The Latest in Forex News & Analysis.

US Senate passes budget resolution

By | October 19, 2017 10:39 pm | 0 Comments

US Senate adopts budget resolution in step advancing Tax reform, USD making strong rally across the board pushing $JPY onto 113 handle, GBP towards 1.3100, NZD below 70 cents for the first time since May.

US stock futures surging at the same time, Dow futures trading over 100 points higher, Treasury bonds lower pushing 10 year yield up to 2.35%.

 

Australia Labor Data

By | 12:34 pm | 0 Comments

 

Strong Australian Job data, employment rose 19.8k vs 15.0k estimate, unemployment rate improve3d to 5.5% vs 5.6% prior month. AUD$ immediately higher from 0.7845 to 0.7870 paid, dragging AUDNZD cross back towards 1.10.

 

In the meantime $JPY trading marginally lower on the back of BOJ Deputy Governor Nakaso comment saying BOJ can control Yield Curve even with smaller JGB purchases

UK CPI

By | October 17, 2017 9:35 am | 0 Comments

UK CPI YoY came out at 3% matching market expectations. This reading confirms a positive streak for UK CPI as last month reading was 2.9%. Last time inflation hit 3% in UK it was 2012.

The rate hike in November is almost a done deal with market pricing it with a chance of 81.8%. It still remains unclear if the BoE will be required to take further actions after this hike. For any future step anyway it might be important to evaluate the wage growth and the pound strength.

 

GBP surges on Brexit Talk

By | October 12, 2017 2:19 pm | 0 Comments

GBP/USD surged after a German paper reported that Michael Barnier, Chief EU Negotiator, might offer UK a 2 year transition period in the EU, if UK meets its exit obligations.

GBP/USD trading at 1.3280 after touching a daily low of 1.3120

FED Minutes

By | October 11, 2017 5:41 pm | 0 Comments

FED minutes released today show that this December rate hike was a close call. Some FED voting members believe that inflation might stabilize below 2% without showing great confidence for the future. The market reacted with USD selling on multiple asst classes.

EUR CPI

By | September 29, 2017 9:15 am | 0 Comments

EUR Core CPI YoY 1.1% vs 1.2% forecast and 1.2% prior reading. CPI YoY 1.5% vs 1.6% expected.

First decline for Core CPI in this quarter as we approach the deadline for ECB October meeting when President Draghi will communicate the monetary policy path and QE decision for 2018.

Considering that ECB has single mandate (price stability), we are currently far from the 2% target. Main concern is still that a single solution has to satisfy a multi-speed region like EU (Italian CPI MoM -0.3% vs -0.1% expected) .

End of Day Recap

By | September 27, 2017 4:55 pm | 0 Comments

US Core Durable Goods MoM 0.2% vs 0.2% forecast. US Durable Goods Mom 1.7% vs 1%. A positive reading for the US with a USD that strengthened on the day (USD Index + 0.43%).

Risk on across may asset classes, with equities up (new all time high for S&P500)  and metals down (XAU breaking a key support and now trading at 1283).

BoC Poloz with a dovish tone in his press conference sent USD/CAD to 1.2482, up 0.91%. A cloud of uncertainty over the next Central Bank move, considering also a weaker USD (compared with the beginning of the year) that might not help exports.

RBNZ rate announcement. Interest Rates unchanged with dovish comments. Lower NZD might be needed to support recovery and inflation growth.

Draghi Press Conference

By | September 25, 2017 10:50 am | 0 Comments

A cautious Mario Draghi reiterated on Monday that downside risks in EU are mostly tied to geopolitical factors. Growth is still in place but ECB should pay attention to not halt recovery.

Final decision on QE will be taken in October, as previously anticipated.

CAD CPI

By | September 22, 2017 10:57 am | 0 Comments

CAD Core CPI for August came out at 0% compared with previous reading of -0.1%. Core CPI YoY stays stable at 0.9%. CPI YoY at 1.4% vs 1.5% forecast.

Disappointment on Core Retail Sales MoM, 0.2% vs 0.4% forecast with previous number revised down to 0.4% from 0.7%. Retail Sales MoM 0.4% vs 0.1% forecast.

Next Interest Rate decision for Bank of Canada is on October 25th, with current market expectation split almost 50/50.

BoC already raised Interest Rates twice this year surprising the market so far. Volatility on USD/CAD is expected to raise as we get closer to the IR decision.

 

UK Retail Sales

By | September 20, 2017 9:14 am | 0 Comments

Uk Retail Sales YoY at 2.8% vs 1.4% forecast. Also, prior reading revised up to 1.7% from 1.5%.

The number for the month of August is even more impressive: 1% vs 0.2% forecast.

This reading (2.8%) makes clear that consumption in the UK is coming back. It is bouncing from a year low of 0.6%, but it is still far from last year 6.2% recorded always in September.

Next week, UK GDP (Q2) should make things more clear, considering that now the market is pricing a rate hike during November MPC meeting at 64.6%.

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