Daily Market Outlook by Kate Curtis from Trader's Way

Commercial Content Analysts
767

USD

The US dollar regained ground against its peers when risk aversion came back in the financial markets. There have been no major reports out of the US but traders seem to be pricing in the possibility of a Fed rate hike for the FOMC meeting next week. US crude oil inventories and import prices data are up for release next.

EUR

The euro was weaker against the dollar and yen but it managed to advance against the higher-yielding commodity currencies. Data from the euro zone was weaker than expected, as the German ZEW economic sentiment index held steady at 0.5 instead of improving to the projected 2.8 figure while the region’s reading ticked up to 5.4, short of the 6.7 consensus. Only the euro zone industrial production report is scheduled today and a 0.8% decline is expected.

GBP

The pound slid against its forex rivals after the UK CPI reports disappointed. Headline inflation was unchanged at 0.6% instead of rising to the projected 0.7% figure while core inflation was also steady at 1.3%. PPI input prices posted a meager 0.2% uptick versus the projected 0.6% increase. UK jobs data is due today and a 1.7K increase in claimants is expected for August while the average earnings index likely slid from 2.4% to 2.1% for the three-month period ending in July.

CHF

The franc returned its recent gains to the dollar but was able to advance against the pound and the yen. Swiss PPI was weaker than expected with a 0.3% drop, sharper than the estimated 0.2% dip and the previous 0.1% decline. ZEW economic expectations data is up for release next.

JPY

Yen pairs had a volatile run after the Nikkei reported that BOJ policymakers are considering lowering interest rates further into negative territory while counteracting this move with a reduction in JGB purchases. Still, a BOJ official said that these are still up for discussion and that the debates would proceed cautiously. Japan’s revised industrial production report is scheduled for release today but no changes to the flat reading are eyed.

Commodity Currencies (AUD, NZD, CAD)

The comdolls sold off sharply against their peers when risk aversion returned to the markets. Data from China came in stronger than expected earlier in the day but the upbeat mood wasn’t sustained as Europe started printing downbeat reports and Fed rate hike expectations weighed on sentiment. New Zealand printed a larger than expected current account deficit and is set to print its Q2 GDP next, likely reporting a 1.1% growth figure.

By Kate Curtis from Trader’s Way

768

USD

The US dollar returned some of its recent wins as traders probably closed positions ahead of today’s major catalysts. From the US alone, we’ve got retail sales, PPI, Philly Fed index, initial jobless claims, industrial production, and the current account balance. Headline retail sales could fall by 0.1% while core retail sales could increase by 0.3%. Headline PPI and core PPI are both expected to print 0.1% gains.

EUR

The euro was able to take advantage of dollar weakness and managed to hold on to most of its recent wins, except against the yen. Euro zone industrial production turned out weaker than expected with a 1.1% slump versus the projected 0.8% decline. Final CPI readings are due today and no revisions to the initial estimates are eyed.

GBP

The pound managed to score some wins despite mixed jobs data. The number of claimants rose by 2.4K in August versus the estimated 1.7K increase in joblessness, but the average earnings index came in better than expected at 2.3% versus 2.1% for the three-month period ending in July. The BOE interest rate decision is scheduled for today and no changes to the benchmark rate or asset purchase program are eyed, although MPC members are expected to stay dovish.

CHF

The pound was able to regain ground when the Swiss ZEW economic expectations index rose from -2.8 to +2.7 to indicate a return to optimism. The SNB rate decision is scheduled today and no major adjustments are eyed, even though a bit of the usual jawboning is expected from Chairman Jordan.

JPY

The yen was able to take advantage of the risk-off flows in the markets as BOJ policymakers refrained from commenting on what they might announce or discuss in their policy statement next week. Japan’s industrial production reading was revised to show a 0.4% drop from the initially reported flat reading.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a mixed performance, as the Aussie consolidated, the Kiwi advanced, and the Loonie lagged. US oil inventories showed a surprise draw of 0.6 million barrels but Loonie traders were still anticipating a buildup in output later on. New Zealand’s economy expanded by 0.9% in Q2, short of the estimated 1.1% growth figure, but the previous reading was upgraded from 0.7% to 0.9%. Australia’s jobs report is due next and a 15.2K increase in hiring is eyed.

By Kate Curtis from Trader’s Way

769

USD

The US dollar slumped after seeing mostly downbeat economic data, as this could seal the deal for the Fed to sit on its hands next week. Headline retail sales fell 0.3% versus the estimated 0.1% dip while core retail sales dropped 0.1% instead of gaining 0.3%. Headline PPI and the Empire State manufacturing index also fell short of estimates while the Philly Fed index posted a higher than expected climb. CPI and consumer sentiment figures are due next.

