Daily Market Outlook by Kate Curtis from Trader's Way

Commercial Content Analysts
727

USD

The US dollar was able to hold its ground against most of its forex peers when equity indices closed at all-time highs thanks to upbeat earnings data. US building permits and housing starts are up for release today with small improvements eyed, although the currency could continue to take its cue from stock market behavior.

EUR

The euro consolidated to the dollar but continued to advance against its comdoll counterparts. There were no major reports out of the euro zone yesterday while today has the ZEW economic sentiment figures on tap. The index from Germany could fall from 19.2 to 8.2 while the region’s reading is slated to fall from 20.2 to 12.3.

GBP

The pound struggled to stay afloat as traders started pricing in expectations for this week’s reports. For today, the CPI numbers are due and price gains are expected. The headline CPI could rise from 0.3% to 0.4% while the core reading could climb from 1.2% to 1.3%. Stronger than expected data could mean more gains for the pound.

CHF

The franc had a mixed performance as it functioned mostly as a counter currency. There were no reports out of the Swiss economy yesterday while today has an empty schedule as well, keeping market sentiment and country-specific price action in play.

JPY

The yen regained a bit of ground against its peers as risk aversion weighed on the commodity currencies. There were no reports out of Japan yesterday and none are due today so risk sentiment could push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi took another hit when the RBNZ shared its proposal to tighten lending conditions in the housing market, possibly keeping their options for a rate cut if necessary. In Australia, the RBA minutes showed that policymakers were more worried about inflation than they seemed in their actual policy announcement. The Loonie was dragged lower by falling oil prices once more and weaker Canadian foreign securities purchases. New Zealand has its GDT auction coming up next.

By Kate Curtis from Trader’s Way

728

USD

The US dollar got a boost from risk aversion in yesterday’s sessions, thanks to the IMF’s downgrades on global growth forecasts. Building permits and housing starts came in line with expectations. There are no reports due from the US economy today so risk sentiment could be the main driver of price action.

EUR

The euro weakened to the dollar and yen but managed to hold on to its gains against the commodity currencies. Data from the euro zone was weaker than expected, as Germany reported that its ZEW economic sentiment index fell from 19.2 to -6.2 while the region’s reading dropped from 20.2 to -14.7. German PPI and euro zone current account balance are due today.

GBP

The pound was unable to take advantage of stronger than expected CPI readings as the IMF downgraded growth forecasts for the UK and the global economy. Headline CPI rose from 0.3% to 0.5%, outpacing the estimate at 0.4%, while core CPI rose from 1.2% to 1.4% versus the consensus at 1.3%. For today, the jobs figures are up for release. Claimant count could increase by 4.1K versus the previous 0.4K drop while the unemployment rate is expected to hold steady at 5.0%. The average earnings index might rise from 2.0% to 2.3% to show faster wage growth.

CHF

The franc had a mixed performance as it weakened to the dollar but advanced to the comdolls and European currencies. There were no reports out of the Swiss economy yesterday and none are due today, leaving the franc to trade as a counter currency.

JPY

The yen took advantage of the return in risk aversion after the IMF downgraded global growth forecasts. There have been no reports out of Japan recently and talks of additional stimulus appear to have fizzled out. There are still no reports lined up from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls suffered sharp losses due to falling commodity prices, particularly for the oil-related Loonie. New Zealand reported a flat reading for its GDT index in the latest dairy auction. In Australia, the MI leading index printed a 0.2% drop. Crude oil inventories are due next and an increase in stockpiles could spur more losses for the Loonie.

By Kate Curtis from Trader’s Way

729

USD

The lack of top-tier data from the US economy left the Greenback reacting to country-specific data. The US dollar advanced to the commodity currencies but was mostly weaker against the euro, pound, and franc as sentiment seemed to improve in that region. Initial jobless claims and the Philly Fed index are due today.

EUR

The euro struggled to hold its ground as some traders started pricing in dovish remarks for today’s ECB statement. ECB head Draghi might decide to sit on his hands since the BOE refrained from cutting rates in last week’s policy statement, deciding to keep their options open for further easing down the line. German PPI beat expectations while the euro zone consumer sentiment index was down from -7 to -8.

GBP

The pound got a lot of support from better than expected UK jobs data. Claimants rose by 0.4K in June while the jobless rate fell from 5.0% to 4.9%. The average earnings index rose from 2.0% to 2.3% as expected, indicating wage growth and upside pressure on consumer inflation. UK retail sales data is due today and a 0.4% drop is eyed.

