Daily Market Outlook by Kate Curtis from Trader's Way

Commercial Content Analysts
504

USD

The US dollar lost ground to its major counterparts when traders quickly booked profits after the PBOC’s yuan devaluation announcements. Some analysts are speculating that this could weigh on Fed rate hike prospects if it results to a decline in exports from other nations, particularly those shipping raw materials to China. US retail sales data is up for release today and traders are expecting to see a 0.4% rebound in core consumer spending and a 0.6% increase in headline retail sales. Initial jobless claims and import prices data are also on today’s docket.

EUR

The euro continued to advance against most of its rivals, as all seemed well in Greece. Data from the euro zone was weaker than expected though, with the region’s industrial production and Italian trade balance both missing expectations. For today, the German and French final CPI readings are due, along with the ECB minutes.

GBP

The pound initially sold off after the release of the UK jobs data, as the average earnings index showed a sharper than expected decline from 3.2% to 2.4% versus the projected 2.8% reading. However, the pound managed to regain ground upon seeing better than expected claimant count change data, which indicated a 4.9K drop in joblessness. Apart from that, the previous reading was revised to show a smaller increase in claimants. There are no reports due from the UK today.

CHF

The franc regained a bit of ground to the dollar and the euro but was still in a weak spot. Swiss ZEW economic expectations showed a nice recovery from -5.4 to +5.9, indicating potential improvements down the line. Swiss PPI is due today and a 0.2% decline in producer prices is eyed.

JPY

The yen advanced against the dollar and most of its forex peers, as profit-taking took place and risk aversion set in during the Asian session. Data from Japan was better than expected, with the industrial production figure upgraded and the tertiary industry activity index printing a higher than expected 0.3% uptick. Earlier today, however, the core machinery orders report printed a worse than expected 7.9% tumble.

Commodity Currencies (AUD, NZD, CAD)

The comdolls managed to recoup their losses after the Chinese central bank’s yuan devaluations, as traders closed out their recent positions. Data from China was mostly weaker than expected, with industrial production, retail sales, and fixed asset investment falling short of expectations. In Australia, the MI inflation expectations index improved from 3.4% to 3.7%. New Zealand retail sales are up for release in the late US session or early Asian trading session.

By Kate Curtis from Trader’s Way

505

USD

The US dollar regained ground in recent trading, as risk aversion seemed to set in the financial markets. Commodity prices have been falling to multi-year lows, triggering flight to safety. US retail sales figures came in line with expectations of a 0.4% increase in core retail sales and a 0.6% gain in headline consumer spending. US PPI, industrial production and capacity utilization, as well as the preliminary UoM consumer sentiment figure are lined up for today and strong data could reinforce speculations of a Fed rate hike in September.

EUR

The euro continued to advance against most of its forex rivals when Greece moved on to secure its third bailout. Medium-tier data from the euro zone came in line with expectations when France showed a -0.4% CPI reading and Germany printed a 0.2% uptick in price levels. Preliminary GDP readings are lined up for today, as well as euro zone final CPI data.

GBP

The pound resumed its climb against its peers even though there were no major reports released from the UK. There are still no reports lined up from the UK today, leaving risk sentiment as the main driver of pound price action.

CHF

The franc showed another round of losses in recent trading when the Swiss PPI showed a worse than expected 0.3% decline in producer prices versus the projected 0.2% dip. This could keep the SNB on intervention watch in an effort to ward off deflationary pressures. There are no reports due from Switzerland today.

JPY

The yen took advantage of the run in risk aversion to advance against most of its currency counterparts. However, data from Japan was actually weaker than expected, with core machinery orders showing a 7.9% drop versus the projected 5.3% decline. There are no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls suffered another round of losses yesterday when gold and oil fell to six-year lows. As it turns out, the yuan devaluation could mean weaker demand for both commodities in the local Chinese market, which might then weigh on prices. Data from New Zealand was weaker than expected, as the quarterly retail sales report showed a mere 0.1% uptick for both headline and core figures. Canadian manufacturing sales data is due today and a 2.3% increase is projected.

By Kate Curtis from Trader’s Way

506

USD

The US dollar had a mixed performance on Friday, as traders reacted mostly to currency-specific data and booked profits ahead of the weekend. US headline PPI came in better than expected with a 0.2% gain versus the expected 0.1% uptick while the core PPI showed a 0.3% increase. Capacity utilization was in line with consensus while industrial production was better than expected at 0.6%. The preliminary UoM consumer sentiment figure fell short of expectations at 92.9. For today, the Empire State manufacturing index is due and a climb from 3.9 to 5.0 is eyed.

EUR

The euro gave back some of its recent wins despite news that the third bailout package was passed by the Greek parliament and European creditors. This week, the event risks associated with this is the actual payment of the ECB deadline on August 20. Data from the euro zone was mostly weaker than expected on Friday, with the preliminary GDP readings from the top economies falling short of expectations. For today, only the euro zone trade balance is due.

GBP

The pound edged slightly higher in recent trading sessions, even though there were no major reports released from the UK. Earlier today, the Rightmove HPI showed a 0.8% decline in prices, leading to a bit of weakness for the pound. There are no other reports due from the UK today.