EUR

The euro held steady to the dollar but gave up ground to some of its other counterparts when risk appetite improved. Final CPI readings from the region showed no revision from the 0.2% headline and 0.8% core readings. There are no reports due from the euro zone today.

GBP

The pound enjoyed additional volatility during the BOE decision and release of the MPC minutes but ended mostly unchanged against its peers. The central bank kept policy unchanged as expected in a unanimous vote since they just increased stimulus in their previous month’s statement. The pound also drew a bit of support from the smaller than expected drop in UK retail sales of 0.2% versus the estimated 0.4% slide.

CHF

The franc popped slightly higher during the SNB statement but the lack of dovishness allowed it to regain ground. There are no reports due from the Swiss economy today.

JPY

The yen was able to hold on to its recent gains and chalk up a bit more even as risk appetite improved in the latter part of the trading day. There have been no reports out of the Japanese economy then and none are due today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls took advantage of the pickup in risk appetite, even as data from Australia came in below expectations. The economy lost 3.9K jobs in August instead of reporting the estimated 15.2K gain. The jobless rate fell but mostly due to weaker labor force participation, reflecting weaker confidence in job prospects. Canadian manufacturing sales and foreign securities purchases are lined up today.

By Kate Curtis from Trader’s Way

770

USD

The US dollar staged a late rally on Friday when CPI readings beat expectations and revived hawkish hopes for this week’s FOMC statement. Headline CPI showed a 0.2% gain versus the projected 0.1% uptick while the core reading showed a 0.3% increase versus the estimated 0.2% rise. The UoM preliminary consumer sentiment index came in short of expectations, though, as the September reading was unchanged from the downgraded 89.9 August figure. There are no major reports due from the US economy today.

EUR

The euro gave up ground against most of its peers at the end of the week even though there were no major reports from the euro zone. Today has the euro zone current account balance and the German Buba monthly report on tap, likely affecting market sentiment for the euro in the absence of other top-tier data.

GBP

The pound made a sharp selloff on Friday even though there were no major releases from the UK. There are still no reports up for release today so overall risk sentiment could be responsible for pushing the pound around today.

CHF

The Swiss franc returned most of its recent wins to the dollar but managed to take advantage of the weakness in the euro and the pound. There were no reports out of the Swiss economy on Friday and none are due today so consolidation could be seen among the franc pairs.

JPY

The yen regained ground as risk aversion seemed to dominate the markets on Friday. Traders are also likely lightening up on their yen positions ahead of this week’s BOJ interest rate statement. Japanese banks are closed for the holiday today so liquidity could be light.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were weighed down both by the declines in commodity prices and in risk appetite but they managed to advance against their European counterparts. Canadian data came in below expectations while crude oil prices slid. Over the weekend, New Zealand reported a rise in its Westpac consumer sentiment index from 106.0 to 108.0. There are no reports due from these economies today.

By Kate Curtis from Trader’s Way

771

[B]USD[/B]

The US dollar was off to a weak start on Monday but soon regained ground during the US session. There were no major reports printed, although the stronger than expected NAHB housing market index may have led to a few gains. US building permits and housing starts are lined up for today but these might not have a lasting impact since traders are holding out for the FOMC decision.

[B]EUR[/B]

The euro continued to weaken against its peers, except for the British pound and Swiss franc. The current account surplus narrowed from 29.5 billion EUR to 21.0 billion EUR, lower than the projected 27.2 billion EUR figure. Only the German PPI is up for release today and a 0.1% uptick in producer prices is eyed.

[B]GBP[/B]

The pound was still one of the weakest performers for the day as traders continued to mull the impact of the Brexit on the UK economy. Last Friday, UK Chancellor Hammond noted that they risk losing access to the single European market if they push for immigration reforms in the Brexit negotiations.

[B]CHF[/B]

The franc regained ground to the dollar, continued to advance against the pound, and gave up ground to the euro. There were no reports out of the Swiss economy, leaving the franc to act as a countercurrency. Swiss SECO economic forecasts are up for release today, along with the trade balance which might show a wider 3.27 billion CHF surplus.

[B]JPY[/B]

The yen benefitted from the lack of risk appetite in the markets, although traders might also be pricing in ahead of a possible BOJ disappointment. Reports have been giving mixed signals, with dovish hints from BOJ Governor Kuroda and the lack of conviction from other policymakers. Japanese banks will reopen from their Monday holiday today.
[B]
Commodity Currencies (AUD, NZD, CAD)[/B]

The comdolls tossed and turned through out the day as the risk switch was flipped on and off. Crude oil had a bit of a boost on hopes of an oil production cap during the Algiers OPEC gathering but the commodity soon returned its gains. Australia reported a 0.4% increase in its CB leading index, up from the earlier 0.3% reading. RBA meeting minutes are due next and New Zealand will have its GDT auction in the next Asian session.

