Dagelijkse Markt Analyse 11 Januari 2019

DAGELIJKSE MARKT ANALYSE 31 MAART 2014

• Euro May Fall on ECB Easing Bets as CPI Drops to Lowest in 4 Years
• US Dollar May Rise if Yellen Commentary Maintains Hawkish Overtones
• Aussie Dollar Underperformed in Asia, Profit-Taking a Possible Driver

March’s preliminary Eurozone CPI report headlines the economic calendar in European hours. Expectations call for the headline year-on-year inflation rate to decline to 0.6 percent, the lowest since November 2009.

Leading cues from March PMI data seemingly bolster the probability of a soft outcome. Weak price growth readings may fuel concerns about continued disinflation and drive speculation about a near-term expansion of ECB stimulus efforts ahead of this week’s ECB policy announcement, weighing on the Euro.

Rest van het artikel

DAGELIJKSE MARKT ANALYSE 1 APRIL 2014

• Eurozone PMIs, German Jobs Figures Unlikely to Dislodge the Euro
• British Pound May Not Find Volatility in Manufacturing PMI Print
• Australian Dollar Little-Changed After Uneventful RBA Rate Decision

A seemingly busy docket of Eurozone economic activity data seems unlikely to produce meaningful direction cues for the Euro. The final revision of March’s Eurozone Manufacturing PMI reading is expected to confirm factory-sector activity growth slowed for a second consecutive month. Separately, Germany’s Unemployment report is forecast to show the ranks of the jobless shrank by 10,000 over the same period, marking the smallest drawdown in four months.

Rest van het artikel

DAGELIJKSE MARKT ANALYSE 2 APRIL 2014


• British Pound Hoping for a Lifeline in Construction PMI Uptick
• Euro Unlikely to See Strong Response to Another Soft PPI Print
• US Dollar Eyeing ADP Jobs Data for Near-Term Direction Cues

The UK Construction PMI report headlines a quiet European economic calendar. Expectations suggest the pace of activity growth in the house-building sector narrowly accelerated in March. The British Pound has shown itself responsive to economic activity data and its implications for BOE policy bets: the currency slid alongside the benchmark 10-year Gilt yield yesterday in the wake of a disappointing Manufacturing PMI release. With that in mind, an upbeat result on today’s report may offer Sterling a lifeline, although technical positioning is looking a bit ominous after yesterday’s selloff.

Rest van het artikel

DAGELIJKSE MARKT ANALYSE 3 APRIL 2014

• Euro at Risk if ECB’s Draghi Hints Stimulus Expansion Plans in the Works
• US Dollar May Rise on Upbeat ISM Data But Follow-Through to be Limited
• Aussie and NZ Dollars Declined in Asia, Soft Chinese Data a Likely Catalyst

The monetary policy announcement from the European Central Bank headlines the economic calendar in the hour ahead. Economists’ consensus forecasts point to no changes this time around and the traders are pricing in a meager 3.8 percent probability of an interest rate cut. For our part, we continue to think the ECB is waiting for its Asset Quality Review (AQR) to reveal the gap in policy transmission that prevents ultra-low borrowing costs in the interbank market from being passed through into the broader economy. Deepening disinflation may prompt a rhetorical effort however, with the Euro vulnerable if ECB President Mario Draghi overtly suggests that policymakers are drawing up plans for stimulus expansion at the press conference following the announcement.

Rest van het artikel

DAGELIJKSE MARKT ANALYSE 4 APRIL 2014

• Dollar and S&P 500 Poised for NFP-Driven Volatility
• Euro Slides Despite ECB Hold on Rates, Stimulus
• Japanese Yen Pairs Rally Over-Extended Ahead of BoJ

Dollar and S&P 500 Poised for NFP-Driven Volatility
It doesn’t take more than a glance at the charts to see there is serious tension in the markets. On the one hand, the Dow Jones FXCM Dollar Index (ticker = USDollar) is at the top of a two-month range. On the other, the S&P 500’s arc to record high has tapered off steadily from its aggressive drive through the opening two days of the week. For the traditional risk-reward scale, that means we have both the FX market’s preferred safe haven at the top of its recent trading band while the banner man for broader capital market’s speculative stands at a record high. While the greenback has slackened its tether to risk trends, this positioning nevertheless reflects an overextended market. And, all that is needed to trigger a sharp rebalancing is the proper catalyst. Can the NFPs be that spark?

