European Outlook: Asian stock markets are narrowly mixed and fluctuating at high levels, as trading volumes are low and investors await the Fed decision The MSCI Asia Pacific index has gained around 22% this year, despite escalating tensions with North Korea. FTSE 100 futures are slightly higher, while U.S. futures are in the red, ahead of the Fed, which is widely expected to announce the start of the balance sheet unwind, or QT (quantitative tightening), while leaving its rate posture unchanged. The BoJ will announce its decision tomorrow, and central banks and geopolitics remain driving factor for markets. Reports that there is still no broad majority at the ECB for a commitment to an end date for QE saw yields correcting again in the Eurozone yesterday, while the BoE’s flagging of the need for a rate hike in coming months has kept Gilt yields underpinned. Today’ calendar includes U.K. retail sales, but is unlikely to take the focus away from the Fed.
German producer price inflation higher than expected. The annual rate rose to 2.6% y/y in August, from 2.2% y/y in the previous month. A renewed uptick in energy prices was the main factor and energy prices rose 0.4% m/m, fuel prices 0.9% m/m and annual rates rose to 2.7 %y/y and 3.9% y/y respectively. Annual food price inflation fell back slightly, but at 5.3% y/y remains very higher and PPI excluding energy rose to 2.6% y/y from 2.5% y/y. Overall PPI remains below the highs seen earlier in the year, but seems to have bottomed out and the data will back the arguments of the hawks at the ECB, who are fighting for the end of additional asset purchases
U.S. reports: revealed upside surprises for both housing starts and trade prices in August, alongside a wider than expected Q2 current account deficit. For starts, we saw August declines of 0.8% for starts and a big 10.2% for completions, but we also saw a 5.7% pop for permits, a strong trajectory for starts under construction, and upward starts revisions that left a solid Q3 path. For trade prices, we saw big 0.6% August headline import and export price increases led by oil imports and nonagricultural exports with a likely Harvey-boost, before an assumed September lift from Irma. The U.S. current account gap widened to $123.1 bln from $113.5 (was $116.8) bln in Q1 thanks to a surge in the deficit on secondary income.
Canada’s manufacturing drop yesterday is suggestive of tame July GDP growth, at best. Factory shipment volumes fell 1.4% in June (values dropped 2.6%). We have penciled in a 0.1% rise for July GDP estimate, which would follow the 0.3% gain in June. A 0.5% decline in wholesale shipment volumes is projected, while retail sales volumes are seen improving 0.3%. Housing starts grew 4.5% to a 222.0k pace in July from 212.5k in June. Hence, the contribution from construction production should be positive. The outlook for mining, oil and gas production is to the downside. Energy export values fell 3.7% m/m in July after plummeting 11.3% m/m in June. However, the manufacturing report’s petro and coal shipments measure did edge up 0.6% in value after the hefty 7.0% drop in June. A 0.1% rise in July GDP would leave the measures on track for a 2.5% pace in Q3 (q/q, saar) which we expect for the separate quarterly measures. The BoC’s base-case estimates projected a slowing in GDP growth during the second half of this year.
Main Macro Events Today
UK Retail Sales – August retail sales data are due today, where expected a modest 0.2% m/m lift. FOMC Rate Decision and Conference – FOMC began its 2-day meeting and is widely expected to announce the start of the balance sheet unwind, or QT (quantitative tightening), while leaving its rate posture unchanged. Remember this is a quarterly meeting that includes the release of economic/price forecasts (SEP – Summary of Economic Projections) and a Yellen press conference. Of importance to the rate outlook is the dot-plot and the nuances in the Fed chair’s remarks. The Committee was still expecting a total of three rate hikes this year at the June 13, 14 meeting, and that’s expected to be the case this time too, keeping the door open for a tightening at the December 12, 13 meeting. It is also expected that the FOMC will maintain the consensus view of three hikes in 2018. While the Fed believes there should be little market reaction to the gradual and well telegraphed unwinding of the balance sheet, it should be “like watching paint dry,” said Yellen in June, officials may be too complacent in their overall assessment on the market responses to policy actions. US Existing Home Sales – Existing home sales for August should bounce 0.7% to a 5.47 mln unit pace, after falling 1.3% in July to 5.44 mln. Sales have fallen in 4 of the 7 months to date, thanks in large part to lack of inventory. NZD GDP – The Q2 GDP, expected to grow 0.9% after the 0.5% gain in Q1 (q/q, sa).
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: Asian stock markets are narrowly mixed. The Fed confirmed the launch of QT and kept rates unchanged, but left the rate hike for December on the table, along with consensus for three more hikes next year. The BoJ meanwhile left policy on hold, as expected, but one dissenter signalled that further easing may be necessary to bring inflation back to target. The Nikkei is up 0.16%, after a narrowly mixed close on Wall Street, the Hang Seng managed to recover some of its early losses, but at 5:37GMT was down -0.07% and the ASX underperformed with a -0.84% loss. FTSE 100 futures are slightly higher, U.S. futures marginally in the red and it seems investors are still digesting central bank decisions and are reluctant to push world markets even higher for now.
FOMC: announced balance sheet runoff in October and left rates unchanged, as expected. The vote was 9-0. The FOMC also left a rate hike on the table for December, with 12 of 16 FOMC members projecting such. Also, 11 of 16 see at least three hikes next year. The hurricanes are not expected to have much impact on the medium term. The FOMC did lower the long run outlook on rates to 2.8% from 3.0%. The median funds rate for 2018 is at 2.1%, the same as in June’s outlook, though the 2019 median slipped to 2.7% from 2.9%, suggesting a slower path of tightening. The policy statement the Fed noted the labor market continued to strengthen while economic activity had been rising moderately. Fed Chair Yellen reiterated the FOMC statement noting the economy will continue to expand at a moderate pace over coming years. Meanwhile, the labor market remains healthy and payroll gains are well above the rate needed to absorb entrants. Inflation has continued to run below the 2% goal, but the low rate doesn’t reflect broad economic conditions. In Q&A she noted that FOMC has hiked rates this year on the belief the economy is performing well. She added the balance sheet runoff has begun too, as such stimulus is no longer needed to such an extent.
Main Macro Events Today
UK Public Borrowing – UK expected to post a deficit on Public Sector Net borrowing at 6.5B from the surplus seen last month at -0.8B. CAD Wholesale Sales – Wholesale sales are expected to fall 1.0% in July (m/m, sa) after the 0.5% drop in June. ECB – ECB President Draghi is due to speak at the European Systemic Risk Board annual conference, in Frankfurt at 13:30 GMT. European Outlook: Asian stock markets are narrowly mixed. The Fed confirmed the launch of QT and kept rates unchanged, but left the rate hike for December on the table, along with consensus for three more hikes next year. The BoJ meanwhile left policy on hold, as expected, but one dissenter signalled that further easing may be necessary to bring inflation back to target. The Nikkei is up 0.16%, after a narrowly mixed close on Wall Street, the Hang Seng managed to recover some of its early losses, but at 5:37GMT was down -0.07% and the ASX underperformed with a -0.84% loss. FTSE 100 futures are slightly higher, U.S. futures marginally in the red and it seems investors are still digesting central bank decisions and are reluctant to push world markets even higher for now. Bund futures dropped sharply in after hour trade on the Fed announcement and Bund yields, which closed down yesterday, are likely to push higher in opening trade, resuming the new uptrend, as the ECB is heading for an announcement on QE reductions. The local calendar has U.K. public finance data as well as the ECB’s latest economic report. ECB’s Draghi, Praet and Smets are all set to speak.
New Zealand’s GDP grew 0.8% in Q2 (q/q, sa) following an upwardly revised 0.6% gain in Q1 (was +0.5%). The increase in Q2 matched expectations. But GDP grew at a 2.5% y/y pace in Q2, only matching the growth rate in Q1 and falling short of the 2.6% to 3.5% annual rates seen in 2016. Indeed, growth is on track to slow to a 2.5% pace for all of 2017 from the 3.6% pace in 2016. Of course, the economy continues to grow, supported by low interest rates. Yet inflation growth remains in the target range (CPI slowed to 1.7% y/y from 2.2%) and the RBNZ expects a decline in coming quarters as the effects of higher food and fuel prices dissipate.
FOMC: announced balance sheet runoff in October and left rates unchanged, as expected. The vote was 9-0. The FOMC also left a rate hike on the table for December, with 12 of 16 FOMC members projecting such. Also, 11 of 16 see at least three hikes next year. The hurricanes are not expected to have much impact on the medium term. The FOMC did lower the long run outlook on rates to 2.8% from 3.0%. The median funds rate for 2018 is at 2.1%, the same as in June’s outlook, though the 2019 median slipped to 2.7% from 2.9%, suggesting a slower path of tightening. The policy statement the Fed noted the labor market continued to strengthen while economic activity had been rising moderately. Fed Chair Yellen reiterated the FOMC statement noting the economy will continue to expand at a moderate pace over coming years. Meanwhile, the labor market remains healthy and payroll gains are well above the rate needed to absorb entrants. Inflation has continued to run below the 2% goal, but the low rate doesn’t reflect broad economic conditions.
Main Macro Events Today
UK Public Borrowing – UK expected to post a deficit on Public Sector Net borrowing at 6.5B from the surplus seen last month at -0.8B. CAD Wholesale Sales – Wholesale sales are expected to fall 1.0% in July (m/m, sa) after the 0.5% drop in June. US Jobless Claims & Philly – The Philly Fed manufacturing index is expected to be little changed at 18.0 in September. The index has fallen in the last three months after surging 16.8 points to 38.8 in May. Meanwhile Jobless Claims should post a rise of 16K up to 300K for last week. ECB – ECB President Draghi is due to speak at the European Systemic Risk Board annual conference, in Frankfurt at 13:30 GMT. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: North Korea tensions are once again leaving their mark on markets, as a stronger Yen weighed on the Nikkei. Hang Seng and ASX 300 were also under pressure, as S&P cut the Hong Kong’s sovereign rating a day after downgrading China. Australian ASX200 meanwhile managed to rebound from a seven months low and is outperforming today after three straight days of losses. U.S. and U.K. stock futures, however, are also heading south as investors eye geopolitical risks and further clues from Fed speakers. Today’s European calendar has preliminary PMI readings for the Eurozone, which we expect to remain broadly stable at high levels. Final French Q2 GDP numbers are also not expected to bring a major surprise. The U.K. CBI industrial trends survey is also due. In Germany Sunday’s election is casting its shadow, although with everyone expecting Merkel to remain in office it is only her choice of coalition partner and the result for the right wing AFD that is creating excitement in what has been dubbed a very boring election campaign.
FX Update: The dollar has traded softer, correcting some following the sharp gains seen in the wake of the Fed’s hawkish turn on Wednesday. EURUSD nudged above 1.1960, up over a big figure form the post-Fed low, and USD-JPY tipped to a low of 111.65, correcting after rallying in eight of the previous nine sessions and putting distance in from yesterday’s two-month peak at 112.71. EUR-JPY and other yen crosses also posted losses. While the BoJ’s reaffirmation at its meeting this week of its commitment to yield curve control and ultra-accommodative monetary policy in general may be an endorsement for yen bears, North Korea’s advance to becoming a nuclear power remains a wildcard risk for yen bears, as the Japanese currency will typically rally amid any heightening in geopolitical tensions. This week’s trading of verbal barbs between Trump and Kim won’t have done unnoticed by market participants.
Trump: New executive orders on N. Korea that target individuals and companies who trade with the rogue nation. He confirmed that the PBoC has ordered Chinese banks to cease business with the region, while the effort will also target N. Korea’s shipping and trade networks. The leaders of Japan and S. Korea backed the tighter stranglehold, and they plan to discuss further means to halt N. Korea’s ability to produce a nuclear arsenal. Though Trump remained open to further dialogue with N. Korea, it’s not clear that this will reduce tensions in the meantime as prior UN actions prompted further missile salvos over Japan.
US Reports Yesterday: Revealed a robust 23.8 September Philly Fed figure that exhibited the same hurricane updraft seen in last Friday’s Empire State report, and we now expect the average of the producer sentiment surveys to reclaim the 57 cycle-high in September that was seen in February and March, versus still-lofty 55-56 figures over the interim. We also saw a surprising 23k drop in initial claims to a still-elevated 259k in the week of Irma, which was also the BLS survey week, though the mass-displacement of individuals and loss of electrical power may have delayed applications for claims. Claims are averaging 274k thus far in September and we expect a 272k average when the month is over, versus an August average of 246k in August. We expect a 90k September nonfarm payroll rise that assumes a 100k Irma hit. We also saw a 0.4% August rise in leading indicators that left a 12-month string of gains.
Main Macro Events Today Eurozone PMI – Consensus is for an unchanged composite PMI reading for September, with an expected correction in the manufacturing PMI likely to be compensated for by a slight rise in the services sector reading. German ZEW investor confidence already improved again in September, while today’s preliminary consumer confidence number rose to the highest reading since 2001. CAD CPI – Expected to grow 0.2% in August relative to July, leaving a pick-up in the annual growth rate to 1.6% in July from 1.2% in July and the year low 1.0% pace in June. Gasoline prices snapped higher in August, which drives our projection. The annual growth rates for the core measures were either steady or slightly firmer in July. CPI-trim growth was 1.3% y/y in July from 1.2% in June, CPI-common was 1.4% from 1.4% and CPI-median was 1.7% from 1.6%. The average of the three core measures ticked higher to 1.5% y/y from the 1.4% in April, May and June. May and Draghi Speeches – UK PM May is speaking in Florence and rumours are swirling of a speech to cement her authority at home and with her own party as well as an olive branch to the EU to finally kick start the Brexit negotiations – watch sterling to day and for follow through on Monday. Draghi has a speech earlier in Dublin and is likely to avoid direct comments on monetary policy, but always one to watch. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Stuart Cowell Senior Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Well, the Fed finally pulled the trigger last week, not on another rate hike but rather the October launch date for quantitative tightening, and the sky didn’t fall. The message remained clear, however, that the majority at the Fed expect to hike once more this year and again three times in 2018 until they reach a lower “new normalization” level on the Fed funds target in 2.5-3.0% area. Europe heats up again, with German coalition talks ahead in the wake of Sunday’s national election and a fresh round of Brexit talks on tap after UK PM May’s keynote speech last week.
United States: The U.S. economic calendar is a healthy one too heading into quarter-end, starting with the Chicago Fed National Activity index (Monday). The Case-Shiller home price index (Tuesday) is forecast to rise 0.7% in July. Consumer confidence (Tuesday) is set to slip to 122.0 in September and new home sales (Tuesday) may drop 1.9% to a 560k pace in August. The MBA mortgage application report is due (Wednesday).The distorting effects from the hurricanes have left many of the estimates anyone’s guess, though there won’t be much impact on the third and final print for Q2 GDP (Thursday). Advanced indicators goods trade deficit (Thursday) is expected to widen to -$65.1 bln vs -$63.9 bln, while initial jobless claims may or may not settle 1k higher at 260k after a relatively smooth ride last week despite the hurricane impact the week prior. Personal income and spending are expected to have inched up 0.2% and 0.1%, respectively in August (Friday), while consumer confidence measures are expected to dip, but from high levels. Core PCE prices are seen up 0.2%. September Chicago PMI and final Michigan sentiment are also on tap to round out the week.
Fedspeak: is heavy this week, with 12 Committee members scheduled. The commentary will give the markets a notion of current thinking in the wake of the FOMC. Monday brings NY’s Dudley, Chicago’s Evans, and Minneapolis’ Kashkari. Evans’ topic is monetary policy. Tuesday has Fed Chair Yellen’s keynote speech at the NABE conference. Cleveland Fed’s Mester also moderates a session at NABE. Atlanta Fed’s Bostic speaks at the Atlanta Press Club. St Louis Fed’s Bullard discusses monetary policy and the economy Wednesday, while Philly Fed’s Rosengren also speaks on policy. Thursday brings KC’s George on monetary policy and the economy. Fed VC Fischer will be at a conference in London, but he is retiring next month. Note that this year’s FOMC voters include Dudley, Evans, Kaplan, and Kashkari, while 2018 voters include Dudley, Bostic, Mester, and Williams.
Canada: A speech by Governor Poloz highlights this week’s calendar. He appears Wednesday at the St. John’s Board of Trade, with the text of his prepared speech available at 11:45 ET. The appearance follows Deputy Governor Lane’s speech last week, who said that the Bank is paying close attention to the impact of the stronger Canadian dollar and that possible changes to NAFTA are a key source of uncertainty for Canada’s outlook.As for the data, July GDP will be the focus on the rather lean docket, which expected ta a 0.1% gain in July GDP. The industrial product price index (IPPI) is expected to expand 0.5% in August. Another sizable gain for the loonie will hold back the IPPI, but higher gasoline and commodity prices are expected to ultimately drive the index higher relative to July. Average weekly earnings for July are due Thursday. The CFIB’s Business Barometer index of small and medium sized business sentiment for September is also due Thursday.
Europe: It’s an action packed week, with German coalition talks following Sunday’s election, a new round of Brexit talks as well as plenty of key data releases and ECBspeakers, including Draghi’s address to lawmakers on Monday. Draghi’s address to lawmakers (Monday) is likely to repeat that the Eurozone economy is recovering, but also that this still hinges on ongoing monetary accommodation, thus justifying the likely extension of QE into 2018, even if monthly purchase levels are expected to be scaled back. Data releases include preliminary inflation data for September and the last set of confidence indicators in the form of Ifo and ESI readings, all of which should back the ECB’s benign central scenario. The data week starts with the German Ifo business climate (Monday), and Eurozone ESI Economic Confidence (Thursday). Markit said that PMI numbers for Q3 point to a quarterly growth rate of 0.7% q/q, which would be a further strengthening from Q2, but even if that proves a tad too optimistic, the recovery clearly continues to broaden across sectors and countries, which is a very good sign and is also underpinning ongoing improvement on labor markets. German sa jobless numbers for August are seen down which would leave the jobless rate at a low 5.7%. Conditions are also improving elsewhere even if more structural reforms are needed to bring especially youth unemployment down further.Indeed, the remaining slack in the labor market is one reason that wage growth has so far failed to pick up decisively and inflation remains modest.
UK: Sterling markets have settled on the November Monetary Policy Committee meeting as being the venue that the BoE will make its first rate hike in over 10 years. Meanwhile, the fourth round of Brexit negotiations will start on Monday. Prime Minister May rejected the Norwegian and Canadian models as being unsatisfactory for the UK while admitting that she is not pretending that you can have all the advantages of the single market with none of the disadvantages. Sterling took a knock on this news as it affirms that the government is aiming for a “hard exit” from the EU. May also announced that she wants a two-year “implementation period,” beyond Brexit day in March 2019, which is something that the EU is widely seen as accepting. The calendar this week brings the September CBI distributive sales survey (Wednesday), the September Gfk consumer confidence survey (Thursday), the third estimate for Q2 GDP, along with the Q2 current account report and August BoE lending data (all due on Friday).
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: Asian stock markets are slightly lower after fresh pressure on tech stocks dragged down Wall Street and with investors watching North Korea tensions, after top North Korea diplomat said a Trump tweet over the weekend was a “declaration of war”. USDJPY fell to 111.73 from 112.25 , while Gold spiked up about $14/ounce to $1,309.86, following comments from North Korea’s foreign minister. U.K. and U.S. stock futures are also down and ongoing risk aversion should keep bonds underpinned. Germany remains focused on the fallout from the election as coalition talks come into focus. Brexit talks restarted yesterday, but May’s speech last week doesn’t seem to have brought the hoped-for breakthrough in the talks. Today’s calendar has French business confidence as well as U.K. mortgage approvals, and more ECB speakers ahead of a keynote speech from Fed’s Yellen. Germany sells 2-year Schatz notes and Italy also bonds.
ECB’s Draghi: “We will decide later this year on a re-calibration of our instruments that maintains the degree of monetary support that the euro area economy still needs”. “We are becoming more confident that inflation will eventual head to levels in line with our inflation aim, but also know that a very substantial degree of monetary accommodation is still needed for the upward inflation path to materialize”. “we still see some uncertainties with respect to the medium-term inflation outlook”. “Recent volatility in the exchange rate represents a source of uncertainty which requires monitoring.”
FED: Fed’s Evans remains concerned over still low inflation expectations in his comments on monetary policy and the economy. This FOMC voter has been worried in recent months over the slowing in price pressures. He needs to see clearer signs of higher inflation before boosting rates again. He is not convinced weak inflation is such a transitory event, in comments to reporters. He added inflation expectations are not consistent with the Fed’s 2% goal, while he is confident that the current policy stance is appropriate. NY Fed’s Dudley spoke as well yesterday. Fed Dudley sees continued gradual policy tightening and temporary factors depressing inflation “fading.” The dovish voter expects the 2% inflation target to be reached in the medium-term and views economic fundamentals as “generally quite favorable,” though the hurricane effects should be short-lived and boost growth over time. Dudley expects the weaker dollar and overseas growth to boost the trade sector, supporting growth and wage gains.
Main Macro Events Today ECB – ECB’s Praet speaking in “ Good Pension Design” lecture at 2nd ECB Annual Research Conference in Frankfurt FOMC – Cleveland Fed’s Mester moderates a session at NABE today, while Fed’s Brainard is due to give opening remarks at the Fed Conference in Washington. Fed Chair Yellen’s Is due to give a speech at the NABE conference at 19:45 GMT. US Home Sales & Consumer Confidence – The Case-Shiller home price index is forecast to rise 0.1% in July. Consumer confidence is set to slip to 120.0 in September vs 122.9. And new home sales may drop 1.9% to a 588k pace in August. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
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Click HERE to READ more Market news.
Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: Asian stock markets are mixed, with Hang Seng and CSI 300 outperforming amid a rebound in tech stocks. Nikkei and ASX are in the red, the former dragged down by companies trading ex-dividend. U.K. and U.S. stock futures are moving higher, pointing to early gains on European stock markets, which are likely to keep upward pressure on Bund yields also as the most recent dip in the EUR won’t prevent the ECB from reigning in asset purchase volumes from next year. Today’s calendar has Eurozone M3 and credit growth numbers, as well as Italian confidence data and the U.K. CBI retailing survey. In Germany the focus will remain on the fallout from the election as Merkel faces tough coalition talks.
US reports: U.S. consumer confidence slipped to 119.8 from 120.4 (122.9) in August but a similar 120.0 in July, as the measure takes a likely hurricane hit. All the confidence surveys have strengthened sharply in 2017 despite some moderation from Q1 peaks, and what is now a small September setback after an August updraft. Consumer confidence remains close to the 16-year high of 124.9 in March. Confidence, producer sentiment and small business optimism have climbed since October of 2016 in the face of a factory rebound that is trimming excess capacity, equity and home price gains, and fiscal policy relief. The rise has defied restraint in GDP growth from ongoing inventory weakness. The 3.4% August U.S. new home sales drop to an expected 560k rate followed net downward revisions to leave a slightly weaker than expected report. The August new home sales drop included a 4.7% decline in the south, and Harvey and Irma will likely depress sales through September before a Q4 bounce.
Fed Chair Yellen: said the Fed should be “wary of moving too gradually,” in her written remarks on Inflation, Uncertainty, and Monetary Policy before the NABE annual conference. So far the gradual approach has been appropriate due to the subdued pace of inflation, but low prices likely reflect factors that should fade. Meanwhile, she added that it is “imprudent” to keep policy on hold until inflation hits the 2% target. There are risks of overheating without modest rate hikes over time. Persistent easy policy can hurt financial stability. There was the usual caveat, however, that persistently low inflation could lead to a slower pace of tightenings. Nevertheless, the gist of her comments, and the leanings of the FOMC back at the September 19, 20 meeting, pretty much confirm a December tightening, unless there is some development between now and then to take if off the table. She also noted that the Fed’s inflation goal is symmetric and that the 2% level is not a ceiling. It would not be a tragedy to see inflation overshoot, she said.
Main Macro Events Today US Goods & Home Sales – ECB’s Praet speaking in “ Good Pension Design” lecture at 2nd ECB Annual Research Conference in Frankfurt BOC– Bank of Canada Governor Poloz speaks today. His speech follows Deputy Governor Lane’s speech last week, who perhaps signalled a more gradualist approach to rate hikes ahead. Lane said the Bank is paying close attention to the impact of the stronger Canadian dollar and that possible changes to NAFTA are a key source of uncertainty for Canada’s outlook. The loonie has seen a slight unwinding relative to the greenback since the Sep 8 announcement while the downside risk from NAFTA changes has been in play since last November’s U.S. election. Of course, mention of both those subjects (loonie, NAFTA) could be meaningful. RBNZ Rates – The Case-Shiller home price index is forecast to rise 0.1% in July. Consumer confidence is set to slip to 120.0 in September vs 122.9. And new home sales may drop 1.9% to a 588k pace in August. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: Asian stock markets are mixed, with Japan outperforming today, as the dollar strengthened. Hang Seng and CSI 300 moved sideways as investors seemed to hold back ahead of a long holiday starting next Monday. The ASX was slightly higher as are FTSE 100 and U.S. futures. The European calendar has Eurozone ESI economic confidence, but political events and central banks remain in focus as traders assess U.S. tax plans, the fallout from the German election, Brexit talks, and now also the risk of a trade war between the U.K. and the U.S. So far both ECB and BoE remain on course to reduce the degree of monetary accommodation somewhat and that should keep yields on an uptrend, especially as stocks move higher.
Germany: German GfK consumer confidence unexpectedly fell back slightly to 10.8 in the October projection from 10.9 in September, suggesting that the election cast its shadow. The full breakdown for the September reading showed a marked improvement in economic sentiment, but a sharp setback for income expectations and the willingness to buy also eased slightly, while inflation expectations turned less negative. Still strong confidence numbers that suggest consumers continue to underpin the recovery, but also indicate that energy price variations quickly leave a mark.
RBNZ held the policy rate at 1.75%, as expected. Low for long remains in place, with Acting Governor Spencer saying “Monetary Policy will remain accommodative for a considerable period.” And a dovish bias was retained, as the Acting Governor concluded that “Numerous uncertainties remain, and policy may need to adjust accordingly.” This was the same as in August, June and May. In other words, it looks like they won’t hesitate to add accommodation if downside risk to the economy manifest. The onus remains on the inflation and growth data, with additional undershoots setting the stage for further easing. But our base case is for no change into 2018. Notably, they observed that Q2 GDP was as expected while the slowing in Q2 annual CPI kept the measure inside the target range.
BoC’s Poloz: “it is a case of feeling your way as you go” he summarised when asked about what will happen to rates going forward. Indeed, his now concluded presser maintained the cautious tone seen in his prepared speech. He reiterated that we are in “uncharted territory for what economies have been through.” As for the rate hikes we’ve seen so far this year, it was a case of data dependence declared–data much stronger than expected–appropriate to move (and move again). He repeated that they are not on a predetermined course and must watch for important unknowns. As for the projected overshoot of the 2% inflation target in 2019, he nonchalantly said they have the 1-3% band for just that reason. Also of interest, he noted that it is typical at this point in the cycle to over-predict inflation The bank needs to “watch it unfold, fell the way with the data.” It seems that for 2018, the aggressive scenario has been uprooted by a “cautious” scenario until the data says otherwise, with two to three rate increases now factored in to leave a 1.75% to 2.00% setting by the end of the 2018. They “will continue to feel their way cautiously” as we get closer to “home.” Policy will be “particularly data dependent.” The Governor said “at a minimum” the two 2015 rate cuts are no longer needed. USDCAD shot up to 1.2431 from near 1.2350, the highest seen since September 1, following the release of BoC governor Poloz’s prepared remarks.
Main Macro Events Today EU ESI– Eurozone ESI Economic Confidence is seen rising to 112.1 from 111.9., while Industrial and consumer confidence seems to stay unchanged. US GDP, Jobless Claims & Goods Trade– The third and final print for Q2 GDP, shows a slight upward revision to a 3.1% clip from 3.0%. Advanced indicators goods trade deficit is expected to widen to -$65.0 bln vs -$65.1 bln, while initial jobless claims may or may not settle 11k higher at 270k after a relatively smooth ride last week despite the hurricane impact the week prior. Speeches of the day – BOE Gov Carney and RBA Deputy Governor Debelle deliver a speech at the Bank of England conference in London today. Meanwhile, Thursday brings also Feds KC’s George who is due to discuss on monetary policy and the economy on BoE conference along with Fed VC Fischer, who is retiring next month. Significant is the fact that Prime Minister May is due to speak as well. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: Asian stock markets moved modestly higher on the last day of the third quarter. Hopes that the U.S. tax reform will boost growth underpinned investor market sentiment, and the MSCI Asia Pacific Index is heading for a third quarter of gains. Trading volumes were subdued, however, ahead of China’s week long holiday. FTSE 100 futures are up, U.S. futures narrowly mixed. Oil prices are slightly down on the day. European bond yields closed mixed yesterday, with Bunds closing up on the day, but far below intraday highs, while Gilt yields as well as Eurozone peripheral yields dropped. The chance that Eurozone inflation will hold steady today, rather than picking up again helped yields to come down from highs, but in our view won’t prevent the ECB from taking the foot off the accelerator. Already released U.K. consumer sentiment unexpectedly rose to -9 from -10. The data calendar also includes the final reading of U.K. Q2 GDP as well as consumer credit data.
FX Update: USDJPY picked up some demand while most other dollar pairings have traded narrow ranges so far today. USDJPY recovered from yesterday’s 112.25 low to the upper 112s. There had been reports yesterday of yen demand into the end of the first half of the fiscal year in Japan, though USDJPY still has rallied, returning focus on the two-and-a-half-month high seen on Wednesday at 113.25. While markets are now taking a more circumscribed view of Trump administrations tax plans, the Fed’s course further tightening is still promoting dollar demand on dips. A batch of data today out of Japan had little impact on forex markets, but encouraging. Japanese Core CPI lifted in September to 0.7% y/y, industrial production rose 2.1% m/m, and retail sales gained 2.8% y/y.
Fedspeak: Fed VC Fischer steered clear of policy and the economic outlook in remarks before the Bank of England, where he discussed “The Independent Bank of England — 20 Years On.” It is still possible those topics may come up in Q&A. As he exited stage right in his last speach as Vice Chairman, he left the markets with this thought: “Or, if I may be permitted a few final words on my way out the door, the watchwords of the central banker should be “Semper vigilans,” because history and financial markets are masters of the art of surprise, and “Never say never,” because you will sometimes find yourself having to do things that you never thought you would.” KC Fed hawk George was true to form, noting further gradual rate hikes are appropriate. The stance of monetary policy is still rather accommodative, she added. She has a brighter outlook on global growth. The U.S. economy is in reasonably good shape currently. There has been a pick-up in business investment. And while there will be a near-term impact from the hurricanes, offsets are projected down the road. George is not an FOMC voter this year nor next.
Main Macro Events Today EU HCPI and German Unemployment -Eurozone headline HICP inflation expected unchanged at 1.5% y/y in September. The French number may still stick a tad higher, but the slight decline in the Spanish headline rate and the steady German number yesterday suggest that the overall Eurozone number also held pretty stable, despite an uptick in energy prices. CAD GDP – GDP is expected to improve 0.1% m/m in July after the 0.3% gain in July. The 0.2% dip in retail shipment volumes added to the mixed backdrop for the July GDP report. US PCE – Personal income and spending are expected to have inched up 0.2% and 0.1%, respectively in August, while consumer confidence measures are expected to dip, but from high levels. Core PCE prices are seen up 0.2%. BoE – BOE Gov Carney is due give closing remarks at the Bank of England’s conference celebrating 20 years of independence, in London. In the conference we will see today also speeches from MPC members such as Broadbent and Cunliffe.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
The Trump bump seemed to get renewed life last week on the release of tax reform plans. That added to an already optimistic tone after signs of solid consumption growth and fixed investment in the U.S. Q2 GDP and with the strength in capital spending evidenced in the August durable goods. Meanwhile, the Asian and European economies are contributing to growth too, with the strength in recent PMIs underpinning positive outlooks.
United States: The September nonfarm payrolls will be the attention-getter which expected at 20k increase after the disappointing 156k gain in August. The September manufacturing ISM (Monday) should slip to 57.5 on the drag from Hurricane Irma, after a stronger than expected 2.5 increase to 58.8 in August. Construction spending for August (Monday) is expected to be unchanged. September vehicle sales (Tuesday) are expected to improve to a 17.0 mln clip, from 16.0 mln previously, though there’s downside risk from the hurricanes. The September ADP (Wednesday) should climb 190k following Augusts 237k surge. There should be little hurricane effect here given the way the data is tabulated. The services ISM (Wednesday) is seen edging up to 55.5 after rising 1.4 points to 55.3 previously. The August trade deficit (Thursday) is forecast narrowing to -$42.5 bln versus July’s -$43.7 bln.
Fedspeak: The U.S. calendar includes may of the key economic reports for the month, but Fedspeak is likely to overshadow, especially as the numbers will be impacted by the varied effects from the hurricanes. Fed Chair Yellen (Wednesday) will be an obvious focal point. Fed Chair Yellen’s comments will be monitored. But after reiterating the Fed’s gradual policy stance last week, she’s unlikely to provide any fresh revelations in her comments on community banking. Along with Yellen, other speakers include Kaplan will participate in a moderated Q&A (Monday). Governor Powell (Thursday) speaks on the Treasury market. SF Williams will be at a community banking event (Thursday). Harker and George (Thursday), along with Bostic and Kaplan (Friday), speak at a workforce development conference. NY Fed’s Dudley could be the most enlightening with his remarks on monetary policy (Friday). Also, Bullard speaks on the economy (Friday). Along with Yellen, current FOMC voters include Kaplan, Dudley, Powell, Harker, while Williams and Bostic are voters in 2018.
Canada: In Canada, Bank of Canada Deputy Governor Leduc speaks on “Firm creation and productivity in the Canadian Economy.” The text of Tuesday’s speech will be available at 12:30 ET. Governor Poloz’s comments from last week provide some insight into the Bank’s view on this topic. The docket of economic data includes the usual early month suspects, notably trade and employment. Employment (Friday) is expected to expand 20.0k in September after the 22.2k rise in August. The unemployment rate is seen at 6.2%, matching August. The trade deficit is projected to slightly narrow to -C$2.9 bln in August from -C$3.0 bln in July. The Ivey PMI (Friday) is projected to slip to 55.0 in September from 56.3 in August. The Markit manufacturing PMI for September is due Monday. Dealer reported vehicle sales for September are expected Tuesday.
Europe:It’s a relatively quiet week that’s thin on data releases, which are unlikely to bring any change to the ECB outlook. There are some ECBspeakers, while the central bank also releases the minutes of the last meeting (Thursday). Merkel’s quest for allies in the new parliament will continue, but is unlikely to make much progress in a week that includes a holiday on Tuesday. Merkel will remain in office as caretaker until a new Chancellor has been elected. The data calendar has final September PMI readings, with the manufacturing PMI (Monday) expected to be confirmed at 58.2 and the Services reading (Wednesday) at 55.6, which should see the composite confirmed at 56.7. The highlight of the week will be German manufacturing orders (Friday) where we are looking for a rebound of 0.5% m/m, after the correction in August. Eurozone growth is broadening and strengthening and even the German recovery is for once underpinned by consumption and domestic demand rather than exports. And while the ECB has acknowledged the improvement, it still sees insufficient changes to underlying inflation to end QE just yet.
Japan: A solid Tankan survey of business conditions out of Japan this morning, which showed optimism at small manufacturers to be at a decade high had little impact on the yen, with the BoJ still seen as being well behind the Fed in terms of cycle, with chronically tepid inflation still remaining a factor in Japan’s economic circumstance. The Tankan showed that labour shortages to be at a 25-year low, which could be the harbinger of second-round inflation via higher wage demands. September consumer confidence (Tuesday) is penciled in at 44.0 from 43.3, while September services PMI (Wednesday) is forecast at 52.0 from 51.6.
Australia: The Reserve Bank of Australia meets (Tuesday) and is expected to hold rates steady at 1.50%. Deputy Governor Debelle takes part in a panel discussion (Thursday). The data docket is headlined by retail sales (Thursday) and the trade balance (Thursday). Retail sales are expected to rise 0.2% in August after the flat reading (0.0%) in July. The trade surplus is seen improving to A$1.0 bln in August from the A$0.5 bln surplus in July. Building approvals are expected to bounce 2.0% m/m in August after the 1.7% drop in July. The Melbourne Institute inflation index for September is due Monday. September ANZ job ads are scheduled for Tuesday.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Click HERE to READ more Market news.
Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: Topix and Nikkei reached fresh two year highs, Chinese stocks traded in Hong Kong rallied as markets reopened after a holiday, benefiting from robust PMI data over the weekend and the PBOC’s announcement that it will cut reserve requirement ratio for next year. The Hang Seng is up 1.75%, the Nikkei gained 0.95% while the ASX 200 dropped -0.49%, as lower oil prices weighed on energy stocks and a sharp fall in QBE insurance, after the company detailed expected losses from recent hurricanes, dragged the index down. Mainland China remains closed for holidays. In Europe Germany is closed for a national holiday after Bunds were underpinned yesterday by intra-Eurozone safe haven flows following the escalation of Spanish tensions. Gilts outperformed with the US100 yesterday amid a broader rise in European stocks ex Spain, which benefited from USD strength. U.K. and U.S. stock futures suggest further gains today. Today’s data calendar is relatively quiet, with only Eurozone producer price inflation and the U.K. CIPS Construction PMI.
U.S. reports: revealed upside surprises across the September ISM and August construction spending reports that add upside risk to forecasts for an Irma-depressed 120k September nonfarm payroll rise and a 3.0% growth rate for Q3 GDP. For the ISM, we saw a headline pop to a 13-year high of 60.8 from a 6-year high of 58.8 in August, as all the producer sentiment surveys are showing a sharp rise with the hurricane rebuild to new cycle-highs. The jobs index also rose, to a 6-year high of 60.3 in September from a prior 6-year high of 59.9. For construction, we saw a 0.5% August rise after upward revisions across the private construction components, though public construction was revised down sharply, and we now have a new cycle-low for that measure in July before a 0.7% August bounce.
FX Update: The dollar has continued to find demand, posting gains versus the euro, yen, sterling and Australian dollar, among other currencies. The narrow trade-weighted USD index clocked a one-and-a-half-month peak at 93.77, while EURUSD traded below 1.1700 for the first time since mid August. USDJPY remained buoyant, albeit with upside momentum being crimped in the face of Japanese exporter offers above 113.00. The pair edged out a high at 113.19, which is six pips short of last week’s two-and-a-half-month peak. The dollar is in demand as markets continue to adjust to the rekindled hawkishness of the Fed, while the elevated tensions between Spain’s central government and the autonomous region of Catalonia have soured appetite for euros. The Australian dollar came under some pressure after the RBA left policy on hold, as was widely expected, but as the accompanying statement of Governor Lowe remained non committal in tone, acknowledging improving economic growth but reaffirming that the inflation outlook remains subdued. AUD-SD posted a two-and-a-half-month low at 0.7785.
Main Macro Events Today UK Construction PMI – The construction PMI expected to come in unchanged at 51.0, a level indicating only weak expansion in the sector. EU PPI – PPI is expected to improve 0.1% m/m in August and 2.3% y/y. FOMC Powell – Governor Powell speaks at a financial regulation event jointly hosted by Reuters and George Washington University, in Washington DC, about regulatory reform. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: Asian stock markets are mixed, as USD weakens and Yen strength saw the Nikkei wiping out gains. The ASX also was under pressure as the dip in oil prices weighed on energy producers, while Chinese stocks in Hong Kong touched a 2-year high and the Hang Seng outperformed. US100 and U.S. stock futures are in the red, suggesting a weak start in Europe, after modest gains yesterday. Germany’s GER30 re-opens after yesterday’s holiday as Spain’s constitutional crisis continues and casts a shadow over the Eurozone. The data calendar includes the final reading of Eurozone services PMIs, as well as the U.K. services PMI and Eurozone retail sales. Germany sells 10-year Bunds.
FX Update: The dollar remained on the ebb, giving back some of the gains posted recently. The narrow trade-weighted USD index is showing a modest 0.2% loss as the London interbank opens, at 93.23, having extended the decline from yesterday’s six-week peak at 93.77. USDJPY ebbed under 112.50 after recent gains stalled above 113.00, where decent export offers were encountered. The pair left a high at 113.19 yesterday, which is 6 pips short of the near three-month high printed last week. The pair had rallied strongly from the early September low at 107.31, though momentum indicators have been turning lower over the last couple of weeks, despite spot making new highs — a divergence that often portends a trend change. EURUSD logged a two-session high at 1.1780, up from yesterday’s two-and-a-half-month low at 1.1696.
Canada: BoC’s Leduc did not directly address policy in his prepared remarks yesterday on the declining dynamism of Canada’s economy. Data show a “surprising and sustained decline in the entry rate of new firms since the early 1980s” he observed. He said “The main concern about the loss of dynamism is that it will lead to less innovation and diminishing long term growth.” As for Canada’s growth, he said it “has been strong, exceeding that of all other G7 countries.” He does find it “encouraging that the Canadian economy is still flexible enough to absorb a major shock” despite the decline in dynamism. He repeated Poloz’s observation that productivity has “increased significantly” since the middle of last year. There is nothing new here on policy or the economy, with the Lane/Poloz duo last month saying all that needed to be said for now. To review, they revealed a pivot to caution following back to back rate hikes in July and September as the economy surged in the first half of this year. Leduc said the growth rate should decline over next few quarters, but remain above potential. That is in-line with the July outlook and Poloz’s comments last month.
USDCAD turned a bit lower as Canadian yields edged up following BoC Leduc’s speech. The pairing had been idling on either side of 1.2510 since the open, before falling back to intra day lows of 1.2482. With oil prices off the boil this week, and narrowed prospects for a near term BoC rate hike, USDCAD upside appears to be the easier path.
Main Macro Events Today EU and German Markit PMI – The Services EU reading is seen at 55.6, and should see the composite confirmed at 56.7, while German Service PMI and Composite anticipated unchanged at 55.6 and 57.8 respectively. The UK Service is seen unchanged as well at 53.2. US ADP and ISM Non-Manuf. PMI – The September ADP should climb 125k following Augusts 237k surge. There should be little hurricane effect here given the way the data is tabulated. The services ISM is seen edging up to 55.5 after rising 1.4 points to 55.3 previously. ECB – President Draghi is due to speak at the Inauguration of the ECB Visito Center in Frankfurt. Fed’s Yellen- The market anxiously awaits Yellen’s comments today,which might be in vain, since she doesn’t take the podium until 15:15 ET, and then it’s merely to deliver opening remarks at a community banking event. That’s not a venue nor a topic for policy insights. Plus, there will be no Q&A. Nothing has changed since the September 19, 20 FOMC to alter the stance regarding the dot plot and the indication of one more hike this year, a stance which Yellen has tacitly approved. In terms of the Fed chair position, should Yellen not be reappointed, it seems to be a battle between Warsh and Powell, with the former’s threat to “shake up” the Fed a worry. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: Another mixed session in Asia, where the Hang Seng continued to outperformed as China remained closed for holidays. ASX and Nikkei meanwhile moved sideways. U.K. and U.S. stock futures are also little changed. No clear direction then for European markets, which will also have little to digest on the data front today. ECB speakers and the minutes of the last ECB meeting meanwhile are likely to confirm that the central bank is heading for a reduction in asset purchase volumes, but with the doves still shying away from a firm commitment to an end date for QE. Spain remains in focus as Madrid and Barcelona remain on confrontation course in a dangerous game of chicken.
