Daily Market Outlook by Kate Curtis from Trader's Way

Commercial Content Analysts
929

USD

The US dollar regained ground as the Fed labor market conditions index saw an upgrade for the March report while traders turned their attention to Wall Street reform. The Treasury Committee headed by Mnuchin had a closed-door meeting to discuss the efficacy of the Volcker Rule as part of Trump’s order to conduct a review of the financial industry. Only medium-tier reports such as JOLTS job openings and final wholesale inventories are lined up today.

EUR

The euro returned its recent wins after the French elections as traders now turned their attention to the parliamentary election and whether or not Macron’s party can get majority of the seats. Data turned out stronger than expected with German factory orders up 1.0% versus the projected 0.7% gain, but this is slower than the previous 3.5% increase. Sentix investor confidence also beat expectations. German industrial production and trade balance, along with Italian retail sales, are up for release today.

GBP

The pound continued to advance against its peers even with no major reports out of the UK yesterday. Earlier today, the BRC retail sales monitor printed a strong 5.6% rebound from the earlier 1.0% decline. There are no other reports due today and traders seem to be gearing up for the BOE Super Thursday.

CHF

The franc had a mixed performance as it mostly reacted to currency-specific events in the absence of top-tier data from Switzerland. Only the Swiss jobless rate is due today and a drop from 3.3% to 3.2% is eyed so the franc might be able to gain a bit more support.

JPY

The yen caved under risk appetite, particularly to the European currencies. Japanese average cash earnings printed a surprise 0.4% drop versus the projected and earlier 0.4% uptick. Consumer confidence was also weaker than expected at 43.2 versus the 44.3 consensus and the earlier 43.9 figure. Japanese leading indicators is due next but the yen could stay sensitive to market sentiment and US bond yields.

Commodity Currencies (AUD, NZD, CAD)

The comdolls managed to make a bit of a rebound against their lower-yielding counterparts on a slight pickup in risk appetite or profit-taking. China’s trade balance printed stronger than expected headline results but the pickup in imports and exports fell short of estimates. Australia’s retail sales report churned out a 0.1% decline earlier today, setting a three-month streak of negative readings. Canadian building permits is due next.

By Kate Curtis from Trader’s Way

930

[B]USD[/B]

The dollar gained a bit of support even with a couple of weaker than expected medium-tier data. Final wholesale inventories ticked 0.2% higher instead of falling by 0.1% in March while the IBD/TIPP economic optimism index ticked lower on a weaker six-month outlook. A bit of risk aversion stemming from geopolitical conflict with North Korea kept the safe-haven currency supported. There are no major reports lined up today so political headlines could influence dollar movement.

[B]EUR[/B]

The euro extended its gains against most of its peers even with mixed data from the region. German industrial production fell 0.4% versus the projected 0.6% dip while the trade surplus narrowed from 21.2 billion EUR to 19.6 billion EUR. Italian retail sales was flat instead of posting the estimated 0.2% uptick. ECB head Draghi has a speech today and Italian and French industrial production numbers are due.

[B]GBP[/B]

The pound was one of the biggest winners in recent trading sessions as traders appear to be pricing in an upbeat BOE announcement on Thursday. There were no major reports out of the UK recently, but last week’s set indicated resilience among the business sectors since PMI turned out stronger than expected.

[B]CHF[/B]

The franc gave up some ground to its peers but managed to hold steady against the commodity currencies. The Swiss jobless rate was unchanged at 3.3% instead of improving to the projected 3.2% figure. There are no major reports due from Switzerland today.

[B]JPY[/B]

The yen was the biggest loser in the past sessions as the threats from North Korea weighed heavily on sentiment in the Asian region. According to the country’s ambassador to the UK, they are gearing up for another nuclear test and that they are prepared to attack the US if necessary. Japan’s leading indicators is due next and an improvement is eyed.

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

The comdolls were stuck mostly in consolidation as traders are waiting for the next catalysts. The API reported its largest draw in stockpiles this year, lending some support for CAD. Chinese CPI was better than expected at 1.2% but PPI fell short of estimates at 6.4% versus 6.8%. EIA crude oil inventories and the RBNZ statement are due next. No actual rate changes are eyed from the RBNZ.

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

931

[B]USD[/B]

The Greenback remained mostly supported by upbeat medium-tier US data and a bit of risk aversion. Fed official Rosengren reiterated his view that three more rate hikes seem reasonable this year and even though he’s not a voting member, US markets and bond yields closed mostly higher on these remarks. US PPI and jobless claims are due next, providing a clue of how Friday’s CPI reports might turn out.
[B]
EUR[/B]

The euro returned some of its recent wins even with mostly strong reports from the region. French industrial production rose 2% versus the estimated 1.2% increase while Italian industrial production ticked 0.4% higher. ECB head Draghi’s remarks dampened the shared currency’s gains as he remained cautious about confirming a pickup in inflation and signaling tapering down the line. The ECB Economic Bulletin and EU economic forecasts are due next.

