Daily Market Outlook by Kate Curtis from Trader's Way

Commercial Content Analysts
524

USD

The US dollar returned its recent gains when US traders came back from their Labor Day holiday, possibly reacting to the bleak NFP release last Friday. Data from the US showed small improvements, with the NFIB small business index improving from 95.4 to 95.9 and the labor market conditions index rising from 1.8 to 2.1. For today, only the JOLTS job openings report is up for release and a rise from 5.25M to 5.30M is eyed.

EUR

The euro edged slightly higher in recent trading, barely able to take advantage of dollar weakness because of the dovish ECB rhetoric. Data from the euro zone was mixed, as Germany reported a larger trade surplus while France printed a wider deficit. There are no reports lined up from the euro zone today.

GBP

The pound was able to bounce back to action in recent trading sessions, despite the lack of top-tier data from the UK yesterday. Today still has an empty economic calendar, which suggests that the British currency might take its cue from risk sentiment.

CHF

The franc scored small gains in recent trading, as the Swiss jobless rate simply came in line with expectations and held steady at 3.3%. There are no reports due from the Swiss economy today, which means that a bit of consolidation might be seen.

JPY

The yen gave up ground in yesterday’s trading sessions when risk appetite appeared to improve in the markets. Data from Japan was mostly stronger than expected, with the GDP revised to show a smaller contraction for Q2 and the current account balance revealing a wider surplus. However, the Economy Watchers sentiment index dipped from 51.6 to 49.3, reflecting pessimism. Consumer confidence and preliminary machine tool orders data are due today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls staged strong rebounds yesterday, as commodity prices and risk appetite picked up. Australia’s NAB business confidence index slumped from 4 to 1 in August, reflecting a downturn in optimism, while China’s trade balance indicated large declines in both imports and exports. Earlier today, Australia printed its Westpac consumer confidence index and showed a 5.6% drop. Later today, the BOC and RBNZ interest rate decisions are lined up, with the latter expected to cut rates and the former likely to stand pat.

By Kate Curtis from Trader’s Way

525

USD

The Greenback was in a weak spot in yesterday’s trading sessions even though there were no major reports out of the US economy. Risk appetite appeared to improve, as higher-yielding currencies stayed supported. Initial jobless claims and import prices data are lined up for today, with the former likely to show a drop from 282K to 279K and the latter expected to indicate a 1.7% drop. Crude oil inventories are also due today.

EUR

The euro carried on with is recovery to the dollar, despite the lack of data from the euro zone. For today, French industrial production and non-farm payrolls data are due, but these reports aren’t likely to spur huge moves.

GBP

The pound made a quick recovery yesterday as traders probably booked profits off their short positions ahead of today’s event risks. The BOE is set to make its monetary policy statement and released the minutes of its meeting as well, revealing how many policymakers voted to keep rates and asset purchases unchanged. Recall that one MPC member voted to hike rates previously so it will be interesting to see if he would maintain this hawkish outlook given the recent financial slump in China and global equities.

CHF

The franc continued to move sideways but was able to score a few gains against the dollar yesterday. There have been no reports released from Switzerland then and none are due today, keeping risk sentiment in charge of price action.

JPY

The yen gave up ground to its forex rivals when PM Abe said that the government plans on raising the corporate tax next year while a BOJ policymaker suggested the possibility of further easing. Data from Japan was weaker than expected, with the core machinery orders report showing a 3.6% slump versus the projected 3.4% increase. PPI was also weaker than expected, indicating potentially lower inflationary pressures down the line.

Commodity Currencies (AUD, NZD, CAD)

The comdolls sold off in recent trading, most especially the Kiwi since the RBNZ cut interest rates from 3.00% to 2.75%. The BOC decided to keep rates on hold at 0.5% but acknowledged the potential risks from China and falling commodity prices. Australia’s jobs report showed a larger than expected 17.4K gain in hiring, enough to bring the jobless rate from 6.3% to 6.2%. China reported a stronger than expected 2.0% CPI reading but its PPI marked a 5.9% slump versus the estimated 5.6% drop.

By Kate Curtis from Trader’s Way

526

USD

The US dollar gave up further ground in recent trading sessions, as risk appetite continued to improve. Data from the US came in mostly in line with expectations, with the initial jobless claims report showing a drop from 281K to 275K in unemployment claimants. Import prices were down 1.8%, slightly worse than the projected 1.7% decline and the previous 0.9% drop. For today, PPI readings and the preliminary UoM consumer sentiment index is due. Producer prices could show a 0.1% decline while consumer confidence might see a dip from 91.9 to 91.4.

EUR

The euro extended its gains versus the dollar and the yen, despite mixed medium-tier data from the euro zone. French non-farm payrolls ticked up by 0.2% while industrial production slumped by 0.8% instead of picking up by 0.3%. A few more more medium-tier reports are lined up today, although risk sentiment might be responsible for pushing euro pairs around.

GBP

The pound scored some gains after the BOE interest rate statement even though the central bank opted to keep rates and asset purchases unchanged as expected. Minutes of their meeting revealed that policymakers aren’t very worried about the downturn in China and it’s potential impact on the British economy, as the UK fundamentals are relatively strong. Only one member voted to hike rates, citing that the projected pickup in inflation is enough reason to warrant tightening. Only the construction output, consumer inflation expectations, and a speech by MPC member Forbes are lined up from the UK today.

