Daily Market Outlook by Kate Curtis from Trader's Way

Commercial Content Analysts
422

USD

The US dollar had a mixed performance in recent trading, as it regained ground to the franc and yen but weakened against the euro and the pound. Existing home sales from the US economy was better than expected, as the reading showed a pickup from 4.89 million to 5.19 million. For today, new home sales, initial jobless claims, and the flash manufacturing PMI are due. Stronger than expected data could allow the dollar to extend its gains while weak results could cast more doubts on the Fed rate hike prospects for this year.

EUR

The euro resumed its slide to most of its major counterparts, as traders started reducing their positions ahead of the Eurogroup meetings later this week. Data from the euro zone was also weaker than expected, as the consumer confidence index slumped from -4 to -5 while Italian retail sales missed the mark. Euro zone PMI readings are up for release today and strong improvements in the manufacturing and services sectors of Germany and France could give the shared currency a boost.

GBP

The pound popped higher after the BOE meeting minutes were released since it revealed that policymakers were not as dovish as expected. Members voted unanimously to keep policy unchanged while citing their positive outlook for inflation later on this year. This marked a shift from their previous bias indicating that pound strength could push price levels much farther away from their inflation target. UK retail sales and public sector net borrowing data are up for release today.

CHF

The franc sold off sharply after the SNB announced that it would be reducing exemptions for institutions being charged negative deposit rates. This means that the Swiss central bank will be slapping on more costs for banks who keep cash parked in the central bank’s vaults, which suggests that they’re hoping to boost lending activity. Switzerland’s trade balance is due today and a smaller surplus is eyed.

JPY

The yen was functioning as a counter currency in recent trading, thanks to the lack of top-tier data from Japan. Earlier today, the flash manufacturing PMI was released and it showed a drop from 50.3 to 49.7, indicating industry contraction. No other reports are lined up from Japan, leaving the yen sensitive to risk flows.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi suffered a sharp blow in today’s Asian trading session when an RBNZ official clarified that they’re not looking to hike rates anytime soon. He pointed out that the inflation outlook remains subdued and that they might even cut rates if needed. Wholesale sales in Canada was weaker than expected with a 0.4% decline but it wasn’t enough to dull the Loonie’s shine. In China, the flash manufacturing PMI dipped from 49.6 to 49.2, reflecting a sharper contraction.

By Kate Curtis from Trader’s Way

423

USD

The dollar returned its recent gains once more when US data surprised to the downside yesterday. Initial jobless claims showed a higher than expected 295K reading versus the projected 288K figure while the flash manufacturing PMI slumped from 55.7 to 54.2. New home sales data was also weaker than expected, as the reading fell from 543K to 481K. Durable goods orders data are up for release today and both headline and core figures are expected to show a recovery.

EUR

The euro regained ground in recent trading as traders reduced their positions ahead of the Eurogroup meetings. Officials are set to discuss the latest set of economic reforms from Greece and decide whether or not to release the next set of bailout funds which would allow the nation to avoid defaulting on its debt. Data from the euro zone was mostly weaker than expected though, as manufacturing and services PMI readings from Germany and France fell short of consensus. The German Ifo business climate index is also due today and an improvement from 107.9 to 108.5 is eyed.

GBP

The pound gave up more ground to some of its rivals when the UK retail sales came in weaker than expected. The report showed a 0.5% decline for March while the previous reading was downgraded to show a mere 0.6% uptick. There are no major reports due from the UK today, leaving the pound to take its cue from risk sentiment and euro zone updates.

CHF

The franc recouped its recent losses after the SNB’s announcement on reducing exemptions for negative deposit rates. Swiss trade balance was also better than expected, as the surplus widened from 2.32 billion CHF to 2.52 billion CHF. No reports are due from the Swiss economy today, which means that the franc might be sensitive to euro zone news.

JPY

The yen regained ground when BOJ Governor Kuroda said that policymakers are already discussing the technical details of an exit strategy from their QE program. He noted that the economy can reach its inflation target by 2016. Earlier today, data from Japan came in mixed, as the SPPI fell short of expectations while the all industries activity index surprised to the upside.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi continued to tumble after an RBNZ official reiterated that they’re not looking to hike interest rates anytime soon. The Aussie also took a few hits when the NAB business confidence reading dropped from 2 to 0 in the first quarter while the HSBC flash manufacturing PMI from China fell short of expectations. BOC Governor Poloz is set to give a testimony in the New York trading session and possibly spur more moves from the Loonie.

By Kate Curtis from Trader’s Way

424

USD

The US dollar gave up more ground on Friday as risk appetite improved and data from the US economy came in mixed. Headline durable goods orders jumped 4.0% while core durable goods orders showed a worse than expected 0.2% slide. Only the flash services PMI is lined up for today and a dip from 59.2 to 59.1 is expected. Weaker than expected figures could lead to more losses for the dollar again.

EUR

The euro managed to gain a bit of support towards the end of the week even though there was still no deal for Greece’s debt. Germany’s Ifo business climate index came in line with expectations when it climbed from 107.9 to 108.6, reflecting an improvement in sentiment. Data on Germany’s import prices is due today and a 0.5% increase is expected.

GBP

The pound sustained its climb on Friday as the upbeat BOE minutes allowed the currency to regain ground. There have been no reports released from the UK economy then while today only has the CBI industrial order expectations report on tap. This is slated to climb from 0 to 4 and probably allow the pound to advance further.

CHF

The franc struggled to recover on Friday, as SNB head Thomas Jordan reminded markets that they are hoping to shore up economic growth with monetary policy. There are no reports lined up from the Swiss economy then but the franc could take its cue from Greek debt updates and market sentiment.