CHF

The Swiss franc could be in for more volatility than usual today with the Swiss retail sales up for release during the London trading session. After printing a 1.8% annualized decline during the previous release, a 0.6% drop is expected this time. Stronger than expected data could lead to a bit of gains for the franc while weak data could spur more losses.

JPY

The yen had a mixed performance as it mostly acted as a counter-currency on Friday. Earlier today, the Japanese GDP release showed a slightly better than expected result, although it still indicated a 0.4% contraction for Q2. No other reports are due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were still in a weak spot last week due mostly to the drop in gold and oil prices. There were no reports released from Australia, New Zealand, and Canada then while today has the foreign securities purchases report from Canada. Further declines in oil and gold could weigh on their price action while a rebound could pave the way for some gains.

By Kate Curtis from Trader’s Way

507

USD

The US dollar regained a bit of ground in yesterday’s trading sessions, despite weaker than expected data from the economy. The Empire State manufacturing index fell from 3.9 to -14.9 instead of rising to the projected 5.0 figure. Meanwhile, the NAHB housing index showed a pickup from 60 to 61, short of the estimated 62 reading. For today, building permits and housing starts data are due and traders are expecting to see a drop from 1.34M to 1.23M for the former and a rise from 1.17M to 1.19M for the latter.

EUR

The euro lost ground in recent trading when the IMF showed reluctance to be part of the third bailout for Greece. There have been no major reports out of the region yesterday and none are lined up today, indicating that Greek bailout updates could continue to set the tone for euro movements.

GBP

The pound was stuck in consolidation recently as traders are still waiting for the UK CPI to be released today. Another flat reading is expected for the headline CPI while the core CPI might show a 0.8% year-over-year increase. Producer prices are expected to chalk up a sharper 1.8% drop compared to the previous 1.3% slide, with additional downside bias due to the recent slump in oil prices. Stronger than expected data could give the pound a boost while weak readings could trigger a selloff.

CHF

The franc sold off against most of its peers when the Swiss retail sales data missed expectations. The report showed a 0.9% annualized slide, worse than the projected 0.6% drop but better than the previous 1.8% tumble. There are no reports lined up from the Swiss economy today, which suggests that risk sentiment and euro zone updates might affect the franc.

JPY

The yen continued to tread carefully against its forex counterparts after Japan showed a 0.4% contraction for Q2. Even though this was slightly better than the projected 0.5% decline in GDP, components of the report reflected declines in exports, investment, and consumer spending. There are no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls managed to keep their heads above water in recent trading as near-term support areas prevented further losses. Commodities are still looking weak, with oil and gold eyeing further downside. New Zealand will have its global dairy trade auction in the late US session and possibly show a small rebound in prices as Russia removed its ban on milk imports from the country. NZ PPI is also due and a 0.5% decline in input prices is expected.

By Kate Curtis from Trader’s Way

508

USD

The US dollar had a mixed performance as it functioned as a counter currency in recent trading sessions. Traders are probably reducing their positions ahead of the release of the FOMC minutes today, which could provide more clues on when the Fed might hike interest rates. Indications that they’re ready to hike in September could spur gains for the Greenback while cautious comments could push rate hike expectations further and lead to a selloff. US CPI readings are also due today and a 0.2% in the headline reading is eyed.

EUR

The euro was in a weak spot in recent trading sessions as the IMF still refused to get on board with the third Greek bailout. With that, Germany signaled that they’re willing to grant debt relief to help the Greek economy meet its budget targets. Note that Greece has a loan payment due to the ECB tomorrow and a higher chance of meeting this obligation could mean gains for the euro. Only the euro zone current account balance is due today.

GBP

The pound enjoyed strong gains after the UK CPI figures came in better than expected. Headline inflation landed back at 0.1% instead of holding steady at the projected flat reading while the core version of the report improved from 0.8% to 1.2%. Producer prices showed a 0.9% decline, half the projected 1.8% tumble, but house price inflation came in slightly weaker than expected. There are no reports due from the UK today.

CHF

The lack of data from Switzerland kept the franc in tight consolidation against the US dollar, possibly because traders are waiting for the FOMC minutes to be released and for the Greek bailout to fall through. There are still no reports due from Switzerland today but US and euro zone updates could push USDCHF around.

JPY

The yen advanced against most of its peers as risk appetite was weak yesterday. Earlier today, Japan reported a weaker than expected trade balance, showing a deficit of 0.37T JPY versus the projected 0.18T JPY shortfall. This suggests that exports have really weakened and that production could see a downturn later on. No other reports are lined up from Japan today, leaving risk sentiment at the helm.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi enjoyed a bit of volatility in the past few hours, thanks to the Global Dairy Trade auction and the quarterly PPI release. Dairy prices saw a 14.8% gain in the latest auction but this wasn’t enough to erase the declines seen in the past few month. PPI readings were also slightly better than expected but not enough to convince traders that New Zealand could withstand another fall in commodities. There are no other reports due from the comdoll economies but the US crude oil inventories report might affect oil prices and the Loonie.

