in at 0.5% as expected while Government consumption rose to 0.6% q/q. Exports have missed expectations but imports also fell so the overall effect of trade on GDP is positive.

This week there is a lot on calendar from GBP. Aside from the Brexit news which should be closely followed we will have data on employment and wages, PPI, inflation and consumption in the UK.

Important events for GBP:

Tuesday:

• ---- Average Weekly Earnings, Regular Pay y/y
• ---- Average Weekly Earnings, Total Pay y/y
• ---- Unemployment Rate
• ---- Claimant Count Change

Wednesday:

• ---- PPI Input m/m
• ---- PPI Input y/y
• ---- PPI Output m/m
• ---- PPI Output y/y
• ---- CPI m/m
• ---- CPI y/y
• ---- Core CPI y/y
• ---- RPI m/m
• ---- RPI y/y
• ---- HPI y/y

Thursday:

• ---- Retail Sales m/m
• ---- Retail Sales y/y
• ---- Core Retail Sales m/m
• ---- Core Retail Sales y/y

AUD

Services PMI for China came in at 50.8 vs 53.1 prior. Composite PMI for China came in at 50.5 vs 52.1 prior. These numbers still show expansion in the Chinese economy (value over 50 represents expansion) however Services PMI hits its lowest level since September 2017 while Composite PMI fell to lowest level since June of 2016. This can have negative impact on the AUD and Australian economy in general.

RBA has kept the interest rate at 1.5% as expected. In the statement following the interest decision - low rates support the economy. Further progress on unemployment and inflation will be gradual. It is expected that unemployment will fall to 4.75% in 2020 and central scenario for inflation is 2.25 percent in 2019, bit higher in 2020. GDP will average 3.5% in 2018 and 2019 before slowing down in 2020. The outlook for the labour market remains positive and wage growth will pick up over time. Board members of RBA stated in the Statement on Monetary Policy that they do not see a strong case for a near-term change in the cash rate. They forecast inflation at 1.75% in December of 2018, at 2% in June 2019 and at 2.25% from December 2019 to December 2020.

This week we will get data regarding wages and employment from Australia. Since employment and inflation represent the core of RBA mandate these data will be closely monitored.

Important events for AUD:

Wednesday:

• ---- Wage Price Index q/q
• ---- Wage Price Index y/y

Thursday:

• ---- Employment Change
• ---- Participation Rate
• ---- Unemployment Rate
• ---- RBA Deputy Governor Debelle Speech

NZD

Export commodity index prices published by ANZ showed a drop of 2.4% m/m and 5.6% y/y. This is the 5th month in a row of falling export prices. The latest New Zealand dairy auction showed prices down -2.0% with an average selling price of $2851 per tonne. This marks the 11th month in a row of falling or flat dairy prices.

The employment report for Q3 has smashed all expectations. The unemployment rate came in at 3.9% vs 4.4% as expected. Employment change came in at 1.1% q/q vs 0.5% q/q as expected and 2.8% y/y vs 2.0% y/y as expected. Participation rate rose to 71.1% vs 70.9% as expected. Average hourly earnings came in at 1.4% vs 0.8% as expected. A very strong report overall with all major categories beating expectations.

RBNZ decided to leave the OCR at 1.75% as expected. They now see the rate hike in Q2 of 2020 vs Q3 2020 as before. They see average OCR in Q2 of 2020 at 1.8% and up to 2.41% in December 2021. Employment is around maximum sustainable level. CPI inflation remains below targeted level of 2% so further supportive monetary policy is needed. GDP is expected to rise in 2019 and Governor Orr said that he would consider a rate cut in the event GDP falls below expectations. Emphasis is now switched over to GDP data.

This week we will have light economic calendar for NZD. Food Price Index will be only notable event.

Important events for NZD:

Monday:

• ---- Food Price Index m/m

CAD

Governor Poloz stated that BOC has a positive outlook and believes that they are normalising at the right pace. He voiced his concerns regarding trade risks which he considers significant.

Ivey PMI data for the month of October came in at 61.8 vs 50.4 the previous month. Ivey PMI captures business conditions in Canada and after the drop in the previous month this is a quite nice comeback. Employment moved up to 54.3 from 51.6 last month, Inventories climbed to 60.9 from 51.8 last month and Prices rose to 72.6 vs 68.8 last month.

Keystone XL pipeline (Canada to Texas oil pipeline) has been blocked by Federal Court. This pipeline is crucial for Canadian Oil exports. In addition to that oil prices are falling and are closing on the year’s lows devaluing CAD further. Considering the light economic calendar for the next week from Canada this can weigh down heavily on the CAD.

This week we will have information from OPEC regarding oil as well as manufacturing sales from Canada.

Important events for CAD:

Tuesday:

• ---- OPEC Monthly Market Oil Report

Friday:

• ---- Manufacturing Sales m/m

JPY

In his speech on Monday BOJ Governor Kuroda stated that the easing program will continue until a targeted inflation of 2% is reached. He added that BOJ is aware that continued easing policy affects the financial system stability and financial intermediation.

Overall household spending came in at -1.6% y/y vs +1.5% as expected. This is a big miss especially considering that the prior reading was +2.8%. A drop in household spending will have negative impact on inflation in Japan making it harder to reach the target of 2%. The time horizon needed for reaching inflationary goal is widening.

This week we will have data for Q3 Preliminary GDP as well as data for industrial production.

Important events for JPY:

Wednesday:

• ---- GDP q/q
• ---- GDP y/y
• ---- GDP Price Index y/y
• ---- Industrial Production m/m
• ---- Industrial Production y/y

CHF

SNB Governor Jordan reiterated his stance that FX market is still fragile and that they are prepared to intervene if the need arises. SNB looks like it is happy with current CHF valuation and will look toward normalising their monetary policy after the ECB does. SNB’s Maechler stated that it is too early for tightening. He also evaluated economic developments as favourable but inflation pressures remain low.

This week we will have data regarding producer price index.

Important events for CHF

Tuesday:

• ---- PPI m/m
• ---- PPI y/y