Dagelijkse Markt Analyse 11 Januari 2019

DAGELIJKSE MARKT ANALYSE 30 APRIL 2014

• Dollar and Dow Ready for Fed and 1Q Growth Update
• Euro More Sensitive to Inflation Update than Growth Data
• Yen Crosses: Is There Still Confusion Over BoJ’s Intentions?

Dollar and Dow Ready for Fed and 1Q Growth Update
The dollar and financial markets were less worried about forging a major trend this past session and far more interested in preparing for the upcoming session’s major event risk. There is plenty of top-tier calendar fodder, but the FOMC rate decision and US 1Q GDP statistics stand out over the rest. This combination of releases has the scope to not only reinvigorate US interest rate speculation – sidelined since the liquidity drain – they could actually change the course on broader risk trends given the proper outcomes. The impact of this wave depends on the market’s susceptibility and the actual outcomes. At best, we know there is a reasonable probability of volatility and a lower level of certainty that it will encourage a dollar advance. However, the market’s performance heading into the release is near certain: retracements and consolidation in preparation of the release.

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DAGELIJKSE MARKT ANALYSE 1 MEI 2014

• Dollar Ends Day Lower but FOMC Holds Back the Bears
• Euro Advance on Inflation, Growth Updates Under ECB Watch
• Yen Crosses Retreat as BoJ Further Quells QE Upgrade Hopes

Dollar Ends Day Lower but FOMC Holds Back the Bears
This past session offered up a remarkably weak 1Q US GDP release which made the Federal Reserve’s decision to uphold withdrawal from stimulus even more surprising. Yet, through this back and forth, neither the dollar nor broader risk trends would win a critical breakout or forge new trend. Isthis unwavering stoicism a reflection of the market’s general state – where complacency is so engrained that the market’s will refuse to reevaluate even under duress? Or is this the perfect balance of positive and negative event risk that the currency and general risk trends can hold steady? It’s likely a mixture of both.

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DAGELIJKSE MARKT ANALYSE 2 MEI 2014

• Gold and silver tease at a break below key support ahead of Non-Farm Payrolls
• Ebbing Ukrainian concerns may prompt further unwinding of fear-positioning in gold
• Base metals vulnerable to further declines on disappointing Chinese figures next week

The precious metals are at a critical juncture ahead of the market-moving US payrolls figures due later in the session. Another disappointing reading would likely sink the US Dollar and as such could act as the saving grace for gold and silver as they trade near key levels of support. Meanwhile, the base metals including copper are likely to look to Chinese economic data next week for guidance.

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DAGELIJKSE MARKT ANALYSE 5 MEI 2014

• HSBC ChinaManufacturing PMI 48.1 in April vs. 48.4 Expected and 48.3 Prior
• AUD/JPY falls as markets shift to the Yen in a risk averse move
• USD/JPY drops below a key technical level at 102.00

The Australian Dollar dropped against the Yen following a weaker-than-expected China PMI print, which may have fuelled concerns over a further deceleration of economic growth in the world’s second largest economy. The HSBC China Manufacturing PMI gauge came in at 48.1 in April, which was below expectations of a 48.4 figure and compared to 48.3 in March.

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DAGELIJKSE MARKT ANALYSE 6 MEI 2014

• Gold and silver safe-haven demand has been bolstered by intensifying Ukrainian turmoil
• Crude oil traders may look past the upcoming US Trade balance figures as supply concerns fester
• Base metals vulnerable to further declines on disappointing Chinese figures this week

Gold and silver traders are treading cautiously during the Asian session following a jump in prices overnight as intensifying geopolitical risks bolstered safe-haven demand for the precious metals. Meanwhile, a better-than-anticipated US services index reading failed to fuel gains for crude oil as WTI continues to struggle below a key technical level of resistance at $100 a barrel. While the upcoming US trade balance figures headline the economic calendar, the reaction from oil and the US Dollar may be muted given the limited implications for Fed policy.