By Kate Curtis from Trader’s Way

509

USD

The US dollar suffered a sharp selloff after the release of the CPI and FOMC minutes since both seemed to show that a September rate hike might be pushed back further. Headline and core inflation showed feeble 0.1% gains, lower than the consensus of 0.2% increases in both reports. Meanwhile, the FOMC minutes showed that policymakers are seeing improvements in the labor market but are concerned that inflation could still weaken. Nonetheless, one FOMC member was willing to hike rates in July but was fine with waiting for additional data anyway. For today, initial jobless claims, existing home sales, and Philly Fed index are due.

EUR

The euro managed to soar against its forex rivals when the German parliament voted in favor of the bailout plan for Greece. Recall that Germany was only willing to get on board if the IMF would also be supportive of the bailout, and the latter has required some form of debt relief. This suggests that Greece can be able to meet its upcoming loan obligation to the ECB this week and might be able to work towards achieving its budget targets sooner or later. There are no major reports due from the euro zone today.

GBP

The pound edged slightly higher in recent trading sessions, but there were no reports released from the UK yesterday. Traders are still probably keeping the currency supported due to the stronger than expected inflation reports the other day. For today, the UK retail sales report is due and a 0.4% rebound from the previous 0.2% decline is expected.

CHF

The franc regained ground to the dollar, thanks to positive updates from Greece and the less hawkish FOMC minutes. There have been no reports released from Switzerland yesterday while today has the trade balance on tap. Analysts are expecting to see a smaller trade surplus of 2.59 billion CHF compared to the previous 3.51 billion CHF.

JPY

The yen advanced against most of its peers in recent trading, spurred mostly by the USDJPY selloff after the FOMC minutes were released. Data from Japan has been weaker than expected, with the trade balance reflecting a larger than expected fall in exports and the all industries activity index posting a meager 0.3% gain. There are no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls managed to hold on to their gains to the dollar but were mostly weaker against their other forex peers. Gold enjoyed a small rebound yesterday after the FOMC minutes were released, but the Aussie barely benefitted from this. Crude oil inventories showed an oversupply, driving prices down along with the Canadian dollar. Canadian wholesale sales data is due today and a 1.0% gain is eyed.

By Kate Curtis from Trader’s Way

510

USD

The US dollar gave up ground to its forex rivals despite stronger than expected data from the economy. Existing home sales jumped from 5.48M to 5.59M while the Philly Fed index improved from 5.7 to 8.3. Initial jobless claims was worse than expected at 277K versus the projected 272K figure and the previous 273K reading. For today, only the flash manufacturing PMI is lined up and a climb from 53.8 to 53.9 is eyed.

EUR

The euro made a strong ascent across the board when Greece finally received its third set of bailout funds and made its loan repayment to the ECB. Greek Prime Minister Alex Tsipras announced his resignation and called for an early election, which might prompt political trouble in the country and lead to a lack of momentum in implementing economic reforms. For now, the shared currency is still drawing support from the release of the third bailout and might be pushed around by the flash manufacturing and services PMIs from Germany and France.

GBP

The pound was weighed down by weaker than expected UK retail sales, which indicated a mere 0.1% uptick instead of the projected 0.4% increase. On a positive note, the previous reading was revised from -0.2% to -0.1%. Only the public sector net borrowing report is due today and a 2.3 billion GBP surplus is eyed, which might be positive for the pound.

CHF

The franc advanced against the dollar after Switzerland printed a better than expected trade balance for July. The surplus widened from 3.51 billion CHF to 3.74 billion CHF, reflecting an improvement in trade activity. No reports are due from Switzerland today but the franc could take its cue from the euro zone data.

JPY

The yen was able to advance against most of its counterparts, except for the euro, as risk aversion supported the lower-yielding currency. There have been no reports released from Japan yesterday while today had the flash manufacturing PMI lined up. The report showed a climb from 51.2 to 51.9, slightly lower than the projected 52.1 figure.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were still under selling pressure, despite stronger than expected wholesale sales data from Canada. The report showed a 1.3% gain versus the projected 1.0% rebound, suggesting better than expected retail sales data for today. The headline figure is slated to show a 0.2% uptick while the core figure could show a 0.6% gain. Also due from Canada are its CPI readings.

By Kate Curtis from Trader’s Way

511

USD

The US dollar suffered a sharp selloff against the yen and the euro, mostly due to the bloodbath in the equity market. Apart from that, lower odds of a Fed rate hike in September are also leading investors to close off their long dollar holdings. Data from the US was weaker than expected, with the flash manufacturing PMI falling from 53.8 to 52.9 instead of ticking up to 53.9. There are no reports due from the US today but FOMC member Lockhart is set to testify.

EUR

The euro managed to advance against most of its forex rivals despite the slump in European equity markets last week. News that Greece finally got its hands on the third set of bailout funds and paid its obligations to the ECB was able to spur a relief rally for the shared currency while PMI readings from the top economies showed resilience. Most of the manufacturing and services PMIs from Germany and France came in line with expectations and showed small improvements. There are no reports due from the euro zone today.

