Daily Market Outlook by Kate Curtis from Trader's Way

Commercial Content Analysts
787

USD

The US dollar resumed its climb against its peers during the US session even as traders were out for the holiday. Only low-tier reports such as the NFIB Small Business Index and labor market conditions index are due from the US today, although strong figures could still fuel the dollar’s rally.

EUR

The euro was in a weak spot on Monday even after economic data came in stronger than expected. Germany’s trade surplus widened from 19.4B EUR to 22.2B EUR while Italy’s industrial production rebounded by 1.7%. Euro zone Sentix investor confidence was up from 5.6 to 8.5, higher than the estimated rise to 6.2. German and euro zone ZEW economic sentiment figures are due today.

GBP

The pound gapped down over the weekend and resumed its slide after filling the gaps. The UK BRC retail sales monitor showed a 0.4% rebound but traders seem to be shrugging off these upbeat reports to focus on Brexit uncertainties. There are no major reports due from the UK today.

CHF

The franc regained a bit of ground when the Swiss jobless rate held steady at 3.3% instead of rising to the projected 3.4% reading. There are no reports due from Switzerland today so the franc could take its cue from market sentiment or euro price action.

JPY

The yen made a correction from its recent selloff but soon resumed its slide against its peers. Japanese banks were closed for the holiday yesterday. Earlier today, Japan’s current account balance printed a larger than expected surplus of 1.98T JPY from the earlier 1.45T JPY reading. The Economy Watchers sentiment index is due next.

Commodity Currencies (AUD, NZD, CAD)

The Aussie and Kiwi were no match to dollar strength but the Loonie was able to put up a fight when crude oil prices rallied. Another informal OPEC meeting is scheduled this week and investors are optimistic that their resolve to stabilize the markets will be stronger after Putin mentioned that Russia is willing to cooperate with any deal to cut or cap production. Australia reported no change in its NAB business confidence index at 6 while home loans posted a sharper than expected 3% drop.

By Kate Curtis from Trader’s Way

788

USD

The US dollar gave back some of its recent gains as traders probably booked profits ahead of the FOMC minutes release later today. Economic data from the US was weaker than expected but these were just low-tier reports such as the NFIB small business index and the labor market conditions index. Hawkish remarks from Fed officials could renew rate hike expectations for later this year, possibly leading to more gains for the dollar.

EUR

The euro was in a weak spot against its peers despite stronger than expected euro zone data. The German ZEW index was up from 0.5 to 6.2, higher than the 4.2 consensus, while the region’s figure jumped from 5.4 to 12.3 to show a pickup in optimism. Only the euro zone industrial production and French final CPI data are due today.

GBP

The pound resumed its slide against most of its forex peers before making a sharp correction during the Asian session. There were no major reports out of the UK, leaving Brexit concerns to weigh on the British currency. BOE MPC member Cunliffe has a testimony lined up today.

CHF

The franc had a mixed performance as it consolidated to the dollar, regained ground to the euro, and slid against the pound. There were no major reports out of the Swiss economy yesterday while today has the ZEW economic expectations index lined up. A higher reading compared to the earlier 2.7 figure could revive gains for the franc.

JPY

The Japanese yen was mostly stronger as traders moved their safe-haven holdings away from the dollar and towards the yen. The Economy Watchers sentiment index was weaker than expected at 44.8, down from the earlier 45.6 figure. Japan’s core machinery orders report showed a smaller than expected 2.2% decline and the preliminary machine tool orders report is due next.

Commodity Currencies (AUD, NZD, CAD)

The comdolls tossed and turned against the dollar and the yen but were mostly stronger against the European currencies. Australia’s Westpac consumer sentiment index posted a 1.1% gain while a report from Moody’s indicated upbeat prospects for the economy. An informal OPEC gathering is set in Istanbul today but no output deal is eyed yet.*

By Kate Curtis from Trader’s Way

789

USD

The US dollar sold off then recovered during the release of the FOMC minutes, as the transcript still contained some degree of caution from policymakers. Still, most committee members acknowledged that the September decision was a close call and that the case for tightening has strengthened. US initial jobless claims and import prices are due today, along with crude oil inventories.

EUR

The euro was mostly weaker for the day after headlines noted that the yield spread between German and US bonds has fallen to their lowest level in ten years. Medium-tier economic reports came in line with expectations, with euro zone industrial production up 1.6% versus 1.4%. Only the German final CPI reading is up for release from the region today.

GBP

The pound made a quick bounce after UK Prime Minister May assured that Brexit terms are still negotiable, calming market fears that the UK would lose access to the single market. BOE Governor Carney will have a testimony later today and more words of reassurance could allow the pound to recover.*

CHF

The franc gave up ground to most of its rivals, except for the euro. Swiss ZEW economic expectations improved from 2.7 to 5.2. There are no reports lined up from the Swiss economy today so market sentiment could play a role in price action.