Rest van het artikel

DAGELIJKSE MARKT ANALYSE 7 APRIL 2014

• German Industrial Production, Swiss CPI Likely to Pass Without Fanfare
• AQR Cues in the ECB Annual Report May Be Market-Moving for the Euro
• Aussie Dollar Down, Japanese Yen Higher as Stocks Drop in Asian Trade

A relatively quiet European economic calendar is headlined by February’s German Industrial Production and March’s Swiss Consumer Price Index figures. The former report is due to the year-on-year output growth rate marginally slowed to 4.7 percent from the 5 percent recorded in February. The latter is set to put the headline inflation rate at -0.1 percent, matching the prior month’s result. Neither release is likely to produce a significant response from price action given their limited implications for traders’ ECB and SNB monetary policy outlook.

Rest van het artikel

DAGELIJKSE MARKT ANALYSE 8 APRIL 2014

• NZ Dollar Continued to Correct Higher, Yen Ignored the BOJ Overnight
• Pound, Franc Unlikely to Move on Industrial Production and Jobs Data
• US Dollar May Find Renewed Support in Taper-Supportive “Fed-Speak”

The New Zealand Dollar continued to correct higher for a second consecutive day in overnight trade. A lull in market-moving event risk seemingly opened the door for further profit-taking after the Kiwi significantly underperformed last week, sliding 0.72 percent against its US namesake. The Japanese Yen edged higher as Asian stocks followed Wall Street lower, boosting haven demand for the safety-linked currency. A monetary policy announcement from the Bank of Japan proved uneventful as Governor Haruhiko Kuroda and company kept things unchanged as expected.

Rest van het artikel

DAGELIJKSE MARKT ANALYSE 9 APRIL 2014

• Dollar Suffers Biggest Drop Since October as Yields Slide
• Japanese Yen Crosses Plunge, Threaten Large Scale Reversal
• British Pound Rallies as Data Solidifies BoE Rate Hike Hopes

Dollar Suffers Biggest Drop Since October as Yields Slide
Risk trends have little to do with the dollar’s performance as of late. Instead, the currency seems to be finding its bearings from interest rate expectations and the capital flows they are encouraging. On the sentiment side of the benchmark, we found equity markets stabilizing after the sharp Friday / Monday tumble that followed last week’s US employment statistics. The FX-based VIX index, meanwhile, extended its slump to 16-month lows (6.92 percent) to deflate any expectations that an impending explosion in financial markets would necessitate an extreme liquidity haven like the greenback. This is more of a contributing aspect to the dollar’s weakness rather than the driver. Alternatively, rate forecasts are under power. The two-year Treasury yield is stabilizing off is 17 percent off its 7-month high and 3-month market rate is at a record low.

Rest van het artikel

DAGELIJKSE MARKT ANALYSE 10 APRIL 2014

• British Pound May Correct Lower After a Status-Quo BOE Rate Decision
• Aussie Dollar Jumps on Jobs But Chinese Export Slump Tempers Advance
• Japanese Yen Outperforms on Haven Demand as Nikkei 225 Trades Lower

A monetary policy announcement from the Bank of England headlines the economic calendar in European hours. On the whole, UK data outcomes have been broadly stable relative to consensus forecasts since the March sit-down. Meanwhile, leading PMI data suggests manufacturing- and service-sector growth accelerated at the slowest pace since June 2013. Furthermore, the latest set of CPI figures put the headline year-on-year inflation rate at just 1.7 percent, the lowest since October 2009.

Rest van het artikel

DAGELIJKSE MARKT ANALYSE 11 APRIL 2014


• Aussie, NZ Dollars Sink as on Risk Aversion as Asian Stocks Follow Wall St. Lower
• Euro May Correct Lower if March’s Final German CPI Print is Revised Downward
• US Dollar May Find Fuel for a Modest Bounce in PPI, UofM Confidence Figures

The Australian and New Zealand Dollars underperformed in overnight trade, sliding as much as 0.4 and 0.6 percent respectively against their major currency counterparts. The sentiment-linked currencies tracked a selloff across Asian stock exchanges downward. The MSCI Asia Pacific regional benchmark equity index slid 1 percent in a move that seemed to follow on from blood-letting on Wall Street earlier in the day.

