Dagelijkse Markt Analyse 11 Januari 2019

DAGELIJKSE MARKT ANALYSE 24 JULI 2014

• Dollar Fails to Leverage Key EURUSD Break
• British Pound Retreats after BoE Minutes, Carney Comments
• New Zealand Dollar Tumbles…After a Rate Hike

Dollar Fails to Leverage Key EURUSD Break
The day after EURUSD – the world’s most liquid currency pair – marked a key break below 1.3500, the pair carved out a trading range of just 19 pips. This is only the second time in the Euro’s history that this pair has settled on a range of less than 20 pips (the other instance was April 18 of this year). This, of course, is a reflection of a more general malaise that sees the average daily range for this key pair falling to record lows alongside the FX volatility readings. Market conditions where participation and volatility are drained is a great equalizer for fundamental and technical developments. The key to seeing the dollar and broader financial markets return to trend – bullish or bearish – is seeing the masses return and reestablish a level of commitment. Can the combo of NFPs, FOMC decision and 2Q US GDP net week do it?

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DAGELIJKSE MARKT ANALYSE 25 JULI 2014


• Dollar Traders Look Ahead to NFPs, GDP and FOMC Decision
• British Pound Already Down 7 Straight Days Faces UK 2Q GDP
• Euro Ready for a Turn after Data Improves, Yields Fall, EURUSD Doji?

Dollar Traders Look Ahead to NFPs, GDP and FOMC Decision
The Dow Jones FXCM Dollar Index (ticker = USDollar) has moved to a five week high and is tempting a more substantial bullish production. That progress may have to wait until next week however. Through the past session, much of the dollar’s gains were founded in counter-currency developments – rather than innate strength on the greenback’s part. Modest gains for USDJPY were the work of risk trends, AUDUSD corrected after its preceding rally, and NZDUSD collapsed after the RBNZ rate decision.

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DAGELIJKSE MARKT ANALYSE 28 JULI 2014

• New Zealand Dollar Down as RBNZ Rate Hike Outlook Continues to Erode
• US Dollar Looks to PMI, Home Sales Data to Set the Tone for a Busy Week

The absence of top-tier scheduled event risk left currency markets rudderless in the opening hours of the trading week, with most of the G10 FX majors languishing in familiar trading ranges against the US Dollar. The New Zealand Dollar narrowly underperformed, sliding as much as 0.2 percent on average against its leading counterparts. The move tracked a decline in New Zealand’s benchmark 10-year bond yield, hinting the continued erosion of interest rate hike bets following last week’s RBNZ policy announcement was behind the selloff.

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DAGELIJKSE MARKT ANALYSE 29 JULI 2014

• US Dollar May Edge Higher as Consumer Confidence Hits Six-Year High
• Australian Dollar Followed S&P 500 Futures Lower in Quiet Asian Trade

Another quiet day on the European economic data front is likely to see investors looking ahead to US economic news-flow. July’s Consumer Confidence reading is in focus, with expectations suggesting the index will rise to a six-year high of 85.4. The outcome may help to set the stage for an overstuffed week of high-profile US releases including the FOMC policy announcement, the second-quarter GDP reading and July’s Nonfarm Payrolls number.

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DAGELIJKSE MARKT ANALYSE 30 JULI 2014

• Dollar Positioned for a Breakout but Will GDP and the Fed Provide?
• Euro Faces its Own Volatility on Stocked Docket
• British Pound Unimpressed by Surge in Mortgage Approvals

Dollar Positioned for a Breakout but Will GDP and the Fed Provide?
It’s an appropriate place to be, heading into such a significant round of event risk. The Dow Jones FXCM Dollar Index (ticker = USDollar) stands just below 10,500 which technical traders will recognize as a meaningful cap on bullish progress from all the way back to last July’s multi-year peak. To progress further, the market is looking to qualify conviction – and there is no better way to assess that sincerity than through two key pieces of event risk: the first 2Q US GDP reading and the FOMC rate decision. In reality, these are not the only high profile US and global items on the calendar. There is a Spanish growth report, Eurozone sentiment surveys, a US ADP jobs report and a Treasury auction of 2-year floating-rate notes that all carry global influence. Yet, to truly unseat the market’s lethargy via investor sentiment trends or changes in US interest rate forecasts, those two particular releases offer the scope to sway the masses.