JPY

Yen pairs tossed and turned during the release of the FOMC minutes as traders moved some of their yen holdings to the safe-haven dollar. Japan’s preliminary machine tool orders report saw a smaller 6.3% drop compared to the earlier 8.4% tumble. The tertiary industry activity index is due today and a 0.2% dip is eyed.

Commodity Currencies (AUD, NZD, CAD)

The comdolls managed to put up a fight against the dollar during the release of the FOMC minutes but soon gave back their gains upon seeing weak Chinese trade data. The surplus narrowed from 346B CNY to 278B CNY, indicating weaker demand. Oil and the Loonie retreated when a report from the OPEC revealed a pickup in production as countries likely ramped up their output in anticipation of a production cap.*

By Kate Curtis from Trader’s Way

790

USD

The US dollar returned some of its recent gains as traders booked profits off their positions on a pickup in risk appetite. Data from the US, namely initial jobless claims and import prices, turned out upbeat. US retail sales and PPI numbers are lined up for today and improvements are eyed. Headline retail sales could show a 0.6% gain while core retail sales could print a 0.4% increase. Headline PPI could show a 0.2% increase while core PPI could print a 0.1% uptick. The preliminary UoM consumer sentiment index is also due ahead of Fed head Yellen’s testimony.

EUR

The euro was able to chalk up a bit of recovery to the dollar but was weaker against the comdolls. Data from the euro zone came in line with expectations as the German final CPI stood at 0.1%. Only the euro zone trade balance is due today and a wider surplus of 20.5 billion EUR is eyed from the earlier 20.0 billion EUR.

GBP

The pound managed to make a quick bounce against its rivals on a bit of profit-taking but the UK currency still looked mostly weak. There were no reports out of the UK economy yesterday while the BOE credit conditions survey and UK construction output data are due today.

CHF

The franc took advantage of dollar weakness but was no match to the pickup in the pound, euro, and yen. There were no reports out of Switzerland yesterday while today has the PPI lined up. Analysts are expecting to see a 0.1% uptick in producer prices, up from the earlier 0.3% drop.

JPY

The yen gave up ground to most of its peers when risk appetite improved in the markets. Japan’s tertiary industry activity index was flat instead of showing the projected 0.2% drop. There are no reports due from the Japanese economy today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were off to a weak start after China printed a weak trade balance spurred by a sharp decline in exports and a surprise drop in imports. However, risk appetite picked up later in the day when US crude oil inventories revealed a large drop in production and triggered a bounce for crude oil. Chinese PPI and CPI numbers are due next.

By Kate Curtis from Trader’s Way

791

USD

The US dollar regained ground against its peers on Friday when retail sales and PPI reports came in the green. Headline retail sales increased 0.6% as expected while core retail sales posted a 0.5% gain versus the projected 0.4% increase. Headline PPI was up 0.3% versus the projected 0.2% increase while core PPI posted a 0.2% uptick versus the projected 0.1% rise. However, preliminary consumer sentiment was weaker than expected at 89.2 versus 92.1. US industrial production data and the Empire State manufacturing index are lined up today.

EUR

The euro continued to slump across the board even though trade data came in better than expected. The surplus widened from an upgraded 20.8 billion EUR to 23.3 billion EUR in the region, reflecting stronger demand. Euro zone final CPI readings and a speech by ECB head Draghi are lined up today, possibly setting the tone for the ECB decision later this week.

GBP

The pound made a bit of a recovery against its rivals as some traders stayed hopeful that the UK parliament hearings could lead to a soft Brexit or a delay in triggering Article 50. In his testimony, BOE Governor Carney shrugged off the massive weakness in the pound since this has been supporting economic activity. There are no major reports due from the UK today so traders could price in expectations for the top-tier releases later in the week or react to any updates from the UK government.

CHF

The franc weakened to the dollar but chalked up more gains against the euro and the pound, acting as the safe-haven in the European region. Swiss PPI posted a stronger than expected 0.3% gain in producer prices versus the projected 0.1% uptick. There are no reports due from the Swiss economy today.

JPY

The yen recouped some of its losses towards the end of the week as traders booked profits off their recent trades. Yen pairs gapped up over the weekend but these gaps were quickly filled in the past few hours. Japan’s revised industrial production report is due next.*

Commodity Currencies (AUD, NZD, CAD)

The comdolls advanced across the board led by upbeat Chinese inflation readings in Friday’s Asian session. There are no major reports from the comdoll economies today but RBA head Lowe has a testimony lined up in the next Asian session while New Zealand will print its quarterly CPI report. Analysts are expecting to see a flat reading for Q3 and a weaker than expected read could underscore McDermott’s remarks on slow inflation for the period, reinforcing RBNZ rate cut expectations.

By Kate Curtis from Trader’s Way

792

[B]USD[/B]

The Greenback pulled back from its rallies after medium-tier US reports disappointed. Industrial production posted a bleak 0.1% uptick instead of the projected 0.3% gain for September while the August reading was downgraded to show a sharper decline. The Empire State manufacturing index slipped deeper into negative territory instead of showing the estimated +1.1 figure. For today, US CPI readings are due, with the headline figure likely to show a 0.3% increase and the core figure expected to post a 0.2% gain.