GBP

The pound was also able to rake in some gains against its rivals, except for the Japanese yen. Data from the UK was closely in line with expectations, as the public sector borrowing report showed a surplus instead of a deficit. Apart from that, rate hike expectations from the BOE are still in play, providing the pound support against the commodity currencies. No reports are due from the UK today.

CHF

The franc took advantage of dollar weakness last Friday and was also able to make profits in the name of risk aversion. There have been no reports released from Switzerland then, but the franc also got a boost from euro zone PMI readings. No reports are due from the Swiss economy today.

JPY

The yen was a big winner last Friday, thanks to the surge in risk aversion spurred by the equity market selloff. There have been no major reports released from Japan, but traders flocked to the lower-yielding currency as Asian markets tumbled. There are still no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The Aussie and Kiwi managed to stem their losses against the dollar but gave up a lot of ground to most of their major counterparts. Oil prices fell below the $40/barrel level, triggering further losses for the Canadian dollar. Retail sales figures from Canada came in better than expected while the CPI readings were in line with consensus.

By Kate Curtis from Trader’s Way

512

[B]USD[/B]

The US dollar had a mixed performance in recent trading, as it suffered a sharp selloff then rebounded later on. It was able to advance against the commodity currencies but paled in comparison to the yen and European currencies. There have been no major reports out of the US yesterday but it looks like the global equity meltdown might be enough to force the Fed to delay their liftoff to December or even next year. US CB consumer confidence, flash services PMI, and new home sales data are up for release today.

[B]EUR[/B]

The euro was able to score gains against most of its forex rivals, although it gave up some ground to the lower-yielding dollar and yen. There have been no reports out of the euro zone yesterday, but it looks like the end of the Greek debt drama has allowed the shared currency to rally. German Ifo business climate numbers are up for release today and analysts are expecting the index to dip from 108.0 to 107.6.

[B]GBP[/B]

The pound managed to hold steady against the dollar and advance against the comdolls but was no match to yen and euro strength. There have been no reports released from the UK yesterday, leaving the pound to draw support from the relatively hawkish BOE stance and improved UK fundamentals. There are still no reports lined up from the UK today.

[B]CHF[/B]

The franc was able to outpace the dollar and the commodity currencies, despite the lack of data from Switzerland. It seems that the threat of SNB intervention is still keeping the Swissy’s gains limited but it has taken advantage of the risk-off market environment. Swiss employment level data is due today and a climb from 4.23M to 4.24M is eyed, which might mean more gains for the franc.

[B]JPY[/B]

The yen continued to rally against its forex rivals in recent trading sessions, thanks to the risk-off environment and sharp selloff in Asian equities. There have been no reports released from Japan yesterday and none are due today, suggesting that the yen could keep reacting to market sentiment.

[B]Commodity Currencies (AUD, NZD, CAD)
[/B]
The comdolls were still the weakest of the bunch, as the stock market selloff dampened demand for commodities and higher-yielding currencies. There were no reports out of Australia, New Zealand, and Canada yesterday while today has the Australian and Chinese CB leading index. The former showed a 0.2% decline while the latter showed a 0.9% increase. Also released today was New Zealand’s quarterly inflation expectations which stayed unchanged at 1.9%.

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

513

USD

The US dollar made a pretty strong rebound during the New York trading session, as equities showed a recovery. Data from the US came in mixed, with the CB consumer confidence index climbing from 91.0 to 101.5 and outpacing the consensus at 92.8. New home sales came in short of expectations but still showed a gain from 481K to 507K. Durable goods orders data is due today and a 0.4% decline in the headline figure is eyed while the core figure could show a 0.3% uptick. FOMC member Dudley is set to testify today and his remarks could influence Fed rate hike expectations.

EUR

The euro weakened slightly but soon resumed its bounce against its forex rivals when European equities showed gains. Data from the euro zone was better than expected, as Germany showed a climb from 108.0 to 108.3 in its Ifo business climate index instead of printing a decline to 107.6. There are no reports due from the euro zone today.

GBP

The pound gave up ground to the dollar but managed to regain ground against the commodity currencies. There have been no reports released from the UK yesterday while today has only medium-tier data on tap. BBA mortgage approvals and the CBI realized sales report are lined up, with strong readings likely to spur pound rallies.

CHF

The franc gave up ground to the dollar in recent trading sessions, despite Swiss data coming in line with expectations. The employment level climbed from 4.23M to 4.24M in the latest quarter, signaling jobs growth. There are no reports due from Switzerland today.

JPY

The yen continued to advance against its forex counterparts when risk appetite remained weak during the Asian trading session. Chinese and Japanese equities continued to chalk up losses, before the PBOC decided to announce an interest rate cut. There have been no reports released from Japan lately and none are due today, indicating that risk sentiment could continue to push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were still on weak footing yesterday, despite the rebounds that occurred for other major currencies. The PBOC announced an interest rate cut in order to keep the economy afloat, but this did very little to boost sentiment for the commodity currencies. In New Zealand, the trade deficit came in at 649 million NZD, wider than the previous 194 million NZD shortfall, signaling a decline in exports. US crude oil inventories are due today and a large oversupply could drive prices lower.