CHF

The franc was also able to advance against the dollar, despite the lack of data from Switzerland. There are still no reports due from the Swiss economy today, which suggests that the currency could take its cue from euro action or overall market sentiment.

JPY

The yen continued to lose traction in recent trading sessions, spurred by the pickup in risk appetite and the dovish outlook from the BOJ. Data from Japan was weaker than expected, with producer prices and core machinery orders both falling by 3.6%. Earlier today, Japan’s BSI manufacturing index showed an improvement from -6.0 to +11.0, reflecting a return to optimism for the current quarter.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to limit their losses, despite the recent RBNZ rate cut. Crude oil inventories came in at 2.6 million barrels for the US, causing a bit of a decline for prices due to rising stockpiles. Earlier today, New Zealand showed a climb in its Business NZ manufacturing index from 53.7 to 55.0, showing a pickup in expansion. No other reports are due from the comdoll economies today.

By Kate Curtis from Trader’s Way

527

USD

The US dollar gave up ground to some of its rivals because of weaker than expected retail sales figures.
Headline retail sales increased by only 0.2% instead of the estimated 0.3% rise while the core version of the report printed a meager 0.1% uptick versus the projected 0.2% gain. CPI readings are lined up for today, with the headline figure slated to show a flat reading and the core figure likely to print a 0.1% increase. Another round of weak figures could spur more losses for the dollar while strong data could set off a rebound.

EUR

The euro struggled to stay afloat after data from the euro zone came up short of expectations. The German ZEW economic sentiment index slipped from 25.0 to 12.1, worse than the projected drop to 18.5. The region’s ZEW index tumbled from 47.6 to 33.3, lower than the projected 42.1 figure. Final CPI readings are due from the euro zone today and no changes to the initially estimated 0.2% headline figure and 1.0% core figure are expected.

GBP

The pound gave up ground when UK inflation reports reflected a slight downturn in price levels as expected. The headline CPI fell from 0.1% to 0.0% in August while the core CPI dipped from 1.2% to 1.0%, taking the recent declines in commodity prices into account. Jobs data is due from the UK today and the economy probably added 5.1K positions for August, enough to keep the jobless rate unchanged at 5.6%.

CHF

The franc resumed its selloff to the dollar, following weaker than expected reports from the euro zone. There have been no figures out of Switzerland yesterday, although the economy printed dismal PPI and retail sales reports the other day. For today, the Swiss ZEW economic expectations index is up for release and a drop from the earlier 5.9 reading could spur more franc losses.

JPY

The yen regained some ground after the BOJ statement, which reflected no change in monetary policy as expected. Japanese policymakers downgraded forecasts for exports and output, accounting for the downturn in demand from its trade partners. One board member voted to taper asset purchases and adopt a more flexible inflation-targeting scheme but he was outvoted by majority of the policymakers.

Commodity Currencies (AUD, NZD, CAD)

Comdolls were able to stay afloat and advance against the US dollar in recent trading. Data from New Zealand was better than expected, with the dairy auction yielding a 16.5% gain in prices and the current account balance showing a slightly smaller deficit than expected. Canadian manufacturing sales and foreign securities purchases data are lined up for today then New Zealand has its Q2 GDP on tap for the next Asian trading session.

By Kate Curtis from Trader’s Way

528

USD

The US dollar tossed and turned during the recent NY trading session, as traders treated the Greenback as a counter currency for their trades instead of picking a clear direction.Traders are also probably reducing their dollar holdings ahead of today’s FOMC statement. The Fed is widely expected to keep interest rates unchanged, possibly citing the slowdown in China and the tumble in commodities as enough reason to stand pat. Also lined up are the Fed’s revised economic projections, which might provide better clues on when the liftoff might take place.

EUR

The euro resumed its slide after the region reported downgrades in its CPI readings for August. The headline CPI was revised from 0.2% to 0.1% while the core CPI was downgraded from 1.0% to 0.9%. There are no major reports due from the euro zone today, but the overall mood seems bearish since the inflation reports reminded traders that the ECB is open to further easing if necessary.

GBP

The pound had a volatile reaction to the UK jobs data but managed to stay in the lead at the end of the day. The economy lost 1.2K jobs in August versus expectations of a 5.1K increase but the unemployment rate still improved from 5.6% to 5.5%. In addition, wage growth picked up from 2.3% to 2.9% in the three months ending in July, hinting at stronger consumer spending down the line. For today, the August UK retail sales report is due and a 0.2% uptick is eyed.

CHF

The franc erased some of its recent wins despite the improvement in the Swiss ZEW economic expectations index from 5.9 to 9.7. Traders probably reduced their franc holdings ahead of today’s SNB statement, as this central bank is known for jawboning their currency or even intervening in the forex market. Keep in mind that the SNB might be a little more dovish this time since the ECB has already expressed its willingness to ease again.

JPY

The yen lost ground to most of its forex rivals even though Japan didn’t release any reports yesterday. Risk appetite seemed to improve during the Asian trading session, but it remains to be seen whether the yen pairs’ gains can be sustained during the FOMC statement. USDJPY moves often spill over to other yen pairs during this event, as any reduction of dollar holdings could mean more demand for other low-yielding currencies like the yen.