Rest van het artikel

DAGELIJKSE MARKT ANALYSE 14 APRIL 2014

• Euro Falls as ECB’s Draghi and Coeure Talk Up Stimulus Expansion
• Upbeat US Retail Sales Data May Boost Fed “Taper” Continuity Bets
• US Dollar May Follow UST Yields Down as S&P 500 Futures Decline

The Euro came under pressure to start the trading week, hobbled by comments by ECB President Mario Draghi and Executive Board member Benoit Coeure. Draghi told the IMF spring gathering that the exchange rate “has become more and more important for price stability” in recent months, warning that keeping policy as accommodative as it is today given further appreciation would “require further monetary policy stimulus”. Coeure elaborated on this theme, saying an ECB asset-buying effort akin to QE might target mid- to longer-term maturities and hinting that completing the AQR was the likely prerequisite to action (as we have argued).

Rest van het artikel

DAGELIJKSE MARKT ANALYSE 15 APRIL 2014

• Dollar Bounces Along with Yields, CPI a Key Benchmark
• British Pound Bulls Fear Weaker Inflation Statistics
• Euro Takes Another Hit as ECB’s Threats Pick Up Intensity

Dollar Bounces Along with Yields, CPI a Key Benchmark
US equities may have put up a decent rebound to open the week, but that wouldn’t stop the dollar from doing the same. The S&P 500 jumped 0.8 percent Monday while the Dow Jones Industrial Average (ticker = USDollar) climbed 0.1 percent itself. A simultaneous rise from the benchmark risk measure and a currency normally relegated to its liquidity status is not particularly surprising, however, as we have seen the greenback draw more of its bearings from yield forecasts than traditional sentiment tides as of late. As it happens, the two-year Treasury yield rose 3.4 percent to 0.367 percent on the same day to help put the fire out of the past two week’s tumble in FOMC speculation. If this bounce is to forge new progress, the upcoming CPI release will have to play its part. Evan a mid-2015 hike needs some nascent inflation pressure.

Rest van het artikel

DAGELIJKSE MARKT ANALYSE 16 APRIL 2014

• Pound Unlikely to Find Momentum in an On-Trend Jobless Claims Decline
• US Dollar Rebound May Continue to Pro-Taper Tone in Fed’s Beige Book
• NZ Dollar Weakens as Soft CPI Erodes RBNZ Bets, Yen Falls as Stocks Rise

The March set of UK Jobless Claims figures headlines the economic calendar in European hours. Consensus forecasts are pointing to a 30k decline in applications for unemployment benefits. Such an outcome would fall in line with the 12-month trend average (-30.3k), offering little impetus for traders to reshape their Bank of England policy bets following the release. With that in mind, the release seems unlikely to generate a meaningful response from the British Pound absent a significant deviation from expectations.

Rest van het artikel

DAGELIJKSE MARKT ANALYSE 17 APRIL 2014

• Dollar Advance Stalls as Yellen Comments and Beige Book Chewed
• Euro: Should We Worry About Demands for More Currency Intervention?
• British Pound Rallies on Strong Jobs Data, But Not Enough for Next Bull Leg

Dollar Advance Stalls as Yellen Comments and Beige Book Chewed
With Friday’s liquidity drain closing in, the dollar is focusing even more intently on the ebb and flow in interest rate expectations for its bearings. Against its major counterparts, the greenback moved higher against all but the pound and Australian dollar - both currencies charged by heavier fundamental catalysts. Though generally higher on the day, the lack of conviction would mean the equally-weighted Dow Jones FXCM Dollar Index (ticker = USDollar) would break its three-day rally with a 0.1 percent slide. Yet, if moderation is the course ahead and a rebound in Treasury yields is the course, the greenback may find itself relatively unimpeded in a slow rebound through week’s end.

Rest van het artikel

DAGELIJKSE MARKT ANALYSE 22 APRIL 2014

• Australian Dollar Outperforms as Markets Return from Easter Holiday
• Quiet European Calendar Leaves “Re-Liquefaction” to Drive FX Rates
• US Dollar Eyes Existing Home Sales Data to Inform QE “Taper” Bets

The Australian Dollar outperformed in otherwise quiet overnight trade, rising as much as 0.4 percent on average against its leading counterparts. A discrete catalyst for the move is not readily apparent. The advance did appear to track gains in Australian 10-year bond prices and the S&P/ASX 200 stock index however. That means the uptick may have reflected little more than a re-establishing of positions after the long Easter break that had Australian markets closed since last Thursday.

