Dagelijkse Markt Analyse 11 Januari 2019

DAGELIJKSE MARKT ANALYSE 28 AUGUSTUS 2014

• Euro May Correct Higher if Augusts’ German CPI Data Tops Expectations
• US Dollar Slumped on Profit-Taking in Asia, 2Q GDP Revision Eyed Ahead

The preliminary set of Augusts’ German CPI figures headlines the economic calendar in European hours. The baseline year-on-year inflation rate is expected to remain unchanged at 0.8 percent, matching a four-year low recorded in May.

In broad trend terms, German price-growth data has cautiously improved relative to consensus forecasts over recent months, hinting at the possibility for an upside surprise. Such an outcome may pour cold water on speculation about an imminent expansion of ECB stimulus, sending the Euro higher. The chart setup likewise hints the single currency is preparing to correct higher.

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DAGELIJKSE MARKT ANALYSE 29 AUGUSTUS 2014

• Euro Looking for a Lifeline in Eurozone CPI Report Ahead of ECB Meeting
• Australian, NZ Dollars Move Lower as Risk Appetite Unravels in Asian Trade

Augusts’ preliminary Eurozone CPI reading headlines the economic calendar in European hours. The benchmark year-on-year inflation rate is expected to edge lower to 0.3 percent, marking the lowest level since October 2009.

In overall terms, price-growth data from the single currency area has cautiously improved relative to consensus forecasts since the beginning of the year, opening the door for an upside surprise. A better-than-expected reading may chip away at speculation about an expansion of ECB stimulus measures at next week’s monetary policy meeting, sending the Euro higher.

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DAGELIJKSE MARKT ANALYSE 1 SEPTEMBER 2014

• New Zealand Dollar Gains as Terms of Trade Data Boost RBNZ Policy Bets
• Euro May Continue Lower if German GDP, EZ PMI Revisions Disappoint

The New Zealand Dollar narrowly outperformed in otherwise quiet overnight trade, rising as much as 0.2 percent on average against its leading counterparts. The move followed an unexpectedly upbeat Terms of Trade report. The ratio of export vs. import prices rose 0.3 percent in the second quarter, topping bets calling for a 3.5 percent decline. The improvement in the island nation’s external position appeared to bolster RBNZ monetary policy bets, with the Kiwi rising alongside New Zealand’s benchmark 10-year bond yield.

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DAGELIJKSE MARKT ANALYSE 2 SEPTEMBER 2014

• US Dollar May Extend Advance if ISM Manufacturing Data Tops Forecasts
• Australian Dollar Ignores RBA Announcement with Fed Policy Bets in Focus

A relatively quiet economic calendar in European trading hours is likely to see traders looking ahead to US news-flow, where the spotlight will fall on Augusts’ ISM Manufacturing print. The index is expected to inch downward to 57.0 from a three-year high of 57.1 recorded in the prior month, implying the pace of factory-sector activity growth narrowly slowed.

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DAGELIJKSE MARKT ANALYSE 3 SEPTEMBER 2014

• British Pound Outlook Clouded Before Augusts’ Services PMI Data Release
• US Dollar Looks for Added Fuel in Factory Orders Report, Fed Beige Book
• Aussie Dollar Corrects Higher, Yen Up as Japan PM Abe Reshuffles Cabinet

The Australian Dollar advanced in overnight trade, rising as much as 0.3 percent against its leading counterparts. The move appeared to reflect corrective price action after yesterday’s sharp decline rather than a discrete catalyst. Indeed, the release of Australian second-quarter GDP and Chinese PMI figures sparked a bit of volatility but offered little by way of directional conviction. The Yen likewise advanced after Prime Minister Shinzo Abe announced a re-shuffle of his cabinet. The announcement sent the benchmark Nikkei 225 stock index lower in afternoon trade, bolstering demand for the safe-haven Japanese unit.