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DAGELIJKSE MARKT ANALYSE 7 MEI 2014

• NZ Dollar Sinks as RBNZ’s Wheeler Threatens FX Market Intervention
• Euro May Not Find Volatility in German Factory Orders, EZ PMI Data
• US Dollar Hoping for a Lifeline as Fed’s Yellen Testifies to Congress

The New Zealand Dollar underperformed in otherwise quiet overnight trade following ominous comments from RBNZ Governor Graeme Wheeler. The central bank chief said the currency is unsustainably overvalued and threatened to intervene against the exchange rate if fundamentals worsen. The Kiwi slid as much as 0.6 percent on average against its leading counterparts.

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DAGELIJKSE MARKT ANALYSE 8 MEI 2014

• Gold vulnerable to easing Ukrainian tensions following tumble overnight
• WTIcracks $100 handle but may be exposed to souring sentiment
• Silver downtrend remains intact with prices eyeing key support at $19.00

Gold and silver have stabilized in Asian trading after plummeting overnight as ebbing geopolitical tensions and an upbeat tone from Fed Chair Janet Yellen weighed on prices. Meanwhile positive investor sentiment and a reported drop in crude oil inventories have pushed WTI above the psychologically-significant $100 a barrel handle. A light US economic docket heading into the end of the week leaves the commodities space to take cues from broader-risk trends, which may leave oil prices exposed to a pullback.

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DAGELIJKSE MARKT ANALYSE 9 MEI 2014

• Dollar Gains on Euro’s Weakness, Rate Forecast Needed for Trend
• Euro Tumbles after ECB Warns of Easing in June
• British Pound Faces Data Today and Heavy Hitters Next Week

Dollar Gains on Euro’s Weakness, Rate Forecast Needed for Trend
Though ultimately little changed on the day Thursday, the dollar put in for exceptional volatility. Early session losses were completely reversed with distinct help from the EURUSD. When it comes to a relative value market, material counter-currency flows can strong-arm others. Given that this is the most liquid currency by a wide margin, the biggest drop in 8 weeks and a severe swell in volatility would ensure the greenback mirrored the action. Outside of that benchmark pair though, the dollar’s pair was mixed and notably leaned to the bearish side. A range of Fed speakers was the highlight of the newswires, but neither Chairwoman Janet Yellen nor her colleagues would say anything material enough to necessitate a change in positioning. For the dollar to take trend either a collapse in general risk trends or a return to hawkish rate forecasting is needed. On the later topic, next week’s CPI report will carry a material impact on the discussion.

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DAGELIJKSE MARKT ANALYSE 12 MEI 2014


• Euro May Lead Amid Correction, Offering a Short Trade Setup
• Japanese Yen Soft in Asia as Nikkei 225 Futures Gap Upward
• New Zealand Dollar Rebounds After Last Week’s Blood-Letting

The economic calendar is quiet in European and US trading hours, offering little by way of market-moving event risk. That opens the door for corrective price action as investors digest last week’s late surge of activity that took the CVIX index of currency market volatility to an eight-day high.

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DAGELIJKSE MARKT ANALYSE 13 MEI 2014

• Dollar Runs into Resistance that Requires a Fundamental Break
• Euro Slowly Slipping as Stimulus Threat Sinks into Market, Pricing
• British Pound Outstrips Its Counterparts as Rate Hopes Hit New Highs

Dollar Runs into Resistance that Requires a Fundamental Break
Monday’s trading session was framed by a high profile breakout in risk trends – namely US equities. At the same time, the US Dollar slowed into resistance. That is a meaningful reversal in roles from last week where the S&P 500 was chopping back and forth in an ill-defined range and EURUSD collapsed in its biggest two-day slump since the Fed announced a sustained path of Tapering on March 19. Both moves seem to fit larger trends. The US stock index has kept its general bullish bearing for five years, and the hesitation from the world’s most liquid currency pair maintains the floor of a 22-month trend. By most accounts, this looks like a return to dominant trends. Technically speaking, this is accurate. From a fundamental perspective, however, this balance is unlikely to last.

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DAGELIJKSE MARKT ANALYSE 14 MEI 2014

• All Eyes on the Bank of England Inflation Report in European Trade
• Currency Markets Appear Primed for a Hawkish BOE Policy Posture
• British Pound Likely to Drop as BOE Rate Hike Outlook Disappoints

The publication of the Bank of England Quarterly Inflation Report headlines the economic calendar in European hours. The document’s release has been the key inflection point for BOE monetary policy for some months now, with officials using the accompanying press conference as the primary venue to introduce pivotal changes in strategy.