[B]EUR[/B]

The euro bounced against the dollar and the yen but was still in a weak spot against the commodity currencies. Euro zone final CPI readings were unchanged at 0.4% for the headline figure and 0.8% for the core figure. There are no reports due from the euro zone economy today.

[B]GBP[/B]

The pound made a bit of a comeback against the dollar but continued to consolidate against the yen. The UK CB leading index posted a flat reading, which is an improvement from the earlier 0.2% decline. UK CPI is up for release and stronger price pressures are eyed due to the weaker pound, with the headline figure slated to rise from 0.6% to 0.9% and the core figure projected to tick higher to 1.4%.

[B]CHF
[/B]
The franc was barely able to take advantage of dollar weakness as it gave up some ground to the euro and pound. There were no major reports out of Switzerland, though, and none are due today so these moves could be dependent on market sentiment.

[B]JPY[/B]

The yen had a mixed performance as it simply reacted to country-specific events. Japan’s industrial production figure was downgraded from 1.5% to 1.3% in August, underscoring the need for additional BOJ stimulus. There are no reports due from Japan today.

[B]Commodity Currencies (AUD, NZD, CAD)
[/B]
The comdolls were mostly stronger, as the Loonie got a boost from higher Canadian foreign securities purchases even with news that Iran could ramp up production to 5 million barrels per day. Meanwhile, the Kiwi also drew support from a higher than expected 0.2% gain in quarterly NZ CPI versus the projected flat reading. The Aussie was also able to rally after the release of the RBA minutes which contained upbeat forecasts for commodity prices and growth, although it had a bit of jawboning against AUD strength. New Zealand’s GDT auction is lined up next.

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

793

[B]USD[/B]

The US dollar was in a weaker spot after US CPI reports failed to impress. Headline CPI posted a 0.3% gain as expected, its fastest pace of growth in five months, while core CPI fell short with a 0.1% uptick versus the estimated 0.2% gain. US building permits and housing starts are up for release today, and traders might take their cues from risk sentiment instead. The Fed Beige Book is also up for release.

[B]EUR[/B]

The euro was still mostly weaker against its peers since there were no reports to support the shared currency yesterday. There are no major reports lined up from the euro zone today so traders could continue to price in expectations for the upcoming ECB rate statement.

[B]GBP[/B]

The pound enjoyed a bounce after UK CPI readings beat expectations and the British parliament seemed likely to vote on a Brexit deal before Article 50 is invoked, easing fears of a hard Brexit. Headline CPI was up from 0.6% to 1.0% and the core CPI climbed from 1.3% to 1.5%. Employment data is due today, with the claimant count change expected to show a 3.4K increase in joblessness, higher than the earlier 2.4K rise. The average earnings index is expected to hold steady at 2.3% while the unemployment rate is projected to stay unchanged at 4.9% as well.

[B]CHF[/B]

The franc had a mixed performance as it consolidated to the dollar, advanced to the euro, and gave up ground to the pound. There were no reports out of Switzerland yesterday and there are none due today, which suggests that risk sentiment could play a major role in price action once more.

[B]JPY[/B]

The yen was able to advance against the dollar and the euro but was mostly weaker against the rest of its peers. There were no reports out of the Japanese economy yesterday while today has the all industries activity index on tap. Analysts are expecting to see a weaker read of 0.2% compared to the estimated 0.3% uptick.

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

The comdolls were able to hold on to their gains for the day, with the Loonie getting a fresh boost from a surprise draw in crude oil stockpiles according to API data. US crude oil inventories data is due today and a rise of 2.2 million barrels is eyed. New Zealand reported a gain of 1.4% in dairy prices during the latest GDT auction. Earlier today, China’s reports met expectations in terms of GDP, retail sales, and fixed asset investment but industrial production was weaker than expected. The BOC decision is coming up next.

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

794

[B]USD[/B]

The US dollar had a mixed performance as it reacted to country-specific events. Data came in mixed, as building permits beat expectations with a gain from 1.15M to 1.23M while housing starts fell from 1.15M to 1.05M instead of rising to 1.18M. US existing home sales are lined up, along with the Philly Fed index and the initial jobless claims.

[B]EUR[/B]

The euro was weighed down by remarks from EU official Weber who called for tough Brexit negotiations, admitting that the split could do damage to the remaining EU bloc as well. There were no major reports out of the region then while today has the ECB rate decision lined up. No actual easing announcements are expected but any downbeat remarks could drag the shared currency much lower.

[B]GBP[/B]

The pound put up a strong fight in the forex arena but was unable to make much headway after EU official Weber reiterated the need to make Brexit negotiations tough on the UK. Employment data was slightly better than expected as the economy added 0.7K positions instead of losing 3.4K jobs. The average earnings index came in at 2.3% as expected while the unemployment rate didn’t budge from 4.9%. UK retail sales data is due today and a 0.3% rebound is eyed.