JPY

The yen advanced once more as risk aversion seemed to settle back in the financial markets at the end of the week. It also helped the yen that BOJ Governor Kuroda has mentioned that they are discussing technical details of an exit strategy. There are no reports due from Japan today, leaving yen traders to price in expectations for the BOJ statement this week.

Commodity Currencies (AUD, NZD, CAD)

The comdolls regained some ground in recent trading, particularly against the US dollar. There have been no major releases on Friday and none are due today, which means that risk sentiment could be responsible for dictating price action for these pairs. RBA Governor Stevens is set to give a testimony in the US session and probably emphasize the need to keep policy accommodative.

By Kate Curtis from Trader’s Way

425

USD

The US dollar was pushed around in recent trading but still ended up mostly weaker to its forex counterparts. There have been no reports released from the US economy then but it looks like the pickup in risk appetite due to the developments in Greece is weighing on the lower-yielding dollar. Apart from that, traders seem eager to reduce their long dollar positions ahead of this week’s FOMC statement. For today, US CB consumer confidence data could still spark some moves, as the index is slated to climb from 101.3 to 102.6.

EUR

The euro regained more ground on the news that Greek Finance Minister Varoufakis has been told to take the backseat in the ongoing negotiations. This could pave the way for more reasonable talks and a better potential for securing a new deal for the debt-ridden nation, preventing a default and a Grexit. German import prices also came in stronger than expected with a 1.0% gain versus the estimated 0.5% uptick. There are no reports due from the euro zone today.

GBP

The pound continued to climb against most of its forex rivals, as the relatively upbeat BOE minutes supported the British currency. UK CBI industrial order expectations came in weaker than expected at 1 versus the estimated reading of 4, but it still marked an improvement from the previous reading of 0. The UK preliminary GDP reading is up for release today and analysts are expecting to see a 0.5% growth figure.

CHF

The franc consolidated to most of its major counterparts, as traders are still waiting to hear more clues from the SNB. There have been no reports released from the Swiss economy lately and it appears that the franc might take its cue from euro zone events or risk sentiment.

JPY

The yen regained ground at the start of the week but looks ready to give up some of its gains now that the retail sales disappointed again. Earlier today, the consumer spending report showed a 9.7% annualized decline, worse than the estimated 7.4% drop and the previous 1.7% decrease. No other reports are lined up from Japan, leaving traders to price in expectations for the BOJ statement mid-week.

Commodity Currencies (AUD, NZD, CAD)

The comdolls took advantage of the pickup in risk appetite yesterday, driven mostly by positive developments in the Greek debt negotiations. There have been no major reports out of these economies lately but BOC Governor Poloz has a testimony coming up and New Zealand will be printing its trade balance and ANZ business confidence index in the next Asian session.

By Kate Curtis from Trader’s Way

426

USD

Dollar traders seem to be reducing their long positions ahead of the FOMC interest rate statement in today’s US session, as the currency gave up more ground to its forex counterparts. It didn’t help that US data was weaker than expected, with the CB consumer confidence index falling from 101.4 to 95.2 instead of improving to the projected 102.6 figure. The Richmond manufacturing index was also weaker than expected, although it did improve from -8 to -3. Also lined up today is the US advanced GDP reading, which might show a 1.0% growth figure, weaker than the 2.2% expansion for the previous quarter.

EUR

The euro continued to climb against the dollar but was mostly weaker against the rest of its forex counterparts, as traders have started to become impatient about the Greek debt situation. There have been no reports released from the euro zone then while today has the German preliminary CPI reading on tap. A 0.1% decline in price levels is expected, down from the previous 0.5% uptick in inflation.

GBP

The pound managed to advance against the dollar despite weaker than expected UK GDP, but was slightly weaker to its other forex rivals. The economy posted a 0.3% growth figure for the first quarter, lower than the projected 0.5% expansion and the previous 0.6% GDP reading. No major reports are due from the UK today.

CHF

The franc gave up ground to its forex counterparts despite the lack of top-tier data from Switzerland. Only the UBS consumption indicator is due today and this might not be enough to stop the franc’s bleeding, although a small improvement from the previous 1.19 figure is expected.

JPY

The yen was off to a rocky start, thanks to a downgrade from Fitch ratings agency and a weaker than expected retail sales report. Consumer spending slumped by 9.7% in March, much worse than the estimated 7.4% drop and the previous 1.7% slide. The yen managed to recover as risk aversion settled in and traders moved their safe-haven holdings from the dollar to the Japanese currency.

Commodity Currencies (AUD, NZD, CAD)

The comdolls advanced against the dollar in recent trading sessions, as a few improvements in Australia and New Zealand were seen. Australia’s CB leading index showed a 0.5% gain for February while New Zealand reported a higher than expected trade surplus of 631 million NZD. Later on, the RBNZ is set to make its monetary policy decision and dovish remarks might force the Kiwi to retreat.

By Kate Curtis from Trader’s Way

427

USD

The US dollar had a volatile New York trading session, thanks to the mixed signals from the FOMC statement. While policymakers dismissed the recent slump in hiring and spending as purely a result of temporary factors, they also downgraded their outlook for growth and hiring. Yellen clarified that they could make policy changes anytime, not just during the months with a scheduled press conference following the FOMC statement. Markets were unsure how to interpret these figures, although many believe that a June rate hike is off the table because of the bleak 0.2% GDP reading for Q1.