Rest van het artikel

DAGELIJKSE MARKT ANALYSE 23 APRIL 2014

• Australian Dollar Plummets as Soft CPI Erodes RBA Rate Hike Bets
• Euro May Decline if Soft PMI Data Boosts ECB Stimulus Speculation
• Minutes from April’s BOE Meeting Unlikely to Stir Pound Volatility

The Australian Dollar sank in overnight after first-quarter CPI data fell short of expectations, pouring cold water on investors’ RBA interest rate hike outlook. The headline year-on-year inflation rate registered at 2.9 percent, falling short of the 3.2 percent reading forecast by economists ahead of the release.

While the RBA has advocated a “period of stability” on benchmark borrowing costs in recent policy meetings, markets have been busy speculating on what the next move will be. Within that context, softer price growth readings undermine the perceived probability of a hike when the standstill ends, eroding yield-based support for the Aussie and sending the currency lower.

Rest van het artikel

DAGELIJKSE MARKT ANALYSE 24 APRIL 2014

• Dollar De Facto Winner in a Reemerging Currency War?
• Euro Traders Will Pay More Attention to Draghi than Data
• British Pound Heading to Inevitable Break

Dollar De Facto Winner in a Reemerging Currency War?
Value in the currency world is assessed on a relative basis. A simple improvement or decline in one unit’s fundamental backdrop does not necessarily secure a strong trend. Sometimes, a currency can find itself in a position where it is assessed to be the ‘best of the worst’. Could the dollar generate strength through this unflattering yet nevertheless supportive distinction? From the docket this past session, the data seemed to fall short of the influence required to tap into the greenback’s deeper fundamental veins. A sharp 14.5 percent drop in new home sales through March – the second largest drop in four years – was a substantial headline to growing fears of a stalled housing sector recovery. Markit’s manufacturing PMI survey for April similarly missed the mark and dimmed investors’ growth expectations modestly.

Rest van het artikel

DAGELIJKSE MARKT ANALYSE 25 APRIL 2014

- U.K. Retail Sales to Contract for Second Time in 2014
- Private Sector Spending Increased 7 of the 12 Months in 2013

The British Pound may face a larger correction over the remainder of the week as U.K. Retail Sales are expected to contract 0.5% in March.

Why Is This Event Important:
A decline in private sector consumption may prompt a bearish reaction in the GBP/USD as it limits the Bank of England’s (BoE) scope to normalize monetary policy sooner rather than later, but the data print may exceed market expectations as Governor Mark Carney sees a stronger recovery in 2014.

Rest van het artikel

DAGELIJKSE MARKT ANALYSE 28 APRIL 2014

• Gold and silver vulnerable near key levels as traders re-assess Ukrainian turmoil
• Crude exposed to souring investor sentiment with technicals suggesting further falls
• Top-tier US economic data spells the potential for breakouts in the commodities space


The precious metals are edging higher in Asian trading as tensions in Eastern Europe continue to simmer. Meanwhile, crude oil is recovering some of the ground it lost on Friday as traders cautiously return to risk-sensitive assets. A light economic calendar over the next 24 hours is likely to leave guidance for the commodities space in the hands of risk-appetite, while a busy docket over the remainder week is likely to spell a resurgence in volatility for the commodities space.

Rest van het artikel

DAGELIJKSE MARKT ANALYSE 29 APRIL 2014

• Dollar Traders Count Down Hours to FOMC Decision
• British Pound Ready for a Breakout on 1Q GDP Release
• Euro Slowly Rising Again, Expect Another ECB Threat?

Dollar Traders Count Down Hours to FOMC Decision
Risk trends were mixed on the day and US yields were modestly higher on the day. For the dollar that would translate into a mixed performance Monday. The greenback is waiting on one of two themes – risk trends or yield forecasts – to gain serious momentum and sweep it to its next trend. For the next 24 hours, that singular focus may leave the greenback adrift. Why? Knowing that much more significant event risk is scheduled for Wednesday and Friday, traders will be hesitant to raise the stakes on their bullish or bearish dollar bets when they could find their positions immediately off the market by a FOMC shift, GDP pace change or big surprise in April employment figures. For the best lead in on risk themes watch USDJPY. For rate forecasts, EURUSD is ideal. Meanwhile, remain dubious of the sentiment data’s impact today.

Rest van het artikel