[B]CHF[/B]

The franc consolidated to the dollar and pound but was able to advance against the euro. There were no reports out of the Swiss economy yesterday while today has the trade balance lined up. A larger surplus of 3.27B CHF is eyed compared to the earlier 3.02B CHF, possibly indicating a pickup in export activity.

[B]JPY[/B]

The yen had a mixed performance as it weakened to the commodity currencies but strengthened against the European currencies and the dollar. There were no reports out of the Japanese economy yesterday and there are none lined up today so the yen could continue to react to country-specific events or overall market sentiment.

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

The Aussie and Kiwi held on to their gains after China’s data came in mostly in line with expectations, even as Australia printed a weak jobs report. Employment fell by 9.8K in September instead of showing the estimated 15.2K rise. The BOC kept rates on hold as expected but Governor Poloz admitted that the idea of additional stimulus was discussed. The Canadian central bank also lowered growth forecasts for the year on expectations of weak exports.

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

795

[B]USD[/B]

Economic data from the US came in mixed, with initial jobless claims missing expectations and the existing home sales report printing upbeat results. The Philly Fed index posted a smaller than expected decline but still indicated a slowdown in the manufacturing industry. There are no major reports due from the US economy today.

[B]EUR
[/B]
The euro continued to tumble against its forex counterparts as traders were disappointed to find out that ECB policymakers hadn’t planned on tapering QE yet. ECB Governor Draghi said that QE could extend past the March 2017 end-date, citing a weak inflation outlook and downside risks to growth. Euro zone business confidence data is due today, along with a speech by German President Weidmann.

[B]GBP[/B]

The pound put up a fight against its forex rivals despite weaker than expected UK retail sales. The report showed a flat reading instead of the estimated 0.3% uptick. UK public sector net borrowing data is due today but market watchers could be more sensitive to Brexit headlines.

[B]CHF[/B]

The franc underwent a volatile period during the ECB press conference as the Swiss currency took its cue from the euro. Swiss trade balance was stronger than expected at a surplus of 4.37B CHF from the earlier 3.01B CHF. There are no reports due from the Swiss economy today.

[B]JPY[/B]

The yen was mostly weaker against its peers even though there were no major reports out of the Japanese economy. Earlier today, BOJ Governor Kuroda had a testimony but his remarks failed to inspire strong moves for the currency, leaving it vulnerable to market sentiment for the rest of the day.
[B]
Commodity Currencies (AUD, NZD, CAD)[/B]

The comdolls were in a weak spot after Australia printed a dismal jobs report. Unemployment rose by 9.8K while labor force participation tanked. In New Zealand, visitor arrivals and credit card spending rebounded. Canada’s CPI and retail sales figures are due today and improvements are expected on both fronts.

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

796

USD

The US dollar was able to post gains against its counterparts on Friday even though there were no major US reports on deck. Only the US flash manufacturing PMI is lined up today and an uptick from 51.5 to 51.6 is eyed. Also on the schedule are speeches from FOMC members Dudley and Bullard.

EUR

The euro was in a weak spot on Friday even though there were no reports out of the region. Today has flash PMI readings from the manufacturing and services sectors of Germany and France, with small improvements eyed. These might be enough to bring the region’s manufacturing PMI up from 52.6 to 52.7 and its services PMI up from 52.2 to 52.4.*

GBP

The pound struggled to hold on to its recent gains after the UK public sector net borrowing figure came in at 10.1 billion GBP versus the projected 8.6 billion GBP figure. Only the CBI industrial order expectations report is lined up today and an improvement from -5 to -2 is expected.

CHF

The franc slid lower against most of its forex peers on Friday as the Swiss currency simply trailed the euro. There are no major reports lined up from the Swiss economy today so the franc could be influenced by the turnout of the euro zone PMI reports unless SNB head Jordan drops a bombshell during his testimony today.

JPY

The yen took advantage of weaker risk appetite on Friday to advance against its higher-yielding rivals. Over the weekend, Japan printed a stronger than expected trade balance, as the surplus came in at 0.35T JPY versus the projected 0.21T JPY figure. Earlier today, Japan’s flash manufacturing PMI jumped from 50.4 to 51.7, higher than the estimated rise to 50.6.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave up a lot of their recent gains, as the Loonie broke past a key level against the US dollar when Canadian data came in weaker than expected. Headline retail sales fell 0.1% while core retail sales was flat. Headline CPI posted a 0.1% uptick versus the projected 0.2% gain while core CPI came in line with expectations of a 0.2% increase. Canada’s wholesale sales is due today.

By Kate Curtis from Trader’s Way

797

USD

The US dollar managed to squeeze out a few gains after the US flash manufacturing PMI jumped from 51.5 to 53.2 to show a faster pace of expansion compared to the estimated rise to 51.6. US CB consumer confidence data is due today and a fall from 104.1 to 101.5 is eyed. The Richmond manufacturing index is also due and an improvement from -8 to -5 is expected.