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DAGELIJKSE MARKT ANALYSE 31 JULI 2014

• Euro May Bounce from 9-Month Low if Flash CPI Data Beats Forecasts
• New Zealand Dollar Bounces as Markets Chew Over RBNZ Policy Outlook

The preliminary estimate of July’s Eurozone CPI reading headlines the economic calendar in European hours. Expectations call for the benchmark year-on-year inflation rate to register at 0.5 percent, unchanged from the prior month. Leading PMI data from Markit Economics suggested output prices fell at a faster pace this month compared with June, opening the door for a downside surprise. Such an outcome may feed ECB stimulus expansion bets, weighing on the Euro.

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DAGELIJKSE MARKT ANALYSE 1 AUGUSTUS 2014

• US Dollar May Turn Lower as July’s Jobs Report Falls Short of Forecasts
• British Pound Unlikely to Find Lasting Driver in Manufacturing PMI Data

The spotlight is firmly pointed at July’s US Employment figures through the end of the trading week. Consensus forecasts are penciling in a 230,000 increase in nonfarm payrolls, marking a slight slowdown compared with the 288,000 jobs gain recorded in June. Worrying cues from PMI data produced by Markit Economics open the door for a downside surprise however.

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DAGELIJKSE MARKT ANALYSE 4 AUGUSTUS 2014

• British Pound Looks to Construction PMI Data to Fuel Continued Selling
• Australian Dollar Strengthened as Risk Appetite Firmed in Overnight Trade

The UK Construction PMI figure headlines an otherwise lackluster European economic calendar. Expectations point to a narrow slowdown in the pace growth in the home-building sector, with the index slipping to 62.0 in July after printing at a four-month high of 62.6 in the previous month.

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DAGELIJKSE MARKT ANALYSE 5 AUGUSTUS 2014

• British Pound Looks to PMI Figures to Inform BOE Rate Hike Speculation
• US Dollar May Rise as Upbeat ISM Report Feeds Fed Normalization Bets
• Aussie Dollar Erases Intraday Losses, Trades Flat After RBA Rate Decision

July’sUK Services PMIfigure is expected to show a slight acceleration in the pace of non-manufacturing sector growth, with the index rising to 58.0 after dropping to a three-month low of 57.7 in the previous month. The Composite PMI gauge is forecast to print unchanged from June. On the whole, UK data flow has tended todisappoint relative to consensus forecasts since late February, hinting analysts are over-estimating the health of the economy and opening the door for a downside surprise. Such an outcome may dent Bank of England interest rate hike bets and weigh on British Pound. On the other hand, technical positioning hints a bounce may be in the cards.

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DAGELIJKSE MARKT ANALYSE 6 AUGUSTUS 2014

• Dollar Swells Without Break as S&P 500 Drops, Fisher Warns of Hikes
• British Pound Top Performer as Data Revives BoE Hopes, More Ahead
• Euro Faces Top Event Risk in 2Q Italian GDP Release

Dollar Swells Without Break as S&P 500 Drops, Fisher Warns of Hikes
The dollar was up against most of its major counterparts this past session and the Dow Jones FXCM Dollar Index (ticker = USDollar) posted its first gain in three trading days. Yet, despitethe breadth of the currency’s performance, its momentum was lacking the necessary muscle to revitalize the July bull run. With USDollar, GBPUSD, USDJPY and AUDUSD still facing boundaries to progress; the focus turns to what can motivate bulls to advance the market. Both of the dollar’s principal drivers were receiving air time on the financial headlines – yet neither has secured conviction. On speculative appetite front, ‘risk aversion’ continues to play out on some markets and is absent in others.