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

772

[B]USD[/B]

The US dollar had a mixed performance as traders refrained from pushing it in a general direction ahead of today’s FOMC statement. Building permits and housing starts fell short of expectations but analysts remarked that this could just be a temporary pullback. Market watchers are still divided on whether the Fed would hike rates or not, as the latter scenario could keep risk-taking in play while the former could lead to a flight to safety.

[B]EUR[/B]

The euro was weaker across the board as Brexit jitters continued to weigh on the currency. There have been no major reports out of the region yesterday and none are due today, which suggests that risk sentiment could be the main driving force for euro pairs.

[B]GBP[/B]

The pound was also one of the bigger losers for the day as traders priced in potential weakness and central bank dovishness in anticipation of Brexit risks. There were no reports out of the UK yesterday while today has public sector net borrowing and the BOE Quarterly Bulletin due.

[B]CHF[/B]

The franc had a volatile run to the dollar but ended higher against its European rivals. Data from Switzerland fell short of expectations as the trade surplus stood at 3.02B CHF versus the estimated 3.27B CHF figure. The SNB Quarterly Bulletin is up for release today.

[B]JPY[/B]

The yen raked in gains in a risk-off environment as traders were reluctant to put money in the safe-haven dollar. Still, the upcoming BOJ statement could change the yen’s behavior as additional rate cuts and bond purchases are eyed. Anything disappointing could allow the yen to hold on to its gains and go for more.

[B]Commodity Currencies (AUD, NZD, CAD)[/B]

The comdolls recouped some of their previous losses despite weaker than expected quarterly HPI from Australia. The RBA minutes were not as dovish as expected while the New Zealand GDT auction yielded a 1.7% gain in prices. The RBNZ decision is lined up after the FOMC statement but no actual changes are expected.

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

773

[B]USD[/B]

The US dollar gave up ground when bulls were disappointed to find out that the Fed still kept interest rates at <0.50% for now. Still, Fed officials kept the door open for a December hike by highlighting the improvements in hiring and spending, explaining that the case for tightening has strengthened. Yellen noted that they will continue to monitor labor market improvements before gauging if a hike in November or December is due. US existing home sales and CB leading index are on tap for today.

[B]EUR
[/B]
The euro continued to sink against its forex peers, except against the US dollar. There have been no major reports out of the region yesterday, as it appears that the downbeat outlook for the UK and European trade activity from last week is still weighing on the shared currency. ECB Governor Draghi has a testimony lined up for today and the euro zone consumer confidence index is up for release.

[B]GBP[/B]

The pound made a quick bounce to the dollar but was still weaker across the board. UK public sector net borrowing data beat expectations but returned to a deficit of 10.1 billion GBP. UK CBI industrial order expectations data and speeches by MPC members Carney and Cunliffe are lined up today.

[B]CHF[/B]

The franc regained ground to the dollar and European currencies but caved to yen strength. There have been no major reports out of the Swiss economy yesterday and none are due today, keeping the franc acting as a counter currency and likely chalking up another mixed performance.

[B]JPY[/B]

The yen had a bit of a selloff after the BOJ’s decision to shift from inflation-targeting to targeting the yield curve. It also unveiled plans to launch more aggressive easing efforts but weren’t enough to keep yen bears in play. Japanese banks are closed for the holiday today.
[B]
Commodity Currencies (AUD, NZD, CAD)[/B]

The comdolls took advantage of dollar weakness as low borrowing costs for much longer could keep global growth supported. The Kiwi had a brief dip after the RBNZ sat on its hands but hinted that further policy easing would be made. Meanwhile, the Loonie bounced slightly on the US EIA report, which showed a draw in crude oil stockpiles. New RBA Governor Lowe has a speech lined up today.

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

774

[B]USD[/B]

Economic data from the US came in mixed and the Greenback failed to establish a clear direction as well. Initial jobless claims and HPI beat expectations while existing home sales and the CB leading index fell short, leaving traders in limbo when it comes to December Fed rate hike expectations. For today, US flash manufacturing PMI data is due and a rise from 52.0 to 52.1 is eyed.