EUR

The euro surged against the dollar and the Kiwi, following relatively downbeat central bank comments for both currencies. Data from the euro zone came in line with expectations, as the German preliminary CPI reading showed a 0.1% dip in price levels. For today, German retail sales and unemployment change figures could have a big say in the shared currency’s price action. Also lined up are Spain’s preliminary CPI and GDP readings.

GBP

The pound extended its gains to the dollar, as there were no major reports to weigh on the British currency yesterday. The only medium-tier release was the CBI realized sales index, which marked a decline from 18 to 12 instead of improving to the estimated 26 reading. There are still no major reports due from the UK economy today as most forex traders are focusing on the upcoming elections and what it could mean for the pound.

CHF

The franc broke out from its consolidation against the US dollar, as the Swiss economy also showed an improvement in data. The UBS consumption indicator marked a climb from 1.21 to 1.35, reflecting an increase in consumer-based indicators. The KOF economic barometer is due today and a climb from 90.8 to 91.6 is expected.

JPY

The yen was mostly stronger in recent trading, as traders moved their safe-haven holdings away from the dollar and towards the Japanese currency. There have been no major releases from Japan then, as traders await today’s BOJ interest rate decision. Earlier today, the preliminary industrial production reading registered a 0.3% dip, better than the projected 3.4% fall.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi was a big loser in recent trading as the RBNZ reiterated its dovish bias and confirmed that they could lower rates if economic performance continues to lag. In Australia, import prices fell by 0.2% for Q1 versus expectations of a 1.1% gain. Canadian monthly GDP is up for release later on and strong data could allow the Loonie to advance again.

By Kate Curtis from Trader’s Way

428

USD

The US dollar was finally able to make a bit of recovery against its forex counterparts, even though economic data came in mixed. Initial jobless claims came in better than expected at 262K versus the estimated 290K figure while the quarterly employment cost index also showed a stronger than expected increase of 0.7%. The core PCE price index, which is the Fed’s preferred inflation measure, posted a weaker than expected 0.1% uptick while personal spending and personal income data fell short. US ISM manufacturing PMI is up for release today and a climb from 51.5 to 52.1 is expected.

EUR

The euro managed to extend its gains to its forex counterparts, despite mixed reports from the euro zone. German retail sales came in weaker than expected with a 2.3% decline versus the projected 0.5% rebound while the unemployment change showed a smaller than expected 8K decline. The euro zone headline CPI estimate was flat at 0.0% as expected while the core CPI estimate was unchanged at 0.6%. There are no reports lined up from the euro zone today.

GBP

The pound stalled in its recent climb to its forex rivals, as there were no reports released from the UK economy. Today has the manufacturing PMI on tap and a small improvement from 54.4 to 54.6 is eyed. Stronger than expected data could allow the pound to resume its climb while a weak reading could spur more losses for pound pairs.

CHF

The franc consolidated after its recent rallies, as traders are awaiting more clues from the Swiss economy. The KOF economic barometer came in weaker than expected at 89.5, down from the previous 90.5 reading and lower than the projected 91.6 figure. For today, there are no economic reports lined up from the Swiss economy and more consolidation could be seen.

JPY

The yen printed a few stronger than expected readings in today’s Asian trading session, allowing yen pairs to bounce back and risk appetite to take hold. Household spending showed a smaller than expected 10.6% slide versus the projected 11.7% drop while the national core CPI climbed from 2.0% to 2.2%. The unemployment rate also improved from 3.5% to 3.4%, although average cash earnings showed a mere 0.1% uptick.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi was in a weak spot for most of the day, as the RBNZ indicated that they could still cut rates if needed. Canada posted better than expected monthly GDP data with a flat reading instead of the estimated 0.1% contraction. In Australia, the PPI showed a better than expected 0.5% uptick. No other reports are lined up from these economies today.

By Kate Curtis from Trader’s Way

429

USD

The US dollar managed to make a bit of a recovery on Friday, despite weaker than expected data from the economy. The ISM manufacturing PMI fell short of expectations when it held steady at 51.5 instead of improving to the estimated 52.1 reading. Construction spending was also weaker than expected with a 0.6% decline instead of the estimated 0.5% uptick. For today, only the US factory orders report is lined up as traders brace themselves for bigger reports due later on.

EUR

The euro was able to hold on to its recent gains when data from the euro zone came in mostly in line with expectations. The headline CPI estimate for April improved from -0.1% to 0.0% while the core CPI estimate was unchanged at 0.6%. However, data from Germany fell short of consensus, as retail sales and hiring showed weakness. The jobless rate in the region also failed to improve from its 11.3% reading when analysts were expecting to see a drop to 11.2%. Final manufacturing PMI readings are due from the euro zone’s top economies today.

GBP

The pound was in a weak spot last Friday, as the UK manufacturing PMI turned out to be a disappointment. The index slipped from a downgraded 54.0 reading to 51.9 instead of improving to the estimated 54.6 figure. Mortgage approvals was also subpar at 61K versus the consensus at 64K. For today, UK banks are on holiday and traders are focusing on the potential impact of the upcoming election on the pound.

CHF

The franc continued to advance against the dollar last week, even though Swiss banks were on a holiday last Friday. The Swiss manufacturing PMI is up for release today and an improvement from 47.9 to 48.2 is eyed. This should reflect a smaller contraction in the industry, which might allow the franc to resume its climb.

JPY

The yen gave up ground to its counterparts despite relatively stronger than expected data from Japan. The national core CPI improved from 2.0% to 2.2% while household spending showed a smaller than expected slide. Japanese banks are on holiday today, which suggests limited liquidity in the Asian trading session.