[B]GBP[/B]

Sterling remained one of the strongest performing currencies as traders are lining up their positions for the BOE Super Thursday. No actual policy changes are expected but many are expecting to hear optimistic remarks, especially since the latest batch of PMI readings have surprised to the upside. Any shift in bias could mean strong action for the pound as the minutes would also shed some light on how most policymakers are leaning.
[B]
CHF[/B]

The franc gave up some ground to most of its peers as there were no reports from Switzerland to give it a boost. Swiss CPI is due today and another 0.2% uptick is eyed, although a stronger than expected read could revive franc gains.*

[B]JPY[/B]

The yen continued to give up ground as traders moved their safe-haven holdings to the dollar on rising US bond yields. At the same time, tensions in North Korea are keeping a lid on the Asian currency’s rally. Bank lending came in at 3.0% in Japan, unchanged from the earlier reading instead of improving to the consensus at 3.2%.*

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

The comdolls had a mixed performance as the Kiwi tanked after the RBNZ decision and a bit of jawboning. The Loonie raked in more gains as the EIA report showed a draw of 5.2 million barrels in stockpiles versus the projected reduction of 2 million barrels. Russia has also expressed willingness to join in the OPEC output deal if it is extended for another 6-9 months.

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

932

USD

The dollar chalked up a few wins earlier in the day but gave these back in the US session even with upbeat reports. Headline PPI ticked 0.5% higher while the core version of the report indicated a 0.45 gain versus the projected 0.2% uptick. For today, CPI and retail sales figures are due. Headline CPI is expected to post a 0.3% rebound while core CPI could advance by 0.2%. Headline retail sales could indicate a 0.6% increase while the core version could print a 0.5% uptick.

EUR

The euro continued to retreat against its peers as traders booked profits after ECB Governor Draghi recently shared a cautious outlook for the region. There were also no major reports to give the shared currency a boost yesterday while today has German preliminary GDP and final CPI data on tap. Euro zone industrial production is also due and a 0.3% rebound is eyed.*

GBP

The pound returned most of its recent gains as traders were disappointed to find out that the BOE was not as hawkish as expected. The central bank kept monetary policy unchanged for the time being but cautioned that Brexit risks could weigh on the consumer sector as wage growth could have trouble keeping up with rising price levels. There are no reports due from the UK today.

CHF

The franc was stuck in consolidation as the Swiss CPI simply came in line with expectations of a 0.2% uptick. There are no reports due from the Swiss economy today so more sideways action could be seen or the franc could be sensitive to market sentiment.

JPY

The yen was able to regain ground against the dollar and European currencies even as Japan’s medium-tier reports came in mixed. Bank lending and current account balance printed weaker than expected results but the Economy Watchers Sentiment index improved from 47.4 to 48.1. There are no reports due from Japan today so yen pairs could take their cue from US bond yields.

Commodity Currencies (AUD, NZD, CAD)

The comdolls managed to hold on to their gains even after the OPEC monthly report projected higher output from non-OPEC members and kept its demand forecast unchanged. There are no major reports due from the comdoll economies today but New Zealand has its quarterly retail sales numbers due over the weekend.

By Kate Curtis from Trader’s Way

933

[B]USD[/B]

The dollar gave back some of its gains earlier in the week when Friday’s set of reports turned out disappointing. Headline CPI came in at 0.2% versus 0.3% while core CPI printed a meager 0.1% uptick. Headline retail sales increased 0.4% versus 0.6% while core retail sales advanced by 0.3% versus 0.5% to signal that the consumer sector is not that strong yet. Only the Empire State manufacturing index is due today and a rise from 5.2 to 7.2 is eyed.

[B]EUR[/B]

The euro was able to advance against most of its counterparts on Friday as European traders moved their holdings away from the pound on a disappointing UK Super Thursday. German preliminary GDP came in line with expectations of a 0.6% expansion while euro zone industrial production was slightly weaker than expected. There are no reports due from the region today.

[B]GBP[/B]

The pound was still in a weak spot after the BOE Super Thursday disappointed earlier in the week. There were no reports out of the UK on Friday and none are due today, but UK PM May has a testimony due and any Brexit-related remarks could push pound pairs around.

[B]CHF[/B]

The franc managed to gain ground against most of its rivals as the pound weakened and a bit of risk aversion returned. There were no reports out of the Swiss economy then and today has the PPI due. Analysts are expecting to see a flat reading after the earlier 0.1% uptick.

[B]JPY[/B]

The yen regained some ground as traders moved out of the dollar on disappointing CPI and retail sales figures from the US. Japan’s PPI turned out stronger than expected with a 2.1% gain versus the estimated 1.8% increase. There are no other reports due from Japan today so market sentiment could push yen pairs around.