CHF

The franc advanced to the dollar but weakened to its other European rivals. There were no reports out of the Swiss economy yesterday and none are due today, which suggests that the franc could keep moving as a counter currency as well.

JPY

The yen resumed its slide when rumors of a 20 trillion JPY economic stimulus package from the government hit the newswires. No details have been provided just yet but traders seem to be pricing in additional easing from the BOJ in their statement next week as well. There are no reports up for release from Japan today so risk sentiment could also push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were mostly weaker as the RBNZ revealed in its economic update that additional easing could be needed in order to bring inflation back to its target level. Policymakers also mentioned that the exchange rate needs to be lower. Visitor arrivals were down 1.0% in June and credit card spending data is due next.

By Kate Curtis from Trader’s Way

730

USD

The US dollar gave up a bit of ground against its forex peers when risk appetite improved after the ECB statement. Still, the Greenback managed to rake in some gains against the Loonie. The Philly Fed index missed expectations as it fell from 4.7 to -2.9 instead of improving to 5.1 while initial jobless claims, existing home sales, and the CB leading index beat expectations. The US flash manufacturing PMI is due today and a rise from 51.3 to 51.9 is eyed.

EUR

The euro encountered additional volatility during the ECB decision but managed to stay afloat when the central bank refrained from adding stimulus. Draghi was less downbeat than usual as he assured that the region can weather the Brexit and that they’d need additional information before deciding to ease further. Flash PMI readings from France and Germany are up for release today and strong readings could keep the euro afloat.

GBP

UK retail sales missed expectations by showing a 0.9% drop versus the estimated 0.4% slide in consumer spending. Still, the pound tried to put up a fight against its peers as the UK government showed progress in moving towards Brexit negotiations. UK manufacturing PMI is up for release today and a tumble from 52.1 to 47.8 is eyed.

CHF

The franc was acting mostly as a counter currency recently but managed to draw a bit of support when the ECB refrained from easing. After all, this means that the SNB won’t need to intervene in the forex market for now to keep EURCHF above its target levels. Swiss trade balance also beat expectations at 3.35 billion CHF. There are no reports due from the Swiss economy today.

JPY

The yen regained a lot of ground towards the end of yesterday’s Asian session when BOJ Governor Kuroda confirmed that they’re not likely to increase stimulus just yet. Data from Japan came in line with expectations yesterday as the all industries activity index had a 1.0% drop while today’s flash manufacturing PMI release came in stronger than expected at 49.0.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were mostly weaker against their peers as the likelihood of easing increased for the RBA and RBNZ. Crude oil prices continued to slide and drag the positively-correlated Loonie with it in the process. Canadian CPI and retail sales figures are due today, with analysts expecting to see weaker inflation and consumer spending data.

By Kate Curtis from Trader’s Way

731

USD

The US dollar was the king of pips on Friday as risk aversion returned and data from the US beat expectations. The flash manufacturing PMI rose from 51.3 to 52.9, higher than the consensus at 51.9. There are no major reports up for release from the US economy today so traders could price in expectations for this week’s GDP release and FOMC statement.

EUR

The euro suffered a sharp selloff towards the end of the trading week when reports of a shooting in a Munich mall hit the newswires. Data from the euro zone earlier in the day was actually stronger than expected, with French flash manufacturing and services PMIs beating expectations. The German Ifo business climate index is due today and a drop from 108.7 to 107.7 is expected.

GBP

Traders dumped the pound upon seeing a sharp contraction in both manufacturing and services PMIs. The former fell from 52.1 to 49.1, higher than the estimated 47.8 figure but still a drop to contraction, while the latter slipped from 52.3 to a record low of 47.4. CBI industrial orders expectations data is due today and a decline from -2 to -6 is eyed.

CHF

The franc got a boost from its safe-haven appeal in the European region, as its counterparts were weighed down by weak data and attacks, but the Swiss currency was still no match to USD strength. There were no reports out of the Swiss economy on Friday and none are due today, which suggests that market sentiment could keep driving franc action.

JPY

The Japanese yen got a boost when BOJ Governor Kuroda made comments ruling out “helicopter money” and led traders to dismiss speculations of additional BOJ easing this week. However, in his remarks during the G20 conference over the weekend, it seemed as though ruling out “helicopter money” doesn’t necessarily mean that stimulus won’t be possible. There are no major reports out of Japan today so traders might price in expectations for the BOJ decision.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were in a weak spot as risk-off vibes weighed on the higher-yielders last Friday. Data from Canada was somewhat upbeat, with CPI readings coming in line with expectations and retail sales data posting strong results. New Zealand’s trade balance is due next and a smaller surplus of 128 million NZD is eyed.