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DAGELIJKSE MARKT ANALYSE 7 AUGUSTUS 2014

• Euro Looks to ECB President Draghi’s Presser for Stimulus Expansion Clues
• Bank of England Rate Decision Likely to be a Non-Event for the British Pound
• Australian Dollar Fell After Soft Jobs Data Undermined RBA Rate Hike Bets

A monetary policy announcement from the European Central Bank headlines the calendar in European hours. The addition of anything new into the policy mix seems unlikely after the central bank introduced a slew of additional measures to boost lending and fight disinflation at its June’s meeting. Officials will likely want to monitor how those are working out before expanding stimulus further.

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DAGELIJKSE MARKT ANALYSE 8 AUGUSTUS 2014

• Yen Soars, Aussie and NZ Dollars Fall as Risk Aversion Sweeps Markets
• US Dollar and Swiss Franc Capitalize on Safety-Seeking Capital Inflows
• Stock Futures Drop, Hinting Risky Asset Liquidation Likely to Continue

The Japanese Yen outperformed in overnight trade, rising as much as 0.5 percent against its leading counterparts, as risk aversion gripped Asian markets and drove demand for the safety-linked currency. The MSCI Asia Pacific regional benchmark equity index fell 1.4 percent in a move the newswires attributed to geopolitical jitters after US President Obama authorized air strikes in Iraq. That compounded an already tense environment tainted by an unraveling cease-fire between Israel and Hamas as well as retaliatory sanctions from Russia against Western powers.

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DAGELIJKSE MARKT ANALYSE 11 AUGUSTUS 2014

• Yen Falls, Aussie and NZ Dollars Rise Amid Risk Appetite Recovery
• US Dollar Looking to Comments from Fed’s Fischer for Guidance

The safe-haven Japanese Yen narrowly underperformed while the sentiment-linked Australian and New Zealand Dollars proved best-supported as risk appetite recovered at the start of the trading week. The MSCI Asia Pacific stock index added 1.2 percent in a move that appeared to be corrective after the regional equities benchmark finished last week with the largest drawdown in five months. S&P 500 futures are pointing higher in late overnight trade, hinting that more of the same is ahead.

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DAGELIJKSE MARKT ANALYSE 12 AUGUSTUS 2014

• Euro May Correct Higher on Upbeat German ZEW Survey Outcome
• NZ Dollar Sold in Asia as Housing Data Dents RBNZ Rate Hike Bets

Augusts’ German ZEW Survey of investor confidence headlines the economic calendar in European hours. The forward-looking Expectations index is expected to print at 17.0, marking the lowest reading since December 2012. Eurozone economic news-flow has been improving relative to consensus forecasts over the past three weeks, opening the door for an upside surprise.

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DAGELIJKSE MARKT ANALYSE 13 AUGUSTUS 2014

• British Pound May Turn Higher on Status-Quo BOE Inflation Report
• Euro Looking for Catalyst to Trigger Rebound, German CPI in Focus
• Aussie Dollar Outperformed on Consumer Confidence Data Overnight

UK Jobless Claims data is unlikely to command the typically high level of attention when the numbers cross the wires as investors look ahead to the release of the Bank of England Inflation Report. As we noted in our weekly forecast, volatility risk is tilted to the upside for the British Pound after a moderation in rate hike expectations delivered five consecutive weeks of losses for the UK unit. That opens the door for a correction higher absent a particularly acute dovish shift in the central bank’s rhetoric or an especially aggressive downgrade of its economic outlook. Technical positioning bolsters the case for a corrective upswing. For its part, the jobs report is forecast to show applications for unemployment benefits fell 30,000 in July, marking the smallest drawdown in three months.