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

The comdolls were mostly weaker for the day, although the Kiwi managed to put up a fight on stronger than expected quarterly retail sales data printed over the weekend. The headline figure rose 1.5% versus the projected 1.1% gain while the core reading increased by 1.2% versus the 0.9% consensus.
[I]
By Kate Curtis from Trader’s Way[/I]

934

USD

The dollar was slightly weaker for the day after the Empire State manufacturing index slid from 5.2 to -1.0 instead of improving to 7.2. Underlying data showed declines in new orders and shipments, casting some doubt on June rate hike forecasts. Building permits and housing starts, along with industrial production and capacity utilization, are lined up from the US today and another batch of weak results could undermine dollar strength.

EUR

The euro resumed its climb against most of its counterparts as more signs of political stability have been emerging in the region. There were no reports out of the euro zone yesterday so traders are looking to the odds of Merkel winning the German elections. For today, German ZEW economic sentiment and euro zone flash GDP data are due with another 0.5% growth figure expected.

GBP

The pound was slightly weaker for the day as Prime Minister May’s Facebook Live event provided little assurance for bulls. Instead, traders are now exercising some caution ahead of the top-tier data releases such as the CPI, jobs figures, and retail sales. Inflation reports are expected to show more upside, with headline CPI likely to advance from 2.3% to 2.6% and the core reading expected to climb from 1.8% to 2.2%.

CHF

The franc was able to benefit from risk-off flows in recent trading sessions as traders remained reluctant to buy the dollar and yen. However, Swiss PPI turned out weaker than expected with a 0.2% drop versus the projected flat reading and the earlier 0.1% uptick. There are no reports due from the Swiss economy today so market sentiment and currency-specific flows could be the main drivers.

JPY

The yen was on slightly weaker footing as traders are keeping close tabs on the North Korea situation. Japanese PPI was stronger than expected at 2.1% versus 1.8% and today has the tertiary industry activity index due. An uptick of 0.1% is expected, slower than the earlier 0.2% increase.

Commodity Currencies (AUD, NZD, CAD)

The Loonie got a bit of a boost on talks between Saudi Arabia and Russia. Energy ministers from both nations agreed to support an extended output deal until March 2018 in order to keep prices afloat. However, weaker risk appetite remains in play after China printed weak industrial production, retail sales, and fixed asset investment reports. New Zealand’s GDT auction and quarterly producer prices data are due next.

By Kate Curtis from Trader’s Way

935

USD

The US dollar gave up some ground to its peers as equity indices and bond yields slid lower on national security issues with the Trump administration. Economic data has been mixed, with building permits and housing starts falling short of estimates while industrial production and capacity utilization reflected optimism in the business sector. There are no major reports due from the US economy today so the focus could remain on developments in Washington regarding the intelligence leak to Russia.

EUR

The euro was able to cash in on mostly stronger than expected medium-tier data. The region’s flash GDP reading came in line with expectations of 0.5% growth while Germany’s ZEW economic sentiment showed a weaker than expected climb from 19.5 to 20.6 versus the consensus at 22.3. Euro zone trade balance and the region’s ZEW index came in better than expected. The Italian trade balance and euro zone final CPI readings are lined up today.

GBP

The pound had a volatile run as it initially rallied on stronger than expected UK CPI then gave up ground when traders realized the repercussions on consumer spending. Headline CPI advanced from 2.3% to 2.7% while core CPI rose from 1.8% to 2.4% to suggest that purchasing power could weaken. Jobs data is due next and a drop in claimants is eyed, although the focus is likely on the average earnings index and whether or not wage growth could stay in pace with rising price levels.

CHF

The franc was the big winner for the day as it took the lion’s share of risk-off flows from the dollar and the yen. There were no reports out of the Swiss economy and none are due today but the currency could continue to benefit if market uncertainties remain in play.

JPY

The yen was also able to squeeze out some gains to the dollar and its higher-yielding peers as US bond yields weakened. However, data from Japan has been far from impressive since the core machinery orders figure came in at 1.4% versus the projected 2.6% increase and the earlier 1.5% gain. Revised industrial production data is due next and no change to the preliminary 2.1% decline is expected.

Commodity Currencies (AUD, NZD, CAD)

The comdolls weakened to the euro, franc, and yen but managed to hold steady against the pound and the dollar. New Zealand quarterly PPI input and output prices turned out stronger than expected while the GDT auction yielded a 3.2% gain in dairy prices. API data revealed a buildup in inventories and the EIA data due today is expected to print a draw of 2.5 million barrels.

By Kate Curtis from Trader’s Way

936

USD

The dollar was barely able to benefit from risk-off flows as concerns about the Trump administration remained in the spotlight. The US Justice Department ordered an official investigation on the alleged information leak to Russia so market watchers are worried that this could delay fiscal reforms. There were no major reports out of the US economy yesterday while today has initial jobless claims and the Philly Fed index.

EUR

The euro extended its climb against most of its major counterparts as medium-tier data turned out upbeat. Final CPI readings were unchanged from their flash figures, which indicated gains over the previous month. Italian trade balance showed a much wider surplus of 5.42 billion EUR compared to the consensus at 1.97 billion EUR. There are no major reports due from the region today.