Commodity Currencies (AUD, NZD, CAD)

The comdolls managed to score some gains due to the reduction in oil inventories and the pickup in prices. New Zealand printed a weaker than expected GDP of 0.4% for Q2, but this was still better than the previous 0.2% expansion. There are no major reports due from these comdoll economies today, leaving commodity currencies to take their cue from oil and gold prices during the FOMC decision.

By Kate Curtis from Trader’s Way

529

[B]USD[/B]

The US dollar suffered a sharp selloff after the FOMC statement since the Fed refrained from hiking interest rates.There was only one member who called for a rate hike but he was outvoted by the rest of the committee who pointed out the risks stemming from China. Fed officials upgraded their growth forecast for 2015 but downgraded their estimates for the next two years. Despite that, 13 out of 17 central bankers still believe that a liftoff is possible before the end of the year.

[B]EUR[/B]

The euro was able to take advantage of dollar weakness and surge past its other forex counterparts yesterday. There have been no reports out of the region yesterday while today has only the current account balance on tap. The surplus is expected to narrow from 25.4 billion EUR to 21.3 billion EUR.

[B]GBP
[/B]
The pound managed to advance against most of its forex rivals, despite weaker than expected UK retail sales data. Consumer spending ticked up by only 0.2% in August as expected but the previous report was downgraded to show a flat reading. There are no reports due from the UK today but BOE member Haldane is scheduled to give a speech.

[B]CHF[/B]

The SNB decided to keep monetary policy unchanged as expected while jawboning their currency in saying that they’re open to intervening in the forex market if necessary. SNB officials sounded more dovish than usual, especially since the ECB has also expressed openness to further easing. There are no reports lined up from the Swiss economy today.

[B]JPY[/B]

The yen took advantage of dollar weakness but was unable to score wins against the rest of its forex peers. Japan’s trade balance showed a smaller deficit of 0.36 trillion JPY from the earlier 0.38 trillion JPY, but the components of the report revealed a decline in both imports and exports, which reflects a downturn in local and international demand. The BOJ meeting minutes are due today.

[B]Commodity Currencies (AUD, NZD, CAD)
[/B]
The comdolls were barely able to sustain their gains against the dollar, as risk aversion seemed to weigh on these higher-yielders. There have been no reports out of the comdoll economies yesterday while today has Canada’s CPI reports on tap. The headline CPI could show a flat reading while the core CPI is slated to post a 0.2% uptick.

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

530

USD

The US dollar was back with a vengeance on Friday, as traders booked profits of their short dollar trades after the FOMC statement. There were no major reports out of the US economy then while today has the existing home sales and a speech from FOMC member Lockhart. Any remarks favoring a rate hike this year could keep the US currency supported while cautious comments suggesting a delay in the liftoff could spur losses.

EUR

The euro barely reacted to the Greek election results, as the shared currency is still being weighed down by the dovish rhetoric from the ECB. Greek Prime Minister Tsipras has been able to stay in power, ensuring that the bailout program can be implemented in time for the creditors’ international review before the end of the year. Only the German PPI report is due from the euro zone today and producer prices are slated to show a 0.3% decline.

GBP

The pound retreated against most of its rivals on Friday, despite the lack of top-tier releases from the UK. BOE member Haldane gave a speech then and assured that the UK economy is staying resilient amid the downturn in other parts of the globe. There are no reports lined up from the UK today.

CHF

The franc returned its recent wins to the dollar on Friday, as there were no reports to give the franc any support. There are still no reports lined up from Switzerland today, which suggests that franc pairs might be sensitive to risk sentiment.

JPY

The yen gave up ground to the dollar and even gapped down over the weekend, but the Japanese currency has been able to advance against the rest of its peers when risk aversion stayed in play. There were no reports released from Japan on Friday and none are due today, suggesting that sentiment could stay in control of price action.

Commodity Currencies (AUD, NZD, CAD)

The comdolls returned their recent wins to the dollar and gave up further ground to the Japanese yen when risk aversion came back in play. Canada’s inflation reports came in line with expectations, as the headline CPI showed a flat reading while the core CPI printed a 0.2% uptick. Over the weekend, New Zealand’s Westpac consumer sentiment index showed a drop from 113 to 106, indicating a sharp decline in optimism. Visitor arrivals ticked up by 0.2% while credit card spending improved from 9.8% to 10.5%. BOC Governor Poloz is set to give a testimony later today.

By Kate Curtis from Trader’s Way

531

USD

The lack of any top-tier reports from the US or other major economies spurred a mixed performance among dollar pairs in recent trading. Traders are still weighing in on the latest FOMC statement and the Fed’s decision to keep rates on hold for the time being while upgrading growth forecasts for the year. There are still no major reports out of the US economy today, with only a speech by Fed official Lockhart lined up.

EUR

The euro was still in a weak spot yesterday, with traders bearish on the shared currency ahead of the PMI releases and Governor Draghi’s speech. The euro failed to draw enough support from the Greek election results, which more or less ensured that the current bailout program will be implemented without much conflict. Only the euro zone consumer confidence index is up for release today and no change from the previous -7 reading is eyed.