FX Update: The Aussie came under pressure following the biggest contraction in Australian retailing sales in four years. The currency is showing a 0.5% decline on the day as the London interbank enters the fray, with AUD-USD logging a two-day low at 0.7819. The August report for Australian retail trade saw turnover unexpectedly contracting by 0.6% m/m, contrary to expectations for 0.3% m/m growth. Elsewhere, narrow ranges have prevailed. USD-JPY has plied a sideways path near 111.75, which is about the halfway mark of the range of the last week. EUR-USD has ebbed modestly lower, to the 1.1750 area and nearing yesterday’s low at 1.1746. The lack of direction reflects a general lack of fresh leads. Fed chair Yellen spoke yesterday after the London close, but she steered clear of policy and economic issues.
Main Macro Events Today
EU Minutes – US Weekly Jobless number – Expectations – 265k down from last weeks 272k BOE – Speeches – McCafferty and Haldane FED Speeches – Powell (prospective new FED Chair), Harker and George Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Stuart Cowell Senior Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: European stock markets moved broadly higher as U.S. factory orders boosted confidence in the global growth outlook. Chinese stocks in Hong Kong tested 2-year highs. Banks were underpinned as U.S. yields moved higher and the dollar strengthened. FTSE 100 futures are also up and the DAX is still trying to break the 13000 mark, as the focus turns to U.S. jobs data. In the Europe investors continue to watch the situation in Catalonia carefully. Spanish markets bounced back yesterday as the central government continues to take a hard line on Barcelona’s secession plans, while leaders in Catalonia seem to the pushing for talks. Indeed, for a long term solution both sides must return to the negotiating table.
FX Update: The dollar has been bid up again, after dipping mid week, gaining concomitantly with Treasury yields following a set of strong data out of the U.S. yesterday, along with relatively hawkish Fedspeack and with all three of the main U.S. equity indices setting record closing highs for a fourth straight session. USDJPY edged out a three-session high just above 113.00 and EURUSD clawed out a new seven-week low at 1.1686. USDCAD logged five-week highs, while Cable plumbed a one-month low. AUDUSD clocked a three-month low, at 0.7743, extending the down trend that’s been developing since the pair failed to sustain gains above 0.8000 between late July and September. Markets are now looking to the September employment report, up later today, savvy to temporary distortions caused by the hurricanes. A relatively subdued 120k headline increase is expected. There is also another barrage of Fed speakers due, which will almost certainly, on net, affirm that a rate hike is in the works for the December FOMC.
Main Macro Events Today
MPC Member Haldane Speech Canadian Unemployment Rate – Expectations – 0.1% down from last month 6.2% US NFP – Expectations – 66k down from last month 156k FED Speeches – Kaplan , speak at a workforce development conference. NY Fed’s Dudley could be the most enlightening with his remarks on monetary policy. Also, Bullard speaks on the economy . Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
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Stuart Cowell Senior Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
The September U.S. jobs report lived up to its “distorted” billing. But, while many of the stats showed outsized gains (in terms of earnings), or losses (in terms of jobs), they could be generally easily rationalized due to the hurricanes. The net result left intact the view that the FOMC will remain on its gradual course of normalization near-term. After the holiday break for the U.S., Canada, and Japan on Monday, markets will be back at full strength with China returning from a week long absence with PMIs on tap. Even before then, there is a risk of a constitutional showdown in Spain over the Catalonia independence vote and heavy-handed response by Madrid, which may yet have Brexit-like complications for the wary EU itself.
United States: The U.S. economic calendar will get off to a slow start after the Columbus/Indigenous Peoples Day holiday break by the markets Monday, focused mainly on more questionable September data including potentially hurricane-impacted inflation and retail sales towards the end of the week.After NFIB small business optimism (Tuesday), MBA mortgage stats are due (Wednesday), along with JOLTS job openings and the FOMC minutes. Accordingly, September PPI is forecast to rise in August (Thursday). Also due then is recently choppy initial jobless claims, seen dropping another 22k to 238k as storm anomalies wash out of the data. Headline CPI is forecast to surge 0.6% in September from 0.4% due to the surge in petroleum prices, in August (Friday).
Canada: A holiday-truncated week is thick with housing data (Monday is Thanksgiving Day). The week begins with September housing starts (Tuesday), expected to dip to 220.0k from the 223.2k in August. Housing permits (Tuesday) are seen slipping 1.0% m/m after the 3.5% drop in July. The August new home price index is due Thursday. The Teranet/National Bank housing price index for September is also due Thursday. There is nothing schedule from the Bank of Canada this week.
Europe: This week’s data releases are unlikely to add much to the discussion as August production numbers are rather backward looking and final inflation numbers are not expected to bring decisive revisions. Developments in Spain, however, will be watched carefully. At the time of writing there was no sign of a breakthrough in the standoff between Madrid and Barcelona. EU officials are watching the situation nervously with a potential showdown on Monday. Wary of setting any type of precedent, they have made clear that an independent Catalonia would no longer be part of the EU, but clearly would prefer the conflict to be resolved without a secession at a time when Brexit talks loom. The data week starts with German August industrial production (Monday). The French production and overall Eurozone IP will be on Thursday. German trade data for August is also due and expected to show another hefty surplus, although the current recovery is more than previously driven by consumption and domestic demand. The main bulk of data releases centres on final September inflation readings, which are expected to confirm German HICP (Friday) at 1.8% y/y, the Spanish (Wednesday) reading at 1.9% y/y, the French (Thursday) at 1.1% y/y, and finally the Italian rate (Friday) at 1.1% y/y. This should leave overall Eurozone HICP inflation, due to the following week on course to be confirmed at 1.5% y/y, well below the ECB’s 2% upper limit for price stability, but also highlighting that the convergence of inflation rates that officials had been hoping would be one of the results of monetary union, hasn’t really happened.
UK: Sterling last week saw its biggest weekly decline, of 2.5% versus the dollar, since August 2016, a time when markets were still reeling from the shock of the vote to leave the EU. Like then, the pound is in a tailspin over political and Brexit uncertainties. The calendar this week has the BRC retail sales report for September (Tuesday), industrial production and trade figures for August (also Tuesday), and the RICS house price balance (Thursday). The BRC report will be monitored to see if the consumer sector continues to hold up, buoyed by near record levels of employment and low borrowing rates, but challenged by an erosion in spending power with inflation exceeding pay increases. As for production, growth in industrial output is expected, which would be the same as in July.
New Zealand: New Zealand’s calendar is thin this week. QV new home prices for September are due Tuesday. The Reserve Bank of New Zealand next meets on November 9. They held rates steady at 1.75% last week, matching expectations. The statement by Acting Governor Spencer was consistent with no change in rates for an extended period.
Japan: The docket kicks off Tuesday after Monday’s holiday with the August current account, where the surplus is expected to narrow to JPY 2,200 bln from 2,320 bln. August machine orders is on Wednesday. The August tertiary industry index (Thursday) should rise 0.1% from the same previously. September PPI (Friday) is seen accelerating slightly to 3.1% y/y from 2.9% in August. Strength in oil prices may be offset by the firmer yen.
China: Loan growth and new yuan loans for September (Tuesday) should show new loans rising to CNY 1,300 bln from 1,090 bln previously. The September trade report (Friday) is forecast to show the surplus narrowing to $39.0 bln from $41.9 bln. Exports likely remained solid, even to the U.S. despite some trade tensions.
Australia: The Reserve Bank of Australia’s Financial Stability Review (Friday) headlines a thin week of data and events. RBA Deputy Governor Debelle speaks (Tuesday) at the FX Global code of conduct in Hong Kong. August housing investment (Thursday) is expected to gain 2.0% after the 2.9% rise in July.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: Asian stock markets were mixed, long yields mostly higher. Japanese shares were underpinned by automakers after a three day weekend, the Hang Seng also moved higher, but the post-holiday rally in mainland China fizzled out and the ASX was under pressure as the currency strengthened. U.S. and U.K. stock futures are higher, but for the Eurozone, Spain will be a key focus as Catalan President Puigdemont is set to address lawmakers in Barcelona at 6 pm to discuss the outcome of the referendum, which delivered a resounding yes, but with a very low participation rate. The central government in Madrid meanwhile has pledged to maintain the unity of Spain and there is no support for Barcelona from the EU. Political events could well overshadow the local calendar, which includes industrial production data out of the U.K., France and Italy and finally U.K. trade numbers.
FX Update: The dollar traded mostly softer yesterday in holiday thinned markets, with holidays affect major centres in both North America and Asia. The narrow trade-weighted USD index fell to a two-session low at 93.48, while EURUSD firmed to a two-session high of 1.1756. The dollar also traded at two-session lows versus sterling and the Australian dollar, while USDCAD gave back a chunk of the gains the pair saw on Friday following the U.S. and Canadian employment reports. USDJPY logged a three-session low at 112.33 in Asia before recouping above 112.50, remaining comfortably off from Friday’s three-month high at 113.44. New data and developments were thin on the ground, though Spanish markets priced out Catalan secession risks, with the movement’s leaders stalling amid not unjust concerns about economic mayhem. Geopolitical concerns remain amid reports that North Korea is planning another missile launch, and an escalating diplomatic spat between the U.S. and Turkey.
Main Macro Events Today
UK Manufacturing Production – Expectations – Down to 0.3% from 0.5% on July. UK Trade Balance – Expectations – At -11.20B from last month -11.58B. CAD Housing Starts – Expectations – to dip to 220.0k from the 223.2k in August. Housing permits are seen slipping 1.0% m/m in August after the 3.5% drop in July. FED Kashkari – Fed dove Kashkari, will open a regional conditions conference by his branch from 10 ET, followed by Dallas Fed centrist Kaplan who is taking part in a Q&A session at Stanford’s SIEPR after the close from 20 ET. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: Asian stock markets moved higher overnight and the Nikkei is set for the highest close since December 1996. Stronger than expected machinery orders for August underpinned an overall improvement in growth optimism, after the upbeat IMF outlook yesterday. Hang Send and CSI 300 are also posting gains and the ASX 200 outperformed as oil prices climbed above USD 51 per barrel. U.K. stock futures are also up as Sterling retreats. In the Eurozone the fact that the showdown between Madrid and Barcelona has been avoided will help to underpin sentiment. European stocks are set to extend gains and the GER30 may finally break the 1300 mark, but Bunds are likely to underperform as risk appetite returns and intra-Eurozone safe haven flows are being priced out. The local calendar is relatively quiet, with only the final reading of Spanish inflation data for September. Investors will also look ahead to the FOMC minutes as well as plenty of central bank speakers at the IMF and World Bank meetings in Washington.
Catalan’s President backs down – Bund futures jump – briefly. Puidgemont rather than unilaterally declaring independence, proposed to suspend the result of the referendum and called for weeks of dialogue. Spain’s central administration had braced itself for a direct conflict, so this is at least a partial victory as Puidgemont seemed to back down first in this game of chicken. Still, with Catalonia suspending the result, rather than fully ignoring it Rajoy will likely still see this as blackmail and it remains to be seen whether he will now take a softer stance or continue to demand a full capitulation from the independent region. EURUSD dipped to 1.1796 from 1.1810 as the Catalonian leader said the current relationship with Spain is unsustainable. From there, the euro jumped to intra day highs of 1.1825 as Puigdemont said he would suspend a declaration of independence in order to pursue dialogue with Madrid.
Main Macro Events Today
FOMC Minutes – FOMC minutes to the September 19-20 policy meeting will provide some further details to the Fed’s recent thinking, but shouldn’t lead to any major revelations.After the policy statement, the economic projections, and Yellen’s press conference last month, as well as recent Fedspeak and data, the markets have all they need to in order to fine tune the outlook including pricing in a December rate hike. FOMC Williams Speech – ECB’ Praet speech –
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: Asian stock markets are broadly higher, following on from gains on Wall Street yesterday, but UK100 and U.S. futures are heading south. Mixed signals then for European markets. The FOMC minutes confirmed that the Fed is on track to hike rates again at the December meeting, the BoE remains headed for a rate hike and the ECB is pretty much set to reduce asset purchases from early next year even if officials remain split on the size of the reduction and whether there should already be a signal that this is the beginning of the end for QE. Brexit talks remain in focus ahead of the crucial EU summit where officials will decide whether sufficient progress has been made for trade talks to begin this year. Meanwhile Spain’s hard line stance on Catalonia and signs that the front in Barcelona is cracking has helped peripheral bond yields to drop sharply yesterday and it remains to be seen whether the gains in bonds can be held. With the data calendar relatively quiet again, politics and central bank speeches will remain in focus. The Eurozone has industrial production for August and there are inflation numbers out of France and Sweden.
FOMC minutes showed “many” saw another rate hike was warranted, while a smaller number (probably Kashkari, Evans, and Kaplan) thought action could wait. Several thought that further tightening should hinge on incoming data, though it was acknowledged that Hurricanes Harvey, Irma, and Maria would impact economic activity. There was active debate over inflation and wages. While many saw some of the softening in inflation as due to idiosyncratic factors, other factors could be at work too and there was concern that such influences could be more persistent. Also, “several expressed concern that the persistence of low rates of inflation might imply that the underlying trend was running below 2%.”
Main Macro Events Today
EU Industial Production – Expectations – 0.5% m/m from 0.1% seen in August. US Jobless Claims & PPI – Expectations – September PPI is forecast to rise 0.4% vs 0.2% in August, while rising 0.2% core and 2.1% core y/y. Also due then is recently choppy initial jobless claims, seen dropping another 22k to 238k as storm anomalies wash out of the data. ECB speeches – ECB President Draghi and ECB’s Praet speak in Washington and New York respectively. FOMC Speeches – Governor Powell addresses “Prospects for Emerging Market Economies in a Normalizing Global Economy” from 10:30 ET and Governor Brainard takes part in a monetary policy panel at the Peterson Institute from 10:30 ET. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: Topix and Nikkei rallied and are targeting fresh highs, boosted by technology companies and retailers as markets start to focus on earnings. Elsewhere gains were more mooted and Hang Seng and CSI 300 swung between gains and losses. U.S. stock futures are higher, UK100 futures slightly down, but for the Eurozone a Bloomberg report that the ECB is considering halving asset purchases next year, but with a longer than anticipated 9 months extension could help the GER30 to finally crack the 13000 mark and keep Bunds underpinned. Brexit risks meanwhile are weighing on U.K. markets as hopes of early trade talks were dashed by Barnier yesterday, although there is still the hope of a transition period, which would at least give more time for talks.
FX Updates: EURUSD opened in N.Y. at 1.1860 highs, and spent much of the remainder of the session slowly grinding lower, basing at 1.1827 after the London close. The pairing traded under both its 50- and 20day moving averages, before reclaiming the levels into the close. Dovish fallout from Wednesday’s FOMC minutes continued to provide some support, though Friday’s U.S. CPI report may end up being a weight on the euro should data come in warm, as expected. Talk of a no-deal exit from the EU has been increasing, with five rounds of negotiation having reached “deadlock,” according to the EU’s chief Brexit negotiator, Barniar. He also said that the EU would agree to a two-year transitory period, to buy more time after actual Brexit occurs in March 2019. Cable surged to $1.3290 after EU’s Barnier’s comments.
Main Macro Events Today
US Retail Sales – Expectations – At 1.7% in September vs -0.2% in August, or 0.3% ex-auto. US CPI – Expectations – CPI is forecast to surge 0.6% in September from 0.4% due to the surge in petroleum price. ECB – ECB Vice President Vitor Constancio is due to speak at 12:30 GMT. FOMC Speeches – Boston Fed dove Rosengren opens a policy conference by his branch at 12:30 GMT. Evans is back on the economy and policy from 14:25 GMT, Kaplan takes Q&A at a CFA conference from 15:30 GMTand Powell is invited to speak at the Boston Fed conference from 17 GMT. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Global economic activity has surprised to the upside this year, most recently manifest in the upward revisions from the IMF. And while there are a number of potential geopolitical headwinds that could slow, if not derail the momentum, recent economic reports from the U.S. suggest a measurable boost from Keynesian style pump-priming as the South and California recover from the hurricanes and fires that devastated the major regions. Meanwhile, the lack of inflationary pressures continues to baffle central bankers, keeping them on patient footing with respect to removing accommodation. Brexit is a major issue for the UK, while Europe is wrestling with the Spain-Catalonia constitutional crisis. The weekend’s Austrian elections may have some ripple effects and give populists and anti-EU forces fresh impetus. On Wednesday, the 19th National Congress of the Communist Party convenes. President Xi is widely expected to be re-elected and is expected to lay out another broad plan for growth. President Trump’s decision to decertify the Iran nuclear deal will add to global concerns, along with the ongoing threats from North Korea.
Europe: Politics will continue to top the agenda. EU leaders will meet Thursday/Friday to talk Brexit. Meanwhile Spain’s constitutional crisis is not over yet. Puigdemont seemed to back down last week, but Rajoy’s ultimatum for a clarification on whether the Catalan leader actually unilaterally declared independence or not at his address to regional lawmakers runs out on October 16 and Madrid also demanded that Catalonia’s leader should respect Spain’s constitution and effectively end the move for independence by October 19.With that in mind the outcome of Austria’s election on October 15could also have ripple effects and give populists and anti-EU forces fresh impetus. Latest opinion polls suggest that the conservative OeVP will be the strongest party, but the right wing FPOe is a close second. Clearly a good result for the FPOe would be cheered by the Front National in France and the AfP in Germany. In Germany itself the regional elections in Lower Saxony over the weekend will also be watched closely and the result of Merkel’s CDU could well impact support for the Chancellor within her own party as crucial coalition talks are about to start in earnest.
Against that background the data calendar looks pretty tame and is unlikely to decisively impact the discussion on policy recalibration that is taking place at the ECB ahead of the next meeting at the end of the month. The final reading of Eurozone September HICP is unlikely to bring a major surprise and is expected to confirm the preliminary number of 1.5% y/y. Still too low for the central bank, especially as Draghi is not happy yet with underlying inflation and especially wage growth.
UK:The pound, after posting its biggest weekly loss since August 2016 in the week prior, last week managed to rebound by over 1.5% versus the dollar and by about 1% versus both the euro and yen. The calendar this week is highlighted by inflation data for September (Tuesday) which expected at new cycle high of 3.0% y/y in headline CPI, and a core CPI reading of 2.8% y/y, after 2.7% in the month previous. Such outcomes would be comfortably in the range of BoE projections, and leave the central bank on course of what is now a widely expected 25 bp rate hike at the November policy meeting. Assuming sterling continues to hold up reasonably well, y/y CPI readings should come off the boil in upcoming months as the impact of the currency’s sharp decline following the Brexit vote in July 2019 falls out of the equation. Monthly labor data (Wednesday) should see the unemployment rate remain unchanged at 4.3%, and show average household earnings continue to lag inflation, with incomes expected to rise by 2.1% y/y in the three months to August. September retail sales (Thursday) is expected to show a 0.1% m/m contraction.
New Zealand: New Zealand’s calendar has Q3 CPI, expected to expand 0.4% (q/q, sa) after the flat reading in Q2. CPI is expected to accelerate to a 1.8% y/y pace from the 1.7% growth rate in Q2. The Reserve Bank of New Zealand next meets on November 9. They held rates steady at 1.75% in September, matching expectations. The statement by Acting Governor Spencer was consistent with no change in rates for an extended period.
Japan: Monday brings revised August industrial production, which is expected to remain unchanged at 2.1% y/y. Skipping to Thursday, the September trade report should reveal a surplus of JPY 400.0 bln, versus the 112.6 bln deficit in August. The September all-industry index (Thursday) is expected to rise 0.1% versus the 0.1% decline previously.
China: September industrial production(Thursday) is estimated at 6.3% y/y from 6.0%, while September retail sales are penciled in at an unchanged 10.1% y/y. Q3 GDP (Friday) is expected at 6.9% y/y, unchanged from Q2.
Australia: The minutes to the Reserve Bank of Australia’s October meeting are due Tuesday. RBA Assistant Governor (Economic) Ellis participates in a panel discussion (Tuesday). RBA Assistant Governor (Financial System) Bullock speaks to the Australian Shareholders Association (Thursday). Employment (Thursday) is seen rising 20.0k in September after the 54.2k gain in August. The unemployment rate is seen at 5.6%, matching the rate in August.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: Asian stock markets moved broadly higher, with Australia’s ASX outperforming as investors piled into miners and banks. So Australia’s hot streak continued with a more than 0.7% rise, while gains elsewhere were more muted as concerns about North Korea emerged and markets speculate about a more hawkish Fed post Yellen. North Korea warned that a nuclear war could “break out any moment”. U.S. and U.K. stock futures are narrowly mixed. May’s visit to Brussels yesterday doesn’t seem to have brought a major breakthrough while in Spain the situation is tensing up after Madrid prepares to replace Catalan security officials after the leaders of two grassroots independence groups were jailed yesterday. Amid ongoing political tensions the European calendar is heating up, with U.K. inflation data for September as well as German ZEW investor confidence and final Eurozone September HICP numbers.
FX Updates: The dollar has continued to trade perkily. USDJPY flipped back above 112.00 as major Asian stock indices hit 10-year highs after Wall Street hit fresh record highs on Monday. The pair has a well-established tendency to correlate with notable moves in global equity markets, though persisting concerns about political disharmony in Spain and North Korea (Pyongyang threatened nuclear war could “break out at any moment”) may have been curtailing yen losses. EURUSD declined for a fourth consecutive session, this time logging a out a one-week low at 1.1756. The dollar also held firm against the Australian dollar and other dollar-bloc currencies, along with sterling and other currencies. Sterling for its part has seen little reaction thus far to news that British PM May and EU Commission President Juncker agreed at a supper meeting last night that Brexit negotiations should “accelerate over the months to come.”