GBP

The pound was able to hold on to most of its wins when UK jobs data came in better than expected. Claimant count change was at 19.4K in April, although the earlier reading showed a downgrade to 33.5K in joblessness. Even so, the unemployment rate improved from 4.7% to 4.6% while the average earnings index rose from 2.3% to 2.4% as expected to reflect wage growth. UK retail sales is due today and a 1.2% rebound from the earlier 1.8% drop is eyed.

CHF

The franc was able to rally again on risk aversion but stopped short of its climb when SNB head Jordan reiterated that they’re ready to intervene in the currency market if necessary. There were no reports out of the Swiss economy yesterday and none are due today so market sentiment could dictate franc price action.

JPY

The yen was the biggest winner for the day as it took advantage of both anti-dollar price flows and risk aversion. Earlier today, Japan also printed stronger than expected GDP growth of 0.5% versus the estimated 0.4% expansion and the earlier 0.3% uptick. However, the preliminary GDP price index reflected a steeper drop of 0.8% versus the estimated 0.7% decline.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave up a lot of ground as risk aversion was still in play yesterday. However, the Aussie made a bit of a bounce on stronger than expected jobs data, as the employment change figure came in at 37.4K versus the 4.5K consensus while the unemployment rate improved from 5.9% to 5.7%. EIA crude oil inventories were down 1.8 million barrels versus 2.5 million barrels but still enough to ease some oversupply concerns. Canadian foreign securities purchases and NZ visitor arrivals data are due next.

By Kate Curtis from Trader’s Way

937

USD

The dollar recovered against its peers on strong medium-tier data and indications that former FBI director Comey was not pressured to stop his investigation into alleged information leaks to Russia. Initial jobless claims landed at 232K versus the 240K consensus while the Philly Fed index posted a surprise gain from 22.0 to 38.8.

EUR

The euro was either stuck in consolidation or reacting to currency-specific events since their were no major reports out of the region yesterday. The ECB meeting minutes contained a few cautious remarks but the recent upside surprises in data points kept the shared currency afloat. German PPI and euro zone current account balance are due today.

GBP

The pound had a volatile run as it enjoyed a strong boost from impressive UK retail sales data then returned its gains and more later in the day. Consumer spending rebounded by 2.3% in April versus the projected 1.2% gain while the previous reading was upgraded from an initially reported 1.8% drop to a smaller 1.4% decline. Only the CBI industrial order expectations index is due today.

CHF

The franc paused from its recent climb as risk appetite appeared to return to the markets. There were no major reports out of Switzerland yesterday and none are due today so the Swiss currency could stay sensitive to risk flows.

JPY

The yen gave back some ground to the dollar when US equities and bond yields recovered. There were no major reports out of Japan recently so the lower-yielding currency is also reacting to risk sentiment and could continue to do so for the rest of the trading week.

Commodity Currencies (AUD, NZD, CAD)

The comdolls tossed and turned on account of changes in market sentiment. Australian employment change rose by 37.4K versus the 4.5K consensus while the jobless rate improved from 5.9% to 5.7%. Canadian foreign securities purchases came in below expectations while credit card spending and visitor arrivals in New Zealand increased at a faster pace. Canadian CPI and retail sales figures are due next.

By Kate Curtis from Trader’s Way

938

USD

Dollar weakness stayed in play for Friday as traders continued to worry about the repercussions of the investigation on Trump’s intelligence information leak to Russia. There were no reports released from the US then so the focus was on political headlines, and it could be the same situation today. A couple of FOMC members are set to give testimonies and any shift to a less hawkish bias could influence Fed rate hike expectations for next month.

EUR

The euro *managed to hold on to most of its gains at the end of last week as medium-tier data beat expectations. German PPI rose 0.4% versus the projected 0.2% uptick while the current account surplus turned out higher than expected. There are no major reports due today but the Eurogroup meetings will take place and discussions will likely focus on Brexit.

GBP

The pound ended the previous week strong but was off to a weak start today as the UK government said over the weekend that it is not willing to pay any bill that the EU charges relating to Brexit. UK Rightmove HPI advanced from 1.1% to 1.2% while the CBI industrial order expectations index advanced from 4 to 9 instead of staying unchanged. UK Prime Minister May has a speech today.

CHF

The franc had a mixed performance as the currency reacted mostly to currency specific events. There were no reports out of the Swiss economy on Friday and none are due today so sentiment flows could still be the main driver of franc pairs.

JPY

The yen gave back a few of its gains towards the end of the week, likely on profit-taking activity. Earlier today, the trade balance came in weaker than expected at 0.10 trillion JPY versus the consensus at 0.25 trillion JPY. To top it off, the earlier reading was downgraded to show a smaller surplus of 0.11 trillion JPY.