Commodity Currencies (AUD, NZD, CAD)

The comdolls took a hit on Friday even though data from China came in line with expectations. The final manufacturing PMI for April was unchanged at 50.1 while the non-manufacturing PMI dipped from 53.7 to 53.4. However, the HSBC final manufacturing PMI released earlier today indicated a downgrade from 49.2 to 48.9, reflecting a sharper contraction in the industry. In Australia, building approvals ticked up by 2.8% versus the projected 1.7% decline.

By Kate Curtis from Trader’s Way

430

USD

Most dollar pairs were stuck in consolidation at the start of the week, as most traders were still off on a May Day holiday and there were no major reports printed. Today has the US ISM non-manufacturing PMI on tap and analysts are expecting to see a dip from 56.5 to 56.2, reflecting a slower pace of expansion in the services industry. Another weaker than expected reading could force the dollar to return more of its recent gains.

EUR

The euro was able to hold on to its recent wins against its forex rivals, as data from the euro zone came in mixed. Spain’s manufacturing PMI fell from 54.3 to 54.2 instead of improving to 54.6 while Italy’s manufacturing PMI climbed from 53.3 to 53.8. In France, the final manufacturing PMI reading was downgraded from 48.4 to 48.0, reflecting a sharper contraction in the industry. Germany’s final manufacturing PMI was upgraded from 51.9 to 52.1 while the region’s final PMI reading was also increased from 51.9 to 52.0. The Spanish unemployment change report and EU economic forecasts are lined up for today.

GBP

The pound slid slightly lower in recent trading, as traders continued to price in weak figures for the PMI releases and downbeat expectations for the upcoming elections. The construction PMI is due today and a drop from 57.8 to 57.6 is expected, with a weaker than expected result likely to push pound pairs much lower.

CHF

The franc moved sideways to the dollar but was able to advance against some of its forex counterparts, as the Swiss manufacturing PMI fell slightly below expectations. The reading was unchanged at 47.9, lower than the projected 48.2 figure, indicating that there wasn’t much improvement in the industry last month. There are no reports due from Switzerland today.

JPY

The yen continued to give up ground to the dollar in yesterday’s trading sessions, although Japanese traders were off on a holiday. There are no reports due from Japan today since banks are still closed for the holiday, leaving risk sentiment in the driver’s seat of yen pairs’ price action.

Commodity Currencies (AUD, NZD, CAD)

The comdolls consolidated at their current levels, waiting for the top-tier events this week. The RBA is set to announce its monetary policy statement today and possibly cut interest rates from 2.25% to 2.00% as they hinted at in their previous meeting minutes. Later on, New Zealand will report its employment change and dairy auction figures, with weak readings likely to spur more losses for the Kiwi. Canada’s trade balance is also lined up today.

By Kate Curtis from Trader’s Way

431

USD

The US dollar returned some of its recent wins as traders continue to price in downbeat expectations for the upcoming NFP release. Data from the US was also mostly weaker than expected, with the trade balance falling short of consensus at a deficit of 51.4 billion USD instead of the estimated 41.2 billion USD shortfall. The final services PMI was also subpar at 57.4 versus the initially reported 57.8 reading while the ISM non-manufacturing PMI indicated a climb from 56.5 to 57.8. For today, the APD non-farm employment change report is due and a 192K reading is expected. Yellen is also set to give a testimony today and possibly spark volatility among dollar pairs.

EUR

The euro managed to resume its climb against its forex counterparts when Spain reported a stronger than expected jobs figure. The economy added 118.9K jobs during the period, better than the projected 64.8K drop in joblessness. Spanish and Italian services PMI data are up for release today, along with the final services PMI readings from France and Germany. Euro zone retail sales data is also up for release and a 0.4% dip is eyed.

GBP

The pound bounced back in recent trading even when the UK construction PMI missed expectations. The reading fell from 57.8 to 54.2 in April, reflecting a slower expansion in the industry. Today the services PMI is due and a dip from 58.9 to 58.6 is expected, with a weaker than expected figure likely to spark more pound losses.

CHF

The franc resumed its rallies in recent trading sessions, despite the lack of data from Switzerland. It seems that the Swiss currency simply took its cue from the euro, which was able to regain ground yesterday. Today could be the same story as there are no reports due from Switzerland while the euro zone has a bunch of potential market movers lined up.

JPY

The yen tossed around in recent trading as Japanese traders were still out for the holiday yesterday. Japanese banks are still closed today, which could mean limited movement in the Asian trading session and the lack of a general direction for the Japanese yen, unless risk sentiment takes control of price action.

Commodity Currencies (AUD, NZD, CAD)

The Aussie and Kiwi suffered another round of selling when economic data came in weak. New Zealand reported a 0.7% quarterly increase in hiring, lower than the projected 0.8% gain and the previous 1.2% rise. In Australia, retail sales was weaker than expected at a 0.3% increase versus the estimated 0.4% gain and the previous 0.7% uptick. Canadian Ivey PMI is up for release later on and a climb from 47.9 to 50.1 is expected.

By Kate Curtis from Trader’s Way

432

USD

The US dollar was once again in a weak spot since data from the economy fell short of expectations and hinted of further weakness down the line. The ADP non-farm employment change showed a 169K increase in hiring versus expectations of a 199K gain for April while the previous month’s reading suffered a downgrade. This set the tone for another NFP disappointment, which could lead to lower expectations of a Fed rate hike this year and more losses for the dollar. Only the US initial jobless claims and Challenger job cuts data are due today.