February’s report carried a critical shift in the BOE’s approach to forward guidance. The Bank changed gears from an approach focused on reaching a 7 percent unemployment rate as the trigger to consider interest rate hikes to the more opaque notion of absorbing overall “spare capacity” in the economy before tightening.

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DAGELIJKSE MARKT ANALYSE 15 MEI 2014

• First-Quarter Eurozone GDP Data Carries Downside Surprise Risk
• Euro Gains Unlikely to Prove Lasting Even on Upbeat GDP Print
• US Dollar May Rise as April’s US CPI Figures Boost Fed Outlook

The preliminary estimate of the first-quarter Eurozone GDP reading headlines the economic calendar in European trading hours. Output is expected to have added 0.4 percent in the three months through March, marking the strongest pace of expansion in three years. Economic data outcomes from the currency bloc have proven increasingly disappointing in recent months, with data from Citigroup revealing that realized results are now trailing analysts’ estimates by the largest margin in over 11 months. That warns of the possibility of a downside surprise.

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DAGELIJKSE MARKT ANALYSE 16 MEI 2014

• Dollar and Rate Outlook Offered Little Help from CPI
• Euro: Expectations for Builds on Weak GDP Release
• Japanese Yen Crosses Starting to Push Against Risk

Dollar and Rate Outlook Offered Little Help from CPI
A tumble from the S&P 500 marked another abrupt decline in ever-fickle risk trends. However, Dollar traders have grown too familiar with the flippant views of risk trends and were too engrossed with interest rates to try and ride a bullish response from the benchmark currency. Marking the contrast, the benchmark equity index tumbled 1.0 percent while the Dow Jones FXCM Dollar Index (ticker = USDollar) ended an otherwise volatile day unchanged. This is not to mean that the greenback’s position as a safe haven is forever broken. Rather, traders and investors have grown wary of short-lived sentiment shifts that seem manufactured simply for deriving the next quick rebound. With each day that passes, it becomes increasingly clear that the markets will only revive genuine momentum with a cleansing risk aversion move.

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DAGELIJKSE MARKT ANALYSLE 19 MEI 2014

• New Zealand Dollar Correction Helped by Supportive PSI, PPI Data
• Euro Unlikely to Find Direction Cues in Construction Output Figures
• US Dollar May Rise if Officials’ Comments Support “Tapering” QE

The New Zealand Dollar corrected higher as markets digested a swift two-day selloff at the end of last week. Supportive economic data likewise helped. The Performance of Services Index rose to 58.9 in April, suggesting activity in the non-manufacturing sector grew at the fastest pace in over six years. Separately, first-quarter PPI figures put the year-on-year wholesale inflation rate at 0.9 percent, a welcome rebound after the index recorded its first negative print in a year in the three months to December 2013. The currency rose as much as 0.3 percent on average against its leading counterparts.

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DAGELIJKSE MARKT ANALYSE 20 MEI 2014

• British Pound Likely to Fall if UK CPI Falls Short of Expectations
• US Dollar Hopes to Find Strength in Pro-Taper Fed Commentary
• Australian Dollar Sinks as RBA Minutes Dent Case for Rate Hikes

April’s UK CPI report headlines the economic calendar in European trading hours. Expectations call for the headline year-on-year inflation rate to tick higher to 1.7 percent, marking a modest recovery from a four-year low of 1.6 percent recorded in the prior month. UK economic data has increasingly deteriorated relative to expectations since late March however, hinting analysts may be overly optimistic in their outlook and opening the door for a downside surprise. Leading PMI data has also offered some (albeit mixed) evidence of softer pricing trends in April. A weaker-than-expected outcome is likely to undermine speculation about near-term policy normalization at the Bank of England, weigh on the British Pound. We remain short GBPJPY.

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DAGELIJKSE MARKT ANALYSE 21 MEI 2014

• BOE May Meeting Minutes May Disappoint Hawks, Weighing on the Pound
• US Dollar May Get Another Push Higher from Pro-“Taper” FOMC Minutes
• Yen Gains After BOJ Rate Decision, Aussie and Kiwi Fall on Risk Aversion

The release of minutes from this month’s Bank of England monetary policy meeting headlines the economic calendar in European trading hours. As we discussed in detail last week in anticipation of the central bank’s quarterly Inflation Report, the thinking on the rate-setting MPC committee may be far less hawkish than the markets are primed to hear. With that in mind, rhetoric pushing back against near-term interest rate hike expectations in today’s release may weigh on the British Pound and we remain short GBPJPY.