Commodity Currencies (AUD, NZD, CAD)

Economic data from Canada came in mostly weaker than expected, with headline CPI at 0.4% versus the 0.5% consensus and the core retail sales down 0.2% instead of posting the projected 0.2% uptick. Headline retail sales rose 0.7% versus the projected 0.4% gain, though. Canadian banks are closed for the holiday today so volatility could pick up closer to the BOC statement and OPEC meeting.

By Kate Curtis from Trader’s Way

939

USD

The US dollar moved slightly lower against most of its peers, particularly the Kiwi. There have been no major reports out of the US while the FOMC speeches gave little assurance that a June hike is on the table. US flash manufacturing and services PMIs are lined up today, along with the new home sales report and Richmond manufacturing index. FOMC members Kashkari and Harker are scheduled for more speeches.*

EUR

The euro managed to hold on to most of its gains so far this week even with resurfacing Greek debt headlines. Flash manufacturing and services PMI readings are due from Germany and France today, with more improvements expected. Strong readings could allow the shared currency to rake in more gains while disappointing results could push it back down.

GBP

The pound has been in a weak spot owing to concerns about Brexit negotiations and the snap elections. BOE Inflation Report hearings and UK public sector net borrowing data are lined up today so the focus could move back to economic data, although Brexit-related headlines could still influence price action.

CHF

The franc paused from its risk-off rallies after SNB head Jordan jawboned the currency last week. There have been no reports out of Switzerland yesterday and none are due today so currency-specific events or market sentiment could keep driving franc pairs around.

JPY

The yen is drawing some support from a pickup in risk aversion and dollar weakness. Reports of an explosion in the Manchester Arena in the UK have spurred geopolitical uncertainties once more during the Asian session. Japan’s flash manufacturing PMI is lined up next and a pickup from 52.7 to 52.9 is expected.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi was the leading performer of the bunch as data from New Zealand have been mostly upbeat in the past weeks. The Loonie also got a bit of a boost from stronger expectations of a 9-month extension of the OPEC deal, with Kuwait and Iraq showing signs that they are likely to cooperate. New Zealand trade balance is due next and a narrower surplus is eyed.

By Kate Curtis from Trader’s Way

940

USD

The US dollar regained some ground in recent trading as market watchers are shifting their focus back to economic data and June rate hike expectations. FOMC member Kashkari indicated that he’s still on the fence, citing that jobs growth has been impressive but that inflation is heading the wrong way. Medium-tier US reports were mixed, with flash manufacturing PMI posting a surprise drop and the services PMI showing a stronger improvement. The Richmond manufacturing index and new home sales figures also disappointed. FOMC minutes are due today and any confirmation that a June rate hike is on the table could stoke the dollar’s gains.

EUR

The euro managed to hold on to most of its recent gains as PMI reports came in mostly stronger than expected, except for the French flash manufacturing PMI. The German Ifo business climate index advanced from 113.0 to 114.6. German GfK consumer climate data is due today, ahead of a speech by ECB head Draghi. Cautious remarks from the central bank head could prevent the shared currency from extending its rallies.

GBP

The pound was one of the weaker performers of the bunch as traders are still reeling from the Manchester Arena attack. This adds to the uncertainty leading up to the snap elections and Brexit negotiations, especially since ISIS has claimed responsibility for the bombing. Public sector net borrowing and CBI realized sales data also disappointed. There are no reports due from the UK today.

CHF

The franc was able to hold on to some of its gains as risk appetite remained weak in the European region. Swiss trade balance was weaker than expected at a surplus of 1.97 billion CHF versus the projected 2.87 billion CHF figure. There are no reports due from Switzerland today so market sentiment could be responsible for the direction of franc pairs.

JPY

The yen slid slightly lower as traders renewed demand for the dollar ahead of the release of the May FOMC meeting minutes. Japanese data also turned out weaker than expected as the flash manufacturing PMI is down from 52.7 to 52.0 while the all industries activity index tumbled by 0.6% versus the projected 0.4% drop. There are no reports due from Japan today so risk sentiment could stay in play.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to hold their ground, with the Kiwi extending its flight. Canadian wholesale sales turned out weaker than expected with a 0.9% gain versus the projected 1.1% increase while New Zealand’s trade balance churned out a larger than expected 578 million NZD surplus. Australia’s quarterly construction work done fell 0.7% versus the projected 0.5% fall. The BOC statement and US crude oil inventories report are lined up next.

By Kate Curtis from Trader’s Way

941

USD

The US dollar gave up ground after the May FOMC meeting minutes didn’t seem as hawkish as expected. Although majority of members confirmed that a rate hike is appropriate soon, they also cited that it would be prudent to wait for more data to see if the slowdown in Q1 was really transitory. Apart from that, the discussions focused on balance sheet rebalancing, which might lessen the need for additional tightening moves down the line. US existing home sales came in below expectations at 5.57 million. Initial jobless claims, goods trade balance, and preliminary wholesale inventories are due today.

EUR

The euro recovered to the dollar but was stuck in consolidation against the commodity currencies. Data came in stronger than expected once more as the German GfK consumer climate index rose from 10.2 to 10.4 instead of holding steady. French and German banks are closed for the holiday today so liquidity could be lower than usual during the London session.