By Kate Curtis from Trader’s Way

732

USD

The US dollar was the big winner for the day, as it raked in gains across the board on risk aversion. Commodity prices have been on the decline while stock indices appear to have peaked since traders are taking profits ahead of this week’s FOMC statement. There were no reports out of the US economy yesterday while today has the CB consumer confidence, new home sales, and Richmond manufacturing index on tap.

EUR

The euro was able to recover against most of its forex peers when the German Ifo business climate reading beat expectations. The index fell from 108.7 to 108.3 instead of dropping all the way down to the 107.7 consensus, suggesting that confidence hasn’t weakened that much after the EU referendum. Only the Belgian NBB business climate index is up for release today.

GBP

The pound was still in a weak spot against its forex rivals despite the stronger than expected CBI industrial order expectations figure. The reading fell from -2 to -4, higher than the projected -6 figure. BBA mortgage approvals data is due today.

CHF

The franc was able to advance against its higher-yielding peers when risk aversion gripped the financial markets, but it was still no match to dollar strength. There were no reports out of the Swiss economy yesterday and none are due today, keeping market sentiment as the main driver of franc price action.

JPY

The yen was off to a weak start but soon reversed and rallied against its rivals when Economy Minister Ishihara suggested that BOJ easing could be moderate. He added that volatility in yen pairs has subsided, leading market watchers to think that the BOJ won’t try to weaken the currency this week. There are no reports lined up from Japan today so officials’ remarks could keep pushing yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The Loonie gave up a lot of ground when crude oil prices hit their lowest level since April. Speculations that stockpiles could show gains revived fears of an oversupply and weak demand. In New Zealand, the trade surplus narrowed to 127 million NZD from a downgraded 348 million NZD figure, although components showed gains in both imports and exports. There are no reports due from the comdoll economies today.

By Kate Curtis from Trader’s Way

733

USD

The US dollar was off to a weak start in the day but it managed to recoup its losses during the US session, thanks to upbeat data. The CB consumer confidence index was down from 97.4 to 97.3 but this was higher than the projected 95.6 figure. New home sales also increased in June, following an upgraded May reading. On the other hand, the flash services PMI posted a larger than expected decline to 50.9 but still indicative of industry growth. Durable goods orders data is due today ahead of the FOMC statement, which might set the tone for rate hike expectations and longer-term USD price action.

EUR

The euro chalked up sharp losses despite seeing stronger than expected business climate data from Belgium. German import prices and GfK consumer sentiment data are up for release today, with the former expected to show a 0.6% increase and the latter likely to fall from 10.1 to 9.9. Still, stronger than expected figures from the euro zone’s top economy could revive strength for the shared currency.

GBP

The pound had a volatile run but was mostly weaker against its forex counterparts. There were no reports out of the UK economy yesterday while today has the preliminary GDP reading due. A growth figure of 0.5% is eyed for Q2, stronger than the earlier 0.4% expansion and probably enough to assure market participants that the economy is on strong footing ahead of the Brexit. UK CBI realized sales data is also due and a drop from 4 to 2 is eyed.

CHF

The franc was in a weak spot against the dollar and its European counterparts even though there were no major reports out of Switzerland. Today has the UBS consumption indicator due and any improvement from the previous 1.35 figure could allow the Swiss currency to recover.

JPY

The yen enjoyed a strong rally during the latter part of the Asian session when news reports indicated that the government stimulus package was much smaller than anticipated. This doused hopes of an aggressive easing announcement from the BOJ this week, leading bears to exit their short positions. There are no reports due from Japan today but any news updates related to economic stimulus could push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The comdolls staged a bit of a recovery yesterday thanks to a pickup in risk appetite. Crude oil prices were still weak as traders priced in a buildup in stockpiles, but the markets appear to be expecting a reduction of 2.1 million barrels for the US EIA data. In Australia, the quarterly CPI came in line with expectations of a 0.4% gain, reducing expectations of an RBA cut.*

By Kate Curtis from Trader’s Way

734

USD

The US dollar had a volatile run during the actual FOMC statement as it initially rallied on an upbeat announcement but returned its recent gains and more when risk appetite picked up. FOMC members upgraded their economic assessment, particularly when it comes to hiring and household spending, leading some market participants to keep their hopes up for a September hike. Prior to this announcement, durable goods orders and pending home sales data missed expectations. Only the US initial jobless claims report is due today.

EUR

The euro was able to rake in gains against the dollar but was weaker against the pound and comdolls. Data from the euro zone was mixed, with the German GfK consumer climate index down from 10.1 to 10.0 versus the projected 9.9 reading and German import prices up 0.5% versus the projected 0.6% increase. German preliminary CPI and unemployment change reports are due today.