Main Macro Events Today
UK PPI & CPI – Expectations – CPI at 3.0% y/y headline from 2.9% in August, and PPI at 1.2% in September from 1.6% m/m EU CPI and German ZEW – Expectations -EU CPI seen unchanged at 1.5% y/y and German ZEW to 20.0 from 17.0 BoE Gov. Carney – Due to testify before the Treasury Select Committee, in London. US Industrial Production – Expectation – at 0.4% after dropping 0.9%, which should leave capacity utilization at 76.4% from 76.1%. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: Asian stock markets traded cautiously as China’s Xi laid out his road map to 2015. Drug makers in Hong Kong and China outperformed, after the President vowed to develop the health industry. The Hang Seng is nevertheless slightly in the red and the Nikkei fluctuated amid concerns that indices are looking overbought. U.K. and U.S. futures are moving higher, after European markets closed mostly with slight losses yesterday and the GER30 failed to hold the 13000 mark. The Spanish IBEX outperformed despite the escalation of the Catalonia crisis, as Madrid prepares to take over control and Puigdemont faces a final ultimatum that runs out tomorrow. In the U.K. Brexit remains high on the agenda after the OECD warned of its negative impact on the economy and ahead of this week’s EU summit on the state of the talks. Data releases today focus on U.K. labour market data and especially wage growth, which will be watched closely by the BoE.
U.S. reports revealed a Q3 underperformance for industrial production despite a 0.3% September bounce thanks to downward back-revisions, though a solid 3%-4% growth rate was expected for this index through Q4 and Q1. The September trade price figures beat estimates thanks to a 1.0% surge in export prices ex-agriculture and a 4.5% petroleum import price rise, leaving headline gains of 0.8% for exports and 0.7% for imports, and rebounding global growth will lift both trade prices and the factory sector going forward. We also saw an NAHB index bounce to 68 in October from 64.
Main Macro Events Today
ECB – ECB President Draghi is due to deliver opening speech at the ECB conference in Frankfurt. UK Labor data – Expectations -Unemployment rate remain unchanged at 4.3% and Household Earnings to rise by 2.1% y/y in the three months to August. US Housing Permits – Expectations – Rise to a 1.200 mln pace following the 0.8% decline in August. FOMC Speeches – NY Fed dove Dudley and Dallas Fed hawk Kaplan. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
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Click HERE to READ more Market news.
Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: Asian markets were mixed. Wall Street closed at record highs but a slight slow down in Chinese GDP growth to 6.8% from 6.9% was enough to knock back Hang Seng and CSI 300. By contrast strong trade data out of Japan helped to underpin the Nikkei. Bank of Korea meanwhile kept policy on hold, but for the first time in a year, there was no dissenter in favour of a rate hike. Oil prices little changed around the USD 52 per barrel mark and U.S. and U.K. stock futures are heading south, with markets correcting slightly after yesterday’s fresh run higher. The GER30 closed at record highs, the UK100 is no far off and with Bund futures lifting off lows in after hour trade yesterday, it may be time for markets to take a breather and some defensive trade today, as the EU’s Brexit summit and Spain’s deadline to Catalonia approach. Data releases today include U.K. retail sales as well as Swiss trade data.
Main Macro Events Today
UK Retail Sales- Expectations – a 0.1% m/m contraction. US Unemployment – Expectations -At 240K from 243K last week. Philly Fed Manufacturing Index – Expectations – to decline to 22.0 after the better than expected 4.9 point jump to 23.8 previously. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: The dollar has rallied across the board, up 0.3% versus the euro and by 0.6% against the yen, following news that the U.S. Senate had passed a budget blueprint that will help push forward the Republican party’s planned $1.5 tln tax cut. The news came after the close of Wall Street, and sparked a rally in U.S. equity index futures while lifting bourses across the Asia-Pacific region. USDJPY rallied to a two-week high of 113.30, gaining over 60 pips from the pre-news levels. EURUSD tumbled to a 1.1804 low from levels just above 1.1850. The relative underperformance of the yen, which is typical during bursts of risk-on sentiment in global markets, saw EURJPY and other yen crosses climb, as the dollar post gains versus the euro and most other currencies. Market participants will monitor the budget’s passage in the House. The budget, if passed, will open the door to expanding the federal deficit by $1.5 tln over 10 years, which will pay for the tax cut. This won’t be pleasing to fiscal conservatives in the House. Rand Paul was the only Republican to vote against in the Senate vote, and while there may be more opposition from House Republicans, the desire for a political has fostered a change in priorities.
U.S. reports: revealed an October Philly Fed surge to a 5-month high of 27.9, and a 22k initial claims plunge to a 44-year low of 222k in the Columbus Day and BLS survey week, with little evidence of distortion from Nate and the California fires. The ISM-adjusted Philly Fed rose to a 6-month high of 59.7 in October from 59.0, and the employment index surged to an all-time high of 30.6 from 6.6. Monday’s Empire State rose to an 8-year high of 30.2 that was also seen in September of 2014. Rebuild activity should support continued sky-high producer sentiment levels into early-2018, and we face substantial upside risk for all the employment, GDP, and factory-sensitive measures into early-2018. [B]Main Macro Events Today[/B]
UK Public Borrowing – Expectations – at 5.7B from 5.1B last month.
Canadian CPI and Retail Sales – Expectations -0.2% increase in September’s CPI and 0.1% increase in September’s Retail Sales.
US Existing Home Sales – Expectations – Existing Home Sales Change (MoM) to increase by 0.7% up to -1.0% from -1.7% last month.
FOMC – Fed’s Mester due to speak at 18:00 GMT and Fed’s Yellen at 23:30 GMT
[B]Disclaimer:[/B] This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
USDJPY, H1 The better than expected general election result for the PM Abe has helped Japanese stocks to close at record highs. The key Nikkei 225 closed up 1.11% at 21,696, and the futures contract trades comfortably in excess of 21,700. The expectations are for continued stimulation from the BOJ. Conversely the JPY slide on the news with USDJPY gaping and breaking to new highs at 114.10, before filling the gap back to 113.60 to suggest further advance in the coming sessions today. Even the under pressure EURJPY broke over 134.00 before declining under the key 133.80 support. Bond yields also came under pressure following the election result with EGB yields decline, helped by Abe’s victory in Japan, which has underpinned the hopped for longer global central bank stimulus as the ECB prepares to announce its QE extension on Thursday. The 10-year Bund yield is currently down -2.0 bp at 0.43%, as the price rallies to 161.65.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
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Stuart Cowell Senior Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: Asian stock markets moved mostly higher overnight, as Japan’s equities continued to rally following Abe’s election win and on hopes of ongoing monetary stimulus. the CSI 300 and the ASX also shrugged off losses in the U.S. and moved higher, although the Hang Seng is marginally in the red and the ASX up a mere 0.06%. U.S. stock futures are up, FTSE 100 futures in the red and there is some caution settling in ahead of earnings reports, especially after the recent run higher in global markets. In Europe politics remain high on the agenda, as Catalonia’s government ponders the response to Madrid’s plans to take over direct control, while Brexit uncertainty lingers, although on the continent at least have long started to prepare for alternative suppliers and cut back business ties with the U.K.. Today’s calendar has French business confidence, as well as preliminary PMI readings for the Eurozone as well as the ECB’s bank lending survey.
FX Update: The dollar majors have posted relatively narrow ranges so far today. EUR-USD has settled around 1.1750 after logging a two-week low at 1.1724 late yesterday. Market participant will remain vigilant on developments in Spain, with Catalonian leaders threatening to unleash mass civil disobedience over the independence issue. A plenary meeting on Thursday’s in Catalan’s regional parliament has become a focal point, and there is some speculation that it may be used a cover for a vote on whether to unilaterally declare independence. We expect the euro to be a sell-on-rallies trade in the meantime. Elsewhere, USD-JPY recouped and settled to the mid 113s after logging a low late yesterday at 113.24. The low completed a correction from the three-month high seen yesterday at 114.10, which was seen as markets reacted to the resounding victory of Abe at weekend elections.
Main Macro Events Today
German Services and Manufacturing PMI’s – Expectations – 55.6 and 60.2 respectively Euro Area Services and Manufacturing PMI’s – Expectations 55.6 and 57.8 respectively US Services and Manufacturing PMI’s – Expectations 55.6 and 53.5 respectively
Support and Resistance Levels
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
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Stuart Cowell Senior Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: Asian stock markets moved cautiously higher, Japan underperform as the Nikkei pulled back from record highs and fluctuated with the Yen. It is currently down -0.43% as the Yen strengthened across the board. The Hang Seng recovered from yesterday’s correction, CSI 300 and ASX 200 are also higher, while U.S. and U.K. stock futures are in the red. Investors are turning cautious again and contemplate the recent run higher in global equities. The DAX managed to close above the 13000 mark again yesterday, but yesterday’s inflation warnings from Markit have increased speculation of a higher ECB taper than currently expected and lifted yields sharply and bond markets are likely to remain defensive ahead of tomorrow’s announcement. The focus today will be on the Ifo reading, which is expected to show broadly stable sentiment. The U.K. released the advance reading for Q3 GDP and we are looking for a steady quarterly growth rate of 0.3% q/q, in line with consensus.
Australia CPI slowed to a 1.8% y/y growth rate in Q3 from the 1.9% rate of increase in Q2. The slowing undershot expectations for a steady or faster annual growth rate (we projected 1.9%). CPI grew 0.6% in Q3 (q/q, sa) after the 0.2% rise in Q2. The “core” measures also came in on the soft side. The trimmed mean CPI grew 1.8% y/y, matching the 1.8% pace in Q2. The trimmed mean slowed to a 0.4% clip in Q3 (q/q, sa) from 0.5% in Q2. The growth rate for the weighted median CPI was 1.9%, steady compared to the revised 1.9% pace in Q2 (was +1.8%). The weighted median CPI grew 0.3% in Q3 (q/q, sa) after the revised 0.6% pace in Q2 (was 0.5%). Total and “core” CPI measures remain below the RBA’s 2-3% target band, consistent with no change in rates through the first half of next year. CB’s bank lending survey.
Main Macro Events Today
UK Q3 GDP – Expectations – 0.3% QoQ and 1.4% YoY US Durable Goods – Expectations – CORE 0.5% and Headline 1.0% Bank of Canada – Interest Rate Decision, Statement and Press Conference – Expectations – No change to rates but Hawkish outlook
Support and Resistance Levels
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Stuart Cowell Senior Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
After both Markit PMIs as well the Ifo reported mounting capacity pressures, there is a good chance that the ECB will cut back asset purchases by more than the EUR 30 bln that Bloomberg consensus suggests. However, while this is likely to see a knee jerk reaction on forex and bond markets, we expect Draghi to package the taper in a dovish statement and forward guidance, in particular leaving the option for another program extension open to dampen the impact and prevent “overreactions” on forex markets. Draghi will also confirm the sequence of exit steps, with rates expected to remain low well past the end of asset purchases, which with a 9 months program extension would push out any rate hike into 2019. And even with EUR 20 bln per months for another 9 months, the ECB will still extend its balance sheet by a further EUR 180 bln, so monetary policy will not only remain expansionary, it will be even more expansionary than now, with Draghi only gently taking the foot off the accelerator. Indeed, the good news this week was that while Bund yields jumped higher Eurozone peripherals actually mostly outperformed. So at least on that front Draghi can be a bit more confident that “less for longer” will not be a cause of a fresh wave of instability.
The euro has been trading buoyantly into the ECB announcement today. EURUSD clocked a one-week high of 1.1837 earlier in the Asian session, and while EURJPY and EURCHF have remained below their respective 22- and 33-month highs of yesterday, they remain underpinned, with both crosses having picked up from shallow dips. EURUSD has akey support/restance level at 1.1830 which represents the 38.2 Fibonacci retrace level from the September 8th high at 1.2092.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Stuart Cowell Senior Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: Asian stock markets moved mostly higher, led by Japanese stocks, which are heading for another weekly advance on a weaker yen and positive leads from teh U.S. where equities rallied on earnings and increasd hopes for Trump’s tax reform. Australian’s benchmark underperformed and headed south as the government lots its majority following a High Court ruling on the citizenship eligibility of lawmakers. FTSe 100 and U.S. stock futures are higher, but it remains to the seen whether the Eurozone can hold the Dfraghi induced gains from yesterday. And Spanish markets, which outperformed yesterday on reports that Puigdemont may be open to early elections, are likely to retreat again after the Catalan leader backtracked partly and ruled out early elections if Madrid doesn’t stop the process to take over control, thus setting the region on a confrontation course with Madrid, which is expected to get clearance from lawmakers today to directly take over control in the autonomous region. The data calendar is pretty empty today, with only German import prices at the start of the session, as well as French consumer confidence and the ECB’s survey of professional forecasters.
FX Action: USDJPY logged a fresh three-month high, at 114.26, making this the seventh up day out of the last nine sessions. EURJPY and most other yen crosses have also been underpinned over this period. The resounding mandate Abe won at Japan’s election of October 15 imparted a downward bias on the yen, as the prime minister’s favoured policy set includes a continued commitment to ultra-accommodative monetary policy, contrasting to the tightening path of the Fed and other central banks. USDJPY has support at 113.60, while the July peak at 114.49 provides an initial target. The year’s high, posted back in January, is at 118.61.
Main Macro Events Today
US Advanced GDP – Expectations – 2.6% US UoM Consumer Sentiment – Expectations – 100.8
Support and Resistance Levels
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Stuart Cowell Senior Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
The U.S. calendar is packed with key events and data, but none more important than President Trump’s announcement of his choice for Fed chair. That will have implications for years to come. An announcement will be forthcoming this week; Powell as chair, and Taylor for vice chair?
United States: The FOMC meets this week, the Fed is unanimously expected to leave rates unchanged at its meeting Tuesday, Wednesday. Although the back-to-back quarterly growth rates of 3.1% and 3.0% for Q2 and Q3 could argue for a tightening, inflation remains tame, and more importantly, there has been no Fedspeak to suggest a move is imminent. No press conference. September income and consumption (Monday) will help fine tune the quarter’s GDP outlook after the report of a 3.0% growth rate last Friday. October consumer confidence is forecast rising to 121. The Chicago PMI should fall to 62.0 in October after jumping 6.3 points to 65.2 in September. ADP headlines (Wednesday) along with the October ISM manufacturing numbers. We’re projecting a 200k jump in private payroll from the ADP, while the manufacturing index should dip to 58.5. October vehicle sales (Thursday) should are expected to decline amid ongoing hurricane disruptions. September construction spending also is likely to be distorted by the various hurricane effects. Nonfarm payrolls (Friday) are forecast surging 320k -400k in October, as the labor market gets back in gear following the hurricane disruptions that knocked employment down by 33k in September. The unemployment rate should hold at 4.2%. The ISM nonmanufacturing index (Friday) should dip to 58.5 in October (median 58.5), giving back some of the 4.5 point gain to 59.8 in September, which was the highest since August 2005.
The earnings slate remains very heavy, though not as bad as last week, which was the busiest for the Q3 season
Canada: August GDP (Tuesday) is expected to rise 0.1% m/m after the flat reading in July. The industrial product price index is seen expanding 0.5% in September after the 0.3% rise in August, as firmer gasoline prices more than offset the drag of a stronger loonie. Employment (Friday) is projected to grow 20.0k in October after the 10.0k gain in September. The unemployment rate is seen at 6.2%, matching September’s rate. Average weekly earnings are expected to expand at a 2.2% y/y pace, matching the growth rate in September. The trade deficit (Friday) is anticipated to narrow to -C$3.0 bln in September from -C$3.4 bln in August. Poloz and Wilkins due to speak Tuesday.
Europe: German HICP (Monday) is seen steady at 1.8%, French inflation reading (Tuesday) likely to nudge higher to 1.2%. The overall Eurozone HICP (Tuesday) should be unchanged at 1.5%. Eurozone manufacturing PMI (Thursday) expected to be confirmed at 58.6. Advanced readings for French GDP and overall Eurozone Q3 GDP (both Tuesday) to show quarterly growth rates that are in line with the first quarter at 0.5% and 0.6% respectively. Spanish GDP meanwhile is expected to nudge lower slightly to 0.8%. The recovery clearly has reached the job market and PMIs also suggest ongoing job creation as companies struggle to fill still strong orders growth and expand production. The German labour market is already very tight and jobless numbers (Monday) are in our view likely to pick up slightly after a stronger than expected dip in September. Still, even the expected pick up of 4K, would leave the October jobless rate at a very low 5.6%. For the Eurozone unemployment rate (Tuesday) we are looking for a decline to 9.0% from 9.1%
UK: UK data reports over the last week have mostly disappointed. The calendar is highlighted by the BoE’s November Monetary Policy Committee (announcing Thursday), which will be accompanied by the publication of its quarterly Inflation Report. Following the BoE’s guidance, markets are fully expecting the central bank to make its first hike of the repo rate in 10 years, taking it to 0.50% from 0.35%.We expect the BoE to package the tightening in dovish guidance. Data releases this week include September data from the BoE on lending (Monday), which we expect to show mortgage approvals come in near unchanged at 66.0k, October Gfk consumer confidence (Tuesday), which we forecast dipping to -10 from -9 in the month prior, and the October PMI surveys. We expect the manufacturing PMI (Wednesday) to come in at 55.9 which would be the same reading as in September. We anticipate the servicers PMI (Friday) in at 53.3 after 53.6 in the month previous.
China: CFLP October manufacturing PMI (Tuesday) is forecast sliding to 52.0 from 52.4. The Caixin/Markit PMI (Wednesday) likely eased to 50.5 from 51.0.
Japan: The BoJ headlines and on Tuesday, no policy changes are expected. The Bank will likely recommit to ultra-accommodative policy settings. As for data, September retail sales (Monday) are expected to dip to a 0.5%. September unemployment (Tuesday) is seen unchanged at 2.7%, with the job offers/seekers ratio likely to tick up to 1.53. PCE (due Tuesday), should show consumption at a 0.5% y/y pace from 0.6%. September industrial production (Tuesday) is penciled in at -2.0% y/y, tumbling from August’s 2.0%. September housing starts (Tuesday) are expected to contract further to a -3.0% y/y rate from -2.0% previously, while construction orders are also slated (Tuesday). Also on the slate are October manufacturing PMI (Wednesday) and October consumer confidence (Thursday), expected at 43.5 from 43.9. Japan is closed Friday for Culture Day.
Australia: CPI (Wednesday) is the focus this week, with a 0.9% gain expected in Q3 after the tame 0.2% rise in Q2. The trade price report (Thursday) is expected to reveal a 1.0% drop in Q3 import prices after the 0.1% dip in Q2. Export prices are seen falling 3.0% in Q3 following the 5.7% pull-back in Q2. The Q3 PPI is due Friday. Reserve Bank of Australia Deputy Governor Debelle speaks (Thursday) on “Uncertainty.”
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Stuart Cowell Senior Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: Asian stock markets moved sideways overnight. U.K. and U.S. stock futures are little changed. Japanese markets pared losses as investors bought on dips, amid hopes of better earnings. The BoJ left policy on hold and while new board member Kataoka opted for additional easing, against a majority in favour of unchanged policy, the announcement had little impact on markets, with investors remaining hesitant to push indices higher ahead of a 3-day weekend in Japan and U.S. jobs data later in the week. The BoJ keeps the -0.1% rate with target remaining at 2% inflation and the 10-year JGB yield target at around 0%. In Europe most markets closed narrowly mixed on Monday, with only Spain rallying as Catalonia risks are being priced out. Today’s calendar has inflation data from Italy, France and for the Eurozone as a whole as well as GDP numbers from France and the Eurozone, the former was already released and came in at 0.5% q/q, as expected, but after last week’s ECB meeting the data won’t have any impact on the policy outlook.
FX Update: The euro rally of yesterday has run out of puff, with EURUSD settling around 1.1630-40, below the 1.1657 high, while EURJPY has remained heavy, near yesterday’s 131.45 low. The yen, meanwhile, remains underpinned despite dovish guidance from the BoJ. USDJPY logged a 12-day low at 112.95, and AUDJPY has remained near the seven-month lows seen yesterday. The BoJ did the expected, and left policy on hold at its meeting today. New board member Kataoka voted for additional easing, while Governor Kuroda espoused dovish guidance in his press conference, warning that “abnormal” yen appreciation would hurt the economy and accelerate deflation, and that the central bank will continue with “powerful” accommodative monetary policy. In the U.S., political intrigue along with the announcement, promised to be made tomorrow, of the new Fed chair, will remain focal points for markets.
Main Macro Events Today
Eurozone GDP and Core CPI – Expectations – at 0.5% q/q from 0.6% and at 1.2% from 1.3% respectively. Canadian GDP- Expectations -0.1% increase in August. BoC – Governor Poloz Speaks before the House of Commons Standing Committee on Finance, in Ottawa. New Zealand Labor Data – Expectations – 0.1% decline in Unemployment Rate for Q3.
Support and Resistance Levels
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Comments
MACRO EVENTS & NEWS OF 20th September 2017.
FX News Today
European Outlook: Asian stock markets are narrowly mixed and fluctuating at high levels, as trading volumes are low and investors await the Fed decision The MSCI Asia Pacific index has gained around 22% this year, despite escalating tensions with North Korea. FTSE 100 futures are slightly higher, while U.S. futures are in the red, ahead of the Fed, which is widely expected to announce the start of the balance sheet unwind, or QT (quantitative tightening), while leaving its rate posture unchanged. The BoJ will announce its decision tomorrow, and central banks and geopolitics remain driving factor for markets. Reports that there is still no broad majority at the ECB for a commitment to an end date for QE saw yields correcting again in the Eurozone yesterday, while the BoE’s flagging of the need for a rate hike in coming months has kept Gilt yields underpinned. Today’ calendar includes U.K. retail sales, but is unlikely to take the focus away from the Fed.