GBP

The pound managed to advance against some of its forex rivals in recent sessions, when the UK Rightmove HPI indicated a 0.9% rebound. There were no other reports out of the UK yesterday but it seems that the currency is drawing support from positive BOE rhetoric. UK public sector net borrowing and CBI industrial order expectations data are due today, along with a speech by BOE member Shafik.

CHF

The franc was still paling in comparison to its forex peers, as it mostly took its cue from euro weakness. There have been no reports out of Switzerland yesterday and none are due today, which suggests that the dovish SNB rhetoric might keep weighing the Swissy down.

JPY

The yen was stuck in consolidation against the comdolls but managed to chalk up gains against the euro. Yen traders are still out on a holiday until tomorrow, which explains the sideways movement of most yen pairs.

Commodity Currencies (AUD, NZD, CAD)

The comdolls resumed their slide, as traders are projecting weak data from the Caixin manufacturing PMI release later this week. Data from New Zealand showed some improvements in visitor arrivals and credit card spending, but these weren’t enough to get rid of speculations that the RBNZ is bound to announce another rate cut within the year. In Canada, wholesale sales data showed a flat reading instead of the projected 0.3% increase. Earlier today, Australia reported a 4.7% increase in house prices for the previous quarter, highlighting the housing boom in Sydney.

By Kate Curtis from Trader’s Way

532

USD

The US dollar advanced against its forex rivals when risk aversion returned to the financial markets, with the euro and pound chalking up the largest losses. Data from the US economy was mixed, with the HPI showing a larger than expected 0.6% increase versus the projected 0.4% gain and the Richmond manufacturing index tumbling from 0 to -5. Fed official Lockhart emphasized that he’s counting on a rate hike for the year, reviving demand for the US dollar. US crude oil inventories and another speech by Lockhart are lined up today.

EUR

The euro was in for a heavy beating yesterday, despite the lack of top-tier data from the euro zone. Traders were likely pricing in expectations for today’s events, namely the PMI releases and a speech by ECB Governor Draghi. He is expected to repeat the central bank’s dovish bias while citing the recent downgrades in inflation figures. The PMI readings are generally expected to show weakness, underscoring the ECB’s willingness to ease if necessary.

GBP

The pound suffered a selloff when data from the UK came in weaker than expected. The public sector net borrowing report showed a larger deficit of 11.3 billion GBP instead of the projected 8.7 billion GBP deficit while the previous reading suffered a downgrade to show a smaller surplus. The CBI industrial order expectations index fell from -1 to -7 to show a decline in order volumes. There are no reports due from the UK today but MPC member Broadbent has a testimony due.

CHF

The franc took its cue from the euro and sold off against most of its forex rivals, as traders predicted that any easing from the ECB would likely be followed by SNB intervention. The Swiss trade balance was actually better than expected at a surplus of 2.87 billion CHF versus the projected 2.78 billion CHF reading, but this was a smaller surplus compared to the earlier month.

JPY

The yen took advantage of the run in risk aversion to advance against the higher-yielding currencies but it was no match to the US dollar. There were no reports released from Japan yesterday since traders are still on a holiday until today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls weakened to the lower-yielding dollar and yen in recent trading sessions when risk aversion popped in. Earlier today, Australia reported a 0.3% increase in its CB leading index, recovering from the previous 0.3% drop. The Chinese Caixin PMI is due today and another fall could spur selling for the comdolls and equities. Canadian retail sales figures are up for release later on, with the headline figure projected to show a 0.5% increase and the core figure expected to show a 0.4% gain.

By Kate Curtis from Trader’s Way

533

USD

The US dollar’s performance was a mixed one, as the currency simply reacted to country-specific events. Data from the US came in line with expectations, as the flash manufacturing PMI held steady at 53.0. Fed member Lockhart reiterated his upbeat tone but this had a minimal effect on the dollar since he already shared the same points in the past. Initial jobless claims and durable goods orders data are lined up today.

EUR

The euro enjoyed a bounce in yesterday’s trading sessions after the region’s PMI readings came in mostly in line with expectations. This was followed by a less dovish speech by ECB head Draghi who said that they’re waiting for more time and evidence to decide if further easing is really necessary. For German central bank head Weidmann, the expansive monetary policy cannot be sustained, especially if the temporary effects of the energy slump start to fade. The German Ifo business climate and GfK consumer sentiment data are up for release today.

GBP

The pound sold off heavily against most of its forex rivals despite the lack of top-tier UK data. For MPC member Broadbent, monetary policy tightening could be warranted as wage inflation continues to pick up. There are still no major reports due from the UK economy today.

CHF

The franc took its cue from the euro to advance against some of its peers even though there were no reports out of Switzerland. The lack of easing bias from the ECB led some franc bears to ease up on their short positions, reducing expectations of easing from the SNB as well. There are no reports due from the Swiss economy today.

JPY

The yen gave up some of its recent wins to the euro but was able to gain traction against the commodity currencies. The return of Japanese traders today could pump up the activity during the Asian trading session, especially since the flash manufacturing PMI from Japan came in below expectations at 50.9 versus the projected 51.3 figure.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were in a weak spot yesterday, thanks to worse than expected data from China. Caixin reported a drop in the manufacturing PMI from 47.3 to 47.0 instead of the estimated improvement to 47.6. In addition, Canada’s core retail sales figure showed a flat reading instead of the estimated 0.4% gain while the previous report suffered negative revisions. In New Zealand, the trade balance missed the consensus of a 875 million NZD deficit and printed a larger 1035 million NZD shortfall plus a downgrade in the earlier report.