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DAGELIJKSE MARKT ANALYSE 4 SEPTEMBER 2014

• Euro Likely to Rise if the ECB Fails to Deliver on Stimulus Expansion Bets
• BOE Policy Announcement Likely to be a Non-Event for the British Pound

A monetary policy announcement from the European Central Bank headlines the economic calendar in the hours ahead. Markets appear primed for an expansion of stimulus following strongly dovish comments from ECB President Mario Draghi at the Jackson Hole Symposium last month. A head-long dive into “classic” QE – that is, pressuring borrowing costs lower by buying bonds with printed money – seems unlikely this time around.

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DAGELIJKSE MARKT ANALYSE 5 SEPTEMBER 2014

• US Dollar May Correct Lower if Payrolls Prove Anything Less Than Stellar
• Dovish Commentary from FinMin English Sank NZ Dollar in Overnight Trade

Currency markets are likely to look past a quiet European economic calendar to focus on the much-anticipated release of Augusts’ US Employment data. The report is expected to show that the economy added 230,000 jobs, topping July’s 209,000 increase. US economic news-flow has dramatically outperformed relative to consensus forecasts over recent weeks, suggesting analysts are underestimating the vigor of the world’s largest economy and opening the door for an upside surprise.

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DAGELIJKSE MARKT ANALYSE 8 SEPTEMBER 2014

• British Pound Sinks as Scottish Independence Poll Sets Off Capital Flight
• Swiss Franc May Decline if August Inflation Data Falls Short of Forecasts

The British Pound tumbled against all of its major counterparts to start the trading week, losing as much as 0.9 percent on average. The move reflected capital flight amid uncertainty linked to the outcome of next week’s Scottish Independence referendum. A YouGov/Sunday Times poll published over the weekend showed those intending to vote in favor of seceding from the UK outnumbered those favoring the status quo for the first time, albeit by a narrow margin (47% for independence, 45% against, 7% undecided).

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DAGELIJKSE MARKT ANALYSE 9 SEPTEMBER 2014

• Dollar Launched Higher to Start the Week
• British Pound Faces Unexpected Risk in Scottish Referendum
• Euro Investor Confidence Drops the Most in Three Years

Dollar Launched Higher to Start the Week
While a particularly sharp move for GBPUSD contributed heavily to the Dollar’s general performance Monday, the currency posted gains against all of its major counterparts. Once again, the breadth and intensity of the move seemed to outpace the fundamentals that would have been expected to fuel it. The economic docket was notably light for US releases – and we are not far removed from the hangover of Friday’s substantial NFPs miss. Alternatively, the steady rise in FX-based volatility readings reflects a growing appreciation for market depth at exactly the same time European currencies (the Euro and British Pound) are being slammed by their own fundamental troubles. As long as there is growing distrust among the most liquid currencies, the greenback will benefit.

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DAGELIJKSE MARKT ANALYSE 10 SEPTEMBER 2014

• British Pound Looking to BOE Commentary to Power a Corrective Recovery
• Australian Dollar Tumbles on Soft Consumer Confidence Data, Risk Aversion

Commentary from Bank of England officials remains in focus in European trading hours. This time, BOE Governor Mark Carney will be joined by Deputy Governor Nemat Shafik and MPC committee members Martin Weale and David Miles in testimony before Parliament’s Treasury Select Committee on Augusts’ quarterly Inflation Report (QIR).

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DAGELIJKSE MARKT ANALYSE 11 SEPTEMBER 2014

- British Pound at its most oversold territory since height of financial crisis
- FX traders positioned for the worst, but how far can the GBPUSD actually go?
- We view odds and qualitatively measure risks below

Traders are aggressively selling the GBP on negative headlines related to the Scottish vote, but what do key market signs tell us on the probabilities for further British Pound depreciation?