GBP

The pound was still in a weak spot against most of its peers as the terror threat in the UK weighed heavily on investor sentiment. There were no reports out of the UK then while today has the second estimate GDP reading, preliminary business investment data, and the BBA mortgage approvals. No revisions are expected for the growth figure but an upgrade could yield some gains for the British currency.

CHF

The franc had a mixed performance as it mostly reacted to currency-specific events. There were no reports out of Switzerland yesterday and none are due today as Swiss banks are closed for the holiday, leaving market sentiment as the likely driver of price action for franc pairs.

JPY

The yen is also in a weak spot as risk appetite appears to have improved. There were no reports out of Japan yesterday and none are due today so the same market factors could stay in play. National and Tokyo core CPI readings are due in the next Asian session.

Commodity Currencies (AUD, NZD, CAD)

The Loonie was one of the top performers thanks to a more optimistic BOC statement. The central bank focused on the improvements in hiring and consumer spending, confirming that their monetary policy stance is still appropriate. Moody’s downgraded China’s outlook but the Aussie seems unnerved as it is currently taking advantage of gold rallies. Crude oil stockpiles fell by 4.4 million barrels, according to the EIA report, and the focus is now on the OPEC meeting.

By Kate Curtis from Trader’s Way

942

USD

The US dollar barely established a clear direction in recent trading sessions as medium-tier reports were mixed. Initial jobless claims landed at 234K from 233K, still lower than the 238K consensus. Preliminary wholesale inventories slid 0.3% instead of showing a 0.2% buildup to indicate stronger demand and likely rising business production later on. However, the goods trade balance revealed a larger deficit of $67.6 billion on higher imports and lower exports, particularly of automotives and consumer goods. The US preliminary GDP reading is due today and a slight upward revision to 0.9% is eyed.

EUR

The euro was able to hold its ground and even take advantage of the dip in commodities. Most European banks were closed for Ascension Day yesterday so liquidity was low. There are no reports due from the euro zone today, which suggests that market sentiment or currency-specific action could push euro pairs around.

GBP

The pound took in some heavy hits after the UK GDP reading was downgrade from 0.3% to 0.2% to suggest that the economy might not be as resilient as many expect. However, preliminary business investment still beat expectations with a 0.6% gain versus the projected 0.3% uptick. There are no reports due from the UK today so traders might focus on Brexit-related headlines.

CHF

The franc regained ground as European currencies and commodities were weaker for the most part of the day. Swiss banks were closed for the holiday yesterday so there were no reports printed then and none are due today, leaving market sentiment in the driver’s seat.

JPY

The yen took advantage of the fall in commodities even as a bit of risk appetite returned in the US session. National and Tokyo core CPI readings are lined up today, with the former expected to rise from 0.2% to 0.4% and the latter likely to show a flat reading after the previous 0.1% dip.*

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave up a lot of ground as commodities tumbled after the OPEC decision. The cartel agreed to a 9-month extension of their output deal as expected, without any additional adjustments in production levels or requiring exempted member nations to join in the output cuts. Saudi’s energy minister urged US shale oil producers to moderate their output as well. There are no other reports due from the comdoll economies for the rest of the week.

By Kate Curtis from Trader’s Way

943

[B]USD[/B]

The US dollar gained some support from mostly stronger than expected economic reports. In particular, its Q1 GDP reading was upgraded from 0.7% to 1.2% versus the 0.9% consensus, signaling that the “slowdown” in the period wasn’t all that worrisome. Durable goods orders posted a 0.7% drop versus the projected 1.4% slide but the core version disappointed with a 0.4% drop instead of the estimated 0.4% uptick.

[B]EUR[/B]

There were no economic reports released from the euro zone economies on Friday while today has only M3 money supply and private loans data. ECB head Draghi also has a testimony lined up and a less cautious tone than usual could mean more support for the shared currency.

[B]GBP[/B]

There were also no major reports out of the UK on Friday but traders seem to be wary of the upcoming snap elections and the possibility that May could lose. UK banks are closed for the holiday today so liquidity could be lower and there are no reports due.

[B]CHF[/B]

The franc had a mixed performance as it mostly reacted to currency-specific events. There were no reports printed out of Switzerland on Friday and none are due today so overall market sentiment could push franc pairs around and the lack of any big catalysts could keep consolidation in play.
[B]
JPY[/B]

The yen barely reacted to mixed inflation reports from Japan. The national core CPI ticked 0.3% higher versus the projected 0.4% uptick while the Tokyo core CPI advanced from -0.1% to 0.1% instead of staying flat. There are no reports due from the Japanese economy next so market sentiment could be the main driver of yen pairs’ action.
[B]
Commodity Currencies (AUD, NZD, CAD)[/B]

The comdolls regained some ground as traders priced in the longer-term impact of the OPEC agreement to extend their output deal by nine months. Chinese banks are closed for the holiday today so liquidity could be lower than usual and there are no reports due from the comdoll economies

By Kate Curtis from Trader’s Way

944

USD

The US dollar was barely moving in recent trading sessions as traders were out enjoying Memorial Day. There were no reports out of the US economy then while today has the core PCE price index, as well as personal spending and income data. The CB consumer confidence index is also lined up and a dip from 120.3 to 120.1 is eyed.