[B]EUR[/B]

The shared currency also chalked up a mixed performance as it rallied then reversed to the dollar, strengthened against the yen, and caved to commodity currencies. There have been no major reports out of the region yesterday but the LTRO did show a smaller 45.3 billion EUR figure compared to the previous 399.3 billion EUR, reflecting weaker long-term loan demand. Euro zone flash PMI readings are due today and small declines in the manufacturing and services sectors of Germany and France are expected.

[B]GBP[/B]

The pound managed to make a bit of a rebound from its continuous slide earlier in the week as BOE officials gave their testimonies yesterday. MPC members gave a bit of reassurance that Brexit fears may have been exaggerated, reducing expectations of additional easing for the next few months. There are no reports due from the UK today.

[B]CHF[/B]

The franc was one of the stronger performers for the day as the Swiss currency seemed to rake in the risk-off flows. There were no reports out of the Swiss economy yesterday and none are due today so the franc might continue to depend on overall market sentiment.

[B]JPY[/B]

The yen returned some of its recent wins as Japanese traders took off for the holiday yesterday. Earlier today, Japan reported a strong flash manufacturing PMI reading, which is up from 49.5 to 50.3 in September instead of falling to 49.3. The all industries activity index is up for release next and a slower 0.2% gain is eyed to follow the earlier 1.0% increase.

[B]Commodity Currencies (AUD, NZD, CAD)[/B]

The comdolls had a mixed performance as risk appetite was all over the place. Canadian CPI and retail sales reports are up for release today and analysts are expecting to see small improvements. Headline CPI could come in at 0.1% while core CPI could post a 0.2% uptick. Headline retail sales might recover by 0.2% while core retail sales could post a 0.5% gain.
[I]
By Kate Curtis from Trader’s Way[/I]

775

USD

The US dollar was unable to hold on to its gains on Friday, as traders were disappointed to see the US flash manufacturing PMI fall from 52.0 to 51.4 instead of rising to 52.1. The new home sales report is due today and a drop from 658K to 598K is expected, keeping in line with the recent string of declines from the housing sector. FOMC member Tarullo also has a speech lined up.

EUR

The euro was stronger on Friday, thanks to mostly stronger than expected flash PMI readings. Only Germany’s services sector printed a disappointment, weighing on the region’s overall reading as well. The German Ifo business climate report is due today and a rise from 106.2 to 106.3 is expected. ECB Governor Draghi also has a speech lined up.

GBP

The pound managed to make a bit of a bounce on Friday even though there were no major reports out of the UK. Only the BBA mortgage approvals report is due today and a drop from 37.7K to 37.2K is expected, possibly forcing the pound to return some of its recent gains.

CHF

The franc advanced against its peers, likely taking its cue from upbeat euro zone PMI readings. There were no reports out of the Swiss economy on Friday and none are lined up today so the franc could trail the euro or be influenced by market sentiment.

JPY

The Japanese yen gave up a bit of ground against its rivals as profit-taking took place. Data from Japan came in better than expected, as the flash manufacturing PMI rose from 49.5 to 50.3 while the all industries activity index posted a 0.3% uptick. BOJ Governor Kuroda has a speech scheduled today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to benefit from dollar and yen weakness on Friday but were slightly weaker against the European currencies. The Loonie gave up a lot of ground when CPI and retail sales figures missed expectations. BOC Governor Poloz has a speech due today.

By Kate Curtis from Trader’s Way

776

USD

The US dollar was barely able to take advantage of the risk-off moves in the market and the slightly stronger than expected US new home sales report. Traders seemed hesitant to hold on to the currency ahead of today’s first set of US presidential debates, as the impact on opinion polls could have a huge say in overall risk sentiment. US CB consumer confidence data is due next and a slide from 101.1 to 98.6 is expected.

EUR

The euro got a boost from stronger than expected German Ifo business climate data, as the reading rose from 106.3 to 109.5. To top it off, ECB Governor Draghi reiterated in his testimony that the region is resilient even after the Brexit vote. German import prices data is due today and a 0.1% decline is eyed.

GBP

The pound managed to make a bit of a bounce against some of its counterparts even though there were no major reports out of the UK. BBA mortgage approvals was slightly weaker than expected at 37K versus the 37.2K estimate and the previous 37.7K figure. CBI realized sales data is due today and a drop from 9 to 8 in the index is expected.

CHF

The franc was able to hold its ground to the dollar but was mostly weaker to its other counterparts. Profit-taking may have been happening as the end of the week, month, and quarter is approaching. There are no reports due from the Swiss economy today and SNB head Jordan’s testimony yesterday didn’t have any surprises.