GBP

The pound barely reacted to the upbeat UK GDP reading, which showed a larger than expected 0.6% expansion versus the projected 0.5% growth figure and the previous 0.4% reading. UK CBI realized sales slipped from 4 to -14, far below the projected dip to 2. Only the UK GfK consumer climate index is due today and a rise from -9 to -7 is eyed.*

CHF

The franc regained ground to the dollar and its European counterparts as the UBS consumption indicator rose from 1.24 to 1.34. There are no reports due from the Swiss economy today so risk sentiment could push franc pairs around.

JPY

The yen lost ground to most of its peers when reports suggested that the government was ready to announce a much larger stimulus program than previously anticipated. However, traders quickly booked profits now that the actual BOJ statement is approaching. Prior to this, Japan will release its inflation, retail sales, and industrial production figures in the next Asian session.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were big winners when risk-taking resumed, as the oil-related Loonie even managed to shrug off the buildup in US crude oil inventories. Australia’s CPI came in line with expectations of a 0.4% increase while the trimmed mean CPI posted a higher than expected 0.5% gain. Australian import prices are due next.

By Kate Curtis from Trader’s Way

735

USD

The US dollar regained ground against its forex peers as risk aversion returned to the financial markets. Data from the US economy was slightly weaker than expected as the initial jobless claims landed at 266K versus the 261K forecast. The US advanced GDP reading is due today and a 2.6% figure is eyed, indicating a much faster pace of growth compared to the 1.1% expansion in the first quarter.*

EUR

The euro suffered a sharp drop against its forex peers as new signs of uncertainty popped up in the euro zone. In Spain, the King asked Prime Minister Rajoy to hold a vote of confidence after the past elections failed to produce a majority government. In Italy, a group of large banks and lenders rejected the proposal to provide a cash injection for the country’s third largest bank, putting downside pressure on the financial sector. Data from the euro zone, namely German CPI and unemployment change, came in stronger than expected. German retail sales, French consumer spending, Spanish flash CPI and GDP are due today. The region’s flash CPI readings are also up for release.

GBP

The pound moved mostly sideways in recent trading sessions as UK data came in mixed. Nationwide HPI showed a larger than expected gain in house prices while the GfK consumer confidence index slumped from -9 to -12 instead of improving to the projected -7 figure. Net lending to individuals and mortgage approvals data are due today.

CHF

The franc regained ground across the board, scoring large gains to the dollar and euro. There were no major reports out of the Swiss economy yesterday and none are due today, which suggests that market sentiment in the region was likely responsible for the flight to safety.

JPY

The yen had a bout of volatility as traders anticipated the BOJ decision. Earlier in the day, the latest batch of Japanese economic reports printed mixed results so there’s room for additional easing but the question is at what amount. An aggressive stimulus program could mean losses for the Japanese currency while a conservative figure could still keep it afloat. Household spending and retail sales both missed forecasts while inflation readings came in close to consensus.

Commodity Currencies (AUD, NZD, CAD)

The comdolls managed to hold on to some of their gains despite the bout of risk aversion yesterday, as the uncertainties were mostly concentrated in the European region. New Zealand’s ANZ business confidence index fell from 20.2 to 16.0, indicating weaker optimism. Australia’s quarterly PPI is due next and a 0.2% rebound is eyed. Canada will be releasing its monthly GDP reading and a 0.5% contraction is expected.*

By Kate Curtis from Trader’s Way

736

USD

The US dollar gave up a lot of ground on Friday when its Q2 advanced GDP reading came in far below expectations. The report showed that the US economy grew by only 1.2% versus the projected 2.6% expansion, just slightly higher than the earlier 1.1% GDP figure. This doused hopes for a September Fed rate hike, causing the dollar to retreat. US ISM manufacturing PMI is due today and a dip from 53.2 to 53.1 is expected.

EUR

The euro took advantage of dollar weakness but gave up ground to the Japanese yen. Data from the euro zone came in mixed, as the Spanish flash CPI, French consumer spending, and French preliminary CPI missed expectations while German retail sales and euro zone flash core CPI beat expectations. The headline CPI reading for the region was better than expected at 0.2%. Final manufacturing PMI readings from the top euro zone economies are due today.

GBP

The pound advanced to the dollar but caved to the comdolls despite better than expected medium-tier reports from the UK. For today, the manufacturing PMI is up for release and no revisions to the initially reported 49.1 reading is expected.