By Kate Curtis from Trader’s Way

535

USD

Dollar pairs tossed and turned in the charts yesterday when FOMC head Yellen gave hawkish remarks but economic data failed to support her upbeat bias. According to Yellen, a rate hike is possible this year as long as the headwinds to the domestic economy don’t lead to any negative surprises. However, headline durable goods orders marked a 2.0% decline while the core version of the report printed a flat reading instead of the estimated 0.2% uptick. New home sales surprised to the upside at 552K versus the projected 516K figure. For today, the US final GDP reading for Q2 and revised UoM consumer sentiment index are due.

EUR

The euro gave back some of its recent gains after seeing mixed figures from Germany. The IFO business climate index came in better than expected at 108.5, up from the previous 108.4 figure and higher than the estimated 107.8 reading. However, the GfK consumer climate index marked a drop from 9.9 to 9.6, lower than the estimated 9.8 figure. A speech by ECB member Weidmann is lined up today, along with euro zone data on private loans and M3 money supply.

GBP

The pound got heavier in recent trading since there were no reports out of the UK to give it any support. There are still no major reports lined up from the UK economy today, although the FPC statement could provide additional volatility for pound pairs.

CHF

The franc erased some of its recent wins to its forex rivals even though there were no major catalysts lined up from Switzerland. There are still no reports due from the Swiss economy today, which suggests that the franc could move to the tune of risk sentiment.

JPY

The yen was off to a strong start during the return of Japanese traders after the long holiday but soon gave up its gains when the US dollar advanced. Earlier today, Japan reported a 0.2% decline in its Tokyo core CPI and a 0.1% drop in its national core CPI as expected. No other reports are due from Japan which means that risk sentiment might take control of yen price action.

Commodity Currencies (AUD, NZD, CAD)

The comdolls fell to fresh lows against the dollar and the yen but managed to bounce off near-term inflection points. There have been no major reports out of the comdoll economies yesterday, although the Kiwi was able to get a small boost from Fonterra’s upgraded milk payout forecasts. There are no reports due from these economies today.

By Kate Curtis from Trader’s Way

536

USD

The US dollar was able to cap off a pretty good week, spurred mostly by hawkish remarks from Fed officials. Most FOMC members hinted that they’re open to tightening before the end of the year, although they maintained that inflation remains weak. Data from the US was stronger than expected, with the final GDP reading enjoying an upward revision from 3.7% to 3.9% in Q2. For today, a bunch of FOMC members (Dudley, Tarullo, Evans, and Williams) are set to give more testimonies. Data on personal spending and income are also due, along with pending home sales and the core PCE price index.

EUR

The euro gave up ground on Friday, due mostly to weaker than expected data from the euro zone as private loans and M3 money supply came up short. There are no reports due from the euro zone today, which suggests that the shared currency could take its cue from market sentiment.

GBP

The pound was unable to recover by the end of the week, as there were no reports to give the British currency a boost. BOE MPC member Cunliffe is set to give a speech today and his monetary policy bias might have a huge impact on pound price action.

CHF

The franc followed in the euro’s footsteps and weakened against the dollar, as there were no reports to give the Swiss currency any support back then. There are still no reports lined up from Switzerland today, which suggests that the franc could keep trailing the euro or move to the tune of risk sentiment.

JPY

The yen regained ground on Friday, presumably as traders booked profits off their short yen positions. There have been no reports out of Japan then and none are due today, indicating that market sentiment could stay in the driver’s seat.

Commodity Currencies (AUD, NZD, CAD)

The comdolls ended the week mostly weaker against their currency rivals, as traders continued to price in the potential repercussions of the slowdown in China on the countries’ trade activity. There are no reports lined up from Australia, Canada, and New Zealand for the rest of the day, leaving risk appetite in control of price action.

By Kate Curtis from Trader’s Way

537

USD

The US dollar had a mixed performance, as it gained ground to the pound and comdolls but weakened against the yen and euro. FOMC officials had mixed views on a potential rate hike later this year, as FOMC member Evans expressed concerns about normalizing too soon. However, Fed officials Dudley and Williams sounded more optimistic in saying that a liftoff is likely to take place this year. Pending home sales was much weaker than expected with a 1.4% decline while personal spending showed a stronger than expected 0.4% gain. Personal income lagged with a bleak 0.3% uptick. US CB consumer confidence data is due today.

EUR

The euro managed to gain ground against the dollar and the comdolls, despite the lack of top-tier data from the region. The polls in Catalonia, Spain don’t seem to be weighing on the shared currency so far, although this could set a precedent for cities looking to break away. German and Spanish preliminary CPI readings are due today and sharp declines might spur euro weakness.

GBP

The pound continued to sell off against its counterparts, despite the lack of any clear catalysts. Traders seem to be unwinding their previous long positions spurred by rate hike expectations, as recent reports from the UK seem to suggest that tightening will be pushed back further. UK net lending to individuals and CBI realized sales data are up for release today.

CHF

The franc followed in the euro’s footsteps and advanced against its rivals, as risk aversion came into play. There were no reports out of Switzerland yesterday and none are due today, suggesting that the current trend might carry on.