By Kate Curtis from Trader’s Way

514

Oil Outlook: Brent $40 floor, $35 written all over WTI Crude

Chris ‘oil’ Williams, City Investor and City Financial Writer, joined Zak Mir and Mike Ingram, to discuss his views on the current oil market and his future predictions.

The supply side: Saudi Arabia trying to blow everyone out the water

Williams noted the situation surrounding Saudi Arabia, with the conclusion that its economy can’t maintain this looking forward, and that with it facing a budget deficit of 20% of its GDP, it cannot continue on the course of lower prices for much longer. In contrast, he added how OPEC countries are decreasing their production as a result of maintenance or political issues, with Venezuela facing the second type of problem. When concerning Iran, it will be opening up at the end of the year, but Williams believes that the market has already priced this in. US shale forecast shows a reduction from 9.6 to 9 million barrels a day, with the majority of shale being hedged about $70-80 a barrel. However, he also commented that with hedges coming off in September-October time, production will have to stop or be significantly reduced.

Brent breaks $45 level, WTI to $35, and BP offering 7.2% yields

Williams began by outlining the situation with Brent Crude, with his opinion judging this down to $40, which was a 2009 low, after breaking the $45 level. In terms of WTI Crude, he highlighted how the $35 level is written all over it. Watch the video for the technical outlook of oil stocks

See more at: Oil Outlook: Brent $40 floor, $35 written all over WTI Crude | TipTV.co.uk

515

USD

The US dollar managed to regain a lot of lost ground in yesterday’s trading sessions when risk aversion extended its stay in the markets. In addition, data from the US was stronger than expected, with the headline durable goods orders showing a 2.0% jump and the core figure indicating a 0.6% gain. US preliminary GDP, initial jobless claims, and pending home sales reports are lined up for today and another batch of strong figures could renew dollar demand. The Jackson Hole Symposium is also set to start today but Yellen’s absence has dampened expectations for a Fed announcement.

EUR

The euro gave back its recent wins to its rivals, despite the lack of any reports from the euro zone yesterday. Traders seem to be reverting to the lower-yielding dollar and Japanese yen, dumping their riskier euro holdings in the process. There are still no major reports due from the euro zone today, which suggests that market sentiment could continue to play a role in euro price action.

GBP

The pound suffered a sharp selloff against its forex peers in yesterday’s sessions, even though there wasn’t any major catalyst for the drop. Analysts say that this was spurred by Cable’s inability to break past key resistance levels, forcing traders to liquidate their pound positions instead. Only the Nationwide HPI report is due from the UK today, leaving traders to hold out for the top-tier UK second GDP estimate and quarterly business investment report due tomorrow.

CHF

The franc followed in the euro’s footsteps and weakened against its forex counterparts, even though the Swiss UBS consumption indicator showed a climb from 1.61 to 1.64. There are no reports due from Switzerland today.

JPY

After a bit of consolidation and profit-taking, the yen resumed its rally against its counterparts in yesterday’s trading session. The Nikkei managed to chalk up a decent win for the day, although risk appetite generally remained weak. There have been no reports out of Japan yesterday and none are due today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were still in a weak spot yesterday, but some managed to score wins against the European currencies. Oil saw a slight rebound, thanks to the drop in US crude oil inventories. Earlier today, Australia reported a 4.0% drop in private capital expenditure and a downgrade in the previous report. No other reports are due from the comdoll economies today, leaving risk sentiment and commodity prices as the main drivers of price action.

By Kate Curtis from Trader’s Way

516

USD

The US dollar managed to stage a strong rally in the US trading session after the Q2 GDP reading enjoyed a large upward revision from 2.3% to 3.7%. However, components of the report showed a significant buildup in inventories, which suggests weak demand and potentially slower business production in the next months. Core PCE price index, along with personal spending and income reports, are lined up for today.

EUR

The euro gave up its recent wins to the dollar and some of its major counterparts, despite the lack of top-tier data from the region. In Germany, import prices recorded a worse than expected 0.7% drop versus the projected 0.3% decline and the previous 0.5% drop. German and Spanish flash CPI readings are due today and 0.1% declines are eyed for both reports.

GBP

The pound continued its selloff in yesterday’s trading sessions, with no reports from the UK to provide any support. For today, the second GDP estimate for Q2 2015 is lined up and no changes to the initial 0.7% estimate is expected. Preliminary business investment data is also due and this might show a 1.6% gain. Stronger than expected data could allow the pound to recover.

CHF

The franc caved to dollar strength in recent trading sessions, spilling over to other Swissy pairs. Switzerland is set to print its Q2 GDP reading today and analysts are expecting to see a 0.1% contraction to follow the previous -0.2% growth figure. This would put the Swiss economy in recession, which might spur more losses for the franc.

JPY

The yen gave up some of its recent gains, mostly spurred by the sharp rally in USDJPY and the pickup in risk appetite. Earlier today, Japan showed mixed reports, with a weaker than expected household spending figure and stronger than expected core CPI readings in Tokyo and in the rest of the country. Retail sales was also better than expected at 1.6% versus the projected 1.1% increase.