EUR

The euro continued to climb against most of its forex counterparts in recent trading, as traders liquidated their previous short positions in hopes that the region’s debt troubles are about to be solved. Economic data came in mostly stronger than expected, as Spain and Italy showed better than expected services PMI readings. However, retail sales came in weaker than expected with a 0.8% decline versus estimates of a 0.4% dip. German factory orders, French industrial production, and trade balance are up for release today and strong readings could keep the euro afloat.

GBP

The pound made a quick recovery when the services PMI showed stronger than expected results. The reading climbed from 58.9 to 59.5 instead of falling to the projected 58.6 figure. There are no reports due from the UK today as traders focus their attention on the elections and the possibility of seeing either a minority government or a coalition government, both of which might weigh on the currency moving forward.

CHF

The franc resumed its climb in recent trading sessions, despite the lack of top-tier reports from Switzerland. For today, the SECO consumer climate report is due, along with the Swiss foreign currency reserves. Improvements in consumer sentiment could allow the franc to extend its rally while the foreign currency reserves report could show if the SNB intervened recently.

JPY

Most yen pairs had limited movement in recent trading sessions, as Japanese traders are still on holiday. There have been no reports released from Japan, which means that risk sentiment is primarily responsible for yen price action lately. There are still no reports lined up from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls weren’t able to take much advantage of dollar weakness, as the Aussie and Kiwi are weighed down by dovish monetary policy biases. Australia reported a weaker than expected retail sales figure and a downside surprise in its latest jobs report, following New Zealand’s bleak quarterly employment release. Canada’s Ivey PMI was stronger than expected at 58.2, representing a huge jump from the previous 47.9 reading. Canadian building permits are due later today.

By Kate Curtis from Trader’s Way

433

USD

The US dollar had a mixed performance against its forex counterparts, as traders closed their open positions ahead of the NFP release. Early labor indicators have been printing mixed signals, with the ISM manufacturing PMI and ADP non-farm employment change readings hinting at weak figures and the ISM non-manufacturing PMI and initial jobless claims data suggesting an upside surprise. Analysts expect to see 228K in hiring gains for April, which might be enough to bring the jobless rate down from 5.5% to 5.4%. An upside surprise could renew the dollar’s rally while weak data could push it much lower.

EUR

The euro gave back some of its recent gains when data from the region came in weaker than expected. Germany reported a 0.9% increase in factory orders, lower than the projected 1.6% gain, while France showed a 0.3% decline in industrial production instead of the estimated 0.1% uptick. The French trade balance was also weaker than expected at a 4.6 billion EUR deficit versus the estimated 3.5 billion EUR shortfall. Germany will release its industrial production and trade balance figures today and more disappointments could spur more euro selling.

GBP

The pound surged up the charts when the UK elections ended and early polls suggested a potential Conservative victory. Still, the possibility of a hung parliament or a coalition government is weighing on the currency for now. UK trade balance and Halifax HPI are lined up for today but traders might pay closer attention to the election results when it comes to figuring out longer-term direction for the pound.

CHF

The franc weakened against most of its counterparts despite stronger than expected data from Switzerland. The SECO consumer climate report showed an unchanged reading of -6 versus the estimated slide to -11, indicating that there wasn’t any improvement in sentiment. Meanwhile, Swiss foreign currency reserves were also mostly unchanged, eliminating the possibility of central bank intervention for the previous months. Swiss CPI is due today and a 0.1% uptick in price levels is eyed.

JPY

The yen gave up ground to the dollar but advanced against the comdolls, as it functioned more as a counter currency in recent trading. There have been no major reports out of Japan then, leaving the currency to take its cue from risk sentiment. Earlier today, the BOJ minutes contained no surprises, but did result to a short pop higher among some yen pairs.

Commodity Currencies (AUD, NZD, CAD)

The Aussie and Kiwi were still getting beaten up in recent trading sessions, thanks to the downbeat jobs data from both economies and the possibility of seeing more rate cuts from their central banks. Canada reported a stronger than expected building permits increase of 11.6% but this was overshadowed by the drop in oil prices. Later today, Canada will release its jobs report and possibly show a 4.5K drop in hiring.

By Kate Curtis from Trader’s Way

434

USD

The US non-farm payrolls report came in line with market expectations of a 223K gain, allowing the jobless rate to drop from 5.5% to 5.4% in April. However, the previous data was revised to show a mere 85K increase in hiring, down from the initially reported 126K gain. Average hourly earnings also fell short of expectations as it showed a 0.1% uptick instead of the projected 0.2% gain. Nonetheless, underlying labor indicators such as the participation rate and the underemployment rate reflected sustained improvements and was enough to reassure market watchers that the Fed’s rate hike bias will be maintained.

EUR

The euro continued to slide against the dollar but managed to sustain its climb against its other forex counterparts on Friday. Data from the euro zone came in mostly weaker than expected, as Germany’s industrial production report and trade balance both fell short of consensus. Italy’s industrial production report showed a 0.4% gain, stronger than the projected 0.3% gain, while the previous month’s reading was upgraded to 0.7%. Eurogroup meetings will take place today and positive expectations for the Greek debt talks could keep the shared currency afloat.

GBP

The pound paused from its post-election rally on Friday when traders closed off positions ahead of today’s BOE interest rate statement. No actual changes are expected but BOE Governor Carney is set to maintain his upbeat tone and talk of potential tightening moves. Halifax HPI from the UK last Friday posted strong gains of 1.6% versus the estimated 0.3% uptick.

CHF

The franc gave up its gains to the dollar after the release of the NFP report, as Swiss CPI fell short of expectations. The report indicated a 0.2% monthly decline in price levels versus estimates of a 0.1% uptick. There are no reports lined up from the Swiss economy today.