EUR

The euro was able to score gains across the board thanks to stronger than expected PMI readings. Only the French services PMI missed the mark but the rest of the industry reports from Germany and the euro zone beat estimates. German Ifo business climate data is due today and a small uptick is eyed but market watchers could pay closer attention to ECB head Draghi’s testimony.

GBP

The pound struggled to stay afloat as the UK CBI industrial order expectations showed a surprise tumble from -5 to -17 instead of rising to -2. BOE Governor Carney has a testimony lined up today and any hints on monetary policy and Brexit action could spur sterling volatility.

CHF

The franc gave up some ground after SNB head Thomas Jordan reiterated that the currency remains significantly overvalued but said that housing market risks are materializing. There are no reports due from the Swiss economy today so risk sentiment could be the main driving force.

JPY

The yen had a mixed performance since it functioned mostly as a counter currency. Japanese data was stronger than expected, easing fears of additional stimulus from the BOJ in their policy meeting next week. There are no reports due from Japan today so risk sentiment could push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were slightly weaker in recent trading sessions, although the Loonie bounced back after BOC Governor Poloz backpedaled on his stimulus hints. He even hinted that they might stay on put for the next 18 months to assess other economic uncertainties before making adjustments. There are no reports due from the comdoll economies today.

By Kate Curtis from Trader’s Way

798

USD

The US dollar advanced against the euro and the pound even as data from the US came in mixed. The CB consumer confidence index fell from a downgraded 103.5 figure to 98.6, worse than the estimated fall to 101.5, while the Richmond manufacturing index rose from 46.7 to 51.3. US flash services PMI and new home sales data are up for release today.

EUR

The euro suffered a sharp selloff when ECB Governor Draghi reiterated that stimulus measures will stay in place until the region hits its inflation targets. Data from Germany was stronger than expected, as its Ifo business climate index jumped from 109.5 to 110.5, higher than the estimated rise to 109.6. Germany’s GfK consumer climate index is due, along with import prices and Italian retail sales data.

GBP

The pound sold off in anticipation of dovish remarks from BOE Governor Carney but was able to bounce back when the central bank head acknowledged that the depreciating currency would be positive for inflation. This led market watchers to speculate that the UK central bank won’t need to adjust policy soon. UK preliminary GDP data is due today and a 0.3% growth figure is eyed, slower than the earlier 0.7% gain, but an upside surprise could be seen.

CHF

The franc had a mixed performance as the lack of top-tier data from Switzerland kept it sensitive to country-specific data. The UBS consumption indicator is up for release today and an improvement from the earlier 1.53 reading could spark gains for the Swiss currency.

JPY

The yen was mostly weaker against its peers as risk appetite kept higher-yielders supported. There were no major reports out of Japan then and none are due today so risk sentiment could keep pushing yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The Aussie got a boost from stronger than expected Australian CPI, with price levels picking up 0.7% versus the estimated 0.5% gain. The trimmed mean CPI came in line with estimates of a 0.4% increase, which might be enough to keep the RBA in its neutral stance. US crude oil inventories data is due and a draw in stockpiles could be positive for the oil-related Loonie, which has been weighed down by reports that Russia and Iraq are unwilling to participate in an output deal.

By Kate Curtis from Trader’s Way

799

USD

The US dollar regained a bit of ground against its peers when most of its medium-tier releases came in better than expected. Flash services PMI jumped from an upgraded 52.3 figure to 54.8, outpacing the consensus at 52.4. The goods trade balance showed a smaller deficit, likely making a positive contribution to Q3 GDP. Preliminary wholesale inventories ticked higher to show a slight dip in demand while new home sales increased. Pending home sales, initial jobless claims, and durable goods orders data are lined up today.

EUR

The euro got another blow when sources close to the ECB shared that the central bank is considering some adjustments to its QE program, apart from extending it past the March 2017 end-date. These could involve less restrictions on the availability and size of bond purchases, which could further boost liquidity and inflation in the region. Data from the region fell short of estimates, with the German GfK consumer climate index down from 10.0 to 9.7 instead of improving to 10.1 and Italian retail sales lower by 0.1% instead of showing the projected 0.2% uptick.

GBP

The pound was able to recover against its peers as traders seem to be positioning for an upside GDP surprise. BBA mortgage approvals also came in better than expected at 38.3K versus 37.3K. The preliminary Q3 GDP could show a 0.3% growth figure, slower than the earlier 0.7% reading, but a stronger than expected result could be printed. CBI realized sales data is also due and a rise from -8 to -2 is expected.

CHF

The franc had a mixed performance as it functioned more as a counter currency instead of establishing its own direction. The UBS consumption indicator is due today and an improvement from the earlier 1.53 reading could be positive for the Swiss currency.