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DAGELIJKSE MARKT ANALYSE 12 SEPTEMBER 2014

• Dollar Looks to Fed to Secure Strongest Run in Half a Century
• British Pound Edges Higher as Market Digests Shift in Scotland Sentiment
• Euro Focus Still on ECB Policy, But Sovereign Bond Yields are Rising…

Dollar Looks to Fed to Secure Strongest Run in Half a Century
Friday is opening once again green for the Dow Jones FXCM Dollar Index (ticker = USDollar). If we close out the session positive, it would mark the fifth consecutive daily advance – matching the currency’s best performance since February. Furthermore, baring a sharp drop before the week closes, we are going to close an even more incredible record for the dollar: the ninth consecutive weekly gain. For the ICE Dollar Index, that matches the longest bull series on records going back nearly 50 years (there were comparable runs in 1997, 1979 and 1975). In other words, the US currency has enjoyed an incredible level of strength. Yet, in a financial system where complacency and comfort dominate; such a move is an affront to established market conditions. Either currency or broader sentiment must yield.

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DAGELIJKSE MARKT ANALYSE 15 SEPTEMBER 2014

• Yen Gains, Aussie Dollar Falls as Soft Chinese News-Flow Sinks Risk Appetite
• US Industrial Production, Empire Survey Data to Inform Fed Policy Outlook

The Japanese Yen outperformed in overnight trade, rising as much as 0.5 percent on average against its leading counterparts, as a drop on Asian stock exchanges drove demand for the safe-haven currency. An MSCI index of regional shares slid 0.7 percent as investors responded to soft Chinese economic data.

Reports released over the weekend showed Industrial Production unexpectedly added just 6.9 percent year-on-year in August, marking weakest print since December 2008. Retail Sales grew 11.9 percent over the same period to post the smallest gain since April.

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DAGELIJKSE MARKT ANALYSE 16 SEPTEMBER 2014

• Dollar Squeezes Out Sixth Straight Advance Amid Financial Market Warnings
• British Pound Traders Weigh BoE Rate Forecasts Against Scottish Referendum
• Euro Traders, Take Note of Investor Sentiment Surveys for Later

Dollar Squeezes Out Sixth Straight Advance Amid Financial Market Warnings
The chorus of officials issuing warning over the complacency and risks present in the financial system keeps building towards a crescendo. An appropriate start to a week laden with exceptionally important event risk – including Wednesday’s FOMC decision – both the OECD (Organization for Economic Co-operation and Development) and the BIS (Bank of International Settlements) remarked on the fundamental dislocations in the global financial system in their respective semi-annual assessments. Neither was shy nor opaque about their assessment that markets were “at odds” with the palpable risks that developed. Both would also connect the current state of contentedness in elevated asset prices and extremely low volatility levels to central banks’ accommodation. And, there is where traders’ interests should start.

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DAGELIJKSE MARKT ANALYSE 17 SEPTEMBER 2014

• Dollar Checks Back in Anticipation of FOMC Decision
• British Pound Volatility but Noncommittal After Inflation Report
• Euro Traders Will React to Fed and then ECB

Dollar Checks Back in Anticipation of FOMC Decision
This week’s top event risk is upon us. The Federal Reserve’s monetary policy meeting carries deeper meaning than just a quick move from the US Dollar. Given the fundamental platform the market has been built upon over the past few years – low participation, excessive leverage and a dependency on low volatility conditions – the impact of this event could ripple throughout the financial system. Yet, for those looking for the quick market-based evaluation of how the central bank’s actions and forecasts are being interpreted by the trading ranks, there are three benchmarks to monitor through the event: the US Dollar, the S&P 500 and US Treasury yields.

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DAGELIJKSE MARKT ANALYSE 18 SEPTEMBER 2014

• Dollar Rallies to 14 Month Highs, S&P 500 Steady After FOMC
• British Pound: Scottish Vote is Close and FX Traders are Nervous
• Euro’s Medium-Term Outlook Bearish Regardless of TLTRO Uptake

Dollar Rallies to 14 Month Highs, S&P 500 Steady After FOMC
The FOMC delivered a more hawkish view of the future…but it did so begrudgingly. Nevertheless, the US Dollar took the cue and advanced against all of its major counterparts this past session. From the Dow Jones FXCM Dollar Index (ticker = USDollar), bullish sentiment translated into a 14-month high. Furthermore, when we look across the majors; the progression of the central bank’s commitment to the slow but steady return to a hawkish regime was plain to see. On one extreme, EURUSD – which sees the ECB actively engaged in a dovish policy to expand its balance sheet – dropped 0.7 percent on the day. On the other, even carry currencies with materially higher interest rates like the New Zealand (down 1.3 percent) and Australian dollars (off 1.5 percent) would also lose ground to the US unit.