CHF

The franc gained a lot of ground to the dollar and its European counterparts when risk aversion returned on Friday. Data from Switzerland was also better than expected as the KOF economic barometer rose from 102.6 to 102.7 instead of falling to 101.6. Swiss banks are closed for the holiday today.

JPY

The yen continued to rake in gains, thanks to risk aversion and a smaller than expected easing expansion from the BOJ. The central bank merely increased its ETF purchases instead of lowering rates further and pumping up their JGB buying operations. Earlier today, Japan’s final manufacturing PMI was upgraded from 49.0 to 49.3 to show a slower pace of industry contraction.

Commodity Currencies (AUD, NZD, CAD)

The comdolls took advantage of the declines in the dollar and managed to advance against the European currencies as well. Data from Canada was weaker than expected, as the economy contracted 0.6% versus the projected 0.5% drop in GDP for May. Underlying inflation data also missed expectations. Earlier today, China reported a fall in its official manufacturing PMI from 50.0 to 49.9 and an increase in its non-manufacturing PMI from 53.7 to 53.9.

By Kate Curtis from Trader’s Way

737

USD

The US dollar managed to score gains against the comdolls on weaker oil prices and rate cut expectations. Data from the US economy was weaker than expected, as the ISM manufacturing PMI slipped from 53.2 to 52.6 versus the projected dip to 53.1. The employment and prices components showed huge declines, suggesting a weaker NFP and lower CPI pressures. US core PCE price index, along with personal spending and income data, are due today.

EUR

The euro consolidated to the dollar but advanced to the commodity currencies despite mostly weaker manufacturing PMI readings from its top economies. Only the Spanish unemployment change report is due today and a 70K drop in joblessness is eyed.

GBP

The pound was mostly weaker against its counterparts as the manufacturing PMI showed an even sharper contraction. The figure was revised from the initially printed 49.1 reading to 48.2, signaling downside pressure on overall economic activity. Only the UK construction PMI is due today and another downgrade from 46.0 to 44.2 is expected.

CHF

The franc continued raking in gains against most of its rivals as risk aversion stayed in play. Swiss banks were closed for a holiday yesterday. The Swiss manufacturing PMI is due today and a rise from 51.6 to 51.9 is expected. Swiss retail sales are also lined up but a sharper decline of 2.0% is eyed.

JPY

The yen held on to its recent gains and even raked in wins against the comdolls. There were no reports out of the Japanese economy yesterday and there are none lined up today, which suggests that market sentiment could keep influencing price action of yen pairs.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were the weakest of the bunch as crude oil price declines and rate cut expectations weighed on risk sentiment and the higher-yielding currencies. Crude oil came close to the $40/barrel as traders are expecting to see another buildup in stockpiles and higher oil rig counts. Earlier today, trade balance and building approvals for Australia missed expectations, setting the stage for a possibly dovish RBA statement. Analysts are expecting a 0.25% cut but a decision to stand pat could simply increase rate cut expectations for the next statement. New Zealand’s GDT auction is coming up in the next Asian session.

By Kate Curtis from Trader’s Way

738

USD

The US dollar regained ground against its forex counterparts, thanks to slightly stronger data. The final services PMI was upgraded from 50.9 to 51.4 to indicate a faster pace of expansion than initially reported. However, the ISM non-manufacturing PMI fell short of expectations when it dropped from 56.5 to 55.5 versus the projected dip to 56.0. For today, the initial jobless claims report is due along with the US factory orders report.

EUR

The euro was mostly weaker against its peers despite mixed data from the region. Spain’s services PMI missed expectations while Italy’s services PMI printed stronger than expected results. Final services PMI readings from Germany and France didn’t have any revisions while the region’s retail sales stayed flat as expected. There are no major reports due from the euro zone today.

GBP

The pound was able to stay afloat when the services PMI didn’t undergo any revisions from its initially reported 47.4 figure. Pound pairs could be due for additional volatility today as the BOE will make its policy decision. An interest rate cut of 0.25% is widely expected, with some even expecting higher bond purchases from the central bank. Updated growth and inflation forecasts are also due.

CHF

The franc returned some of its recent gains as there were no reports out of Switzerland yesterday. Today the SECO consumer climate index is due and a fall from -15 to -16 is expected. Other than that, risk sentiment could be the main driver of franc price action.

JPY

The yen slowly edged higher against some of its forex rivals as there were no new catalysts from Japan. There are still no reports lined up from the Japanese economy today so slow price action could be in the cards unless there are any announcements from the Japanese government or any changes in market sentiment.