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DAGELIJKSE MARKT ANALYSE 14 AUGUSTUS 2014

• Dollar May Find Real Traction if EURUSD Collapses
• Euro Traders Look for Same Volume, Volatility as Pound on Eurozone GDP
• British Pound Suffers Biggest Drop in 7 Months, Heaviest Volume in a Year

Dollar May Find Real Traction if EURUSD Collapses
A look at the chart shows us the Dow Jones FXCM Dollar Index (ticker = USDollar) made progress this past session. A push higher has led the greenback benchmark to its highest level in 5 months; and to some eager bulls, it looks like a technical break. However, between the uneven bid for the currency and the lack of a fundamental motivation accompanying this performance, a healthy amount of skepticism is warranted. While the USDollar may have marked progress, its advance was modest – around half the average daily range of the past trading month. Furthermore, a single dollar pairing was responsible for the bulk of this move: GBPUSD. The ‘Cable’ dropped 0.7 percent Wednesday under heavy trading conditions. This move was the responsibility of the sterling, not the dollar. That becomes immediately evident when we see the lack of progress for other majors and the lost ground booked against the traditional carry currencies – Aussie, Kiwi and Loonie dollars.

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DAGELIJKSE MARKT ANALYSE 15 AUGUSTUS 2014

• British Pound May Turn Higher on Profit-Taking After 2Q UK GDP Data
• US Dollar Could Rise on Firming Fed Outlook if PPI Figures Outperform

A revised set of second-quarter UK GDP figures amounts to the only bit of noteworthy event risk on tap in European trading hours. Expectations suggest the initial estimate showing output grew 0.8 percent in the three months through June will be confirmed. UK economic news-flow has stabilized relative to consensus forecasts over recent weeks according to data from Citigroup. That points to a kind of balance between expected and realized data outcomes, hinting a print in line with analysts’ bets is probable.

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DAGELIJKSE MARKT ANALYSE 25 AUGUSTUS 2014

• US Home Sales Data May Help Dollar May Build on Yellen-Inspired Gains
• Euro May Fall as German IFO Survey Boosts ECB Stimulus Expansion Bets

The US Dollar outperformed in overnight trade as Asian markets took their turn to respond to supportive remarks from Fed Chair Janet Yellen at the Jackson Hole Economic Symposium last week. The greenback added as much as 0.2 percent on average against its leading counterparts, setting a six-month high.

The expected time gap between October’s end of “QE3” asset purchases and the first Fed interest rate hike may shrink further on the back of supportive US economic data. July’s New Home Sales report headlines the docket to start the week, with a print at 429,000 expected compared with 406,000 in the prior month.

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DAGELIJKSE MARKT ANALYSE 26 AUGUSTUS 2014

• Dollar Hits New 12-Month High, Forecasts for Early Fed Hike Buildings
• Euro Dives to Start the Week Following Draghi’s Jackson Hole Warning
• Yen Crosses: USDJPY Deviates Further from the Pack

Dollar Hits New 12-Month High, Forecasts for Early Fed Hike Buildings
The Dollar is looking more and more robust. Despite a hearty appetite for risk assets to start the week (working against the greenback’s safe haven status) and little sign that the market was re-pricing its Fed forecasts, the greenback gapped up to open the week. This bullish thrust sent the Dow Jones FXCM Dollar Index (ticker = USDollar) to a six-month high. Amongst the majors, EURUSD dropped to its lowest level in a year while USDJPY notched a modicum of progress on its crawl to seven-month highs. From the two aforementioned majors, we may be looking at a temporary market element at play: gains founded in counterparty weakness. For the dollar itself, there is little demand for liquidity to push the market to seek out haven. As for the currency’s more pressing theme of late – rate expectations – neither Treasury yields nor Fed Funds futures have taken traction. That said, the number of non-market surveys (economists and hedge funds) suggesting a growing call for an earlier first Fed hike are making for more dramatic headlines. Will traders adopt this outlook?

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DAGELIJKSE MARKT ANALYSE 27 AUGUSTUS 2014

• NZ Dollar Outperforms as Upbeat Dairy Exports Bets Bolster RBNZ Outlook
• Canadian Dollar Gains on M&A Flows After Burger King, Tim Hortons Deal

The New Zealand Dollar outperformed in overnight trade, rising as much as 0.4 percent on average against its leading counterparts. The move followed the announcement of a partnership between dairy giant Fonterra and Chinese baby food manufacturer Beingmate to produce infant formula. Fonterra also said that despite “difficult market conditions” and lingering “downside risks”, its expected farm-gate milk price forecast remains unchanged at NZ$6/kg for the 2014-15 season.

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