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DAGELIJKSE MARKT ANALYSE 19 SEPTEMBER 2014


The USD/CAD may face a larger decline over the next 24-hours trading should Canada’s Consumer Price Index (CPI) raise the Bank of Canada’s (BoC) scope to further normalize monetary policy.

Why Is This Event Important:
Sticky inflation may put increased pressure on the BoC to raise the benchmark interest rate sooner rather than later, and a strong inflation print may heighten the appeal of the Canadian dollar as central bank Governor Stephen Poloz scales back his dovish tone for monetary policy.

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DAGELIJKSE MARKT ANALYSE 22 SEPTEMBER 2014

• Gold and Silver Downside Risks Remain Following Break Below Technical Barriers
• Copper and Crude Oil Suffer Ahead of Chinese September Manufacturing Figures
• Platinum Targets The 1,314 Floor Following A Slide Under The 1,360 Handle

The precious metals have extended Friday’s declines in Asian trading today with silver the worst performer of the group (currently weaker by 1.24 percent). Interestingly, the broad-based weakness for the metals has occurred alongside a dip for their pricing currency the US Dollar, as well as falls for major equity indices. This suggests the catalyst behind the alternative assets’ descent is a break of a key technicals, which may have triggered a cascade of sell orders.

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DAGELIJKSE MARKT ANALYSE 23 SEPTEMBER 2014

• Dollar Finds Capital Market Uncertainties Offset Wavering Fed Rhetoric
• British Pound Tops Majors’ Performance as Focus Returns to BoE
• Euro Pressure Remains as Consumer Confidence Falls, Draghi Commits to Stimulus

Dollar Finds Capital Market Uncertainties Offset Wavering Fed Rhetoric
While Fed rate speculation tempered its support for the US Dollar to start the week, a shift in sentiment moved in to supplement the bulls. Having passed last week’s fireworks (Fed decision big amongst the high profile event risks) without risk trends imploding, we still find investors uneasy about the future’s prospects. From the usual list of suspects, we would see a substantial dimming in speculative confidence. Most prominent on the day was the drop in global equities which pulled indexes from the US to Europe to Asia back from multi-year or record highs. Joining the fray was a sharp drop in Emerging Markets, a high-yield debt slip and fresh multi-year low for the CRB commodities index. A uniform drop from these very different asset types implies sentiment itself is shifting course rather than an individual market simply causing ripples.

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DAGELIJKSE MARKT ANALYSE 24 SEPTEMBER 2014

• Dollar Staves Off Correction as Fed Looks to Lose Hawks
• Euro Reacts to Data but Bigger Troubles Lie Ahead
• Japanese Yen: Prime Minister Abe Says Keeping an Eye on ‘Weak’ Currency

Dollar Staves Off Correction as Fed Looks to Lose Hawks
Interest rate forecasts and a need for safety – that is what the Dollar feeds off of. Market developments this past session hit on both themes, but the currency wasn’t struck with a meaningful wave of conviction. That is because both channels of fundamental drive – though ultimately supportive of the greenback – were partially blocked by offsetting stipulations. Starting with the most omnipresent and imposing matter, the S&P 500 posted its third consecutive decline to put the benchmark in its deepest correction since the beginning of August. Offering the scope that upgrades this move from detached misstep to a more systemic concern on risk, equities were lower on a global basis and the VIX Volatility Index soared further to 15 – the highest level in six weeks. And yet, fear stopped short of infecting the FX markets.

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