EUR

The euro took a hit after ECB head Draghi’s testimony, even as he did have upbeat remarks on the economy. He acknowledged that economic risks have subsided and that the threat of deflation is lower than before. However, Draghi also mentioned that the economy needs an “extraordinary” amount of support, weighing on the shared currency. German import prices, preliminary CPI, French consumer spending, and French preliminary GDP are due today.

GBP

The pound recovered from its recent slide after the ComRes poll reflected a wider 12-point lead for May’s Conservative Party compared to the YouGov poll indicating a mere 5-point gap. This suggests that the UK economy could avoid additional political uncertainty ahead of the Brexit negotiations. There were no reports out of the UK yesterday and none are due today.

CHF

The franc had a mixed performance as it reacted to currency-specific events. There were no reports out of Switzerland yesterday while today has the KOF economic barometer due. An improvement from 106.0 to 106.2 is expected, possibly adding support for the franc.

JPY

The yen also had a mixed performance as it simply reacted to market sentiment. Household spending, retail sales, and the BOJ core CPI reading are due today. Household spending could fall by 0.7% versus the earlier 1.3% slide while retail sales might increase from 2.1% to 2.1%.

Commodity Currencies (AUD, NZD, CAD)

The comdolls managed to hold on to their recent gains and go for more against the euro. There were no reports out of the comdoll economies yesterday while today has the current account balance and underlying inflation data from Canada. Strong figures could underscore the BOC’s relatively confident stance and allow the Loonie to keep advancing.

By Kate Curtis from Trader’s Way

945

USD

The US dollar scored a few gains when the core PCE price index printed a larger than expected 0.2% gain versus the projected 0.1% uptick. Personal income and spending both posted 0.4% gains as expected while the CB consumer confidence index for May surprised with a tumble from 119.4 to 117.9 instead of improving to 120.1. Chicago PMI, pending home sales, and the Fed Beige Book are lined up next.

EUR

The shared currency moved mostly sideways even as economic data turned out weaker than expected. German import prices ticked 0.1% down instead of posting the projected 0.2% uptick while preliminary CPI fell by 0.2% versus the projected 0.1% dip. French consumer spending increased by 0.5%, short of the projected 0.8% gain, while the Spanish flash CPI also fell short. German retail sales and unemployment change, as well as French preliminary CPI, are lined up today.

GBP

The pound suffered a sharp selloff in the latter trading sessions when a YouGov poll reflected a narrowing lead for the Conservative Party, also indicating that it would fall short of securing the majority by 16 seats. There were no reports out of the UK economy yesterday while today has medium-tier reports such as net lending to individuals and mortgage approvals data lined up.

CHF

The franc was also in a weak spot as sentiment in Europe appears to have turned sour. Also, the Swiss KOF economic barometer fell from 106.3 to 101.6 versus the projected 106.2 reading. The Swiss UBS consumption indicator is due next and another weaker than expected read could mean more franc weakness.

JPY

The yen had a mixed performance as it functioned more of a counter currency instead of setting its own direction. The BOJ core CPI posted a 0.2% uptick, representing a rebound over the earlier 0.1% drop. Preliminary industrial production is due next and a 4.2% rebound is eyed.

Commodity Currencies (AUD,NZD, CAD)

The Loonie turned lower as economic data from Canada came out weaker than expected. The current account deficit widened from 11.8 billion CAD to 14.1 billion CAD while the underlying inflation readings came in below consensus. According to the RBNZ, financial risks are subsiding and upward pressures to home prices are lower. Chinese official PMI readings are due next and another round of declines could mean more weakness for the comdolls.

By Kate Curtis from Trader’s Way

946

Forex Major Currencies Outlook (Jun 01, 2017)

USD

The dollar was barely able to establish a clear direction in recent trading as economic data came in mixed. The Chicago PMI surprised with a jump from 58.3 to 59.4, outpacing the consensus at 57.0 to reflect a much stronger pace of industry expansion. The Fed Beige Book showed that most districts saw moderate growth but the pending home sales report printed a 1.3% slump instead of the projected 0.7% uptick.

EUR

The euro managed to score some wins versus the comdolls and the pound even as flash CPI readings from the region turned out weaker than expected. The headline reading came in at 1.4% versus the 1.5% forecast and the earlier 1.9% increase while the core reading landed at 0.9% versus 1.0% from the previous 1.2% gain. The region’s jobless rate improved from 9.4% to 9.3% though. Final manufacturing PMI readings from its top economies are due next.