Commodity Currencies (AUD, NZD, CAD)

The comdolls made decent rebounds in yesterday’s trading sessions, spurred by the return in risk appetite. In Australia, private capital expenditure showed a 4.0% drop, worse than the projected 2.5% decline. There are no reports lined up from the comdoll economies today, leaving risk sentiment in control.

By Kate Curtis from Trader’s Way

517

USD

The US dollar had a mixed performance on Friday, but managed to advance against some of its rivals. Data from the US was mostly weaker than expected, as the personal spending figure came in below consensus with a 0.3% gain versus the projected 0.4% increase while the personal income figure showed a 0.4% uptick as expected. The UoM consumer sentiment figure was downgraded from 92.9 to 91.9 versus the projected upgrade to 93.2. For today, only the Chicago PMI is lined up and no changes to the previous 54.7 figure is expected.

EUR

The euro gave back some of its recent wins, as data from the euro zone came in mixed. Germany showed a flat reading for its preliminary CPI while Spain posted a worse than expected 0.4% drop. For today, German retail sales and the flash headline and core CPI readings for the region are due.

GBP

The pound was in a weak spot on Friday, as the UK reports failed to provide strong support. The GDP reading was unchanged at 0.7% as expected while the quarterly preliminary business investment figure showed a stronger than expected 2.9% increase. There are no reports due from the UK economy today.

CHF

The franc enjoyed a bit of volatility on Friday due to the stronger than expected Swiss GDP of 0.2%, allowing the economy to dodge a recession. SNB head Thomas Jordan’s speech managed to erase some of the gains though, as he emphasized that they’re ready to intervene in the forex market if necessary.

JPY

The yen was able to chalk up some gains after seeing strong economic data but gave up ground on risk appetite. Retail sales showed a stronger than expected 1.6% jump versus the projected 1.1% increase while the jobless rate improved from 3.4% to 3.3%. The national core CPI stayed flat instead of showing the projected 0.2% decline. Earlier today, Japan reported a 0.6% decline in preliminary industrial production data for July.

Commodity Currencies (AUD, NZD, CAD)

The Loonie was able to rake in some gains on Friday, thanks to the back-to-back gains in oil prices. Earlier today, New Zealand reported a drop in its ANZ business confidence index from -15.3 to -29.1 while Australia showed a 1.9% drop in company operating profits as expected. Canada’s current account balance is due later on and a smaller deficit is eyed.

By Kate Curtis from Trader’s Way

518

USD

The US dollar was able to hold on to its gains at the start of the week, as risk aversion seemed to return to the financial markets. Data from the US came in slightly weaker than expected, as the Chicago PMI dipped from 54.7 to 54.4 instead of holding steady. For today, the US ISM manufacturing PMI is due and it might show a dip from 52.7 to 52.6, reflecting a weaker pace of expansion. Traders will be more interested to see how the employment index fares to gauge if the August NFP might miss or surpass expectations.

EUR

The euro managed to hold on to its recent wins when data from the region came in mostly in line with expectations. The headline CPI estimate showed a 0.2% gain as expected while the core version of the report indicated a 1.0% increase. Final manufacturing PMI readings are lined up for today and upward revisions could allow the shared currency to gain further ground.

GBP

The pound was still in a weak spot, as UK traders were off on a bank holiday yesterday. Today has the UK manufacturing PMI on tap and no change is expected from the previous 51.9 reading. A drop could mean more pound weakness while a climb could spur gains.

CHF

The franc enjoyed a few gains in recent trading sessions, thanks to the stronger than expected KOF economic barometer reading. The figure climbed from an upgraded 100.4 reading to 100.7, reflecting stronger improvements in the economy. The Swiss manufacturing PMI is due today and a climb from 48.7 to 49.9 is expected.

JPY

The yen managed to hold on to its recent gains as risk aversion returned to the financial markets. Data from Japan was weaker than expected, with the preliminary industrial production report showing a 0.6% drop instead of the projected 0.1% uptick. Earlier today, Japan reported a 5.6% gain in quarterly capital spending versus the projected 9.0% increase.

Commodity Currencies (AUD, NZD, CAD)

The comdolls lost a bit of ground due to China’s weak PMI readings, both from the government and Markit. The RBA decided to keep rates on hold at 2.00% as expected and confirmed that the Aussie is already adjusting to lower commodity prices. The Canadian monthly GDP reading is due today and a 0.2% expansion is eyed for June. Also lined up is the global dairy trade auction in New Zealand.

By Kate Curtis from Trader’s Way

519

USD

The US dollar managed to advance against most of its forex counterparts, despite weaker than expected data from the US economy. The ISM manufacturing PMI fell from 52.7 to 51.1, worse than the estimated dip to 52.6. The employment component recorded a drop of 1.5, reflecting weaker conditions and a potential downside surprise in the NFP. For today, the ADP non-farm employment change report is due and it might show a 204K increase in hiring, stronger than the previous 185K gain.