JPY

The yen regained ground against its peers as risk aversion was present in the financial markets. Earlier today, the BOJ monetary policy meeting minutes spurred a bounce since it contained more details on why the central bank is making its adjustments. No other reports are due from Japan for the rest of the day.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi and Aussie took advantage of dollar weakness and also advanced against European currencies. The Loonie, on the other hand, was bogged down by the lack of a deal in the OPEC meeting and downbeat remarks from BOC Governor Poloz. There are no reports due from the comdoll economies today.

By Kate Curtis from Trader’s Way

777

USD

The US dollar had a mixed performance across the board, although the currency was slightly supported by better than expected data. The flash services PMI climbed from 51.0 to 51.9, outpacing the estimate at 51.1, while the CB consumer confidence index improved from 101.8 to 104.1 instead of dropping to to projected 98.6 reading. For today, durable goods orders data are due, with analysts expecting to see a 1.0 drop in the headline figure and a 0.5% decline in the core reading. Fed head Yellen and FOMC member Bullard also have testimonies lined up.

EUR

The euro was mostly in recent trading sessions after Germany printed a sharper than expected fall in import prices. The report showed a 0.2% drop versus the estimated 0.1% dip, putting more pressure on domestic inflation. Germany’s GfK consumer climate index is due today and no change from the earlier 10.2 reading is eyed.

GBP

The pound managed to bounce against most of its counterparts as traders were likely booking profits from the currency’s slide earlier in the month. UK CBI realized sales was weaker than expected, as the index fell from +9 to -8 instead of just dipping to +8. There are no major reports lined up from the UK economy today.

CHF

The franc tried to hold steady to the dollar but weakened against most of its counterparts as risk appetite rebounded after the US presidential debates. The Swiss UBS consumption indicator is due today, along with the KOF economic barometer which could rise from 99.8 to 100.5

JPY

The yen was off to a weak start but soon regained ground towards the latter sessions. There were no major reports out of Japan then and none are due today, which suggests that risk sentiment could be responsible for pushing the Japanese currency around.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a mixed performance, with the Aussie holding on to its gains on lower odds of an RBA cut and the Kiwi sliding lower on rate cut expectations. The Loonie had a volatile time after OPEC leaders suggested that they might not come up with an output deal just yet but noted that they’re moving closer to an agreement. US crude oil inventories are up for release next.

By Kate Curtis from Trader’s Way

778

USD

The US dollar had a mixed performance as the slightly stronger than expected durable goods orders figures weren’t enough to trigger a strong boost. Headline durable goods orders for August was flat instead of sliding by 1.0% while core durable goods orders fell 0.4% versus the estimated 0.5% drop. However, the July readings were downgraded significantly to show that activity wasn’t as strong as initially reported. US initial jobless claims and final GDP results are due today, along with another speech by Fed head Yellen.

EUR

The euro managed to advance against the dollar and the yen but was no match to comdoll strength. Germany’s GfK consumer climate index fell from 10.2 to 10.0 to show weaker optimism. For today, German and Spanish flash CPI readings are due. The German unemployment change report is also due today and a 5K drop in joblessness is eyed.

GBP

The pound continued to advance against most of its peers even though there were no major reports out of the UK economy. Today’s schedule has the net lending to individuals and mortgage approvals report due.*

CHF

The franc was still in a weak spot against its forex rivals even though Switzerland’s UBS consumption indicator improved from 1.46 to 1.53. Today’s schedule is empty for the Swiss economy so the franc could take its cue from euro zone data or market sentiment.

JPY

The yen was off to a weak start in the Asian session after Japan printed a weaker than expected retail sales report. Consumer spending was down 2.1% on a year-over-year basis versus the projected 1.7% drop and the previous 0.2% dip. BOJ Governor Kuroda has a speech lined up and dovish remarks could continue to push the currency down.

Commodity Currencies (AUD, NZD, CAD)

The Loonie cheered the positive outcome of the OPEC gathering in Algiers, as energy ministers agreed that they need to come up with a deal to cap production. For now, they will still discuss the size and scale of the program but the official deal won’t be announced until their November meeting. US crude oil inventories were down 1.9 million barrels versus the estimated rise of 2.4 million barrels. There are no reports due from the comdoll economies today.

By Kate Curtis from Trader’s Way

779

USD

The US dollar had a mixed performance, although it was mostly stronger across the board when risk aversion picked up. Data from the US economy was also mostly stronger than expected, with the exception of pending home sales for August. The final GDP reading was upgraded from 1.1% to 1.4% while initial jobless claims showed a smaller than expected tally. For today, personal spending and income numbers are due, along with the core PCE price index. The Chicago PMI and revised consumer sentiment data from the UoM are also lined up.