Commodity Currencies (AUD, NZD, CAD)

The Loonie was able to rake in some gains after the US crude oil inventories report showed a buildup in crude oil stockpiles offset by a slump in gasoline supplies. In New Zealand, the ANZ commodity price index fell from 3.7% to 2.0%. Australia reported a meager 0.1% uptick in retail sales versus the projected 0.3% gain. There are no other reports due from the comdoll economies for today.

By Kate Curtis from Trader’s Way

739

USD

The US dollar had a mixed performance as it advanced against the European currencies but was mostly weaker against the commodity currencies. Data from the US economy was also mixed, as initial jobless claims stood at 269K versus the projected 265K figure and the previous 266K reading while factory orders showed a smaller than expected 1.5% drop versus the estimated 1.8% slide. The US NFP report is due today and a 180K rise in hiring is eyed, slower than the earlier 271K increase, while the jobless rate could fall from 4.9% to 4.8%.

EUR

The euro sold off to most of its counterparts except for the pound after the BOE decision. Euro zone retail PMI improved from 48.5 to 48.9 to show a slower pace of contraction in the industry. German factory orders and French trade balance are up for release today.

GBP

The pound suffered a sharp selloff against its rivals when the BOE cut interest rates and increased its bond purchases. The vote to cut rates by 0.25% was unanimous but the vote to increase stimulus from 375 billion GBP to 435 billion GBP was 6-3. Only the Halifax HPI is due from the UK today and a 0.1% drop in house prices is eyed.

CHF

The franc lost ground to some of its peers, except for the pound. The Swiss SECO consumer climate held steady at -15 instead of falling to the projected -16 figure. For today, the Swiss foreign currency reserves report is due and this might show some clues on whether or not the SNB is intervening in the forex market to keep the franc weak.

JPY

The yen returned some of its recent wins when risk appetite improved in the financial markets. There were no reports out of Japan yesterday, giving traders a chance to book profits off their recent positions. Japan’s average cash earnings report printed a stronger than expected 1.3% increase.

Commodity Currencies (AUD, NZD, CAD)

The comdolls took advantage of the pickup in risk appetite to recover against the safe-haven currencies and even chalk up gains against the European currencies. Crude oil prices continued to recover as the US natural gas storage report showed a reduction in supply. Canada’s jobs report is due today and a 10.2K increase in hiring is eyed but the jobless rate is slated to rise from 6.8% to 6.9%.

By Kate Curtis from Trader’s Way

740

Beautiful Analysis Kate, What primary news sources do you use for releases?

741

USD

The US dollar had a mixed performance since there were no major catalysts from the US economy yesterday. Only the Fed labor market conditions index was printed and it reflected the first positive reading for the year, assuring market watchers that an employment rebound is taking place. US preliminary non-farm productivity and unit labor costs data are up for release today.

EUR

The euro was mostly weaker against its peers even though there were no major reports out of the region. German industrial production came in line with estimates of a 0.8% gain while today has the trade balance up for release.

GBP

The pound resumed its slide to most of its major counterparts as traders seem to be pricing in weaker manufacturing production data due today. A flat reading is expected to follow the previous 0.5% drop but a larger than expected decline could mean sharper pound losses.

CHF

The franc sank to the dollar but managed to hold on to its gains against its other currency rivals. Swiss CPI came in better than expected with a 0.4% drop in price levels versus the estimated 0.5% decline. The Swiss jobless rate is due today and no change from the 3.3% reading is eyed.

JPY

The yen also had a mixed performance but was mostly weaker on risk appetite, except against the pound. Japan’s Economy Watchers Sentiment index showed a rise from 41.2 to 45.1 versus the projected 42.6 reading. There are no major reports due from Japan today so risk sentiment could be the main driver for yen pairs.

Commodity Currencies (AUD, NZD, CAD)

The comdolls struggled to hold on to their gains but the Loonie got a bit of a boost on the rumored OPEC meeting for September. Qatar’s oil minister also noted that a rebound in demand is expected to be seen in the second half of the year. CPI data from China beat expectations, keeping the Aussie supported, while RBNZ rate cut expectations are still weighing on the Kiwi.*

By Kate Curtis from Trader’s Way

742

USD

The US dollar was off to a good start for the day but wound up erasing its wins when traders booked their post-NFP positions. Preliminary non-farm productivity fell 0.5% versus the projected 0.5% increase while unit labor costs rose 2.0% versus the estimated 1.8% gain. US JOLTS job openings data is due today but might not have much of an impact since the official NFP report was already printed.

EUR

The euro took advantage of dollar weakness but was still no match to comdoll strength. Data from the euro zone was weaker than expected since Germany reported a smaller trade surplus of 21.7 billion EUR versus the projected 23.2 billion EUR figure and the previous 22.1 billion EUR surplus. Only the French industrial production report is due today and a 0.3% rebound is eyed.