German producer price inflation higher than expected. The annual rate rose to 2.6% y/y in August, from 2.2% y/y in the previous month. A renewed uptick in energy prices was the main factor and energy prices rose 0.4% m/m, fuel prices 0.9% m/m and annual rates rose to 2.7 %y/y and 3.9% y/y respectively. Annual food price inflation fell back slightly, but at 5.3% y/y remains very higher and PPI excluding energy rose to 2.6% y/y from 2.5% y/y. Overall PPI remains below the highs seen earlier in the year, but seems to have bottomed out and the data will back the arguments of the hawks at the ECB, who are fighting for the end of additional asset purchases
U.S. reports: revealed upside surprises for both housing starts and trade prices in August, alongside a wider than expected Q2 current account deficit. For starts, we saw August declines of 0.8% for starts and a big 10.2% for completions, but we also saw a 5.7% pop for permits, a strong trajectory for starts under construction, and upward starts revisions that left a solid Q3 path. For trade prices, we saw big 0.6% August headline import and export price increases led by oil imports and nonagricultural exports with a likely Harvey-boost, before an assumed September lift from Irma. The U.S. current account gap widened to $123.1 bln from $113.5 (was $116.8) bln in Q1 thanks to a surge in the deficit on secondary income.
Canada’s manufacturing drop yesterday is suggestive of tame July GDP growth, at best. Factory shipment volumes fell 1.4% in June (values dropped 2.6%). We have penciled in a 0.1% rise for July GDP estimate, which would follow the 0.3% gain in June. A 0.5% decline in wholesale shipment volumes is projected, while retail sales volumes are seen improving 0.3%. Housing starts grew 4.5% to a 222.0k pace in July from 212.5k in June. Hence, the contribution from construction production should be positive. The outlook for mining, oil and gas production is to the downside. Energy export values fell 3.7% m/m in July after plummeting 11.3% m/m in June. However, the manufacturing report’s petro and coal shipments measure did edge up 0.6% in value after the hefty 7.0% drop in June. A 0.1% rise in July GDP would leave the measures on track for a 2.5% pace in Q3 (q/q, saar) which we expect for the separate quarterly measures. The BoC’s base-case estimates projected a slowing in GDP growth during the second half of this year.
Main Macro Events Today
UK Retail Sales – August retail sales data are due today, where expected a modest 0.2% m/m lift.
FOMC Rate Decision and Conference – FOMC began its 2-day meeting and is widely expected to announce the start of the balance sheet unwind, or QT (quantitative tightening), while leaving its rate posture unchanged. Remember this is a quarterly meeting that includes the release of economic/price forecasts (SEP – Summary of Economic Projections) and a Yellen press conference. Of importance to the rate outlook is the dot-plot and the nuances in the Fed chair’s remarks. The Committee was still expecting a total of three rate hikes this year at the June 13, 14 meeting, and that’s expected to be the case this time too, keeping the door open for a tightening at the December 12, 13 meeting. It is also expected that the FOMC will maintain the consensus view of three hikes in 2018. While the Fed believes there should be little market reaction to the gradual and well telegraphed unwinding of the balance sheet, it should be “like watching paint dry,” said Yellen in June, officials may be too complacent in their overall assessment on the market responses to policy actions.
US Existing Home Sales – Existing home sales for August should bounce 0.7% to a 5.47 mln unit pace, after falling 1.3% in July to 5.44 mln. Sales have fallen in 4 of the 7 months to date, thanks in large part to lack of inventory.
NZD GDP – The Q2 GDP, expected to grow 0.9% after the 0.5% gain in Q1 (q/q, sa).
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Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 21st September 2017.
FX News Today
European Outlook: Asian stock markets are narrowly mixed. The Fed confirmed the launch of QT and kept rates unchanged, but left the rate hike for December on the table, along with consensus for three more hikes next year. The BoJ meanwhile left policy on hold, as expected, but one dissenter signalled that further easing may be necessary to bring inflation back to target. The Nikkei is up 0.16%, after a narrowly mixed close on Wall Street, the Hang Seng managed to recover some of its early losses, but at 5:37GMT was down -0.07% and the ASX underperformed with a -0.84% loss. FTSE 100 futures are slightly higher, U.S. futures marginally in the red and it seems investors are still digesting central bank decisions and are reluctant to push world markets even higher for now.
FOMC: announced balance sheet runoff in October and left rates unchanged, as expected. The vote was 9-0. The FOMC also left a rate hike on the table for December, with 12 of 16 FOMC members projecting such. Also, 11 of 16 see at least three hikes next year. The hurricanes are not expected to have much impact on the medium term. The FOMC did lower the long run outlook on rates to 2.8% from 3.0%. The median funds rate for 2018 is at 2.1%, the same as in June’s outlook, though the 2019 median slipped to 2.7% from 2.9%, suggesting a slower path of tightening. The policy statement the Fed noted the labor market continued to strengthen while economic activity had been rising moderately. Fed Chair Yellen reiterated the FOMC statement noting the economy will continue to expand at a moderate pace over coming years. Meanwhile, the labor market remains healthy and payroll gains are well above the rate needed to absorb entrants. Inflation has continued to run below the 2% goal, but the low rate doesn’t reflect broad economic conditions. In Q&A she noted that FOMC has hiked rates this year on the belief the economy is performing well. She added the balance sheet runoff has begun too, as such stimulus is no longer needed to such an extent.
Main Macro Events Today
UK Public Borrowing – UK expected to post a deficit on Public Sector Net borrowing at 6.5B from the surplus seen last month at -0.8B.
CAD Wholesale Sales – Wholesale sales are expected to fall 1.0% in July (m/m, sa) after the 0.5% drop in June.
ECB – ECB President Draghi is due to speak at the European Systemic Risk Board annual conference, in Frankfurt at 13:30 GMT.
European Outlook: Asian stock markets are narrowly mixed. The Fed confirmed the launch of QT and kept rates unchanged, but left the rate hike for December on the table, along with consensus for three more hikes next year. The BoJ meanwhile left policy on hold, as expected, but one dissenter signalled that further easing may be necessary to bring inflation back to target. The Nikkei is up 0.16%, after a narrowly mixed close on Wall Street, the Hang Seng managed to recover some of its early losses, but at 5:37GMT was down -0.07% and the ASX underperformed with a -0.84% loss. FTSE 100 futures are slightly higher, U.S. futures marginally in the red and it seems investors are still digesting central bank decisions and are reluctant to push world markets even higher for now. Bund futures dropped sharply in after hour trade on the Fed announcement and Bund yields, which closed down yesterday, are likely to push higher in opening trade, resuming the new uptrend, as the ECB is heading for an announcement on QE reductions. The local calendar has U.K. public finance data as well as the ECB’s latest economic report. ECB’s Draghi, Praet and Smets are all set to speak.
New Zealand’s GDP grew 0.8% in Q2 (q/q, sa) following an upwardly revised 0.6% gain in Q1 (was +0.5%). The increase in Q2 matched expectations. But GDP grew at a 2.5% y/y pace in Q2, only matching the growth rate in Q1 and falling short of the 2.6% to 3.5% annual rates seen in 2016. Indeed, growth is on track to slow to a 2.5% pace for all of 2017 from the 3.6% pace in 2016. Of course, the economy continues to grow, supported by low interest rates. Yet inflation growth remains in the target range (CPI slowed to 1.7% y/y from 2.2%) and the RBNZ expects a decline in coming quarters as the effects of higher food and fuel prices dissipate.
FOMC: announced balance sheet runoff in October and left rates unchanged, as expected. The vote was 9-0. The FOMC also left a rate hike on the table for December, with 12 of 16 FOMC members projecting such. Also, 11 of 16 see at least three hikes next year. The hurricanes are not expected to have much impact on the medium term. The FOMC did lower the long run outlook on rates to 2.8% from 3.0%. The median funds rate for 2018 is at 2.1%, the same as in June’s outlook, though the 2019 median slipped to 2.7% from 2.9%, suggesting a slower path of tightening. The policy statement the Fed noted the labor market continued to strengthen while economic activity had been rising moderately. Fed Chair Yellen reiterated the FOMC statement noting the economy will continue to expand at a moderate pace over coming years. Meanwhile, the labor market remains healthy and payroll gains are well above the rate needed to absorb entrants. Inflation has continued to run below the 2% goal, but the low rate doesn’t reflect broad economic conditions.
Main Macro Events Today
UK Public Borrowing – UK expected to post a deficit on Public Sector Net borrowing at 6.5B from the surplus seen last month at -0.8B.
CAD Wholesale Sales – Wholesale sales are expected to fall 1.0% in July (m/m, sa) after the 0.5% drop in June.
US Jobless Claims & Philly – The Philly Fed manufacturing index is expected to be little changed at 18.0 in September. The index has fallen in the last three months after surging 16.8 points to 38.8 in May. Meanwhile Jobless Claims should post a rise of 16K up to 300K for last week.
ECB – ECB President Draghi is due to speak at the European Systemic Risk Board annual conference, in Frankfurt at 13:30 GMT.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
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Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 22nd September 2017.
FX News Today
European Outlook: North Korea tensions are once again leaving their mark on markets, as a stronger Yen weighed on the Nikkei. Hang Seng and ASX 300 were also under pressure, as S&P cut the Hong Kong’s sovereign rating a day after downgrading China. Australian ASX200 meanwhile managed to rebound from a seven months low and is outperforming today after three straight days of losses. U.S. and U.K. stock futures, however, are also heading south as investors eye geopolitical risks and further clues from Fed speakers. Today’s European calendar has preliminary PMI readings for the Eurozone, which we expect to remain broadly stable at high levels. Final French Q2 GDP numbers are also not expected to bring a major surprise. The U.K. CBI industrial trends survey is also due. In Germany Sunday’s election is casting its shadow, although with everyone expecting Merkel to remain in office it is only her choice of coalition partner and the result for the right wing AFD that is creating excitement in what has been dubbed a very boring election campaign.
FX Update: The dollar has traded softer, correcting some following the sharp gains seen in the wake of the Fed’s hawkish turn on Wednesday. EURUSD nudged above 1.1960, up over a big figure form the post-Fed low, and USD-JPY tipped to a low of 111.65, correcting after rallying in eight of the previous nine sessions and putting distance in from yesterday’s two-month peak at 112.71. EUR-JPY and other yen crosses also posted losses. While the BoJ’s reaffirmation at its meeting this week of its commitment to yield curve control and ultra-accommodative monetary policy in general may be an endorsement for yen bears, North Korea’s advance to becoming a nuclear power remains a wildcard risk for yen bears, as the Japanese currency will typically rally amid any heightening in geopolitical tensions. This week’s trading of verbal barbs between Trump and Kim won’t have done unnoticed by market participants.
Trump: New executive orders on N. Korea that target individuals and companies who trade with the rogue nation. He confirmed that the PBoC has ordered Chinese banks to cease business with the region, while the effort will also target N. Korea’s shipping and trade networks. The leaders of Japan and S. Korea backed the tighter stranglehold, and they plan to discuss further means to halt N. Korea’s ability to produce a nuclear arsenal. Though Trump remained open to further dialogue with N. Korea, it’s not clear that this will reduce tensions in the meantime as prior UN actions prompted further missile salvos over Japan.
US Reports Yesterday: Revealed a robust 23.8 September Philly Fed figure that exhibited the same hurricane updraft seen in last Friday’s Empire State report, and we now expect the average of the producer sentiment surveys to reclaim the 57 cycle-high in September that was seen in February and March, versus still-lofty 55-56 figures over the interim. We also saw a surprising 23k drop in initial claims to a still-elevated 259k in the week of Irma, which was also the BLS survey week, though the mass-displacement of individuals and loss of electrical power may have delayed applications for claims. Claims are averaging 274k thus far in September and we expect a 272k average when the month is over, versus an August average of 246k in August. We expect a 90k September nonfarm payroll rise that assumes a 100k Irma hit. We also saw a 0.4% August rise in leading indicators that left a 12-month string of gains.
Main Macro Events Today
Eurozone PMI – Consensus is for an unchanged composite PMI reading for September, with an expected correction in the manufacturing PMI likely to be compensated for by a slight rise in the services sector reading. German ZEW investor confidence already improved again in September, while today’s preliminary consumer confidence number rose to the highest reading since 2001.
CAD CPI – Expected to grow 0.2% in August relative to July, leaving a pick-up in the annual growth rate to 1.6% in July from 1.2% in July and the year low 1.0% pace in June. Gasoline prices snapped higher in August, which drives our projection. The annual growth rates for the core measures were either steady or slightly firmer in July. CPI-trim growth was 1.3% y/y in July from 1.2% in June, CPI-common was 1.4% from 1.4% and CPI-median was 1.7% from 1.6%. The average of the three core measures ticked higher to 1.5% y/y from the 1.4% in April, May and June.
May and Draghi Speeches – UK PM May is speaking in Florence and rumours are swirling of a speech to cement her authority at home and with her own party as well as an olive branch to the EU to finally kick start the Brexit negotiations – watch sterling to day and for follow through on Monday. Draghi has a speech earlier in Dublin and is likely to avoid direct comments on monetary policy, but always one to watch.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Stuart Cowell
Senior Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 25th September 2017.
FX News Today
Well, the Fed finally pulled the trigger last week, not on another rate hike but rather the October launch date for quantitative tightening, and the sky didn’t fall. The message remained clear, however, that the majority at the Fed expect to hike once more this year and again three times in 2018 until they reach a lower “new normalization” level on the Fed funds target in 2.5-3.0% area. Europe heats up again, with German coalition talks ahead in the wake of Sunday’s national election and a fresh round of Brexit talks on tap after UK PM May’s keynote speech last week.
United States: The U.S. economic calendar is a healthy one too heading into quarter-end, starting with the Chicago Fed National Activity index (Monday). The Case-Shiller home price index (Tuesday) is forecast to rise 0.7% in July. Consumer confidence (Tuesday) is set to slip to 122.0 in September and new home sales (Tuesday) may drop 1.9% to a 560k pace in August. The MBA mortgage application report is due (Wednesday).The distorting effects from the hurricanes have left many of the estimates anyone’s guess, though there won’t be much impact on the third and final print for Q2 GDP (Thursday). Advanced indicators goods trade deficit (Thursday) is expected to widen to -$65.1 bln vs -$63.9 bln, while initial jobless claims may or may not settle 1k higher at 260k after a relatively smooth ride last week despite the hurricane impact the week prior. Personal income and spending are expected to have inched up 0.2% and 0.1%, respectively in August (Friday), while consumer confidence measures are expected to dip, but from high levels. Core PCE prices are seen up 0.2%. September Chicago PMI and final Michigan sentiment are also on tap to round out the week.
Fedspeak: is heavy this week, with 12 Committee members scheduled. The commentary will give the markets a notion of current thinking in the wake of the FOMC. Monday brings NY’s Dudley, Chicago’s Evans, and Minneapolis’ Kashkari. Evans’ topic is monetary policy. Tuesday has Fed Chair Yellen’s keynote speech at the NABE conference. Cleveland Fed’s Mester also moderates a session at NABE. Atlanta Fed’s Bostic speaks at the Atlanta Press Club. St Louis Fed’s Bullard discusses monetary policy and the economy Wednesday, while Philly Fed’s Rosengren also speaks on policy. Thursday brings KC’s George on monetary policy and the economy. Fed VC Fischer will be at a conference in London, but he is retiring next month. Note that this year’s FOMC voters include Dudley, Evans, Kaplan, and Kashkari, while 2018 voters include Dudley, Bostic, Mester, and Williams.
Canada: A speech by Governor Poloz highlights this week’s calendar. He appears Wednesday at the St. John’s Board of Trade, with the text of his prepared speech available at 11:45 ET. The appearance follows Deputy Governor Lane’s speech last week, who said that the Bank is paying close attention to the impact of the stronger Canadian dollar and that possible changes to NAFTA are a key source of uncertainty for Canada’s outlook.As for the data, July GDP will be the focus on the rather lean docket, which expected ta a 0.1% gain in July GDP. The industrial product price index (IPPI) is expected to expand 0.5% in August. Another sizable gain for the loonie will hold back the IPPI, but higher gasoline and commodity prices are expected to ultimately drive the index higher relative to July. Average weekly earnings for July are due Thursday. The CFIB’s Business Barometer index of small and medium sized business sentiment for September is also due Thursday.
Europe: It’s an action packed week, with German coalition talks following Sunday’s election, a new round of Brexit talks as well as plenty of key data releases and ECBspeakers, including Draghi’s address to lawmakers on Monday. Draghi’s address to lawmakers (Monday) is likely to repeat that the Eurozone economy is recovering, but also that this still hinges on ongoing monetary accommodation, thus justifying the likely extension of QE into 2018, even if monthly purchase levels are expected to be scaled back. Data releases include preliminary inflation data for September and the last set of confidence indicators in the form of Ifo and ESI readings, all of which should back the ECB’s benign central scenario. The data week starts with the German Ifo business climate (Monday), and Eurozone ESI Economic Confidence (Thursday). Markit said that PMI numbers for Q3 point to a quarterly growth rate of 0.7% q/q, which would be a further strengthening from Q2, but even if that proves a tad too optimistic, the recovery clearly continues to broaden across sectors and countries, which is a very good sign and is also underpinning ongoing improvement on labor markets. German sa jobless numbers for August are seen down which would leave the jobless rate at a low 5.7%. Conditions are also improving elsewhere even if more structural reforms are needed to bring especially youth unemployment down further.Indeed, the remaining slack in the labor market is one reason that wage growth has so far failed to pick up decisively and inflation remains modest.
UK: Sterling markets have settled on the November Monetary Policy Committee meeting as being the venue that the BoE will make its first rate hike in over 10 years. Meanwhile, the fourth round of Brexit negotiations will start on Monday. Prime Minister May rejected the Norwegian and Canadian models as being unsatisfactory for the UK while admitting that she is not pretending that you can have all the advantages of the single market with none of the disadvantages. Sterling took a knock on this news as it affirms that the government is aiming for a “hard exit” from the EU. May also announced that she wants a two-year “implementation period,” beyond Brexit day in March 2019, which is something that the EU is widely seen as accepting. The calendar this week brings the September CBI distributive sales survey (Wednesday), the September Gfk consumer confidence survey (Thursday), the third estimate for Q2 GDP, along with the Q2 current account report and August BoE lending data (all due on Friday).
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
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Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 26th September 2017.
FX News Today
European Outlook: Asian stock markets are slightly lower after fresh pressure on tech stocks dragged down Wall Street and with investors watching North Korea tensions, after top North Korea diplomat said a Trump tweet over the weekend was a “declaration of war”. USDJPY fell to 111.73 from 112.25 , while Gold spiked up about $14/ounce to $1,309.86, following comments from North Korea’s foreign minister. U.K. and U.S. stock futures are also down and ongoing risk aversion should keep bonds underpinned. Germany remains focused on the fallout from the election as coalition talks come into focus. Brexit talks restarted yesterday, but May’s speech last week doesn’t seem to have brought the hoped-for breakthrough in the talks. Today’s calendar has French business confidence as well as U.K. mortgage approvals, and more ECB speakers ahead of a keynote speech from Fed’s Yellen. Germany sells 2-year Schatz notes and Italy also bonds.
ECB’s Draghi: “We will decide later this year on a re-calibration of our instruments that maintains the degree of monetary support that the euro area economy still needs”. “We are becoming more confident that inflation will eventual head to levels in line with our inflation aim, but also know that a very substantial degree of monetary accommodation is still needed for the upward inflation path to materialize”. “we still see some uncertainties with respect to the medium-term inflation outlook”. “Recent volatility in the exchange rate represents a source of uncertainty which requires monitoring.”
FED: Fed’s Evans remains concerned over still low inflation expectations in his comments on monetary policy and the economy. This FOMC voter has been worried in recent months over the slowing in price pressures. He needs to see clearer signs of higher inflation before boosting rates again. He is not convinced weak inflation is such a transitory event, in comments to reporters. He added inflation expectations are not consistent with the Fed’s 2% goal, while he is confident that the current policy stance is appropriate. NY Fed’s Dudley spoke as well yesterday. Fed Dudley sees continued gradual policy tightening and temporary factors depressing inflation “fading.” The dovish voter expects the 2% inflation target to be reached in the medium-term and views economic fundamentals as “generally quite favorable,” though the hurricane effects should be short-lived and boost growth over time. Dudley expects the weaker dollar and overseas growth to boost the trade sector, supporting growth and wage gains.
Main Macro Events Today
ECB – ECB’s Praet speaking in “ Good Pension Design” lecture at 2nd ECB Annual Research Conference in Frankfurt
FOMC – Cleveland Fed’s Mester moderates a session at NABE today, while Fed’s Brainard is due to give opening remarks at the Fed Conference in Washington. Fed Chair Yellen’s Is due to give a speech at the NABE conference at 19:45 GMT.
US Home Sales & Consumer Confidence – The Case-Shiller home price index is forecast to rise 0.1% in July. Consumer confidence is set to slip to 120.0 in September vs 122.9. And new home sales may drop 1.9% to a 588k pace in August.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 27th September 2017.
FX News Today
European Outlook: Asian stock markets are mixed, with Hang Seng and CSI 300 outperforming amid a rebound in tech stocks. Nikkei and ASX are in the red, the former dragged down by companies trading ex-dividend. U.K. and U.S. stock futures are moving higher, pointing to early gains on European stock markets, which are likely to keep upward pressure on Bund yields also as the most recent dip in the EUR won’t prevent the ECB from reigning in asset purchase volumes from next year. Today’s calendar has Eurozone M3 and credit growth numbers, as well as Italian confidence data and the U.K. CBI retailing survey. In Germany the focus will remain on the fallout from the election as Merkel faces tough coalition talks.
US reports: U.S. consumer confidence slipped to 119.8 from 120.4 (122.9) in August but a similar 120.0 in July, as the measure takes a likely hurricane hit. All the confidence surveys have strengthened sharply in 2017 despite some moderation from Q1 peaks, and what is now a small September setback after an August updraft. Consumer confidence remains close to the 16-year high of 124.9 in March. Confidence, producer sentiment and small business optimism have climbed since October of 2016 in the face of a factory rebound that is trimming excess capacity, equity and home price gains, and fiscal policy relief. The rise has defied restraint in GDP growth from ongoing inventory weakness. The 3.4% August U.S. new home sales drop to an expected 560k rate followed net downward revisions to leave a slightly weaker than expected report. The August new home sales drop included a 4.7% decline in the south, and Harvey and Irma will likely depress sales through September before a Q4 bounce.