JPY

The yen was able to take advantage of the run in risk aversion, as Asian equities are mostly weaker. There were no reports out of Japan yesterday while today also has an empty docket, indicating that sentiment could keep pushing yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The comdolls resumed their slide in recent trading sessions, weighed down by falling commodity prices and concerns in China. News reports showed that the Chinese government is being more open to foreign investment and that the PBOC might be ready to ease again, putting risk aversion back in play. There are no reports lined up from the comdoll economies today.

By Kate Curtis from Trader’s Way

538

USD

The US dollar was off to a strong start when risk sentiment weakened during the Asian trading session but gave back its recent wins when higher-yielders regained ground later on. Data from the US was better than expected, with the CB consumer confidence index rising from 101.3 to 103.0, reflecting stronger optimism. For today, the ADP non-farm employment change report is due and it might show a climb from 190K to 192K, suggesting a possible upside surprise in the NFP. Also lined up today is the Chicago PMI and a testimony by Fed head Yellen.

EUR

The euro continued to advance against most of its forex peers, albeit at a slightly slower pace. Data from the euro zone was weaker than expected, as the German preliminary CPI indicated a 0.2% drop versus the projected 0.1% decline while the Spanish flash CPI came in at -0.9% versus -0.6%. Employment and consumer spending reports are lined up from France and Germany today, with strong figures likely to give the shared currency another boost.

GBP

The pound was still unable to recover in recent trading, despite stronger than expected data from the UK. Net lending to individuals came in at 4.3 billion GBP versus the projected 4.1 billion GBP figure while the CBI realized sales index jumped from 24 to 49. UK current account balance and final GDP readings are up for release today, as strong data could allow the UK currency to gain traction.

CHF

The franc advanced to the dollar once more, even though there were no reports out of Switzerland. Today has the KOF economic barometer on tap and a climb from 100.7 to 101.2 is expected, possibly spurring more gains for the Swiss currency.

JPY

The yen raked in gains during the earlier trading sessions, thanks to falling Asian equities. Earlier today, Japan printed a weaker than expected 0.8% gain retail sales versus the projected 1.2% annualized increase. Industrial production was also weaker than expected since the report showed a 0.5% drop instead of the estimated 1.1% gain while the previous reading suffered a downgrade.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were off to a shaky start but managed to hold on to their current levels when risk appetite returned in the latter trading sessions. Underlying inflation readings from Canada came in better than expected while New Zealand reported a climb in its ANZ business confidence index from -29.1 to -18.1. Australian building approvals data is still due and a 1.8% decline is eyed. Later on, Canada will release its monthly GDP reading and the US will print its latest crude oil inventories update.

By Kate Curtis from Trader’s Way

539

USD

The US dollar had a mixed performance after data from the economy came in mixed. The ADP non-farm employment change beat expectations with a 200K gain versus the projected 192K increase and the previous 186K rise, spelling positive prospects for Friday’s NFP report. However, the Chicago PMI came in below consensus at 48.7 down from the previous 54.4 reading, indicating a slump to industry expansion. Initial jobless claims and the ISM manufacturing PMI are due today, with the former expected to show a 273K figure and the latter likely to print a drop from 51.1 to 50.8.

EUR

The euro suffered a nasty selloff against its forex rivals when the euro zone CPI estimates showed that deflation is taking place. The headline CPI came in at -0.1% versus the projected 0.0% figure, dragged down by an 8.9% drop in energy prices. The core CPI held steady at 0.9% as expected, but this didn’t seem to be enough to quash easing speculations. Final manufacturing PMI readings are due from the region today with downbeat results likely to push the shared currency lower.

GBP

The pound slowed down from its recent selloff against the dollar and recovered against the euro, but it was still mostly weaker to the comdolls. UK current account balance came in better than expected while the final GDP was unchanged at 0.7% for Q2. The UK manufacturing PMI is due today and a drop from 51.5 to 51.3 is expected.

CHF

The franc also suffered a selloff yesterday, despite mixed reports from Switzerland. The UBS consumption indicator improved from 1.59 to 1.63 but the KOF economic barometer fell from 101.2 to 100.4. To top it off, the franc was also dragged down by deflation in the euro zone, as the prospect of ECB easing could spur SNB intervention. Swiss retail sales data is due today and a 0.3% rebound is eyed.

JPY

The yen gave up some of its recent wins when risk appetite appeared to improve in the latter trading sessions. Data from Japan was also weaker than expected, with retail sales showing a smaller than expected 0.8% gain and the preliminary industrial production report showing a surprise 0.5% decline. Earlier today, the Tankan survey indicated a fall in the manufacturing component from 15 to 12 and a climb in the non-manufacturing component from 23 to 25.

Commodity Currencies (AUD, NZD, CAD)

The comdolls made a decent rally against the European currencies and the safe-havens, as commodity prices picked up slightly. This was partly spurred by the stronger than expected Canadian monthly GDP reading of 0.3% and the Chinese PMI readings coming in line with expectations. The official government manufacturing PMI ticked up from 49.7 to 49.8 while the Caixin version was upgraded from 47.0 to 47.2. There are no other reports due from the comdoll economies for the rest of the day.