JPY

The yen gave up ground to the dollar but managed to hold on to its wins against its other forex rivals, despite the lack of top-tier data from Japan on Friday. There are still no reports due from the Japanese economy today, leaving risk sentiment in the driver’s seat of yen pairs’ price action.

Commodity Currencies (AUD, NZD, CAD)

Thecomdolls were still in a weak spot last Friday, especially after the NFP release renewed demand for the dollar. In Canada, hiring data was weaker than expected as the economy lost 19.7K jobs in April versus expectations of a 4.5K decline while the jobless rate held steady at 6.8%. Over the weekend, China printed a weaker than expected CPI reading and announced a surprise interest rate cut – its third one so far this year. No major reports are due from the comdolls today.

By Kate Curtis from Trader’s Way

435

USD

The US dollar had a mixed performance as it managed to advance against most of its forex counterparts but gave up ground to the pound. There have been no major reports out of the US economy at the start of the week and it seems that China’s interest rate announcement weighed on risk sentiment and favored the lower-yielding US dollar. For today, only the medium-tier JOLTS job openings report is due, along with a speech by FOMC member Williams.

EUR

The euro slid lower to its forex rivals when the Eurogroup meetings ended without any debt deal for Greece. Government officials have expressed confidence that they can be able to meet their payment obligations due this week and this might be enough to keep the shared currency afloat for the time being. The focus could then shift to their next set of payments due in June, as there are no major reports due from the euro zone today.

GBP

The pound got a strong boost after the BOE decided to keep interest rates and bond purchases unchanged in their latest rate statement. The rally might’ve simply been a sign of relief after the central bank retained its usual stance even after the UK elections. Traders might now turn their attention to the BOE Inflation Report later on this week and the UK jobs release, as this should shed more light on the country’s economic performance. For today, UK manufacturing production data is due and a 0.3% uptick is eyed.

CHF

The franc continued to slide lower against the dollar, as there were no reports to keep the Swiss currency supported yesterday. There are still no reports due from Switzerland today, leaving the franc functioning more as a counter currency against its forex rivals.

JPY

The yen continued to weaken to the dollar and to most of its forex counterparts when risk sentiment picked up in the Asian session. China’s interest rate cut managed to provide support to Asian equities, allowing the Nikkei to end in the green for Monday. There have been no major reports released from Japan then and none are due today.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi was still in a weak spot against its forex counterparts but the Aussie drew a bit of support from China’s surprise rate cut, as this could boost business activity and demand for raw material exports. NAB business confidence in Australia held steady at 3 in April, signifying the lack of improvement in sentiment. The RBNZ financial stability report is up for release later on, although this might not be enough to pause the Kiwi’s slide.

By Kate Curtis from Trader’s Way

436

USD

The US dollar returned some of its recent wins as risk appetite somewhat improved in the markets and traders also booked profits ahead of the US retail sales release today. Data from the US economy was weaker than expected, as the JOLTS job openings came in at 4.99M versus expectations of a climb from 5.14M to 5.16M. The headline retail sales reading might show a 0.3% uptick for April while the core version of the report could print a 0.4% increase. Stronger than expected data could allow the dollar to recover while weak results could push it lower.

EUR

The euro popped a bit higher despite the lack of reports released from the euro zone since Greece was able to make its repayment to the IMF yesterday. Euro zone preliminary GDP readings are up for release today, with Germany likely to print a 0.5% growth figure and France expected to show a stronger 0.4% expansion compared to its previous GDP. The euro zone flash GDP is expected to come in at 0.5%, higher than the previous 0.3% expansion and enough to support Draghi’s claims that a sustained recovery is taking hold.

GBP

The pound extended its rally in yesterday’s trading sessions thanks to stronger than expected UK manufacturing production data. The report showed a 0.4% gain, higher than the projected 0.3% uptick, while the previous reading was upgraded to show a 0.5% increase. For today, the BOE Inflation Report could add volatility among pound pairs, along with the UK claimant count change release. The jobs report could show a 20.1K decline in joblessness, which could bring the jobless rate down from 5.6% to 5.5%.

CHF

The franc gave back some of its recent wins, as there were no reports to allow the currency to extend its climb. There are still no major reports lined up from Switzerland today, although the franc might take its cue from euro zone GDP data and follow the reaction of the shared currency.

JPY

The yen weakened to most of its forex rivals when risk appetite picked up during the Asian trading session. BOJ Governor Kuroda spoke in front of parliament and clarified that he is not looking to cut interest rates on excess reserves parked in the central bank’s vault. Earlier today, Japan’s current account balance came in better than expected at 2.07T JPY versus the estimated 1.34T JPY surplus.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi was still in a weak spot in recent trading but the Aussie got a boost from upbeat housing data and positive remarks from Fitch regarding the country’s credit rating. Australia also released its government budget and this was taken positively by the Aussie. Chinese industrial production numbers and retail sales data are up for release today.

By Kate Curtis from Trader’s Way

437

USD

The US dollar had a mixed performance in recent trading sessions, despite weaker than expected data from the economy. Headline retail sales showed a flat reading for April instead of posting the projected 0.3% gain while core retail sales indicated a mere 0.1% uptick versus the estimated 0.4% increase. Apart from that, US import prices marked a 0.3% decline instead of showing the estimated 0.3% uptick, suggesting weaker price pressures down the line. For today, US PPI readings and initial jobless claims data are due.