Fed Chair Yellen: said the Fed should be “wary of moving too gradually,” in her written remarks on Inflation, Uncertainty, and Monetary Policy before the NABE annual conference. So far the gradual approach has been appropriate due to the subdued pace of inflation, but low prices likely reflect factors that should fade. Meanwhile, she added that it is “imprudent” to keep policy on hold until inflation hits the 2% target. There are risks of overheating without modest rate hikes over time. Persistent easy policy can hurt financial stability. There was the usual caveat, however, that persistently low inflation could lead to a slower pace of tightenings. Nevertheless, the gist of her comments, and the leanings of the FOMC back at the September 19, 20 meeting, pretty much confirm a December tightening, unless there is some development between now and then to take if off the table. She also noted that the Fed’s inflation goal is symmetric and that the 2% level is not a ceiling. It would not be a tragedy to see inflation overshoot, she said.
Main Macro Events Today
US Goods & Home Sales – ECB’s Praet speaking in “ Good Pension Design” lecture at 2nd ECB Annual Research Conference in Frankfurt
BOC– Bank of Canada Governor Poloz speaks today. His speech follows Deputy Governor Lane’s speech last week, who perhaps signalled a more gradualist approach to rate hikes ahead. Lane said the Bank is paying close attention to the impact of the stronger Canadian dollar and that possible changes to NAFTA are a key source of uncertainty for Canada’s outlook. The loonie has seen a slight unwinding relative to the greenback since the Sep 8 announcement while the downside risk from NAFTA changes has been in play since last November’s U.S. election. Of course, mention of both those subjects (loonie, NAFTA) could be meaningful.
RBNZ Rates – The Case-Shiller home price index is forecast to rise 0.1% in July. Consumer confidence is set to slip to 120.0 in September vs 122.9. And new home sales may drop 1.9% to a 588k pace in August.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 28th September 2017.
FX News Today
European Outlook: Asian stock markets are mixed, with Japan outperforming today, as the dollar strengthened. Hang Seng and CSI 300 moved sideways as investors seemed to hold back ahead of a long holiday starting next Monday. The ASX was slightly higher as are FTSE 100 and U.S. futures. The European calendar has Eurozone ESI economic confidence, but political events and central banks remain in focus as traders assess U.S. tax plans, the fallout from the German election, Brexit talks, and now also the risk of a trade war between the U.K. and the U.S. So far both ECB and BoE remain on course to reduce the degree of monetary accommodation somewhat and that should keep yields on an uptrend, especially as stocks move higher.
Germany: German GfK consumer confidence unexpectedly fell back slightly to 10.8 in the October projection from 10.9 in September, suggesting that the election cast its shadow. The full breakdown for the September reading showed a marked improvement in economic sentiment, but a sharp setback for income expectations and the willingness to buy also eased slightly, while inflation expectations turned less negative. Still strong confidence numbers that suggest consumers continue to underpin the recovery, but also indicate that energy price variations quickly leave a mark.
RBNZ held the policy rate at 1.75%, as expected. Low for long remains in place, with Acting Governor Spencer saying “Monetary Policy will remain accommodative for a considerable period.” And a dovish bias was retained, as the Acting Governor concluded that “Numerous uncertainties remain, and policy may need to adjust accordingly.” This was the same as in August, June and May. In other words, it looks like they won’t hesitate to add accommodation if downside risk to the economy manifest. The onus remains on the inflation and growth data, with additional undershoots setting the stage for further easing. But our base case is for no change into 2018. Notably, they observed that Q2 GDP was as expected while the slowing in Q2 annual CPI kept the measure inside the target range.
BoC’s Poloz: “it is a case of feeling your way as you go” he summarised when asked about what will happen to rates going forward. Indeed, his now concluded presser maintained the cautious tone seen in his prepared speech. He reiterated that we are in “uncharted territory for what economies have been through.” As for the rate hikes we’ve seen so far this year, it was a case of data dependence declared–data much stronger than expected–appropriate to move (and move again). He repeated that they are not on a predetermined course and must watch for important unknowns. As for the projected overshoot of the 2% inflation target in 2019, he nonchalantly said they have the 1-3% band for just that reason. Also of interest, he noted that it is typical at this point in the cycle to over-predict inflation The bank needs to “watch it unfold, fell the way with the data.” It seems that for 2018, the aggressive scenario has been uprooted by a “cautious” scenario until the data says otherwise, with two to three rate increases now factored in to leave a 1.75% to 2.00% setting by the end of the 2018. They “will continue to feel their way cautiously” as we get closer to “home.” Policy will be “particularly data dependent.” The Governor said “at a minimum” the two 2015 rate cuts are no longer needed. USDCAD shot up to 1.2431 from near 1.2350, the highest seen since September 1, following the release of BoC governor Poloz’s prepared remarks.
Main Macro Events Today
EU ESI– Eurozone ESI Economic Confidence is seen rising to 112.1 from 111.9., while Industrial and consumer confidence seems to stay unchanged.
US GDP, Jobless Claims & Goods Trade– The third and final print for Q2 GDP, shows a slight upward revision to a 3.1% clip from 3.0%. Advanced indicators goods trade deficit is expected to widen to -$65.0 bln vs -$65.1 bln, while initial jobless claims may or may not settle 11k higher at 270k after a relatively smooth ride last week despite the hurricane impact the week prior.
Speeches of the day – BOE Gov Carney and RBA Deputy Governor Debelle deliver a speech at the Bank of England conference in London today. Meanwhile, Thursday brings also Feds KC’s George who is due to discuss on monetary policy and the economy on BoE conference along with Fed VC Fischer, who is retiring next month. Significant is the fact that Prime Minister May is due to speak as well.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
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Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 29th September 2017.
FX News Today
European Outlook: Asian stock markets moved modestly higher on the last day of the third quarter. Hopes that the U.S. tax reform will boost growth underpinned investor market sentiment, and the MSCI Asia Pacific Index is heading for a third quarter of gains. Trading volumes were subdued, however, ahead of China’s week long holiday. FTSE 100 futures are up, U.S. futures narrowly mixed. Oil prices are slightly down on the day. European bond yields closed mixed yesterday, with Bunds closing up on the day, but far below intraday highs, while Gilt yields as well as Eurozone peripheral yields dropped. The chance that Eurozone inflation will hold steady today, rather than picking up again helped yields to come down from highs, but in our view won’t prevent the ECB from taking the foot off the accelerator. Already released U.K. consumer sentiment unexpectedly rose to -9 from -10. The data calendar also includes the final reading of U.K. Q2 GDP as well as consumer credit data.
FX Update: USDJPY picked up some demand while most other dollar pairings have traded narrow ranges so far today. USDJPY recovered from yesterday’s 112.25 low to the upper 112s. There had been reports yesterday of yen demand into the end of the first half of the fiscal year in Japan, though USDJPY still has rallied, returning focus on the two-and-a-half-month high seen on Wednesday at 113.25. While markets are now taking a more circumscribed view of Trump administrations tax plans, the Fed’s course further tightening is still promoting dollar demand on dips. A batch of data today out of Japan had little impact on forex markets, but encouraging. Japanese Core CPI lifted in September to 0.7% y/y, industrial production rose 2.1% m/m, and retail sales gained 2.8% y/y.
Fedspeak: Fed VC Fischer steered clear of policy and the economic outlook in remarks before the Bank of England, where he discussed “The Independent Bank of England — 20 Years On.” It is still possible those topics may come up in Q&A. As he exited stage right in his last speach as Vice Chairman, he left the markets with this thought: “Or, if I may be permitted a few final words on my way out the door, the watchwords of the central banker should be “Semper vigilans,” because history and financial markets are masters of the art of surprise, and “Never say never,” because you will sometimes find yourself having to do things that you never thought you would.” KC Fed hawk George was true to form, noting further gradual rate hikes are appropriate. The stance of monetary policy is still rather accommodative, she added. She has a brighter outlook on global growth. The U.S. economy is in reasonably good shape currently. There has been a pick-up in business investment. And while there will be a near-term impact from the hurricanes, offsets are projected down the road. George is not an FOMC voter this year nor next.
Main Macro Events Today
EU HCPI and German Unemployment -Eurozone headline HICP inflation expected unchanged at 1.5% y/y in September. The French number may still stick a tad higher, but the slight decline in the Spanish headline rate and the steady German number yesterday suggest that the overall Eurozone number also held pretty stable, despite an uptick in energy prices.
CAD GDP – GDP is expected to improve 0.1% m/m in July after the 0.3% gain in July. The 0.2% dip in retail shipment volumes added to the mixed backdrop for the July GDP report.
US PCE – Personal income and spending are expected to have inched up 0.2% and 0.1%, respectively in August, while consumer confidence measures are expected to dip, but from high levels. Core PCE prices are seen up 0.2%.
BoE – BOE Gov Carney is due give closing remarks at the Bank of England’s conference celebrating 20 years of independence, in London. In the conference we will see today also speeches from MPC members such as Broadbent and Cunliffe.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 2nd October 2017.
FX News Today
The Trump bump seemed to get renewed life last week on the release of tax reform plans. That added to an already optimistic tone after signs of solid consumption growth and fixed investment in the U.S. Q2 GDP and with the strength in capital spending evidenced in the August durable goods. Meanwhile, the Asian and European economies are contributing to growth too, with the strength in recent PMIs underpinning positive outlooks.
United States: The September nonfarm payrolls will be the attention-getter which expected at 20k increase after the disappointing 156k gain in August. The September manufacturing ISM (Monday) should slip to 57.5 on the drag from Hurricane Irma, after a stronger than expected 2.5 increase to 58.8 in August. Construction spending for August (Monday) is expected to be unchanged. September vehicle sales (Tuesday) are expected to improve to a 17.0 mln clip, from 16.0 mln previously, though there’s downside risk from the hurricanes. The September ADP (Wednesday) should climb 190k following Augusts 237k surge. There should be little hurricane effect here given the way the data is tabulated. The services ISM (Wednesday) is seen edging up to 55.5 after rising 1.4 points to 55.3 previously. The August trade deficit (Thursday) is forecast narrowing to -$42.5 bln versus July’s -$43.7 bln.
Fedspeak: The U.S. calendar includes may of the key economic reports for the month, but Fedspeak is likely to overshadow, especially as the numbers will be impacted by the varied effects from the hurricanes. Fed Chair Yellen (Wednesday) will be an obvious focal point. Fed Chair Yellen’s comments will be monitored. But after reiterating the Fed’s gradual policy stance last week, she’s unlikely to provide any fresh revelations in her comments on community banking. Along with Yellen, other speakers include Kaplan will participate in a moderated Q&A (Monday). Governor Powell (Thursday) speaks on the Treasury market. SF Williams will be at a community banking event (Thursday). Harker and George (Thursday), along with Bostic and Kaplan (Friday), speak at a workforce development conference. NY Fed’s Dudley could be the most enlightening with his remarks on monetary policy (Friday). Also, Bullard speaks on the economy (Friday). Along with Yellen, current FOMC voters include Kaplan, Dudley, Powell, Harker, while Williams and Bostic are voters in 2018.
Canada: In Canada, Bank of Canada Deputy Governor Leduc speaks on “Firm creation and productivity in the Canadian Economy.” The text of Tuesday’s speech will be available at 12:30 ET. Governor Poloz’s comments from last week provide some insight into the Bank’s view on this topic. The docket of economic data includes the usual early month suspects, notably trade and employment. Employment (Friday) is expected to expand 20.0k in September after the 22.2k rise in August. The unemployment rate is seen at 6.2%, matching August. The trade deficit is projected to slightly narrow to -C$2.9 bln in August from -C$3.0 bln in July. The Ivey PMI (Friday) is projected to slip to 55.0 in September from 56.3 in August. The Markit manufacturing PMI for September is due Monday. Dealer reported vehicle sales for September are expected Tuesday.
Europe:It’s a relatively quiet week that’s thin on data releases, which are unlikely to bring any change to the ECB outlook. There are some ECBspeakers, while the central bank also releases the minutes of the last meeting (Thursday). Merkel’s quest for allies in the new parliament will continue, but is unlikely to make much progress in a week that includes a holiday on Tuesday. Merkel will remain in office as caretaker until a new Chancellor has been elected. The data calendar has final September PMI readings, with the manufacturing PMI (Monday) expected to be confirmed at 58.2 and the Services reading (Wednesday) at 55.6, which should see the composite confirmed at 56.7. The highlight of the week will be German manufacturing orders (Friday) where we are looking for a rebound of 0.5% m/m, after the correction in August. Eurozone growth is broadening and strengthening and even the German recovery is for once underpinned by consumption and domestic demand rather than exports. And while the ECB has acknowledged the improvement, it still sees insufficient changes to underlying inflation to end QE just yet.
Japan: A solid Tankan survey of business conditions out of Japan this morning, which showed optimism at small manufacturers to be at a decade high had little impact on the yen, with the BoJ still seen as being well behind the Fed in terms of cycle, with chronically tepid inflation still remaining a factor in Japan’s economic circumstance. The Tankan showed that labour shortages to be at a 25-year low, which could be the harbinger of second-round inflation via higher wage demands. September consumer confidence (Tuesday) is penciled in at 44.0 from 43.3, while September services PMI (Wednesday) is forecast at 52.0 from 51.6.
Australia: The Reserve Bank of Australia meets (Tuesday) and is expected to hold rates steady at 1.50%. Deputy Governor Debelle takes part in a panel discussion (Thursday). The data docket is headlined by retail sales (Thursday) and the trade balance (Thursday). Retail sales are expected to rise 0.2% in August after the flat reading (0.0%) in July. The trade surplus is seen improving to A$1.0 bln in August from the A$0.5 bln surplus in July. Building approvals are expected to bounce 2.0% m/m in August after the 1.7% drop in July. The Melbourne Institute inflation index for September is due Monday. September ANZ job ads are scheduled for Tuesday.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 3rd October 2017.
FX News Today
European Outlook: Topix and Nikkei reached fresh two year highs, Chinese stocks traded in Hong Kong rallied as markets reopened after a holiday, benefiting from robust PMI data over the weekend and the PBOC’s announcement that it will cut reserve requirement ratio for next year. The Hang Seng is up 1.75%, the Nikkei gained 0.95% while the ASX 200 dropped -0.49%, as lower oil prices weighed on energy stocks and a sharp fall in QBE insurance, after the company detailed expected losses from recent hurricanes, dragged the index down. Mainland China remains closed for holidays. In Europe Germany is closed for a national holiday after Bunds were underpinned yesterday by intra-Eurozone safe haven flows following the escalation of Spanish tensions. Gilts outperformed with the US100 yesterday amid a broader rise in European stocks ex Spain, which benefited from USD strength. U.K. and U.S. stock futures suggest further gains today. Today’s data calendar is relatively quiet, with only Eurozone producer price inflation and the U.K. CIPS Construction PMI.
U.S. reports: revealed upside surprises across the September ISM and August construction spending reports that add upside risk to forecasts for an Irma-depressed 120k September nonfarm payroll rise and a 3.0% growth rate for Q3 GDP. For the ISM, we saw a headline pop to a 13-year high of 60.8 from a 6-year high of 58.8 in August, as all the producer sentiment surveys are showing a sharp rise with the hurricane rebuild to new cycle-highs. The jobs index also rose, to a 6-year high of 60.3 in September from a prior 6-year high of 59.9. For construction, we saw a 0.5% August rise after upward revisions across the private construction components, though public construction was revised down sharply, and we now have a new cycle-low for that measure in July before a 0.7% August bounce.
FX Update: The dollar has continued to find demand, posting gains versus the euro, yen, sterling and Australian dollar, among other currencies. The narrow trade-weighted USD index clocked a one-and-a-half-month peak at 93.77, while EURUSD traded below 1.1700 for the first time since mid August. USDJPY remained buoyant, albeit with upside momentum being crimped in the face of Japanese exporter offers above 113.00. The pair edged out a high at 113.19, which is six pips short of last week’s two-and-a-half-month peak. The dollar is in demand as markets continue to adjust to the rekindled hawkishness of the Fed, while the elevated tensions between Spain’s central government and the autonomous region of Catalonia have soured appetite for euros. The Australian dollar came under some pressure after the RBA left policy on hold, as was widely expected, but as the accompanying statement of Governor Lowe remained non committal in tone, acknowledging improving economic growth but reaffirming that the inflation outlook remains subdued. AUD-SD posted a two-and-a-half-month low at 0.7785.
Main Macro Events Today
UK Construction PMI – The construction PMI expected to come in unchanged at 51.0, a level indicating only weak expansion in the sector.
EU PPI – PPI is expected to improve 0.1% m/m in August and 2.3% y/y.
FOMC Powell – Governor Powell speaks at a financial regulation event jointly hosted by Reuters and George Washington University, in Washington DC, about regulatory reform.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 4th October 2017.
FX News Today
European Outlook: Asian stock markets are mixed, as USD weakens and Yen strength saw the Nikkei wiping out gains. The ASX also was under pressure as the dip in oil prices weighed on energy producers, while Chinese stocks in Hong Kong touched a 2-year high and the Hang Seng outperformed. US100 and U.S. stock futures are in the red, suggesting a weak start in Europe, after modest gains yesterday. Germany’s GER30 re-opens after yesterday’s holiday as Spain’s constitutional crisis continues and casts a shadow over the Eurozone. The data calendar includes the final reading of Eurozone services PMIs, as well as the U.K. services PMI and Eurozone retail sales. Germany sells 10-year Bunds.
FX Update: The dollar remained on the ebb, giving back some of the gains posted recently. The narrow trade-weighted USD index is showing a modest 0.2% loss as the London interbank opens, at 93.23, having extended the decline from yesterday’s six-week peak at 93.77. USDJPY ebbed under 112.50 after recent gains stalled above 113.00, where decent export offers were encountered. The pair left a high at 113.19 yesterday, which is 6 pips short of the near three-month high printed last week. The pair had rallied strongly from the early September low at 107.31, though momentum indicators have been turning lower over the last couple of weeks, despite spot making new highs — a divergence that often portends a trend change. EURUSD logged a two-session high at 1.1780, up from yesterday’s two-and-a-half-month low at 1.1696.
Canada: BoC’s Leduc did not directly address policy in his prepared remarks yesterday on the declining dynamism of Canada’s economy. Data show a “surprising and sustained decline in the entry rate of new firms since the early 1980s” he observed. He said “The main concern about the loss of dynamism is that it will lead to less innovation and diminishing long term growth.” As for Canada’s growth, he said it “has been strong, exceeding that of all other G7 countries.” He does find it “encouraging that the Canadian economy is still flexible enough to absorb a major shock” despite the decline in dynamism. He repeated Poloz’s observation that productivity has “increased significantly” since the middle of last year. There is nothing new here on policy or the economy, with the Lane/Poloz duo last month saying all that needed to be said for now. To review, they revealed a pivot to caution following back to back rate hikes in July and September as the economy surged in the first half of this year. Leduc said the growth rate should decline over next few quarters, but remain above potential. That is in-line with the July outlook and Poloz’s comments last month.
USDCAD turned a bit lower as Canadian yields edged up following BoC Leduc’s speech. The pairing had been idling on either side of 1.2510 since the open, before falling back to intra day lows of 1.2482. With oil prices off the boil this week, and narrowed prospects for a near term BoC rate hike, USDCAD upside appears to be the easier path.
Main Macro Events Today
EU and German Markit PMI – The Services EU reading is seen at 55.6, and should see the composite confirmed at 56.7, while German Service PMI and Composite anticipated unchanged at 55.6 and 57.8 respectively. The UK Service is seen unchanged as well at 53.2.
US ADP and ISM Non-Manuf. PMI – The September ADP should climb 125k following Augusts 237k surge. There should be little hurricane effect here given the way the data is tabulated. The services ISM is seen edging up to 55.5 after rising 1.4 points to 55.3 previously.
ECB – President Draghi is due to speak at the Inauguration of the ECB Visito Center in Frankfurt.
Fed’s Yellen- The market anxiously awaits Yellen’s comments today,which might be in vain, since she doesn’t take the podium until 15:15 ET, and then it’s merely to deliver opening remarks at a community banking event. That’s not a venue nor a topic for policy insights. Plus, there will be no Q&A. Nothing has changed since the September 19, 20 FOMC to alter the stance regarding the dot plot and the indication of one more hike this year, a stance which Yellen has tacitly approved. In terms of the Fed chair position, should Yellen not be reappointed, it seems to be a battle between Warsh and Powell, with the former’s threat to “shake up” the Fed a worry.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 5th October 2017.
FX News Today
European Outlook: Another mixed session in Asia, where the Hang Seng continued to outperformed as China remained closed for holidays. ASX and Nikkei meanwhile moved sideways. U.K. and U.S. stock futures are also little changed. No clear direction then for European markets, which will also have little to digest on the data front today. ECB speakers and the minutes of the last ECB meeting meanwhile are likely to confirm that the central bank is heading for a reduction in asset purchase volumes, but with the doves still shying away from a firm commitment to an end date for QE. Spain remains in focus as Madrid and Barcelona remain on confrontation course in a dangerous game of chicken.
FX Update: The Aussie came under pressure following the biggest contraction in Australian retailing sales in four years. The currency is showing a 0.5% decline on the day as the London interbank enters the fray, with AUD-USD logging a two-day low at 0.7819. The August report for Australian retail trade saw turnover unexpectedly contracting by 0.6% m/m, contrary to expectations for 0.3% m/m growth. Elsewhere, narrow ranges have prevailed. USD-JPY has plied a sideways path near 111.75, which is about the halfway mark of the range of the last week. EUR-USD has ebbed modestly lower, to the 1.1750 area and nearing yesterday’s low at 1.1746. The lack of direction reflects a general lack of fresh leads. Fed chair Yellen spoke yesterday after the London close, but she steered clear of policy and economic issues.