GBP

The pound suffered a sharp selloff when the UK goods trade balance missed expectations at a deficit of 12.4 billion GBP for June. To top it off, the previous reading was downgraded to show a wider deficit. BOE official McCafferty mentioned in an op-ed piece that the central bank could lower rates further if economic activity slows. There are no reports due from the UK economy today.

CHF

The franc regained ground to the dollar but was mostly weaker against its other rivals. The Swiss jobless rate was unchanged at 3.3% as expected but traders seemed to be paying more attention to overall market sentiment. There are no reports due from Switzerland today.

JPY

The yen regained ground as it took advantage of dollar weakness but was mostly steady against the comdolls. Japanese core machinery orders jumped 8.3% versus the estimated 3.4% increase while PPI showed a slightly smaller than expected 3.9% fall versus the estimated 4.0% decline. Japanese tertiary industry activity data is due next and a 0.3% rebound is expected.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were the biggest beneficiaries of dollar weakness and risk appetite yesterday. The Loonie got a slight boost from the oil rally that took place after the EIA upgraded its 2016 demand forecast. In Australia, the Westpac consumer sentiment index showed a 2.0% increase, recovering from the earlier 3.0% slide. Home loans rose only 1.2% versus the estimated 2.4% gain, suggesting that the housing sector is starting to cool. The RBNZ decision is coming up in the late US session and a 0.25% cut is eyed.

By Kate Curtis from Trader’s Way

743

USD

The US dollar was unable to make much headway against its counterparts despite stronger than expected jobs data. The JOLTS job openings report showed a 5.62 million figure, up from the earlier 5.51 million reading and the 5.52 million consensus. Initial jobless claims and import prices are up for release today but traders seem to be reacting to market sentiment or waiting for the retail sales data on Friday.

EUR

The euro advanced to the dollar and pound, but was still weaker to the yen and commodity currencies. France reported a 0.8% drop in industrial production instead of the estimated 0.3% uptick. France’s final CPI and Italy’s trade balance are up for release today.

GBP

The pound continued to slide lower against its counterparts as traders are adjusting their positions after the BOE’s decision to expand its bond purchase program. There were no reports out of the UK economy yesterday and none are due today so the ongoing trends could carry on.

CHF

The franc was stronger across the board despite the lack of top-tier data from Switzerland. It appears as though the Swiss currency is benefitting from safe-haven flows in Europe and anti-dollar sentiment. There are still no reports due from Switzerland today.

JPY

The yen regained ground against its peers as traders continued to favor the Japanese currency against the dollar. Tertiary industry activity rose 0.8% versus the projected 0.3% uptick. There are no reports due from Japan today since banks are closed for the holiday.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to hold on to their gains despite the fall in crude oil prices and the RBNZ’s decision to cut interest rates by 0.25%. This decision came in line with market expectations, as many market watchers were also disappointed to find out that the central bank wasn’t more dovish. Oil inventories were up by 1.1 million barrels instead of showing the estimated drop of 1.3 million barrels. Australia’s MI inflation expectations were down from 3.7% to 3.5%.

By Kate Curtis from Trader’s Way

744

USD

The US dollar had a mixed performance, as it advanced to the European currencies and yen but gave up ground to the Canadian dollar. Medium-tier US data beat expectations, as the initial jobless claims came in at 266K versus the 272K forecast while import prices rose 0.1% instead of printing the projected 0.2% drop. US retail sales are up for release today, with analysts expecting to see a 0.4% increase in the headline figure and a 0.2% uptick for the core figure. PPI and preliminary UoM consumer sentiment data are also lined up.

EUR

The euro was unable to hold on to most of its recent gains since there were no major reports from the euro zone. Today has the preliminary GDP readings from its top economies such as Germany and Italy, as well as the GDP reading for the entire region. The German economy is expected to have grown by 0.3% in Q2 while the euro zone could chalk up the same GDP figure.

GBP*

The pound was still one of the weaker performers for the day, as there were no reports out of the UK economy to give it a boost. Only the UK construction output figure is lined up for today and a 0.9% rebound is expected to follow the previous 2.1% slide.

CHF

The franc returned some of its recent wins as risk appetite seemed to improve earlier in the day. There were no reports out of Switzerland then and none are due today, which suggests that sentiment could stay the bigger driver of price action.