JPY

The yen also had a mixed performance since it simply reacted to country-specific factors when there were no reports out of Japan. There are still no major reports lined up for today so market sentiment could push yen pairs around ahead of Japan’s consumer spending and inflation releases on Friday.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were in a weak spot even as the US EIA report showed a reduction in crude oil stockpiles of 0.6 million barrels. Australia printed a sharper than expected 1.0% fall in import prices versus the estimated 0.7% drop while New Zealand showed a much wider trade deficit spurred by a 5.7% drop in exports. There are no other reports due from the comdoll economies for the rest of the day

By Kate Curtis from Trader’s Way

800

USD

The US dollar resumed its climb against its peers, thanks to strong gains in US bond yields and mostly upbeat medium-tier data. Headline durable goods orders fell 0.1% instead of rising by 0.1% while core durable goods orders came in line with estimates of a 0.2% gain. Initial jobless claims stood at 258K versus 261K while pending home sales posted a 1.5% gain, higher than the estimated 1.2% increase. US advanced GDP data is due today and a 2.5% expansion is projected.

EUR

The euro recouped most of its recent losses as traders likely booked profits off their shorts on upbeat data. The Spanish unemployment rate improved from 20% to 18.9%, much better than the estimated 19.3% reading. Preliminary GDP and CPI readings from Germany, France, and Spain are lined up today so strong readings are likely to drive the euro higher while weak results could force it to retreat again.

GBP

The pound also regained a bit of ground but was unable to sustain its climb even after the preliminary Q3 UK GDP came in better than expected. The economy expanded by 0.5% in Q3 even after the Brexit referendum while the earlier figure was upgraded to 0.7% growth. There are no reports due from the UK economy today.

CHF

The franc barely made much headway against its peers, except against the Japanese yen. The Swiss UBS consumption indicator rose from 1.53 to 1.59 to reflect a bit of improvement. Swiss KOF economic barometer is due today and a rise from 101.3 to 101.8 is eyed.

JPY

The yen gave up ground when economic data from Japan beat expectations, presumably due to the pickup in risk appetite it caused. Household spending is down 2.1% on a year-over-year basis, better than the projected 2.6% decline and the previous 4.6% drop. Tokyo core CPI came in at -0.4% versus the projected 0.5% dip while national core CPI came in line with estimates of a 0.5% decline. BOJ core CPI is still due next.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were the weaker performers of the day, giving up ground to the dollar and European currencies. Australian import prices posted a steeper 1.0% decline compared to the estimated 0.7% drop while PPI rose 0.3% versus the estimated 0.6% gain. Crude oil ticked slightly higher after Saudi Arabia reportedly proposed a 4% output cut to Russia. There are no other reports due from the comdoll economies today.*

By Kate Curtis from Trader’s Way

801

USD

The US dollar rallied then reversed on Friday, as traders reacted to a stronger than expected GDP reading then booked profits quickly. The US economy grew by 2.9% in Q3, outpacing the consensus of 2.5%, while the price index for the same period also posted a stronger than expected 1.5% increase. Meanwhile, the UoM sentiment figure was downgraded from 87.9 to 87.2 to show weaker optimism. Today has the core PCE price index, along with personal spending and income data, lined up.

EUR

The euro was able to keep up its climb until the end of the week even as data came in mixed. French CPI and consumer spending fell short of estimates but Germany and Spain reported stronger than expected inflation figures. Euro zone CPI estimates are up for release today and the headline reading is slated to rise from 0.4% to 0.5% while the core figure could hold steady at 0.8%. German retail sales and Italian CPI are also due.

GBP

The pound gave up some of its recent gains since there were no reports to give the UK currency support on Friday. The GfK consumer climate index ticked down a couple of notches from -1 to -3 to show more pessimism. Today has mortgage approvals and net lending to individuals data lined up.

CHF*

The franc recouped a lot of its losses at the end of Friday’s New York session on profit-taking. Swiss data was also stronger than expected, as the KOF economic barometer rose from 101.6 to 104.7, higher than the estimate at 101.8. There are no reports due from Switzerland today so the franc could trail the euro or react to market sentiment.

JPY

The yen was off to a weak start after reports released over the weekend came in below estimates. Industrial production was flat in September versus the projected 0.9% gain while retail sales fell 1.9% on a year-over-year basis versus the projected 1.7% slump. Housing starts data is still up for release next.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were mostly weaker for the day as strong US GDP reinforced projections of higher borrowing costs, which could then weigh on global demand. Australia’s PPI was also weaker than expected at 0.3% versus 0.6%. Earlier today New Zealand reported a drop in its ANZ business confidence index from 27.9 to 24.5. Australia’s MI inflation gauge fell from 0.4% to 0.2% while its private sector credit posted another 0.4% gain as expected.

By Kate Curtis from Trader’s Way

802

USD

The US dollar returned some of its recent gains as traders booked profits at the end of the month. Economic data from the US came in line with estimates, except for the Chicago PMI which showed a sharper decline and a slower pace of expansion. The core PCE price index was up 0.1% as expected, personal spending rose 0.5%, and personal income increased by 0.3%. The ISM manufacturing PMI is due today and a rise from 51.5 to 51.8 is expected.