Main Macro Events Today
EU Minutes –
US Weekly Jobless number – Expectations – 265k down from last weeks 272k
BOE – Speeches – McCafferty and Haldane
FED Speeches – Powell (prospective new FED Chair), Harker and George
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Stuart Cowell
Senior Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 6th October 2017.
FX News Today
European Outlook: European stock markets moved broadly higher as U.S. factory orders boosted confidence in the global growth outlook. Chinese stocks in Hong Kong tested 2-year highs. Banks were underpinned as U.S. yields moved higher and the dollar strengthened. FTSE 100 futures are also up and the DAX is still trying to break the 13000 mark, as the focus turns to U.S. jobs data. In the Europe investors continue to watch the situation in Catalonia carefully. Spanish markets bounced back yesterday as the central government continues to take a hard line on Barcelona’s secession plans, while leaders in Catalonia seem to the pushing for talks. Indeed, for a long term solution both sides must return to the negotiating table.
FX Update: The dollar has been bid up again, after dipping mid week, gaining concomitantly with Treasury yields following a set of strong data out of the U.S. yesterday, along with relatively hawkish Fedspeack and with all three of the main U.S. equity indices setting record closing highs for a fourth straight session. USDJPY edged out a three-session high just above 113.00 and EURUSD clawed out a new seven-week low at 1.1686. USDCAD logged five-week highs, while Cable plumbed a one-month low. AUDUSD clocked a three-month low, at 0.7743, extending the down trend that’s been developing since the pair failed to sustain gains above 0.8000 between late July and September. Markets are now looking to the September employment report, up later today, savvy to temporary distortions caused by the hurricanes. A relatively subdued 120k headline increase is expected. There is also another barrage of Fed speakers due, which will almost certainly, on net, affirm that a rate hike is in the works for the December FOMC.
Main Macro Events Today
MPC Member Haldane Speech
Canadian Unemployment Rate – Expectations – 0.1% down from last month 6.2%
US NFP – Expectations – 66k down from last month 156k
FED Speeches – Kaplan , speak at a workforce development conference. NY Fed’s Dudley could be the most enlightening with his remarks on monetary policy. Also, Bullard speaks on the economy .
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Stuart Cowell
Senior Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 9th October 2017.
FX News Today
The September U.S. jobs report lived up to its “distorted” billing. But, while many of the stats showed outsized gains (in terms of earnings), or losses (in terms of jobs), they could be generally easily rationalized due to the hurricanes. The net result left intact the view that the FOMC will remain on its gradual course of normalization near-term. After the holiday break for the U.S., Canada, and Japan on Monday, markets will be back at full strength with China returning from a week long absence with PMIs on tap. Even before then, there is a risk of a constitutional showdown in Spain over the Catalonia independence vote and heavy-handed response by Madrid, which may yet have Brexit-like complications for the wary EU itself.
United States: The U.S. economic calendar will get off to a slow start after the Columbus/Indigenous Peoples Day holiday break by the markets Monday, focused mainly on more questionable September data including potentially hurricane-impacted inflation and retail sales towards the end of the week.After NFIB small business optimism (Tuesday), MBA mortgage stats are due (Wednesday), along with JOLTS job openings and the FOMC minutes. Accordingly, September PPI is forecast to rise in August (Thursday). Also due then is recently choppy initial jobless claims, seen dropping another 22k to 238k as storm anomalies wash out of the data. Headline CPI is forecast to surge 0.6% in September from 0.4% due to the surge in petroleum prices, in August (Friday).
Canada: A holiday-truncated week is thick with housing data (Monday is Thanksgiving Day). The week begins with September housing starts (Tuesday), expected to dip to 220.0k from the 223.2k in August. Housing permits (Tuesday) are seen slipping 1.0% m/m after the 3.5% drop in July. The August new home price index is due Thursday. The Teranet/National Bank housing price index for September is also due Thursday. There is nothing schedule from the Bank of Canada this week.
Europe: This week’s data releases are unlikely to add much to the discussion as August production numbers are rather backward looking and final inflation numbers are not expected to bring decisive revisions. Developments in Spain, however, will be watched carefully. At the time of writing there was no sign of a breakthrough in the standoff between Madrid and Barcelona. EU officials are watching the situation nervously with a potential showdown on Monday. Wary of setting any type of precedent, they have made clear that an independent Catalonia would no longer be part of the EU, but clearly would prefer the conflict to be resolved without a secession at a time when Brexit talks loom. The data week starts with German August industrial production (Monday). The French production and overall Eurozone IP will be on Thursday. German trade data for August is also due and expected to show another hefty surplus, although the current recovery is more than previously driven by consumption and domestic demand. The main bulk of data releases centres on final September inflation readings, which are expected to confirm German HICP (Friday) at 1.8% y/y, the Spanish (Wednesday) reading at 1.9% y/y, the French (Thursday) at 1.1% y/y, and finally the Italian rate (Friday) at 1.1% y/y. This should leave overall Eurozone HICP inflation, due to the following week on course to be confirmed at 1.5% y/y, well below the ECB’s 2% upper limit for price stability, but also highlighting that the convergence of inflation rates that officials had been hoping would be one of the results of monetary union, hasn’t really happened.
UK: Sterling last week saw its biggest weekly decline, of 2.5% versus the dollar, since August 2016, a time when markets were still reeling from the shock of the vote to leave the EU. Like then, the pound is in a tailspin over political and Brexit uncertainties. The calendar this week has the BRC retail sales report for September (Tuesday), industrial production and trade figures for August (also Tuesday), and the RICS house price balance (Thursday). The BRC report will be monitored to see if the consumer sector continues to hold up, buoyed by near record levels of employment and low borrowing rates, but challenged by an erosion in spending power with inflation exceeding pay increases. As for production, growth in industrial output is expected, which would be the same as in July.
New Zealand: New Zealand’s calendar is thin this week. QV new home prices for September are due Tuesday. The Reserve Bank of New Zealand next meets on November 9. They held rates steady at 1.75% last week, matching expectations. The statement by Acting Governor Spencer was consistent with no change in rates for an extended period.
Japan: The docket kicks off Tuesday after Monday’s holiday with the August current account, where the surplus is expected to narrow to JPY 2,200 bln from 2,320 bln. August machine orders is on Wednesday. The August tertiary industry index (Thursday) should rise 0.1% from the same previously. September PPI (Friday) is seen accelerating slightly to 3.1% y/y from 2.9% in August. Strength in oil prices may be offset by the firmer yen.
China: Loan growth and new yuan loans for September (Tuesday) should show new loans rising to CNY 1,300 bln from 1,090 bln previously. The September trade report (Friday) is forecast to show the surplus narrowing to $39.0 bln from $41.9 bln. Exports likely remained solid, even to the U.S. despite some trade tensions.
Australia: The Reserve Bank of Australia’s Financial Stability Review (Friday) headlines a thin week of data and events. RBA Deputy Governor Debelle speaks (Tuesday) at the FX Global code of conduct in Hong Kong. August housing investment (Thursday) is expected to gain 2.0% after the 2.9% rise in July.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 10th October 2017.
FX News Today
European Outlook: Asian stock markets were mixed, long yields mostly higher. Japanese shares were underpinned by automakers after a three day weekend, the Hang Seng also moved higher, but the post-holiday rally in mainland China fizzled out and the ASX was under pressure as the currency strengthened. U.S. and U.K. stock futures are higher, but for the Eurozone, Spain will be a key focus as Catalan President Puigdemont is set to address lawmakers in Barcelona at 6 pm to discuss the outcome of the referendum, which delivered a resounding yes, but with a very low participation rate. The central government in Madrid meanwhile has pledged to maintain the unity of Spain and there is no support for Barcelona from the EU. Political events could well overshadow the local calendar, which includes industrial production data out of the U.K., France and Italy and finally U.K. trade numbers.
FX Update: The dollar traded mostly softer yesterday in holiday thinned markets, with holidays affect major centres in both North America and Asia. The narrow trade-weighted USD index fell to a two-session low at 93.48, while EURUSD firmed to a two-session high of 1.1756. The dollar also traded at two-session lows versus sterling and the Australian dollar, while USDCAD gave back a chunk of the gains the pair saw on Friday following the U.S. and Canadian employment reports. USDJPY logged a three-session low at 112.33 in Asia before recouping above 112.50, remaining comfortably off from Friday’s three-month high at 113.44. New data and developments were thin on the ground, though Spanish markets priced out Catalan secession risks, with the movement’s leaders stalling amid not unjust concerns about economic mayhem. Geopolitical concerns remain amid reports that North Korea is planning another missile launch, and an escalating diplomatic spat between the U.S. and Turkey.
Main Macro Events Today
UK Manufacturing Production – Expectations – Down to 0.3% from 0.5% on July.
UK Trade Balance – Expectations – At -11.20B from last month -11.58B.
CAD Housing Starts – Expectations – to dip to 220.0k from the 223.2k in August. Housing permits are seen slipping 1.0% m/m in August after the 3.5% drop in July.
FED Kashkari – Fed dove Kashkari, will open a regional conditions conference by his branch from 10 ET, followed by Dallas Fed centrist Kaplan who is taking part in a Q&A session at Stanford’s SIEPR after the close from 20 ET.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 11th October 2017.
FX News Today
European Outlook: Asian stock markets moved higher overnight and the Nikkei is set for the highest close since December 1996. Stronger than expected machinery orders for August underpinned an overall improvement in growth optimism, after the upbeat IMF outlook yesterday. Hang Send and CSI 300 are also posting gains and the ASX 200 outperformed as oil prices climbed above USD 51 per barrel. U.K. stock futures are also up as Sterling retreats. In the Eurozone the fact that the showdown between Madrid and Barcelona has been avoided will help to underpin sentiment. European stocks are set to extend gains and the GER30 may finally break the 1300 mark, but Bunds are likely to underperform as risk appetite returns and intra-Eurozone safe haven flows are being priced out. The local calendar is relatively quiet, with only the final reading of Spanish inflation data for September. Investors will also look ahead to the FOMC minutes as well as plenty of central bank speakers at the IMF and World Bank meetings in Washington.
Catalan’s President backs down – Bund futures jump – briefly. Puidgemont rather than unilaterally declaring independence, proposed to suspend the result of the referendum and called for weeks of dialogue. Spain’s central administration had braced itself for a direct conflict, so this is at least a partial victory as Puidgemont seemed to back down first in this game of chicken. Still, with Catalonia suspending the result, rather than fully ignoring it Rajoy will likely still see this as blackmail and it remains to be seen whether he will now take a softer stance or continue to demand a full capitulation from the independent region. EURUSD dipped to 1.1796 from 1.1810 as the Catalonian leader said the current relationship with Spain is unsustainable. From there, the euro jumped to intra day highs of 1.1825 as Puigdemont said he would suspend a declaration of independence in order to pursue dialogue with Madrid.
Main Macro Events Today
FOMC Minutes – FOMC minutes to the September 19-20 policy meeting will provide some further details to the Fed’s recent thinking, but shouldn’t lead to any major revelations.After the policy statement, the economic projections, and Yellen’s press conference last month, as well as recent Fedspeak and data, the markets have all they need to in order to fine tune the outlook including pricing in a December rate hike.
FOMC Williams Speech –
ECB’ Praet speech –
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 12th October 2017.
FX News Today
European Outlook: Asian stock markets are broadly higher, following on from gains on Wall Street yesterday, but UK100 and U.S. futures are heading south. Mixed signals then for European markets. The FOMC minutes confirmed that the Fed is on track to hike rates again at the December meeting, the BoE remains headed for a rate hike and the ECB is pretty much set to reduce asset purchases from early next year even if officials remain split on the size of the reduction and whether there should already be a signal that this is the beginning of the end for QE. Brexit talks remain in focus ahead of the crucial EU summit where officials will decide whether sufficient progress has been made for trade talks to begin this year. Meanwhile Spain’s hard line stance on Catalonia and signs that the front in Barcelona is cracking has helped peripheral bond yields to drop sharply yesterday and it remains to be seen whether the gains in bonds can be held. With the data calendar relatively quiet again, politics and central bank speeches will remain in focus. The Eurozone has industrial production for August and there are inflation numbers out of France and Sweden.
FOMC minutes showed “many” saw another rate hike was warranted, while a smaller number (probably Kashkari, Evans, and Kaplan) thought action could wait. Several thought that further tightening should hinge on incoming data, though it was acknowledged that Hurricanes Harvey, Irma, and Maria would impact economic activity. There was active debate over inflation and wages. While many saw some of the softening in inflation as due to idiosyncratic factors, other factors could be at work too and there was concern that such influences could be more persistent. Also, “several expressed concern that the persistence of low rates of inflation might imply that the underlying trend was running below 2%.”
Main Macro Events Today
EU Industial Production – Expectations – 0.5% m/m from 0.1% seen in August.
US Jobless Claims & PPI – Expectations – September PPI is forecast to rise 0.4% vs 0.2% in August, while rising 0.2% core and 2.1% core y/y. Also due then is recently choppy initial jobless claims, seen dropping another 22k to 238k as storm anomalies wash out of the data.
ECB speeches – ECB President Draghi and ECB’s Praet speak in Washington and New York respectively.
FOMC Speeches – Governor Powell addresses “Prospects for Emerging Market Economies in a Normalizing Global Economy” from 10:30 ET and Governor Brainard takes part in a monetary policy panel at the Peterson Institute from 10:30 ET.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 13th October 2017.
FX News Today
European Outlook: Topix and Nikkei rallied and are targeting fresh highs, boosted by technology companies and retailers as markets start to focus on earnings. Elsewhere gains were more mooted and Hang Seng and CSI 300 swung between gains and losses. U.S. stock futures are higher, UK100 futures slightly down, but for the Eurozone a Bloomberg report that the ECB is considering halving asset purchases next year, but with a longer than anticipated 9 months extension could help the GER30 to finally crack the 13000 mark and keep Bunds underpinned. Brexit risks meanwhile are weighing on U.K. markets as hopes of early trade talks were dashed by Barnier yesterday, although there is still the hope of a transition period, which would at least give more time for talks.
FX Updates: EURUSD opened in N.Y. at 1.1860 highs, and spent much of the remainder of the session slowly grinding lower, basing at 1.1827 after the London close. The pairing traded under both its 50- and 20day moving averages, before reclaiming the levels into the close. Dovish fallout from Wednesday’s FOMC minutes continued to provide some support, though Friday’s U.S. CPI report may end up being a weight on the euro should data come in warm, as expected. Talk of a no-deal exit from the EU has been increasing, with five rounds of negotiation having reached “deadlock,” according to the EU’s chief Brexit negotiator, Barniar. He also said that the EU would agree to a two-year transitory period, to buy more time after actual Brexit occurs in March 2019. Cable surged to $1.3290 after EU’s Barnier’s comments.
Main Macro Events Today
US Retail Sales – Expectations – At 1.7% in September vs -0.2% in August, or 0.3% ex-auto.
US CPI – Expectations – CPI is forecast to surge 0.6% in September from 0.4% due to the surge in petroleum price.
ECB – ECB Vice President Vitor Constancio is due to speak at 12:30 GMT.
FOMC Speeches – Boston Fed dove Rosengren opens a policy conference by his branch at 12:30 GMT. Evans is back on the economy and policy from 14:25 GMT, Kaplan takes Q&A at a CFA conference from 15:30 GMTand Powell is invited to speak at the Boston Fed conference from 17 GMT.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 16th October 2017.
FX News Today
Global economic activity has surprised to the upside this year, most recently manifest in the upward revisions from the IMF. And while there are a number of potential geopolitical headwinds that could slow, if not derail the momentum, recent economic reports from the U.S. suggest a measurable boost from Keynesian style pump-priming as the South and California recover from the hurricanes and fires that devastated the major regions. Meanwhile, the lack of inflationary pressures continues to baffle central bankers, keeping them on patient footing with respect to removing accommodation. Brexit is a major issue for the UK, while Europe is wrestling with the Spain-Catalonia constitutional crisis. The weekend’s Austrian elections may have some ripple effects and give populists and anti-EU forces fresh impetus. On Wednesday, the 19th National Congress of the Communist Party convenes. President Xi is widely expected to be re-elected and is expected to lay out another broad plan for growth. President Trump’s decision to decertify the Iran nuclear deal will add to global concerns, along with the ongoing threats from North Korea.
Europe: Politics will continue to top the agenda. EU leaders will meet Thursday/Friday to talk Brexit. Meanwhile Spain’s constitutional crisis is not over yet. Puigdemont seemed to back down last week, but Rajoy’s ultimatum for a clarification on whether the Catalan leader actually unilaterally declared independence or not at his address to regional lawmakers runs out on October 16 and Madrid also demanded that Catalonia’s leader should respect Spain’s constitution and effectively end the move for independence by October 19.With that in mind the outcome of Austria’s election on October 15could also have ripple effects and give populists and anti-EU forces fresh impetus. Latest opinion polls suggest that the conservative OeVP will be the strongest party, but the right wing FPOe is a close second. Clearly a good result for the FPOe would be cheered by the Front National in France and the AfP in Germany. In Germany itself the regional elections in Lower Saxony over the weekend will also be watched closely and the result of Merkel’s CDU could well impact support for the Chancellor within her own party as crucial coalition talks are about to start in earnest.
Against that background the data calendar looks pretty tame and is unlikely to decisively impact the discussion on policy recalibration that is taking place at the ECB ahead of the next meeting at the end of the month. The final reading of Eurozone September HICP is unlikely to bring a major surprise and is expected to confirm the preliminary number of 1.5% y/y. Still too low for the central bank, especially as Draghi is not happy yet with underlying inflation and especially wage growth.
UK:The pound, after posting its biggest weekly loss since August 2016 in the week prior, last week managed to rebound by over 1.5% versus the dollar and by about 1% versus both the euro and yen. The calendar this week is highlighted by inflation data for September (Tuesday) which expected at new cycle high of 3.0% y/y in headline CPI, and a core CPI reading of 2.8% y/y, after 2.7% in the month previous. Such outcomes would be comfortably in the range of BoE projections, and leave the central bank on course of what is now a widely expected 25 bp rate hike at the November policy meeting. Assuming sterling continues to hold up reasonably well, y/y CPI readings should come off the boil in upcoming months as the impact of the currency’s sharp decline following the Brexit vote in July 2019 falls out of the equation. Monthly labor data (Wednesday) should see the unemployment rate remain unchanged at 4.3%, and show average household earnings continue to lag inflation, with incomes expected to rise by 2.1% y/y in the three months to August. September retail sales (Thursday) is expected to show a 0.1% m/m contraction.
New Zealand: New Zealand’s calendar has Q3 CPI, expected to expand 0.4% (q/q, sa) after the flat reading in Q2. CPI is expected to accelerate to a 1.8% y/y pace from the 1.7% growth rate in Q2. The Reserve Bank of New Zealand next meets on November 9. They held rates steady at 1.75% in September, matching expectations. The statement by Acting Governor Spencer was consistent with no change in rates for an extended period.
Japan: Monday brings revised August industrial production, which is expected to remain unchanged at 2.1% y/y. Skipping to Thursday, the September trade report should reveal a surplus of JPY 400.0 bln, versus the 112.6 bln deficit in August. The September all-industry index (Thursday) is expected to rise 0.1% versus the 0.1% decline previously.
China: September industrial production(Thursday) is estimated at 6.3% y/y from 6.0%, while September retail sales are penciled in at an unchanged 10.1% y/y. Q3 GDP (Friday) is expected at 6.9% y/y, unchanged from Q2.
Australia: The minutes to the Reserve Bank of Australia’s October meeting are due Tuesday. RBA Assistant Governor (Economic) Ellis participates in a panel discussion (Tuesday). RBA Assistant Governor (Financial System) Bullock speaks to the Australian Shareholders Association (Thursday). Employment (Thursday) is seen rising 20.0k in September after the 54.2k gain in August. The unemployment rate is seen at 5.6%, matching the rate in August.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 17th October 2017.
FX News Today
European Outlook: Asian stock markets moved broadly higher, with Australia’s ASX outperforming as investors piled into miners and banks. So Australia’s hot streak continued with a more than 0.7% rise, while gains elsewhere were more muted as concerns about North Korea emerged and markets speculate about a more hawkish Fed post Yellen. North Korea warned that a nuclear war could “break out any moment”. U.S. and U.K. stock futures are narrowly mixed. May’s visit to Brussels yesterday doesn’t seem to have brought a major breakthrough while in Spain the situation is tensing up after Madrid prepares to replace Catalan security officials after the leaders of two grassroots independence groups were jailed yesterday. Amid ongoing political tensions the European calendar is heating up, with U.K. inflation data for September as well as German ZEW investor confidence and final Eurozone September HICP numbers.
FX Updates: The dollar has continued to trade perkily. USDJPY flipped back above 112.00 as major Asian stock indices hit 10-year highs after Wall Street hit fresh record highs on Monday. The pair has a well-established tendency to correlate with notable moves in global equity markets, though persisting concerns about political disharmony in Spain and North Korea (Pyongyang threatened nuclear war could “break out at any moment”) may have been curtailing yen losses. EURUSD declined for a fourth consecutive session, this time logging a out a one-week low at 1.1756. The dollar also held firm against the Australian dollar and other dollar-bloc currencies, along with sterling and other currencies. Sterling for its part has seen little reaction thus far to news that British PM May and EU Commission President Juncker agreed at a supper meeting last night that Brexit negotiations should “accelerate over the months to come.”
Main Macro Events Today
UK PPI & CPI – Expectations – CPI at 3.0% y/y headline from 2.9% in August, and PPI at 1.2% in September from 1.6% m/m
EU CPI and German ZEW – Expectations -EU CPI seen unchanged at 1.5% y/y and German ZEW to 20.0 from 17.0
BoE Gov. Carney – Due to testify before the Treasury Select Committee, in London.