EUR

The euro suffered a brief selloff when news of Deutsche Bank clients withdrawing funds hit the newswires. Still, the shared currency managed to take a piece out of the safe-haven flows in the region as equities tanked. Data from the region was mostly stronger than expected, with German and Spanish flash CPI readings beating expectations and Germany’s unemployment change report printing a surprise 1K rise in joblessness instead of the estimated 5K drop. German retail sales and French preliminary CPI numbers are lined up today but the Deutsche Bank story could prove to be a bigger mover.

GBP

The pound trailed the euro in sliding against its peers in the wake of the Deutsche Bank news, as banking troubles in Europe could take a huge hit on London’s financial sector. UK net lending to individuals was stronger than expected at $4.5 billion GBP. UK final GDP and current account balance numbers are due today.

CHF

The franc was the big winner for the day as the Swiss currency was the safe-haven of choice in Europe. There were no reports out of the Swiss economy yesterday while today has the KOF economic barometer due and a rise from 99.8 to 100.5 is eyed. More updates on the Deutsche Bank story could impact the franc, although profit-taking could also be in the cards at the end of the month and quarter.

JPY

The yen was also the beneficiary of safe-haven flows but it caved to franc strength. Earlier today, Japan printed weaker than expected readings for inflation and consumer spending. Household spending slipped 4.6% versus the estimated 2.1% drop while the Tokyo and national core CPI posted 0.5% declines versus the projected drops of 0.4%. The unemployment rate ticked higher but preliminary industrial production beat expectations.

Commodity Currencies (AUD, NZD, CAD)

The comdolls took a huge hit from the run in risk aversion, even giving up ground to the euro and the pound as traders sought lower-yielding currencies. There were no major reports out of the comdoll economies yesterday and the Loonie seems to have let go of its post-OPEC gains. China’s Caixin flash manufacturing PMI is lined up ahead of Canada’s monthly GDP reading. Chinese official PMI readings are due over the weekend.

By Kate Curtis from Trader’s Way

780

USD

The US dollar struggled to find a clear direction on Friday and took a bit of a hit on profit-taking at the end of the month and quarter. Economic data from the US came in mixed last Friday, as Chicago PMI and the revised consumer sentiment index from the UoM beat expectations. The core PCE price index and personal income reading came in line with expectations while personal spending fell short. The ISM manufacturing PMI is due today and a rise from 49.4 to 50.4 is expected.

EUR

The euro was able to recover slightly after the Deutsche Bank news sparked weakness earlier in the week. Euro zone data came in mixed, with French consumer spending and CPI beating expectations while the core CPI flash estimate fell short. Final manufacturing PMI readings are due from its top economies today and significant downgrades could mean losses for the shared currency.

GBP

The pound was off to a weak start this week as it gapped down to its counterparts after UK PM Theresa May signaled that they will invoke Article 50 by the first quarter of next year. UK current account balance, final GDP and revised business investment numbers all beat expectations on Friday. UK manufacturing PMI is due today and a dip from 53.3 to 52.1 is eyed.

CHF

The franc lost ground to some of its peers as risk appetite made a quick recovery at the end of the week. Data from Switzerland was better than expected as the KOF economic barometer rose from 99.7 to 101.3, outpacing the consensus at 100.5 Swiss retail sales data is due today and a 1.6% year-over-year drop is eyed, marking an improvement from the earlier 2.2% slide.

JPY

The yen was still the weakest performer on Friday as BOJ core CPI missed expectations, confirming that the central bank is likely to add stimulus. Over the weekend, the Tankan report was released, with the manufacturing component unchanged at 6 instead of improving to 7 and the non-manufacturing component down from 19 to 18 as expected. There are no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were off to a weak start this week as risk aversion seems to be returning. Over the weekend, Chinese PMI readings came in line with expectations, as the manufacturing PMI held steady at 50.4 while the non-manufacturing PMI rose from 53.5 to 53.7. Australia’s MI inflation gauge rose from 0.2% to 0.4%. There are no other reports due from the comdoll economies for today.

By Kate Curtis from Trader’s Way

781

EUR/USD
1.1226
Moving Averages: Strong Sell
Indicators: Strong Sell Strong
Summary: Strong Sell Strong

782

[B]USD[/B]

The US dollar was able to get a boost from upbeat ISM manufacturing PMI data, as the reading rose from 49.4 to 51.5 to reflect a return to industry expansion. The jobs component also showed a gain but was still indicating contraction, albeit at a slower pace compared to the previous month. There are no major reports from the US economy today.