By Kate Curtis from Trader’s Way

540

USD

The US dollar had a mixed performance in recent trading sessions, as traders are probably squaring off their positions ahead of the US NFP release today. Data from the US came in mostly weaker than expected, with the initial jobless claims report showing a 277K figure and the ISM manufacturing PMI falling from 51.1 to 50.2. The jobs report is expected to show a 201K increase in hiring for September, up from the previous 173K gain. Stronger than expected figures could fuel rate hike expectations for the Fed, possibly resulting to a dollar rally.

EUR

The euro regained a bit of ground in recent trading when data from the euro zone came in mostly in line with expectations. Only the Italian manufacturing PMI missed the mark while the German and French final PMI readings were unchanged. The Spanish unemployment change report is up for release today and a 17.9K increase in joblessness is eyed.

GBP

The pound staged a small rebound yesterday when the UK manufacturing PMI came in line with expectations. The figure fell from 51.6 to 51.5 in September, slightly higher than the projected 51.3 figure. For today, the construction PMI is due and a climb from 57.3 to 57.5 is expected, although traders might want to wait until the release of the services PMI next week.

CHF

The franc was still in a weak spot after Switzerland reported a weaker than expected retail sales figure. Consumer spending fell by 0.3% year-over-year in August instead of showing the projected 0.3% increase. There are no reports due from the Swiss economy today.

JPY

The yen gave up ground to its forex rivals, as data from Japan has been coming in weaker than expected. Earlier today, the country reported an increase in joblessness, as the unemployment rate ticked up from 3.3% to 3.4%. Household spending, on the other hand, came in strong with a 2.9% gain versus the projected 0.4% uptick. There are no other reports lined up from Japan, leaving market sentiment in control of yen price action.

Commodity Currencies (AUD, NZD, CAD)

The comdolls strengthened in recent trading sessions, after Chinese PMI readings came in mostly in line with expectations. Australia reported a 0.4% increase in retail sales as expected, enough to bounce back from the previous 0.1% decline. No other reports are lined up from the comdoll economies today, which suggests that they might take their cues from commodity movements.

By Kate Curtis from Trader’s Way

541

USD

The US dollar sold off sharply against its forex rivals when the NFP report came in way below expectations. The report indicated a mere 142K increase in hiring instead of the projected 201K gain while the previous reports were downgraded to a total of 59K in negative revisions. The jobless rate still held steady at 5.1% as expected but wage growth was absent. The US ISM non-manufacturing PMI is due today and a fall from 59 to 58 is eyed.

EUR

The euro took advantage of dollar weakness and the pickup in risk appetite at the end of the week, even though data from the region came in below consensus. The Spanish unemployment change report showed a 26.1K increase in joblessness versus the projected 17.9K rise and the previous 21.7K increase. Final services PMI readings from the euro zone’s largest economies are due today, along with the Sentix investor confidence index.

GBP

The pound managed to take a break from its recent slide against the dollar on Friday, as the UK construction PMI came in better than expected. The figure climbed from 57.3 to 59.9, reflecting a faster pace of industry expansion in September. For today, the services PMI is due and a rise from 55.6 to 56.4 is expected. This might have a larger impact on pound price action since the services sector contributes more to overall economic growth.

CHF

The franc was able to advance against its forex peers in recent trading, as market participants sought another safe-haven alternative after seeing the dismal US NFP. There were no reports released from Switzerland then and none are due today, keeping the franc sensitive to risk flows.

JPY

The yen gained ground to the dollar on Friday, even though the reports from Japan came in mixed. Household spending picked up by 2.9% year-over-year while the jobless rate increased from 3.3% to 3.4% in the same month. Earlier today, the average cash earnings report showed a weaker than expected rise in wages of 0.5% versus the projected 0.7% figure.

Commodity Currencies (AUD, NZD, CAD)

The comdolls took advantage of dollar and yen weakness on Friday, as commodities also drew a bit of support as well. Australian retail sales came in line with expectations of 0.4% growth while today’s ANZ job advertisements release showed a 3.9% jump in listings. No other reports are due from the comdolls today, keeping risk sentiment in play.

By Kate Curtis from Trader’s Way

542

USD

The dollar had a mixed performance against its peers, although it was generally weaker due to the downbeat NFP release last week.

Data from the US came in weaker than expected, as the ISM non-manufacturing PMI fell from 59.0 to 56.9, worse than the projected fall to 58.0. The US trade balance is up for release today and a wider deficit is eyed, possibly indicating a fall in export activity.

EUR

The euro continued to chalk up losses against its higher-yielding forex counterparts, as the euro zone final services PMI readings came in mixed. Spain and Italy posted weaker than expected results while France printed an upward revision and Germany’s reading was downgraded slightly. Euro zone retail sales came in flat instead of showing the projected 0.1% dip. German factory orders data is due today and a 0.5% rebound is eyed.

GBP

The pound struggled to end its decline in recent trading sessions, but was pushed lower by a bleak services PMI figure. The report showed a drop from 55.6 to 53.3 instead of the projected rise to 56.4, indicating that industry growth slowed down in September. There are no major reports lined up from the UK today.

CHF

The franc could be in for a bit more volatility today since Switzerland is set to print its latest CPI reading. The report could show a 0.1% uptick in price levels after falling by 0.2% in the previous month, but weaker than expected data could mean more losses for the franc.