EUR

The euro held on to its recent wins when euro zone data came in mostly in line with estimates. The headline CPI flash reading stood at 0.5% while the core figure held steady at 0.8% as expected. The region’s flash GDP estimate came in at 0.3% but Italy’s preliminary CPI reading came in short. French and Italian banks are closed for the holiday today so lower liquidity is expected during the European session.

GBP

The pound was able to advance after BOE Governor Carney confirmed that he would be staying in office for three more years, easing fears that he might step down in the middle of Brexit negotiations. UK net lending to individuals and mortgage approvals came in line with expectations. The manufacturing PMI is due today and a fall from 55.4 to 54.6 is eyed.

CHF

The franc was barely able to establish any clear direction in recent trading since there were no economic reports out of the Swiss economy. Swiss retail sales and manufacturing PMI data are due today, with the former expected to show a 2.3% year-over-year drop and the latter projected to rise from 53.2 to 53.9.*

JPY

The yen was stuck in consolidation as traders are holding out for the BOJ decision. No actual changes are expected for the time being, although officials are expected to provide more details on the shift in their monetary policy framework. Dovish remarks could keep a lid on yen gains while upbeat comments could allow the Japanese currency to recover.

Commodity Currencies (AUD, NZD, CAD)

The Loonie gave up ground when crude oil prices fell on reports of record high OPEC output and a buildup in inventories. Earlier today, Chinese PMI readings came in mostly better than expected. Canada is set to print its monthly GDP reading and might show a bleak 0.2% expansion while New Zealand has its quarterly jobs report due.

By Kate Curtis from Trader’s Way

803

USD

The US dollar gave up a lot of its recent gains as election-related uncertainties weighed on US markets. Polls continued to show a narrowing lead for Clinton over Trump as the FBI investigation into her private email server is hurting her credibility. Data came in mostly in line with expectations, as the ISM manufacturing PMI advanced from 51.5 to 51.9 while the jobs component returned to showing expansion. Today has the FOMC statement lined up and hawkish remarks could keep the US currency afloat.

EUR

The euro took advantage of dollar weakness and was able to advance against most of its rivals, except against the franc. French and Italian banks were closed for the holiday and there were no euro zone reports released. Today has the final manufacturing PMI readings due, along with the German unemployment change. Analysts are expecting to see a flat reading for October.

GBP

The pound also weakened against its forex peers as the UK manufacturing PMI slumped from 55.5 to 54.3, lower than the 54.6 consensus. Today has the construction PMI due and a slide from 52.3 to 51.9 is expected, although traders might hold out ahead of the BOE decision tomorrow.

CHF

The franc was one of the top performers for the day as traders seemed to transfer their safe-haven holdings out of the dollar and onto the franc. SNB head Jordan attempted to jawbone the currency to no avail, with franc bulls unwilling to stop unless actual intervention is seen. Swiss retail sales came in line with expectations of a 2.3% year-over-year drop while the manufacturing PMI beat expectations by rising from 53.2 to 54.7 versus the 53.9 forecast.*

JPY

Yen pairs were mostly stuck in consolidation as traders couldn’t get a clear direction after the BOJ refrained from boosting stimulus again. Central bank officials had a dovish outlook, citing that risks to growth and inflation were tilted to the downside. There are no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi was one of the strongest performers, thanks to upbeat jobs data and the 11.4% jump in dairy prices during the GDT auction. Quarterly employment change rose 1.4% while the jobless rate fell from 5.0% to 4.9%, indicating that a potential RBNZ rate cut might be their last one for a long while. In Australia, the currency got a boost from a slightly hawkish RBA statement and PMI improvements in China. US crude oil inventories are due next and a draw in stockpiles could support the Loonie.

By Kate Curtis from Trader’s Way

804

USD

The US dollar continued to slide against its peers as stock indices closed lower on election jitters. The FOMC kept interest rates on hold as expected, making some slight revisions in their rhetoric but still keeping December rate hike expectations in play. The ADP non-farm employment change missed the mark and showed a 147K reading versus the projected 166K increase. ISM non-manufacturing PMI is due today and a fall from 57.1 to 56.2 is expected.

EUR

The euro advanced against its counterparts as data from the region was mostly stronger than expected. Spanish and French manufacturing PMI beat expectations while the indices from Italy and the rest of the euro zone came up short. Germany reported a 13K drop in joblessness instead of printing a flat reading. Spanish and Italian jobs data are lined up for today.

GBP

The pound also regained ground as traders likely booked short positions ahead of today’s BOE statement. The construction PMI beat expectations with a rise from 52.3 to 52.6 instead of the projected drop to 51.9. No actual policy changes are expected from the BOE today but any change in rhetoric could spur strong moves for pound pairs.