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DAGELIJKSE MARKT ANALYSE 22 MEI 2014

• Euro at Risk if Disappointing PMIs Bolster ECB Stimulus Speculation
• British Pound Rally May Not Find Added Fuel in 1Q UK GDP Revision
• Australian Dollar Rebounds, Yen Drops on Upbeat Chinese PMI Data

The preliminary set of May’s Eurozone PMI data headlines the economic calendar in European hours. The region-wide composite measure is expected to tick gently lower to 53.9, down from a three-year high at 54.0 recorded in the prior month. Fundamental news-flow from the currency bloc has increasingly disappointed relative to consensus forecasts over recent months (according to data from Citigroup). That suggests analysts are underestimating the degree of malaise in the area, opening the door for a downside surprise. Such an outcome may amplify bets on an imminent expansion of ECB stimulus, compounding downward pressure on the Euro after it made a tentative technical break lower yesterday.

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DAGELIJKSE MARKT ANALYSE 23 MEI 2014

• Dollar Advances to 6 Week High, On Verge of Critical EURUSD Break
• Euro: Economic Activity Readings Push ECB Further Towards Stimulus
• Japanese Yen Crosses Rebound – How Long Does It Last?

Dollar Advances to 6 Week High, On Verge of Critical EURUSD Break
It’s happening again. The S&P 500 is parked just below a record high at the same time the Dow Jones FXCM Dollar Index (ticker = USDollar) is tentatively turning a bear trend having closed a six-week high. Has the position of the currency as a ‘safe haven of last resort’ changed to one of a carry currency? No. This is a reflection of the quality of sentiment we are dealing with. Rather than look at the relationship between benchmark ‘risk’ gauge and ‘safe haven’, we can also refer to activity measures on the high-flying equity measure. Volatility already flat-lined recently below 12 percent – a rare occurrence over the past seven years – and this past session’s push above 1,890 was forged on one of the lowest readings of volume outside of holidays on record. This has the characteristics of a zombie bull market where complacency and habit dictate progress rather than committed positioning. With Monday’s market holiday, a struggle to rekindle momentum behind either a bullish break or bearish reversal should be expected. In the meantime, that may not prevent the dollar from edging out more serious technical levels. The trouble for the Euro, pullback from AUDUSD and GBPUSD, and the risk move on USDJPY may inadvertently forge a bull trend.

DAGELIJKSE MARKT ANALYSE 26 MEI 2014

• New Zealand Dollar Sold on Soft Trade Balance Data in Overnight Trade
• Euro Likely to Look Beyond Germany’s GfK Consumer Confidence Survey
• US Financial Markets’ Closure to Drain Liquidity at the Start of the Week

The New Zealand Dollar underperformed in otherwise quiet overnight trade, falling as much as 0.2 percent on average against its leading counterparts. The move followed the release of disappointing Trade Balance data that showed a monthly surplus of NZ$534 million in April. Economists were penciling in a print at NZ$634 million ahead of the release. Technical positioning hints further NZDUSD weakness is ahead.

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DAGELIJKSE MARKT ANALYSE 27 MEI 2014


• Franc Likely to Look Past Trade Figures, Euro at Risk on Dovish Commentary
• US Dollar Looking to Consumer Confidence, Durables Data to Drive Recovery
• Aussie and NZ Dollars Advanced on Firming Risk Appetite in Overnight Trade

The economic calendar remains quiet in European hours, with Swiss Trade Balance figures amounting to the only bit of noteworthy event risk on the docket. The trade surplus is expected to edge to CHF2.1 billion in April, marking a hairline improvement over the prior month. The release probably won’t meaningful direction cues to the Swiss Franc considering its limited implications for SNB monetary policy. Indeed, with the central bank forecasting inflation below 1 percent through 2015, Thomas Jordan and company seem unlikely to step away from an ultra-accommodative policy regime for some time yet.

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