JPY

The yen struggled to hold on to its recent gains, particularly to the US dollar, as Japanese banks were closed on a holiday yesterday. There are no reports due from Japan today but it seems as though the downbeat data from China might have revived risk aversion in the Asian markets.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a mixed performance, as the Loonie was able to benefit from crude oil gains while the Aussie and Kiwi slid lower. The Kiwi barely drew support from upbeat quarterly retail sales data as traders are focused on what the RBNZ might do next in terms of driving the currency down. As for the Aussie, downbeat industrial production, retail sales, and fixed asset investment figures from China could likely weigh on Australia’s export activity later on.*

By Kate Curtis from Trader’s Way

745

USD

The US dollar sold off briefly against its counterparts on Friday when the retail sales report missed expectations. Headline consumer spending was flat while the core version of the report showed a 0.3% drop. PPI readings were also below consensus, with a 0.4% drop in the headline figure and a 0.3% decline for the core reading. The preliminary consumer sentiment index was also lower than expected at 90.4, hinting at weaker consumer spending later on. Only the Empire State manufacturing index is due today and a rise from 0.6 to 2.1 is expected.

EUR

The euro took advantage of dollar weakness on Friday but was off to a weak start this week, even though most banks in the region are closed for the holiday. Germany’s preliminary GDP beat expectations with 0.4% growth while Italy’s flash GDP was weaker than expected with its flat reading. The region’s growth figure stood at 0.3% as expected.

GBP

The pound was the weakest of the bunch, as traders likely positioned ahead of this week’s top-tier UK releases. Construction input was also weaker than expected with a 0.9% decline while the Rightmove HPI showed a 1.2% fall in house prices. No other reports are due from the UK today but there could be some pricing in ahead of the CPI data due tomorrow.

CHF

The franc was barely able to hold on to its recent gains to the dollar as there were no reports to give the Swiss currency a boost on Friday. Today has the PPI on tap and a 0.2% drop in producer prices is eyed, likely to weigh on overall inflation down the line.

JPY

The yen slid lower to start the week after Japan’s preliminary GDP reading came in flat for Q2 versus the projected 0.2% expansion. On a less downbeat note, the previous reading was upgraded to 0.5% while the price index beat expectations at 0.8%.*

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a mixed performance, as the Aussie and Kiwi lagged while the Loonie held on to its gains. Expectations of a production cut in the upcoming OPEC informal meeting are supporting crude oil prices and the positively correlated Canadian currency for now while Australia and New Zealand might be facing weaker demand for commodity products due to weaker than expected demand from China. Industrial production, retail sales, and fixed asset investment all declined and missed expectations last week.

By Kate Curtis from Trader’s Way

746

USD

The US dollar was mostly weaker in recent trading, only advancing against the British pound and Japanese yen. Data from the US economy was weaker than expected as the Empire State manufacturing index showed a surprise drop to industry contraction. US CPI, along with building permits and housing starts, are up for release today. Weaker inflation readings are eyed, following the disappointing PPI readings last Friday. Also lined up are the industrial production and capacity utilization data.

EUR

The euro took advantage of dollar weakness but was no match to comdoll strength. French and Italian banks were closed for the holiday so liquidity was lower for euro pairs yesterday. The German ZEW economic sentiment index is due today and a rise from -6.8 to +2.1 is expected, which would reflect a return to optimism. Meanwhile, the region’s ZEW index is slated to improve from -14.7 to -6.3.

GBP

The pound was still the weakest performer for the day as traders started pricing in expectations for the top-tier UK reports this week. The UK CPI is up for release today and no change in the 0.5% headline figure is eyed. The core reading is expected to dip from 1.4% to 1.3% with weaker than expected results likely to drive the UK currency lower.

CHF

The franc raked in more gains against its forex counterparts as Swiss PPI beat expectations. The report showed a 0.1% dip in producer prices versus the projected 0.2% decline. There are no reports due from the Swiss economy today so risk sentiment might have a bigger impact.

JPY

The yen held its ground despite seeing downbeat GDP data from Japan, as the lower-yielding currency was also supported by risk aversion in the Asian session. The economy posted a flat GDP reading for Q2 instead of the projected 0.2% expansion. There are no reports due from the Japanese economy today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to rally due to gains in gold and crude oil, but the event risks could turn things around. The RBA minutes are due today and indications of further rate cuts could mean losses for the Australian currency while New Zealand has its GDT auction, jobs data, and PPI readings lined up. Another strong gain in dairy prices, coupled with stronger than expected quarterly employment and producer prices gains, could lift the Kiwi while downbeat readings could spur rate cut expectations. Canada’s manufacturing sales data is also due but the currency could take its cue from crude oil.

By Kate Curtis from Trader’s Way