[B]EUR[/B]

The euro was mostly weaker against its peers, except against the pound and the yen. Economic data from the euro zone was mostly stronger than expected but the shared currency appeared to have gotten weighed down by the idea that the UK could leave the single market. Euro zone PPI and Spanish unemployment change data are due today.

[B]GBP[/B]

The pound was the weakest performer for the day as Brexit jitters continued to weigh on the currency. Data from the UK was actually better than expected, as the manufacturing PMI rose from 53.4 to 55.4 to reflect a faster pace of industry growth. Construction PMI is due today and a dip from 49.2 to 49.1 could be seen.

[B]CHF[/B]

The franc gave up ground to the dollar but was able to take advantage of the selloff in the European currencies and the Japanese yen. Swiss retail sales missed expectations as it posted a 3.0% drop versus the projected 1.6% fall. There are no reports due from the Swiss economy today.

[B]JPY[/B]

The Japanese yen seems to be losing traction as bears are now trying to push for upside breakouts in yen pairs. Data from Japan came in weak over the weekend while today has the consumer confidence index due. A decline from 42.0 to 41.8 is expected.

[B]Commodity Currencies (AUD, NZD, CAD)[/B]

The comdolls still managed to hold on to their gains to the dollar and push for new lows against the pound. Australian building approvals showed a smaller than expected 1.8% fall versus the projected 5.8% slump. New Zealand’s Global Dairy Trade auction is coming up in the next Asian session.

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

783

[B]USD[/B]

The US dollar continued to advance against its peers even though there were no major reports out of the US economy. News that the ECB could be ready to taper its QE program before its conclusion drove risk aversion back in the markets on the prospect of reduced stimulus. For today, the ADP non-farm employment change report is due and a weaker gain of 166K compared to the earlier 177K reading is eyed. Also lined up today is the ISM non-manufacturing PMI, which might show a climb from 51.4 to 53.1.

[B]EUR
[/B]
The euro made a strong rally when unnamed ECB officials were quoted saying that policymakers are close to reaching a consensus on QE tapering before the program’s end-date on March 2017. ECB Governor Draghi refused to comment on these speculations and denied that any discussions had taken place. Euro zone retail sales and services PMIs from its top economies are due today.

[B]GBP[/B]

The pound carried on with its slide as investors continued to price in the repercussions for the UK in case it does leave the single market. Data was actually better than expected, as the construction PMI rose from 49.2 to 52.3 instead of dipping to 49.1. The services PMI is due today and a drop from 52.9 to 52.1 is expected, although traders could still shrug off any stronger than expected figures.

[B]CHF[/B]

The franc was in a weak spot to the dollar and euro but took advantage of pound weakness. There were no reports out of Switzerland yesterday and none are due today, leaving the franc functioning as a counter currency.

[B]JPY[/B]

The yen was also one of the weaker performers of the day as stronger odds of a Fed rate hike drove traders away from the lower-yielding yen and onto the dollar. Yen bulls seem to be running out of energy in pushing for downside breaks of the lows in yen pairs, despite stronger than expected consumer confidence data. There are no reports due from Japan today.
[B]
Commodity Currencies (AUD, NZD, CAD)[/B]

The comdolls were no match to dollar strength, although the Aussie managed to hold on to some of its wins after the RBA kept rates unchanged. The Kiwi was the weakest of the bunch after the GDT auction showed a 3% decline in milk prices. Australia retail sales, Canadian trade balance, and US crude oil inventories are lined up for today.
[I]
By Kate Curtis from Trader’s Way[/I]

784

USD

The Greenback was able to squeeze out more gains after US data came in mostly upbeat. The ISM non-manufacturing PMI jumped from 51.4 to 57.1, higher than the consensus at 53.1, and indicated a strong gain in its jobs component. However, the ADP non-farm employment change figure came in at 154K only, short of the estimated 166K figure and the previous 175K increase. Factory orders surprised with a 0.2% uptick instead of the estimated 0.4% drop. US initial jobless claims and Challenger job cuts are due today.

EUR

The euro struggled to hold on to its recent gains after ECB officials downplayed the idea of tapering. Data was somewhat weaker than expected as services PMI readings from Spain and France came in below consensus. German factory orders data is due today, along with the minutes of the latest ECB meeting.

GBP

The pound was still one of the weakest performers for the day, even as the UK services PMI showed a smaller than expected fall from 52.9 to 52.6 versus the projected drop to 52.1. There are no major reports due from the UK economy today, which might give bears time to book profits or keep Brexit jitters in play.