US Industrial Production – Expectation – at 0.4% after dropping 0.9%, which should leave capacity utilization at 76.4% from 76.1%.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 18th October 2017.
FX News Today
European Outlook: Asian stock markets traded cautiously as China’s Xi laid out his road map to 2015. Drug makers in Hong Kong and China outperformed, after the President vowed to develop the health industry. The Hang Seng is nevertheless slightly in the red and the Nikkei fluctuated amid concerns that indices are looking overbought. U.K. and U.S. futures are moving higher, after European markets closed mostly with slight losses yesterday and the GER30 failed to hold the 13000 mark. The Spanish IBEX outperformed despite the escalation of the Catalonia crisis, as Madrid prepares to take over control and Puigdemont faces a final ultimatum that runs out tomorrow. In the U.K. Brexit remains high on the agenda after the OECD warned of its negative impact on the economy and ahead of this week’s EU summit on the state of the talks. Data releases today focus on U.K. labour market data and especially wage growth, which will be watched closely by the BoE.
U.S. reports revealed a Q3 underperformance for industrial production despite a 0.3% September bounce thanks to downward back-revisions, though a solid 3%-4% growth rate was expected for this index through Q4 and Q1. The September trade price figures beat estimates thanks to a 1.0% surge in export prices ex-agriculture and a 4.5% petroleum import price rise, leaving headline gains of 0.8% for exports and 0.7% for imports, and rebounding global growth will lift both trade prices and the factory sector going forward. We also saw an NAHB index bounce to 68 in October from 64.
Main Macro Events Today
ECB – ECB President Draghi is due to deliver opening speech at the ECB conference in Frankfurt.
UK Labor data – Expectations -Unemployment rate remain unchanged at 4.3% and Household Earnings to rise by 2.1% y/y in the three months to August.
US Housing Permits – Expectations – Rise to a 1.200 mln pace following the 0.8% decline in August.
FOMC Speeches – NY Fed dove Dudley and Dallas Fed hawk Kaplan.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
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Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 19th October 2017.
FX News Today
European Outlook: Asian markets were mixed. Wall Street closed at record highs but a slight slow down in Chinese GDP growth to 6.8% from 6.9% was enough to knock back Hang Seng and CSI 300. By contrast strong trade data out of Japan helped to underpin the Nikkei. Bank of Korea meanwhile kept policy on hold, but for the first time in a year, there was no dissenter in favour of a rate hike. Oil prices little changed around the USD 52 per barrel mark and U.S. and U.K. stock futures are heading south, with markets correcting slightly after yesterday’s fresh run higher. The GER30 closed at record highs, the UK100 is no far off and with Bund futures lifting off lows in after hour trade yesterday, it may be time for markets to take a breather and some defensive trade today, as the EU’s Brexit summit and Spain’s deadline to Catalonia approach. Data releases today include U.K. retail sales as well as Swiss trade data.
Main Macro Events Today
UK Retail Sales- Expectations – a 0.1% m/m contraction.
US Unemployment – Expectations -At 240K from 243K last week.
Philly Fed Manufacturing Index – Expectations – to decline to 22.0 after the better than expected 4.9 point jump to 23.8 previously.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 20th October 2017.[/B]
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[B]FX News Today[/B]
European Outlook: The dollar has rallied across the board, up 0.3% versus the euro and by 0.6% against the yen, following news that the U.S. Senate had passed a budget blueprint that will help push forward the Republican party’s planned $1.5 tln tax cut. The news came after the close of Wall Street, and sparked a rally in U.S. equity index futures while lifting bourses across the Asia-Pacific region. USDJPY rallied to a two-week high of 113.30, gaining over 60 pips from the pre-news levels. EURUSD tumbled to a 1.1804 low from levels just above 1.1850. The relative underperformance of the yen, which is typical during bursts of risk-on sentiment in global markets, saw EURJPY and other yen crosses climb, as the dollar post gains versus the euro and most other currencies. Market participants will monitor the budget’s passage in the House. The budget, if passed, will open the door to expanding the federal deficit by $1.5 tln over 10 years, which will pay for the tax cut. This won’t be pleasing to fiscal conservatives in the House. Rand Paul was the only Republican to vote against in the Senate vote, and while there may be more opposition from House Republicans, the desire for a political has fostered a change in priorities.
U.S. reports: revealed an October Philly Fed surge to a 5-month high of 27.9, and a 22k initial claims plunge to a 44-year low of 222k in the Columbus Day and BLS survey week, with little evidence of distortion from Nate and the California fires. The ISM-adjusted Philly Fed rose to a 6-month high of 59.7 in October from 59.0, and the employment index surged to an all-time high of 30.6 from 6.6. Monday’s Empire State rose to an 8-year high of 30.2 that was also seen in September of 2014. Rebuild activity should support continued sky-high producer sentiment levels into early-2018, and we face substantial upside risk for all the employment, GDP, and factory-sensitive measures into early-2018.
[B]Main Macro Events Today[/B]
UK Public Borrowing – Expectations – at 5.7B from 5.1B last month.
Canadian CPI and Retail Sales – Expectations -0.2% increase in September’s CPI and 0.1% increase in September’s Retail Sales.
US Existing Home Sales – Expectations – Existing Home Sales Change (MoM) to increase by 0.7% up to -1.0% from -1.7% last month.
FOMC – Fed’s Mester due to speak at 18:00 GMT and Fed’s Yellen at 23:30 GMT
[IMG]https://analysis.hotforex.com/wp-content/uploads/2017/10/2017-10-20_8-47-33.png[/IMG]
[B]Support and Resistance Levels[/B]
[IMG]https://analysis.hotforex.com/wp-content/uploads/2017/10/2017-10-20_10-01-04.png[/IMG]
[B]Always trade with strict risk management. Your capital is the single most important aspect of your trading business.[/B]
[B]Please note that times displayed based on local time zone and are from time of writing this report.[/B]
Click [URL=https://www.hotforex.com/hf/en/trading-tools/economic-calendar.html][B]HERE[/B][/URL] to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click [URL=https://www.hotforex.com/en/trading-tools/trading-webinars.html][B]HERE[/B][/URL] to register for FREE!
[URL=https://analysis.hotforex.com/][B]Click HERE to READ more Market news.[/B][/URL]
[B]
Andria Pichidi
Market Analyst
HotForex
[/B]
[B]Disclaimer:[/B] This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 23rd October 2017.
USDJPY, H1
USDJPY, H1
The better than expected general election result for the PM Abe has helped Japanese stocks to close at record highs. The key Nikkei 225 closed up 1.11% at 21,696, and the futures contract trades comfortably in excess of 21,700. The expectations are for continued stimulation from the BOJ. Conversely the JPY slide on the news with USDJPY gaping and breaking to new highs at 114.10, before filling the gap back to 113.60 to suggest further advance in the coming sessions today. Even the under pressure EURJPY broke over 134.00 before declining under the key 133.80 support. Bond yields also came under pressure following the election result with EGB yields decline, helped by Abe’s victory in Japan, which has underpinned the hopped for longer global central bank stimulus as the ECB prepares to announce its QE extension on Thursday. The 10-year Bund yield is currently down -2.0 bp at 0.43%, as the price rallies to 161.65.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Stuart Cowell
Senior Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 24th October 2017.
FX News Today
European Outlook: Asian stock markets moved mostly higher overnight, as Japan’s equities continued to rally following Abe’s election win and on hopes of ongoing monetary stimulus. the CSI 300 and the ASX also shrugged off losses in the U.S. and moved higher, although the Hang Seng is marginally in the red and the ASX up a mere 0.06%. U.S. stock futures are up, FTSE 100 futures in the red and there is some caution settling in ahead of earnings reports, especially after the recent run higher in global markets. In Europe politics remain high on the agenda, as Catalonia’s government ponders the response to Madrid’s plans to take over direct control, while Brexit uncertainty lingers, although on the continent at least have long started to prepare for alternative suppliers and cut back business ties with the U.K.. Today’s calendar has French business confidence, as well as preliminary PMI readings for the Eurozone as well as the ECB’s bank lending survey.
FX Update: The dollar majors have posted relatively narrow ranges so far today. EUR-USD has settled around 1.1750 after logging a two-week low at 1.1724 late yesterday. Market participant will remain vigilant on developments in Spain, with Catalonian leaders threatening to unleash mass civil disobedience over the independence issue. A plenary meeting on Thursday’s in Catalan’s regional parliament has become a focal point, and there is some speculation that it may be used a cover for a vote on whether to unilaterally declare independence. We expect the euro to be a sell-on-rallies trade in the meantime. Elsewhere, USD-JPY recouped and settled to the mid 113s after logging a low late yesterday at 113.24. The low completed a correction from the three-month high seen yesterday at 114.10, which was seen as markets reacted to the resounding victory of Abe at weekend elections.
Main Macro Events Today
German Services and Manufacturing PMI’s – Expectations – 55.6 and 60.2 respectively
Euro Area Services and Manufacturing PMI’s – Expectations 55.6 and 57.8 respectively
US Services and Manufacturing PMI’s – Expectations 55.6 and 53.5 respectively
Support and Resistance Levels
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Stuart Cowell
Senior Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 25th October 2017.
FX News Today
European Outlook: Asian stock markets moved cautiously higher, Japan underperform as the Nikkei pulled back from record highs and fluctuated with the Yen. It is currently down -0.43% as the Yen strengthened across the board. The Hang Seng recovered from yesterday’s correction, CSI 300 and ASX 200 are also higher, while U.S. and U.K. stock futures are in the red. Investors are turning cautious again and contemplate the recent run higher in global equities. The DAX managed to close above the 13000 mark again yesterday, but yesterday’s inflation warnings from Markit have increased speculation of a higher ECB taper than currently expected and lifted yields sharply and bond markets are likely to remain defensive ahead of tomorrow’s announcement. The focus today will be on the Ifo reading, which is expected to show broadly stable sentiment. The U.K. released the advance reading for Q3 GDP and we are looking for a steady quarterly growth rate of 0.3% q/q, in line with consensus.
Australia CPI slowed to a 1.8% y/y growth rate in Q3 from the 1.9% rate of increase in Q2. The slowing undershot expectations for a steady or faster annual growth rate (we projected 1.9%). CPI grew 0.6% in Q3 (q/q, sa) after the 0.2% rise in Q2. The “core” measures also came in on the soft side. The trimmed mean CPI grew 1.8% y/y, matching the 1.8% pace in Q2. The trimmed mean slowed to a 0.4% clip in Q3 (q/q, sa) from 0.5% in Q2. The growth rate for the weighted median CPI was 1.9%, steady compared to the revised 1.9% pace in Q2 (was +1.8%). The weighted median CPI grew 0.3% in Q3 (q/q, sa) after the revised 0.6% pace in Q2 (was 0.5%). Total and “core” CPI measures remain below the RBA’s 2-3% target band, consistent with no change in rates through the first half of next year. CB’s bank lending survey.
Main Macro Events Today
UK Q3 GDP – Expectations – 0.3% QoQ and 1.4% YoY
US Durable Goods – Expectations – CORE 0.5% and Headline 1.0%
Bank of Canada – Interest Rate Decision, Statement and Press Conference – Expectations – No change to rates but Hawkish outlook
Support and Resistance Levels
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Stuart Cowell
Senior Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 26th October 2017.
FX News Today
After both Markit PMIs as well the Ifo reported mounting capacity pressures, there is a good chance that the ECB will cut back asset purchases by more than the EUR 30 bln that Bloomberg consensus suggests. However, while this is likely to see a knee jerk reaction on forex and bond markets, we expect Draghi to package the taper in a dovish statement and forward guidance, in particular leaving the option for another program extension open to dampen the impact and prevent “overreactions” on forex markets. Draghi will also confirm the sequence of exit steps, with rates expected to remain low well past the end of asset purchases, which with a 9 months program extension would push out any rate hike into 2019. And even with EUR 20 bln per months for another 9 months, the ECB will still extend its balance sheet by a further EUR 180 bln, so monetary policy will not only remain expansionary, it will be even more expansionary than now, with Draghi only gently taking the foot off the accelerator. Indeed, the good news this week was that while Bund yields jumped higher Eurozone peripherals actually mostly outperformed. So at least on that front Draghi can be a bit more confident that “less for longer” will not be a cause of a fresh wave of instability.
The euro has been trading buoyantly into the ECB announcement today. EURUSD clocked a one-week high of 1.1837 earlier in the Asian session, and while EURJPY and EURCHF have remained below their respective 22- and 33-month highs of yesterday, they remain underpinned, with both crosses having picked up from shallow dips. EURUSD has akey support/restance level at 1.1830 which represents the 38.2 Fibonacci retrace level from the September 8th high at 1.2092.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Stuart Cowell
Senior Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 27th October 2017.
FX News Today
European Outlook: Asian stock markets moved mostly higher, led by Japanese stocks, which are heading for another weekly advance on a weaker yen and positive leads from teh U.S. where equities rallied on earnings and increasd hopes for Trump’s tax reform. Australian’s benchmark underperformed and headed south as the government lots its majority following a High Court ruling on the citizenship eligibility of lawmakers. FTSe 100 and U.S. stock futures are higher, but it remains to the seen whether the Eurozone can hold the Dfraghi induced gains from yesterday. And Spanish markets, which outperformed yesterday on reports that Puigdemont may be open to early elections, are likely to retreat again after the Catalan leader backtracked partly and ruled out early elections if Madrid doesn’t stop the process to take over control, thus setting the region on a confrontation course with Madrid, which is expected to get clearance from lawmakers today to directly take over control in the autonomous region. The data calendar is pretty empty today, with only German import prices at the start of the session, as well as French consumer confidence and the ECB’s survey of professional forecasters.
FX Action: USDJPY logged a fresh three-month high, at 114.26, making this the seventh up day out of the last nine sessions. EURJPY and most other yen crosses have also been underpinned over this period. The resounding mandate Abe won at Japan’s election of October 15 imparted a downward bias on the yen, as the prime minister’s favoured policy set includes a continued commitment to ultra-accommodative monetary policy, contrasting to the tightening path of the Fed and other central banks. USDJPY has support at 113.60, while the July peak at 114.49 provides an initial target. The year’s high, posted back in January, is at 118.61.
Main Macro Events Today
US Advanced GDP – Expectations – 2.6%
US UoM Consumer Sentiment – Expectations – 100.8
Support and Resistance Levels
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Stuart Cowell
Senior Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 30th October 2017.
FX News Today
The U.S. calendar is packed with key events and data, but none more important than President Trump’s announcement of his choice for Fed chair. That will have implications for years to come. An announcement will be forthcoming this week; Powell as chair, and Taylor for vice chair?
United States: The FOMC meets this week, the Fed is unanimously expected to leave rates unchanged at its meeting Tuesday, Wednesday. Although the back-to-back quarterly growth rates of 3.1% and 3.0% for Q2 and Q3 could argue for a tightening, inflation remains tame, and more importantly, there has been no Fedspeak to suggest a move is imminent. No press conference. September income and consumption (Monday) will help fine tune the quarter’s GDP outlook after the report of a 3.0% growth rate last Friday. October consumer confidence is forecast rising to 121. The Chicago PMI should fall to 62.0 in October after jumping 6.3 points to 65.2 in September. ADP headlines (Wednesday) along with the October ISM manufacturing numbers. We’re projecting a 200k jump in private payroll from the ADP, while the manufacturing index should dip to 58.5. October vehicle sales (Thursday) should are expected to decline amid ongoing hurricane disruptions. September construction spending also is likely to be distorted by the various hurricane effects. Nonfarm payrolls (Friday) are forecast surging 320k -400k in October, as the labor market gets back in gear following the hurricane disruptions that knocked employment down by 33k in September. The unemployment rate should hold at 4.2%. The ISM nonmanufacturing index (Friday) should dip to 58.5 in October (median 58.5), giving back some of the 4.5 point gain to 59.8 in September, which was the highest since August 2005.
The earnings slate remains very heavy, though not as bad as last week, which was the busiest for the Q3 season
Canada: August GDP (Tuesday) is expected to rise 0.1% m/m after the flat reading in July. The industrial product price index is seen expanding 0.5% in September after the 0.3% rise in August, as firmer gasoline prices more than offset the drag of a stronger loonie. Employment (Friday) is projected to grow 20.0k in October after the 10.0k gain in September. The unemployment rate is seen at 6.2%, matching September’s rate. Average weekly earnings are expected to expand at a 2.2% y/y pace, matching the growth rate in September. The trade deficit (Friday) is anticipated to narrow to -C$3.0 bln in September from -C$3.4 bln in August. Poloz and Wilkins due to speak Tuesday.
Europe: German HICP (Monday) is seen steady at 1.8%, French inflation reading (Tuesday) likely to nudge higher to 1.2%. The overall Eurozone HICP (Tuesday) should be unchanged at 1.5%. Eurozone manufacturing PMI (Thursday) expected to be confirmed at 58.6. Advanced readings for French GDP and overall Eurozone Q3 GDP (both Tuesday) to show quarterly growth rates that are in line with the first quarter at 0.5% and 0.6% respectively. Spanish GDP meanwhile is expected to nudge lower slightly to 0.8%. The recovery clearly has reached the job market and PMIs also suggest ongoing job creation as companies struggle to fill still strong orders growth and expand production. The German labour market is already very tight and jobless numbers (Monday) are in our view likely to pick up slightly after a stronger than expected dip in September. Still, even the expected pick up of 4K, would leave the October jobless rate at a very low 5.6%. For the Eurozone unemployment rate (Tuesday) we are looking for a decline to 9.0% from 9.1%
UK: UK data reports over the last week have mostly disappointed. The calendar is highlighted by the BoE’s November Monetary Policy Committee (announcing Thursday), which will be accompanied by the publication of its quarterly Inflation Report. Following the BoE’s guidance, markets are fully expecting the central bank to make its first hike of the repo rate in 10 years, taking it to 0.50% from 0.35%.We expect the BoE to package the tightening in dovish guidance. Data releases this week include September data from the BoE on lending (Monday), which we expect to show mortgage approvals come in near unchanged at 66.0k, October Gfk consumer confidence (Tuesday), which we forecast dipping to -10 from -9 in the month prior, and the October PMI surveys. We expect the manufacturing PMI (Wednesday) to come in at 55.9 which would be the same reading as in September. We anticipate the servicers PMI (Friday) in at 53.3 after 53.6 in the month previous.
China: CFLP October manufacturing PMI (Tuesday) is forecast sliding to 52.0 from 52.4. The Caixin/Markit PMI (Wednesday) likely eased to 50.5 from 51.0.
Japan: The BoJ headlines and on Tuesday, no policy changes are expected. The Bank will likely recommit to ultra-accommodative policy settings. As for data, September retail sales (Monday) are expected to dip to a 0.5%. September unemployment (Tuesday) is seen unchanged at 2.7%, with the job offers/seekers ratio likely to tick up to 1.53. PCE (due Tuesday), should show consumption at a 0.5% y/y pace from 0.6%. September industrial production (Tuesday) is penciled in at -2.0% y/y, tumbling from August’s 2.0%. September housing starts (Tuesday) are expected to contract further to a -3.0% y/y rate from -2.0% previously, while construction orders are also slated (Tuesday). Also on the slate are October manufacturing PMI (Wednesday) and October consumer confidence (Thursday), expected at 43.5 from 43.9. Japan is closed Friday for Culture Day.
Australia: CPI (Wednesday) is the focus this week, with a 0.9% gain expected in Q3 after the tame 0.2% rise in Q2. The trade price report (Thursday) is expected to reveal a 1.0% drop in Q3 import prices after the 0.1% dip in Q2. Export prices are seen falling 3.0% in Q3 following the 5.7% pull-back in Q2. The Q3 PPI is due Friday. Reserve Bank of Australia Deputy Governor Debelle speaks (Thursday) on “Uncertainty.”
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Stuart Cowell
Senior Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 31st October 2017.
FX News Today
European Outlook: Asian stock markets moved sideways overnight. U.K. and U.S. stock futures are little changed. Japanese markets pared losses as investors bought on dips, amid hopes of better earnings. The BoJ left policy on hold and while new board member Kataoka opted for additional easing, against a majority in favour of unchanged policy, the announcement had little impact on markets, with investors remaining hesitant to push indices higher ahead of a 3-day weekend in Japan and U.S. jobs data later in the week. The BoJ keeps the -0.1% rate with target remaining at 2% inflation and the 10-year JGB yield target at around 0%. In Europe most markets closed narrowly mixed on Monday, with only Spain rallying as Catalonia risks are being priced out. Today’s calendar has inflation data from Italy, France and for the Eurozone as a whole as well as GDP numbers from France and the Eurozone, the former was already released and came in at 0.5% q/q, as expected, but after last week’s ECB meeting the data won’t have any impact on the policy outlook.
FX Update: The euro rally of yesterday has run out of puff, with EURUSD settling around 1.1630-40, below the 1.1657 high, while EURJPY has remained heavy, near yesterday’s 131.45 low. The yen, meanwhile, remains underpinned despite dovish guidance from the BoJ. USDJPY logged a 12-day low at 112.95, and AUDJPY has remained near the seven-month lows seen yesterday. The BoJ did the expected, and left policy on hold at its meeting today. New board member Kataoka voted for additional easing, while Governor Kuroda espoused dovish guidance in his press conference, warning that “abnormal” yen appreciation would hurt the economy and accelerate deflation, and that the central bank will continue with “powerful” accommodative monetary policy. In the U.S., political intrigue along with the announcement, promised to be made tomorrow, of the new Fed chair, will remain focal points for markets.
Main Macro Events Today
Eurozone GDP and Core CPI – Expectations – at 0.5% q/q from 0.6% and at 1.2% from 1.3% respectively.
Canadian GDP- Expectations -0.1% increase in August.
BoC – Governor Poloz Speaks before the House of Commons Standing Committee on Finance, in Ottawa.
New Zealand Labor Data – Expectations – 0.1% decline in Unemployment Rate for Q3.
Support and Resistance Levels
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Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.