GBP

The pound took another hit when a poll from The Sun indicated a narrower lead for Theresa May’s Conservative Party. It showed a 44% stronghold for Conservatives and 38% for Labour. UK net lending to individuals was also weaker than expected at 4.3 billion versus the 4.5 billion consensus. UK manufacturing PMI is due next and a dip from 57.3 to 56.5 is expected.

CHF

The franc barely budged when SNB head Jordan started jawboning again. He mentioned that an overvalued franc puts pressure on the Swiss economy but franc traders don’t seem to be bothered until they see actual central bank action. The Credit Suisse Economic Expectations index is up from 22.2 to 30.8 and the Swiss manufacturing PMI is due next.

JPY

The yen was able to hold on to its recent gains as risk aversion stayed in play. Japanese capital spending data is due next and a 3.9% figure is eyed, slightly higher than the earlier 3.8% read. The final manufacturing PMI is also due but no changes to the initial 52.0 estimate is expected.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were slightly weaker even after Canada printed a higher than expected monthly GDP growth of 0.5% versus 0.3% in March. Oil prices remain under pressure ahead of inventory data from API and EIA. Australia has its private capital expenditure data and retail sales figures due next, along with China’s Caixin manufacturing PMI. New Zealand is due to print its quarterly overseas trade index as well.

By Kate Curtis from Trader’s Way

947

Forex Major Currencies Outlook (Jun 02, 2017)

USD

The dollar got a boost from upbeat leading jobs indicators, namely the ADP employment change and ISM manufacturing PMI. The former climbed from 174K to 253K, outpacing the consensus at 181K, while the latter ticked up from 54.9 to 54.9 instead of dipping to the consensus at 54.7. Underlying component showed a rise in hiring activity and a decline in prices. The NFP report is due next, and this is expected to show a 181K reading and no change in the jobless rate at 4.4%.

EUR

The euro was able to hold on to most of its gains even with mixed data from the region. French and Italian manufacturing PMI came in weaker than expected while the Spanish manufacturing PMI beat expectations. The region’s PPI and the Spanish unemployment change report are lined up today.

GBP

The pound struggled to stay afloat as more polls indicated a narrowing lead for PM May’s Conservative Party, keeping political uncertainty in play. The UK manufacturing PMI is down from 57.3 to 56.7 versus the projected drop to 56.5. The construction PMI is up for release next and a drop from 53.1 to 52.7 is expected.

CHF

The franc had a mixed performance as it reacted mostly to currency-specific events. The Swiss manufacturing PMI is down from 56.2 to 55.1 to reflect a slower pace of industry growth compared to the projected 56.1 figure. There are no reports due from the Swiss economy today.

JPY

The yen also had a mixed performance as it was sensitive to market sentiment and currency-specific events. Data from Japan was stronger than expected, with capital spending up 4.5% versus 3.9% in Q1 and the final manufacturing PMI upgraded from 52.0 to 53.1. The Japanese consumer confidence index is due next and a rise from 43.2 to 43.6 is expected.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave up ground to the dollar and euro but managed to hold steady against the pound. Crude oil steadied as the EIA report showed a draw of 6.4 million barrels in stockpiles versus the projected decline of 2.7 million barrels. The Canadian trade balance is due next and flat reading is eyed.

By Kate Curtis from Trader’s Way

948

Forex Major Currencies Outlook (Jun 05, 2017)

USD

The dollar sold off heavily on Friday when the NFP reading fell short of estimates, casting doubts on a June hike. The economy added 138K jobs in May versus the projected 181K increase and the earlier reading, which was downgraded to 174K. The unemployment rate improved from 4.4% to 4.3% while the average hourly earnings figure printed a 0.2% uptick as expected. US ISM non-manufacturing PMI is due today and a drop from 57.5 to 57.1 is eyed.

EUR

The euro was still mostly weaker for the day after the region’s PPI reading showed a flat reading versus the 0.2% uptick to indicate weaker price pressures down the line. Most European banks are closed in observation of Whit Monday today but final services PMI readings are still lined up.

GBP

The pound is off to a shaky start owing to the fresh round of attacks in London and the upcoming snap elections. Polls could have a major impact on the currency’s direction for the week and additional volatility is expected. UK services PMI is due today and a fall from 55.8 to 55.1 is expected.

CHF

The franc gave up some of its recent wins as the SNB continued to jawbone the currency. There were no reports released from Switzerland on Friday and none are due today since Swiss banks are closed for the holidays.

JPY

The yen took advantage of dollar weakness on Friday as bond yields tumbled upon seeing the NFP report. Japan’s consumer confidence index improved from 43.2 to 43.6 as expected and there are no reports due from Japan today so market sentiment could push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The comdolls regained ground versus the dollar but were still weak against the yen. Data from Canada, namely trade balance and labor productivity data, turned out weaker than expected. New Zealand banks are closed for the holiday while Australia just reported a drop in its AIG services index from 53.0 to 51.5.

By Kate Curtis from Trader’s Way