EUR

The euro was able to hold on to its recent gains, thanks to stronger than expected data from Germany and Italy. The euro zone’s largest economy showed a 7K increase in employment while Italy reported improvements in its monthly and quarterly jobless rates. The Spanish unemployment change report is due today and it might show a 35.3K increase in joblessness, following the previous 74K reduction.

GBP

The pound gave up ground in recent trading sessions due to weaker than expected UK manufacturing PMI. The index slumped from 51.9 to 51.5 instead of holding steady, reflecting a downturn in industry activity. For today, the construction PMI is due and it might show a climb from 57.1 to 57.6, with stronger than expected results likely to spur a pound recovery.

CHF

The franc regained some ground in yesterday’s sessions, as the Swiss manufacturing PMI landed back above 50.0. The index improved from 48.7 to 52.2, higher than the projected 49.9 figure, indicating a strong expansion in the industry. No reports are due from Switzerland today.

JPY

The yen continued to stay strong against its rivals, particularly the commodity currencies, as risk appetite remained weak in recent trading sessions. Chinese equities recorded more declines, confirming that the slowdown isn’t over yet. Data from Japan was weaker than expected, with capital spending rising by only 5.6% in the previous quarter versus the projected 9.0% gain. No reports are due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls resumed their selloff even though New Zealand and Canada reported positive data. The Canadian economy expanded by 0.5% in June, stronger than the projected 0.2% growth, while the Global Dairy Trade auction indicated a 10.9% gain in prices. Weak PMI readings from China may be to blame for the recent drop in risk appetite, as the RBA also sounded somewhat positive with their statement yesterday.

By Kate Curtis from Trader’s Way

520

USD

The US dollar had a mixed trading day, as data from the economy fell short of expectations. The ADP non-farm employment change report showed a mere 190K gain in hiring versus the projected 224K increase while the previous reading was downgraded from 185K to 177K, suggesting a downside surprise for tomorrow’s NFP release. Revised non-farm productivity and unit labor costs were also weaker than expected. Factory orders posted a 0.4% uptick, half of the projected 0.8% increase. For today, the ISM non-manufacturing PMI is due and it might show a drop from 60.3 to 58.3.

EUR

The euro paused from its recent rallies against its forex rivals, despite stronger than expected jobs data from Spain. The economy reported a 21.7K increase in joblessness, lower than the estimated 35.3K gain. Final services PMI readings are due from the euro zone today ahead of the ECB rate decision later on. No actual policy changes are expected but Draghi’s remarks on inflation might be crucial to euro price action.

GBP

The pound was still in a weak spot in recent trading sessions, as the UK construction PMI came in slightly lower than expected. The index climbed from 57.1 to 57.3, lower than the estimated 57.6 figure. For today, the services PMI is due and this could have a stronger impact on pound movement. The index is expected to rise from 57.4 to 57.6, which might allow the UK currency to recover.

CHF

The franc gave up more ground to the dollar, despite the lack of data from Switzerland. There are still no reports due from the Swiss economy today, leaving the franc sensitive to counter currency moves or euro zone data.

JPY

The yen held on to its recent wins when risk aversion extended its stay in the markets. There have been no reports released from Japan yesterday and none are due today, leaving risk sentiment the main driver of yen price action.

Commodity Currencies (AUD, NZD, CAD)

Comdolls have been looking mostly weaker, even though the Loonie drew some support from the reduction in US crude oil inventories and speculations that the OPEC is ready to discuss production levels. Earlier today, Australia reported a 0.1% decline in retail sales instead of the projected 0.4% increase and a smaller than expected trade deficit of 2.46 billion AUD. Canada’s trade balance is up for release later on and a wider deficit is eyed.

By Kate Curtis from Trader’s Way

521

USD

The US dollar was able to take advantage of the run in risk aversion, thanks to the ECB’s dovish monetary policy statement. Data from the US was also better than expected, as the ISM non-manufacturing PMI dipped from 60.3 to 59.0, better than the projected drop to 58.3. For today, the NFP could prove to be a huge catalyst, as analysts are expecting to see only 215K in hiring gains. Leading employment indicators are mostly suggesting a downside surprise, which might force the dollar to retreat. The jobless rate is expected to fall from 5.3% to 5.2% while average hourly earnings could pick up by 0.2%.

EUR

The euro suffered a sharp selloff when the ECB announced that it is open to further easing. It even downgraded growth and inflation forecasts, underscoring its willingness to act if commodity prices continue to fall. There are no major reports out of the euro zone today, leaving traders to adjust their positions to take the ECB’s dovish stance into account.

GBP

The pound also suffered a decline yesterday when the UK services PMI turned out to be a disappointment. The index fell from 57.4 to 55.6, reflecting a downturn in industry activity. This followed the bleak construction and manufacturing PMI readings from earlier on in the week, increasing the odds of hearing a dovish outlook from the BOE as well. There are no reports due from the UK today.

CHF

The franc took its cue from the euro and lost ground to its rivals, as traders predicted that the SNB might ramp up its intervention efforts if the ECB eases monetary policy. There have been no reports out of Switzerland yesterday while today has the CPI on tap. This could show a 0.2% decline in price levels for August, following the previous 0.6% slide.