CHF

The franc returned some of its recent gains to the euro and pound, as traders were concerned about potential SNB intervention at these levels. Today has the Swiss SECO consumer climate index due and a rise from -15 to -13 is eyed.

JPY

The yen rallied against most of its forex peers as risk aversion still lingered in the financial markets. Japanese banks are closed for the holiday today so there are no major reports due.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a mixed performance as the Aussie advanced while the Loonie lagged. US crude oil inventories rose by 14.4 million barrels versus the estimated buildup of 1.6 million barrels. Australia’s trade balance showed a smaller than expected deficit buoyed by a 2% gain in exports. There are no other reports due from the comdoll economies today.

By Kate Curtis from Trader’s Way

805

USD

The US dollar chalked up another round of declines against its peers as economic data came in mostly weaker than expected, except for factory orders which posted a slightly stronger 0.3% gain versus the estimated 0.2% uptick. Initial jobless claims showed a larger rise while unit labor costs indicated downside pressure on wages. The NFP report is due today and a 174K gain is eyed, which might be enough to bring the jobless rate down from 5.0% to 4.9%.*

EUR

The euro was slightly weaker against its peers, although it was able to squeeze out a few more gains against the commodity currencies. Euro zone data was mixed, with the Spanish unemployment change figure coming in better than expected and the Italian jobs report falling short of consensus. Final services PMI readings are due from the region’s top economies today.

GBP

The pound staged a strong rally after the British High Court ruled that the UK government would need the parliament’s approval before officially invoking Article 50. This could mean more delays before the negotiation process begins, postponing the official Brexit date as well. The UK government is still set to appeal this decision to the supreme court by December 7. The BOE kept rates on hold as expected, issuing a slightly less dovish statement than usual. There are no reports due from the UK today but Brexit-related headlines could push pound pairs around.

CHF

The franc gave up some of its recent wins to the European currencies after the British High Court decision, as risk appetite improved in the region. Swiss SECO consumer climate improved from -15 to -13 as expected, reflecting a smaller degree of pessimism. There are no reports due from the Swiss economy today.

JPY

The yen weakened slightly against its peers during the Japanese bank holiday as risk appetite improved somewhat. There were no reports out of Japan yesterday and none are due today so market sentiment could be the main driver of yen price action.

Commodity Currencies (AUD, NZD, CAD)

The comdolls took advantage of dollar and yen weakness but were no match to euro and pound strength. Australia printed a strong trade balance buoyed by a 2% gain in exports and a stronger than expected 0.6% gain in retail sales. Canada’s jobs report is due today and a 10K drop in hiring is expected. The Ivey PMI is also due and a slide from 58.4 to 56.2 is expected.

By Kate Curtis from Trader’s Way

806

USD

The US dollar took a hit on Friday when the NFP report printed a lower than expected 161K gain versus the estimated 174K increase. The jobless rate fell from 5.0% to 4.9% as expected while average hourly earnings posted a 0.4% gain versus the projected 0.3% uptick. However, the Greenback was off to a strong start in the week after FBI director Comey said that they found no evidence of wrongdoing in their investigation of Clinton’s private email server. Only medium-tier reports are due today and election-related updates could have a bigger impact on USD movement.

EUR

The euro had a mixed performance on Friday then gapped down against most of its peers this week, as risk appetite picked up. Services PMI readings from the euro zone fell short of estimates last week while today has retail sales and Sentix investor confidence data on tap. Stronger than expected data could keep the shared currency afloat but market sentiment could play a greater role in price action.

GBP

The pound continued to profit off the British High Court’s ruling that the UK government would need to get parliamentary approval before invoking Article 50. There were no reports out of the UK economy on Friday and only the Halifax HPI is due today so Brexit-related headlines might still be the main driver’s of pound movement.

CHF

The franc advanced to the dollar but was weaker against the rest of its counterparts as risk appetite seemed to return. There were no reports out of the Swiss economy on Friday while today has foreign currency reserves and CPI data due. A large jump in reserves could be evidence of SNB intervention while weak CPI could keep traders on their toes for potential central bank action.

JPY

The yen was off to a weak start on Monday as the FBI’s conclusion on its investigation on Clinton’s private email server renewed hopes that the Democratic nominee could win the elections. The BOJ released its monetary policy meeting minutes over the weekend and also its average cash earnings report, which indicated a 0.2% uptick as expected.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were mostly stuck in consolidation at the end of the week, awaiting clues on how market sentiment might fare. Canada’s employment data came in above consensus, as the economy added 43.9K positions in October versus the estimated 10K drop. The Ivey PMI also beat expectations with a rise from 58.4 to 59.7, reflecting stronger industry growth. However, the trade balance showed a weaker than expected 4.1 billion CAD deficit versus the projected 1.7 billion CAD shortfall and the previous 2 billion CAD deficit. ANZ jobs advertisements in Australia showed a 1% gain to show a possible turnaround in hiring.

By Kate Curtis from Trader’s Way