Aug 31st 2016: Kiwi Out-Performs

August 31, 2016 by

Morning Report: 07.30 London

  • The dollar has continued its bull run following renewed speculation on a rate hike next month. The dollar index is pushing higher again this morning, while the USD/JPY builds further momentum.

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  • The yen pairs are on the rise, with the GBP/JPY out-performing its peers.

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  • The dollar pairs are generally struggling, but the NZD/USD is showing some relative strength right now.

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  • The pound-euro balance remains with the pound as the EUR/GBP drops again.

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Coming up today: 
  • Coming up today, we have German unemployment change at 08.55.
  • This is followed by European CPI flash estimate at 10.00.
  • US ADP non-farm employment change follows at 13.15, followed by Chicago PMI at 14.45, home sales at 15.00 and crude oil inventories at 15.30.
  • Canadian GDP is released at 13.30.

Trade Idea: 

  • The NZD/USD is showing some relative strength in the face of a strong US dollar. Should the dollar pressure ease, the NZD/USD could be one pair set to rocket.

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Aug 30th 2016: Dollar Extends Advance

August 30, 2016 by

Morning Report: 07.15 London

  • The dollar index has now extended the rally which started on Friday following the Jackson Hole Fed summit. Comments from Fed Chair Yellen and Vice Chair Fischer have set the dollar soaring on the prospect of a rate hike as early as September, with the possibility of two rate hikes before the end of the year. The dollar is on the rise again after nipping back yesterday.

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  • The dollar pairs are responding as expected, with the main pairs recovering yesterday only from selling off again this morning.

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  • The pound/euro balance has been in the pound’s favour since Friday.

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Coming up today: 
  • Coming up today, we have UK lending to individuals at 09.30.
  • Following this, we get Canadian current account and RMPI data at 13.30.
  • US CB Consumer confidence follows at 15.00.

Trade Idea: 

  • The AUD/JPY has enjoyed the softening of the yen in recent days and this could well continue. A Fed rate hike is a sign of US strength and by implication, global strength. While China is the world’s booming economy, it’s the US that still calls the shots. Any US growth could have a knock-on effect on China and therefore Australia.

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Aug 26th 2016: Brexit – Not That Bad?

August 26, 2016 by

Morning Report: 07.45 London

  • The US dollar is on the back foot this morning after a ‘Fed Up’ community activists protested at the Jackson Hole Symposium of central bankers. This came after another set of strong data from the US with durable goods orders coming in above expectations. The USD/JPY is following suit and nipping lower.

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  • The EUR/USD is performing particularly well this morning after gains yesterday, despite poor German Ifo business climate data.

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  • The pound is rising this morning after losses yesterday, but today’s second estimate GDP will be a stern test.

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  • Meanwhile, the AUD/USD and in particular the NZD/USD continue to outperform.

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Coming up today: 
  • We have UK second estimate GDP at 09.30, released alongside preliminary business investment.
  • Then at 13.30 we get US preliminary GDP, followed by Fed Chair Yellen speaking at 15.00, alongside revised UoM consumer sentiment.

Trade Idea: 

  • Despite the initial turmoil, the British pound has stabilised lately and there is a general sense of cautious optimism emerging, at least judging back the number of editorial pieces hinting at such. So is Brexit really not that bad?
  • The truth is that we still don’t know yet. We haven’t even officially ‘Brexited’ the EU yet so nothing fundamentally has changed. Indeed, UK consumers seem to be taking this view with consumer spending carrying on regardless, no doubt helped by a positive Olympic experience. On the other hand, executives remain cautious and their forward planning and confidence reflect this. At some point either consumers will stop being so optimistic or executives will stop being so pessimistic. With UK consumer spending making up 60% of the economy, Theresa May will be hoping for the latter.

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Aug 25th 2016: Markets Eye US Unemployment

August 25, 2016 by

Morning Report: 07.15 London

  • This morning, the dollar is on the back foot as markets eye this afternoon’s US unemployment figures for clues on future policy. The USD/JPY is following suit after gains yesterday.

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  • While the euro is making gains, the pound is on the back foot as traders expect a solid release for German IFO business climate.

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  • Elsewhere, the NZD/USD continues to tease the highs, while the AUD/USD makes another push.

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Coming up today: 

  • Coming up today we have German Ifo business climate at 09.00.
  • This is followed by US core durable goods orders and unemployment claims at 13.30.

Trade Idea: 

  • After slipping from the highs, the EUR/USD is showing some promise this morning. With the dollar slipping back again, there could be some short-term upside.

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Aug 24th 2016: Euro Steady Following Economic Wobble

August 24, 2016 by

Morning Report: 08.00 London

  • This morning, the euro is on a stable footing after decidedly mixed economic data yesterday which saw German services PMI drop more than expected. The EUR/GBP dropped on the news but is recovering a little this morning.

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  • The dollar itself is making gains this morning after coming under pressure yesterday. The USD/JPY is unchanged by contrast.

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  • The Australian dollar is struggling to make any headway at the highs and has now since dropped off for two days. The NZD/USD remains unchanged, however.

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Coming up today: 
  • Coming up today we have the US existing home sales at 15.00, with crude oil inventories at 15.30.

Trade Idea: 

  • The USD/CAD’s decline has been interrupted of late, but there are signs that the downtrend force is still in place. This should still be the case with oil prices holding around recent highs.

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