JPY

The yen was able to rally when risk aversion kicked in after the ECB statement. There have been no major reports out of Japan, putting the yen in a weak spot earlier in the day due to the absence of Chinese traders. However, the low-yielding currency enjoyed safe-haven flows when the ECB shared a downbeat economic view. There are no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were in a good mood earlier in the day, as the absence of Chinese traders kept risk-off moves in check. However, data from Australia came in mixed, as the retail sales report showed a 0.1% drop while the trade balance indicated a smaller deficit. Crude oil inventories showed 4.7 million barrels in stockpiles but this did little to push oil prices lower, as revisions to US data showed that they were producing fewer barrels than initially reported. Canada is set to print its jobs numbers today and might show a 4.8K decrease in hiring.

By Kate Curtis from Trader’s Way

522

USD

The US dollar tossed and turned after the release of the jobs report, which indicated a weaker than expected headline figure of 173K versus the projected 225K reading. Despite that, the jobless rate improved from 5.3% to 5.1% in August while the participation rate held steady. Average hourly earnings ticked up by 0.3% versus the estimated 0.2% gain while the average workweek also showed an increase in hours. US banks are on Labor Day holiday today, which means that stock trading is closed and that the dollar could be in for consolidation.

EUR

The euro was still in a weak spot at the end of the trading week, following ECB Governor Draghi’s announcement that the central bank is open to further easing. Data from the euro zone was weaker than expected since the German factory orders report indicated a 1.4% slide versus the estimated 0.5% drop. Only the euro zone Sentix investor confidence index is due today and a drop from 18.4 to 16.2 is eyed.

GBP

The pound was barely able to take advantage of dollar weakness, as the British currency was still reeling from the bleak PMI readings. There have been no reports out of the UK on Friday while today has the BRC retail sales monitor on tap. Despite that, pound pairs are expected to move carefully ahead of the BOE statement and MPC minutes later on.

CHF

The franc barely took the lead on Friday, as the Swiss CPI simply came in line with expectations. The report showed a 0.2% drop in price levels for August, following the previous 0.6% decline. Swiss foreign currency reserves data is lined up for today and this should give traders an idea of whether or not the SNB is intervening in the currency market to keep the franc weak.

JPY

The yen continued to advance against its rivals, as risk aversion extended its stay in the financial markets. Average cash earnings came in weaker than expected at 0.6% versus the projected 2.1% increase. Later on, Japan will print its final GDP reading for Q2, current account balance, and Economy Watchers sentiment index.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were still in a weak spot last Friday, despite the rebounds seen in commodity prices that week. Data from Canada was mostly stronger than expected, with the economy adding 17K versus 2K jobs in August. However, the jobless rate ticked up from 6.8% to 7.0% in the same month. Meanwhile, the Ivey PMI improved from 52.9 to 58.0, outpacing the consensus at 53.5. For today, Australia reported a 1.0% increase in ANZ job advertisements, setting the stage for an upbeat jobs report later on. Canadian banks are closed for the holiday.

By Kate Curtis from Trader’s Way

523

USD

The US dollar chalked up small gains against its forex counterparts despite the lack of liquidity in yesterday’s market. US traders were off on a Labor Day holiday and there were no reports from the US economy. For today, only low-tier reports such as the NFIB small business index and labor market conditions index are lined up, leaving the US dollar sensitive to risk flows.

EUR

The euro managed to edge slightly higher against the dollar in recent trading, taking advantage of the absence of US traders. Data from the euro zone was weaker than expected, with the German industrial production report printing a meager 0.7% gain versus the projected 1.2% increase and the Sentix investor confidence figure falling from 18.4 to 13.6. For today, only the German and French trade balance are lined up, along with the revised euro zone GDP reading.

GBP

The pound was able to bounce back in yesterday’s trading sessions even though there were no major reports released from the UK. The UK economic schedule is still empty today, which suggests that the pound might take its cue from market sentiment or that traders might position themselves ahead of the BOE announcement later on.

CHF

The franc regained a bit of ground in recent trading sessions, as the Swiss foreign currency reserves report didn’t indicate any signs of central bank intervention. The Swiss jobless rate is up for release today and it is expected to hold steady at 3.3%.

JPY

The yen was still able to advance yesterday as the return of Chinese investors spurred risk-off moves during the Asian trading session. Data from Japan was mostly stronger than expected, with the current account balance showing a larger surplus and the final GDP reading revised from -0.4% to -0.3%. There are no major reports due from the Japanese economy today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were mostly stuck in consolidation in recent trading, as Canadian traders were also off on a holiday. Data from Australia and New Zealand showed promising results, as the ANZ job advertisements in Australia indicated a 1.0% gain while manufacturing sales picked up by 0.4% in New Zealand for Q2. Earlier today, Australia’s NAB business confidence index for August printed a decline from 4 to 1 but the Chinese trade balance showed a stronger than expected headline reading and a smaller than expected decline in exports.

By Kate Curtis from Trader’s Way