CHF

The franc advanced to the dollar but sold off sharply against the euro in what some speculate to be a form of mild intervention from the SNB. There were no reports out of the Swiss economy yesterday while today has the CPI due. Analysts are expecting to see a 0.2% rebound in price levels.

JPY

The yen continued to sell off against its peers as bulls appear to be reducing their holdings and transferring to the dollar instead. There were no major reports out of Japan yesterday and none are due today so risk sentiment could still be the main driving force for yen pairs.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi and Aussie were somewhat weaker for the day while the Loonie got a boost from the rally in crude oil. The US EIA reported a draw of 3.3 million barrels from crude oil stockpiles, marking its fifth weekly drop in a row and easing fears of an oversupply. Australia’s trade balance beat expectations by printing a smaller deficit as both imports and exports rose. There are no other reports due from the comdolls today.

By Kate Curtis from Trader’s Way

785

USD

The Greenback managed to squeeze out more gains on Thursday as medium-tier jobs data came in strong. Initial jobless claims stood at 249K versus the estimated 255K figure and the earlier 254K reading. Challenger job cuts showed a larger 24.7% fall in unemployment compared to the earlier 21.8% decline. The NFP report due today could show a 171K increase in hiring, larger than the earlier 151K gain and likely enough to keep Fed hike expectations in place. A number of FOMC officials are set to testify before the end of the US session.

EUR

The euro caved to the dollar and most of its other peers even though data came in stronger than expected. Germany reported a 1% gain in factory orders versus the estimated 0.3% uptick. German and French industrial production numbers are up for release today, along with the French trade balance.

GBP

The pound suffered a sharp drop on what appeared to be a flash crash after French President Hollande reiterated that the EU should give the UK a tough time in Brexit negotiations. He argued that leaving the union comes at a price, one that the UK should be willing to pay. The UK currency quickly recovered as traders booked profits on thin liquidity. UK manufacturing production data is due today and a 0.4% rebound is eyed.

CHF

The franc slid to the dollar but managed to hold its ground against its other counterparts. Swiss CPI came in weaker than expected with a meager 0.1% uptick in price levels versus the projected 0.2% increase. For today, the foreign reserves data is up for release and this should shed more light on whether or not the SNB conducted a form of mild intervention to keep EURCHF supported recently.

JPY

The yen continued to slide against its peers as traders booked profits off their long yen positions, but the Japanese currency managed to get a piece of the pound selloff. Data from Japan was weaker than expected, with average cash earnings down 0.1% instead of showing the estimated 0.5% gain.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were still weaker against the dollar as risk aversion seems to be taking hold. Canada’s jobs report is due today and an increase of 8.5K in hiring is eyed, which might be enough to keep the unemployment rate steady at 7%. The Ivey PMI is also due and a rise from 52.3 to 53.0 is expected.

By Kate Curtis from Trader’s Way

786

USD

The US dollar gave back some of its recent gains when the NFP reading missed expectations. The actual figure landed at 156K versus the 171K consensus but the previous reading was upgraded from 151K to 167K. Average hourly earnings rose 0.2% as expected, higher than the earlier 0.1% uptick, but the jobless rate rose from 4.9% to 5.0%. US banks are closed for Columbus Day today.

EUR

The euro was able to hold its ground after medium-tier reports from the region printed stronger than expected results. German industrial production rose 2.5% versus the projected 1.1% increase while French industrial production also beat expectations. German trade balance, Italian industrial production, and euro zone Sentix investor confidence are lined up for today.

GBP

The pound was still in a weak spot on Friday when UK manufacturing and industrial production fell short of expectations. Manufacturing production showed a 0.2% uptick versus the projected 0.4% gain while industrial production fell 0.4% instead of showing the projected 0.1% increase. The UK BRC retail sales monitor is due today.

CHF

The franc took advantage of dollar and pound weakness but was mostly weaker to the euro and yen. Swiss foreign currency reserves showed only a small increase from 627B CHF to 628B CHF, suggesting that the central bank hasn’t been intervening. The Swiss jobless rate is due today and no change from the earlier 3.4% figure is eyed.

JPY

The yen regained a bit of ground on Friday after the US NFP fell short of estimates. Data from Japan, namely average cash earnings and leading indicators, were short of estimates as well so risk aversion likely supported the lower-yielding currency. Japanese banks are closed for the holiday today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls took advantage of dollar weakness to recover from their recent slide. Canada’s jobs figure beat expectations with a 67.2K gain versus the estimated 8.5K increase and the earlier 26.2K gain. Canada’s Ivey PMI also beat expectations by rising from 52.3 to 58.4. Canadian banks are closed for the holiday today.

By Kate Curtis from Trader’s Way