EUR

The euro popped higher against its forex counterparts, thanks to mostly stronger than expected data from the euro zone’s top economies. France posted a higher than expected GDP growth of 0.6% versus the projected 0.4% figure while Italy showed a stronger than expected 0.3% expansion, higher than the projected 0.2% growth figure. Meanwhile, Germany’s GDP reading came in as a disappointment at 0.3% instead of the estimated 0.5% expansion. The region’s flash GDP reading landed at 0.4%, a notch lower than the projected 0.5% GDP figure. French and German banks are on holiday today so there are no reports due from the region.

GBP

The pound experienced additional volatility during the release of the BOE Inflation Report, which revealed that the central bank isn’t likely to hike interest rates anytime this year. It also showed that policymakers downgraded growth forecasts for this year and the next couple of years while citing that inflation could fall into the negative territory before eventually recovering back to their 2% target. Jobs data came in weaker than expected, with the claimant count change showing a mere 12.6K drop in hiring versus the estimated 20.5K decline while the previous reading suffered a downgrade. There are no reports lined up from the UK today.

CHF

The franc recovered to the dollar even though there were no reports out of Switzerland. The Swiss currency drew support from positive developments in the euro zone, as these lowered the odds of further ECB easing and lessened the need for the SNB to intervene and keep the franc weak. There are still no reports due from Switzerland today since Swiss banks are closed for the holiday.

JPY

The yen gave up ground to most of its forex rivals when risk appetite improved in the forex market. There have been no major reports released from Japan, leaving the yen to act as a counter currency. For today, there are still no top-tier reports lined up, although medium-tier data such as the preliminary machine tool orders report could provide clues for the next batch of major reports.

Commodity Currencies (AUD, NZD, CAD)

The comdolls enjoyed a strong recovery in recent trading, particularly for the Kiwi which saw stronger than expected retail sales readings from New Zealand. The country showed a 2.7% jump in headline retail sales for the first quarter and a 2.9% surge in core retail sales. The RBNZ indicated their plans to implement measures to curb housing inflation, which suggests that they could be preparing to lower borrowing costs soon. There are no major reports lined up from Australia and Canada.

By Kate Curtis from Trader’s Way

438

USD

The US dollar managed to regain a bit of ground in recent trading sessions, even though data from the US economy came in mostly weaker than expected. Initial jobless claims were better than expected but the PPI readings indicated that weaker price pressures are to be expected. The headline PPI showed a 0.4% drop instead of the projected 0.1% uptick while the core figure showed a 0.2% decline. For today, the Empire State manufacturing index, preliminary UoM consumer sentiment figure, and the industrial production and capacity utilization reports are due.

EUR

The euro extended its climb against its forex counterparts despite the lack of data from the economy. European banks were closed for the holiday, leaving traders to take their cues from German bond yields and risk sentiment. For today, there are still no reports lined up from the region.

GBP

The pound was able to sustain its recent rallies as data from the UK came in better than expected. The RICS house price balance showed a 33% figure, much higher than the projected 22% reading, while the previous report enjoyed an upward revision. UK construction output is due today, along with the leading index. Better than expected data could allow the currency to end the week with strong gains.

CHF

The franc managed to regain ground in yesterday’s trading sessions even without any help from economic data. The currency followed in the euro’s footsteps and was able to advance against its counterparts. For today, Swiss PPI data is due and a 0.1% decline in producer prices is eyed.

JPY

The yen recovered against some of its currency rivals as risk appetite faded in recent trading. Earlier today, data from Japan showed a 2.1% decline in producer prices and a decline from 41.7 to 41.5 in consumer confidence. Nonetheless, BOJ Governor Kuroda remained confident that no further stimulus is necessary. No other reports are due from Japan today, leaving the yen sensitive to risk flows again.

Commodity Currencies (AUD, NZD, CAD)

The comdolls popped higher at the start of the day, mostly due to upbeat retail sales data from New Zealand, then gave back their gains as risk appetite weakened later on. There have been no reports released from the comdoll economies then while today only has the manufacturing sales report from Canada, which might show a 1.2% rebound.

By Kate Curtis from Trader’s Way

439

USD

The US dollar had a volatile run on Friday, as it gained some ground against its forex counterparts only to give most of it back by the end of the day. Data from the US economy came in weaker than expected, dashing hopes that the Fed might be able to hike interest rates sometime this year. Industrial production slipped by 0.3% instead of showing the estimated 0.1% uptick while the Empire State manufacturing index landed at 3.1, short of the projected improvement to 5.1. The preliminary consumer sentiment index from the University of Michigan was also notably weaker, as the reading slipped from 95.9 to 88.6. There are no major reports due from the US today but a speech by FOMC member Evans is lined up.

EUR

The euro managed to advance against most of its forex rivals even though there were no major reports out of the region then. Renewed optimism surrounding Greece’s ability to make its latest set of debt repayments continued to support the shared currency but it remains to be seen whether this sentiment might last or not. Only a couple of minor reports are due from the euro zone today, as the euro might carry on with its ascent.

GBP

The pound was able to hold on to its recent gains and go for more, as the UK continued to show economic progress. Construction output picked up by 3.9% in March, slightly short of the estimated 4.1% rebound, while the CB leading index showed a 0.2% uptick. Earlier today, the Rightmove HPI showed a 0.1% decline, erasing part of the 1.6% gain seen last time. No other reports are due from the UK today.

CHF

The franc popped lower after the Swiss PPI release but managed to recover quickly, as the currency was lifted by optimism in the euro zone. Producer prices slipped 2.1% in April, worse than the projected 0.1% dip. The Swiss retail sales report is up for release today and a smaller 2.0% annualized decline is expected, compared to the previous 2.7% tumble.