JPY

The yen sold off heavily against its forex rivals, as risk appetite appeared to improve yesterday and traders priced in downbeat remarks from the BOJ in this week’s rate statement. Japanese average cash earnings data was weaker than expected with a 0.5% uptick instead of the estimated 0.7% increase. There are no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to advance against their counterparts in recent trading sessions, thanks to the pick up in commodity prices and the return in risk appetite due to forecasts of a delayed Fed rate hike. Australia’s ANZ job advertisements picked up by 3.9% indicating better hiring prospects while the RBA kept rates on hold at 2.00% earlier today. In New Zealand, the NZIER business confidence index slipped from 5 to -14 but traders seem to be awaiting positive results from the upcoming dairy auction. Canada’s trade balance and Ivey PMI are also on today’s docket.

By Kate Curtis from Trader’s Way

543

USD

The US dollar reacted mostly to risk sentiment and continued to weaken against its forex rivals, as data from the economy simply came in line with expectations.

The trade deficit widened from 41.8 billion USD to 48.3 billion USD, indicating a 2% decline in exports and an increase in shipments coming from China. For today, only the crude oil inventories report is due and this might have more of an impact on the Loonie rather than the Greenback.

EUR

The euro resumed its advance to the dollar in recent trading sessions, despite weaker than expected data from Germany. Instead of printing the estimated 0.5% rebound, Germany factory orders slipped by 1.8% and the previous reading was downgraded to show a 2.2% tumble. German industrial production and French trade balance numbers are due today and more weak figures could erase the euro’s recent gains.

GBP

The pound managed to make a bit of recovery in yesterday’s trading sessions, even though the Halifax HPI from the UK came in below expectations. The report showed a 0.9% drop in house prices instead of the projected 0.1% uptick. For today, the UK manufacturing production figure is due and it might show a 0.4% rebound from the previous 0.8% decline.

CHF

The franc advanced against its forex peers when the Swiss CPI came in line with expectations of a 0.1% uptick. For today, data on foreign currency reserves is due and a large increase in holdings could suggest currency intervention by the SNB, which might drive the franc lower again.

JPY

The yen was still in a weak spot leading up to today’s BOJ rate statement, as investors are pricing in dovish remarks from the central bank. Data from Japan has been mostly disappointing recently, which might factor in the central bank’s decision. No actual policy changes are expected for now.

Commodity Currencies (AUD, NZD, CAD)

The comdolls continued to advance against their peers in recent trading sessions, supported by the pickup in dairy prices in New Zealand and the RBA’s decision to stand pat. The latest GDT auction recorded a 9.9% increase in prices, marking its fourth consecutive bi-weekly gain and signaling a bottom in the dairy industry. In Canada, the trade balance and Ivey PMI came in weaker than expected. Canadian building permits data is due today and a 0.5% increase is expected.

By Kate Curtis from Trader’s Way

544

USD

The US dollar had a mixed performance once more, as it gave up ground to most of its forex peers but advanced to the euro and the franc. There have been no major reports out of the US yesterday, leaving the dollar to act mostly as a counter currency. For today, the FOMC minutes are up for release and might contain some upbeat remarks from Fed officials. However, traders are likely to take this in light of the recent NFP disappointment, possibly brushing off strong hints about a liftoff later this year.

EUR

The euro was still in a weak spot yesterday, particularly against commodity currencies. There have been no major reports out of the euro zone, as traders seem to be bracing themselves for more dovishness in the ECB meeting minutes to be released today. Keep in mind that it was during the September meeting when Draghi admitted that they’re open to further easing if inflation falls further, and support from his other policymakers could weigh on the euro.

GBP

The pound was able to stage a decent rebound in yesterday’s trading sessions, thanks to an upbeat UK manufacturing production figure. The report showed a 0.5% increase versus the projected 0.4% rise, following a positive revision in the previous reading. Industrial production was also better than expected with a 1.0% gain versus the projected 0.3% uptick. The BOE rate statement and MPC meeting minutes are due today, with reassuring remarks likely to extend the pound’s rallies.

CHF

The franc gave up ground to the dollar, even though the Swiss foreign currency reserves didn’t confirm any large intervention moves by the SNB. Traders seem to be trading the Swissy carefully ahead of the ECB meeting minutes release, as dovish remarks could lead the Swiss central bank to ease as well. The Swiss jobless rate is also due today and a climb from 3.3% to 3.4% is eyed.

JPY

The yen was off to a weak start as traders anticipated dovish remarks from the BOJ, but the safe-haven currency was able to regain ground during the latter sessions. The central bank kept monetary policy unchanged as expected, acknowledging the recent slump but maintaining its outlook that the economy would continue to recover moderately. Earlier today, the core machinery orders report printed a surprise 5.7% slide versus the projected 3.3% increase.

Commodity Currencies (AUD, NZD, CAD)

The comdolls carried on with their rallies, despite weaker than expected building permits data from Canada and an increase in oil stockpiles in the US. The latest dairy auction in NZ yielded a 9.9% gain in prices, providing support for the Kiwi throughout the day. Canadian housing starts data is due today, although the return of Chinese traders from their holiday could also spur volatility among higher-yielders today.

By Kate Curtis from Trader’s Way