JPY

The yen had a mixed performance, as it gained ground to the comdolls but was weaker against the euro and the pound. There have been no major reports released from Japan last Friday, leaving the yen at the mercy of risk sentiment. Earlier today, Japan reported a 2.9% jump in core machinery orders, stronger than the projected 1.7% rebound. The revised industrial production report and the tertiary industry activity data are due later today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were slightly weaker at the end of the trading week, as bleak data and downbeat central bank biases weighed on the currencies. However, Canada managed to print stronger than expected data during the US session and allowed the Loonie to regain some ground. Manufacturing sales jumped 2.9% in March while foreign securities purchases was significantly higher than expected at 22.47 billion CAD. Canadian banks are closed for the holiday today.

By Kate Curtis from Trader’s Way

440

USD

The US dollar regained some ground against its forex counterparts yesterday, as traders booked profits off key levels ahead of the FOMC minutes release tomorrow. Data from the US has been weaker than expected, with the NAHB housing index falling from 56 to 54 instead of improving to 57. Today, building permits and housing starts data are due. Building permits could climb from 1.04M to 1.06M while housing starts could increase from 0.93M to 1.02M, which might be enough to extend the dollar’s gains. Weaker than expected data, however, could put the Greenback back in selloff mode.

EUR

The euro snapped its recent rallies, as it gave up a lot of its gains to its forex rivals. Optimism for the Greek debt situation seems to have faded since traders are now focusing on the debt-ridden nation’s ability to make its next batch of payments. The German ZEW economic sentiment figure is lined up for today and analysts are expecting to see a drop from 53.3 to 48.8 for May. Also due today is the euro zone final CPI reading and the region’s ZEW economic sentiment figure.

GBP

The pound was unable to sustain its climb in recent trading sessions, as traders closed their positions ahead of today’s CPI release. There have been no reports to provide the pound any support yesterday while today’s inflation reports could show no improvements in price levels. Headline CPI is slated to hold steady at a flat reading while the core CPI might also stay unchanged at 1.0%. Weaker than expected data might lead to more pound losses.

CHF

The franc gave up its recent wins when the Swiss retail sales report printed dismal results. Consumer spending slipped by 2.8% year-over-year in March, worse than the projected 2.0% slide, while the previous month’s reading was downgraded to show a sharper decline of 3.1% from the initially reported 2.7% drop. There are no reports lined up from Switzerland today but SNB official Danthine is set to give a testimony.

JPY

The yen was in a weak spot after Japan printed mostly weaker than expected data. Although core machinery orders marked a stronger than expected 2.9% gain, industrial production and tertiary industry activity both fell short of consensus. There are no reports due from Japan today but speculations of further easing later this year could keep the yen weak.

Commodity Currencies (AUD, NZD, CAD)

The comdolls managed to stay afloat in recent trading, despite weaker than expected PPI from New Zealand. Quarterly producer input prices marked a 1.1% slide versus the projected 0.6% drop while output prices showed a 0.9% slide instead of the estimated 0.1% uptick. Earlier today, New Zealand quarterly inflation expectations improved from 1.8% to 1.9% while the RBA minutes suggested that the central bank might sit on its hands for a while before cutting interest rates again. Later on, the New Zealand dairy auction is set to take place while BOC Governor Poloz has a testimony due.

By Kate Curtis from Trader’s Way

441

USD

The US dollar regained a lot of ground to its forex counterparts, thanks to dovish remarks from European central bank officials. This was enough to bring risk aversion back in the financial markets, lending support to the safe-haven dollar. In addition, data from the US economy has been stronger than expected, with building permits and housing starts both surpassing expectations. For today, the FOMC minutes are up for release and reassuring comments from Fed officials could continue to keep the dollar supported. On the other hand, concerns about the ongoing slowdown in the economy could force the Greenback to return its recent wins.

EUR

The euro suffered a sharp selloff in recent trading, thanks to pessimistic comments from ECB officials. According to ECB Board member Benoit Couere, the central bank might need to lower deposit rates further or to front-load its QE program before summer in order to boost liquidity in the region. ECB official Noyer echoed this sentiment in saying that the central bank stands ready to do more in order to bring inflation closer to the 2% target. Aside from these, EC President Juncker dismissed speculations that a reform proposal has been passed for Greece, increasing the odds of a default or euro zone exit.

GBP

The pound followed in the euro’s footsteps as it returned its recent wins to its forex rivals. UK inflation data was weaker than expected and confirmed the deflation in the economy, as the headline reading showed a 0.1% decline in price levels. The core CPI fell from 1.0% to 0.8%, farther away from the central bank’s 2% target. For today, the BOE minutes are up for release and downbeat remarks could push the pound much lower.

CHF

The franc was also in a very weak spot in recent trading sessions, as risk aversion took over the forex market. There have been no reports released from the Swiss economy then and none are due today, indicating that the franc could take its cue from other European currencies and events.

JPY

The yen took advantage of the run in risk aversion to advance against its forex counterparts, except for the safe-haven US dollar. There have been no reports released from Japan then while today had the preliminary GDP reading on tap. The report indicated a 0.6% expansion, stronger than the projected 0.4% growth figure.

Commodity Currencies (AUD, NZD, CAD)

The comdolls took heavy blows after risk appetite weakened in the financial markets. The RBA meeting minutes provided a bit of support for the Aussie as it suggested that the central bank might wait a few more months before considering another rate cut. Meanwhile, the New Zealand dairy auction showed a 2.2% decline in prices, showing that the downturn in the industry isn’t over yet. Earlier today, Australia reported a 6.4% increase in its Westpac consumer sentiment index.

By Kate Curtis from Trader’s Way