News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bullish
Oil - US Crude
Mixed
Wall Street
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bullish
GBP/USD
Mixed
USD/JPY
Bearish
More View more
Real Time News
  • 9 out of 11 S&P 500 sectors ended lower, with 79.2% of the index’s constituents closing in the red. Energy (-2.63%), industrials (-1.47%) and financials (-1.34%) were among the worst performers, whereas real estate (+0.17%) outperformed. https://t.co/j9VI9UQc7N
  • Gold Price Forecast: XAU/USD Bid on Weak Dollar, Softer Yields -via @DailyFX Link to Full Analysis: https://www.dailyfx.com/forex/market_alert/2021/05/18/gold-price-forecast-xau-usd-bid-on-weak-dollar-softer-yields.html $XAUUSD $GLD $GC_F https://t.co/Cs94yiNhfI
  • The US Dollar is losing ground against a few ASEAN counterparts. USD/SGD, USD/IDR and USD/PHP seem to be maintaining a downside bias. USD/THB may rise. Get your market update from @ddubrovskyFX here:https://t.co/I2oeWXMFLc https://t.co/C49ElPMI7l
  • Treasury Sec. Yellen: - Investments and tax proposals in "Jobs Plan" will enhance net profitability of corporations, improve global competitiveness - These are investments to make the economy more competitive and sustainable
  • Treasury Sec. Yellen: - Corporate sector must bear its fair share, plan to return corporate tax toward the historical norm - We will target incentives for companies to move funds, operations overseas
  • Treasury Sec. Yellen: - We must improve public R&D to maintain America's technological edge - We must build support systems to improve quality of life and opportunities for those most impacted by wealth inequality
  • Treasury Sec. Yellen: - We must reorient the framing of US fiscal policy - Poor US fiscal policy has meant infrastructure wasn't maintained or modernized
  • Treasury Sec. Yellen: - Innovation required from public & private sector to improve the economy - We must invest in public infrastructure and institutions that drive productivity
  • Treasury Sec. Yellen: - Wage gains and profits have benefitted the top families in America - Middle class families have faced wage stagnation
  • Bitcoin lower for the 4th consecutive day, but crucially held above $42,000 #BTC #Bitcoin $BTCUSD https://t.co/buRKsUDgzR
FX Markets Brace for Big Week: EZ CPI; BOJ, FOMC, & BOE; US NFP

FX Markets Brace for Big Week: EZ CPI; BOJ, FOMC, & BOE; US NFP

Christopher Vecchio, CFA, Senior Strategist

Talking Points:

- The Japanese Yen, like the Swiss Franc, continues to track broad risk trends vis-à-vis US Treasury yields.

- The BOE rate hike this week is largely priced-in, meaning forward guidance on the future path of rates will be the determining factor for the British Pound.

- The FOMC meeting this week will be a placeholder before the December rate hike – no surprise given the lack of press conference or a new summary of economic projections.

Join me on Mondays at 7:30 EDT/11:30 GMT for the FX Week Ahead webinar, where we discuss top event risk over the coming days and strategies for trading FX markets around the events listed below.

10/31 Tuesday | --:-- GMT | Bank of Japan Rate Decision

The monthly Bank of Japan Monetary Policy Statement is expected to see rates remain at -0.10% with the 10-year JGB yield target unchanged around 0%. In order to boost inflation to a stable, target, level of 2%, the BOJ controls short-term and long-term interest rates via market intervention, while the central bank has also committed itself to increasing the monetary base until inflation hits target. At the end of the month, the central bank announces which government bond issues it will buy in the next month, with approximate purchase amounts and purchase dates.

Consumer price inflation in Japan rose by +0.7% in September 2017, in-line with market expectations but still well-below the BOJ’s +2% target. It’s worth pointing out that of the +0.7% gain in prices, +0.5% can be attributed to recent gains in energy (+7.6% y/y). It’s also worth noting that as of the end of September 2017, the BOJ owned approximately 45% of all outstanding Japanese government debt. Expect the BOJ to retain the mantle of ‘most dovish G7 central bank’ for the foreseeable future.

Pairs to Watch: AUD/JPY, EUR/JPY, USD/JPY, Gold

10/31 Tuesday | 08:30 GMT | EUR Euro-Zone Consumer Price Index (OCT A)

Inflation remains low in the Euro-Zone, despite near-term advances on the headline CPI figures. European Central Bank President Mario Draghi, at the ECB policy meeting last week, noted that an "ample degree of stimulus is still needed," pointing to "domestic price pressures [remaining] muted" and that "core inflation has yet to show convincing upward trend" to justify the ECB's patience on rates. Incoming inflation figures point to price pressures unchanged at +1.5% y/y in October, perhaps enough to prevent the Euro from falling much more sharply but not enough to spark a complete turnaround.

Pairs to Watch: EUR/GBP, EUR/JPY, EUR/USD

11/01 Wednesday | 18:00 GMT | USD Federal Reserve Rate Decision

The Federal Reserve’s October policy statement should reaffirm the desire to raise rates by the end of the year, although that much information is already priced-in to rates. Given that it is a non-press conference, non-summary of economic projections (SEP) meeting, markets are pricing a 0% chance of a rate move this week, and instead focusing on December, when the odds of a Fed rate hike are now above 93%; prior to the September FOMC meeting, the implied probability was only 45%. Barring a new perspective that convinces market participants that current pricing on 2018 rates hike is wrong (market is pricing in one, Fed says three), this particular FOMC meeting may yield little for the US Dollar.

Pairs to watch: EUR/USD, USD/JPY, DXY Index, Gold

11/02 Thursday | 11:00 GMT | GBP Bank of England Rate Decision

Super Thursday will see Bank of England latest monetary policy announcement and the MPC Quarterly Inflation Report. All UK policy measures are expected to remain unchanged, while the QIR is expected to see near-term growth expectations and inflation forecasts hold steady. The BOE will join the shift among central banks to a more hawkish stance, with rates markets pricing in almost a 100% chance of a 25-bps hike this Thursday. The most recent inflation report showed that price pressures increased from August to September (+2.9% to +3.9% y/y on the headline), and now that the base effect of the weaker British Pound thanks to Brexit has been eliminated, it seem like inflation won’t push much higher than +3% y/y in the near future. It is very possible, if not likely, that this BOE rate hike is ‘one-and-done.’ Guidance on the future path of rates will be the key factor for the British Pound.

Pairs to Watch: EUR/GBP, GBP/JPY, GBP/USD

11/03 Friday | 12:30 GMT | USD Change in Nonfarm Payrolls and Unemployment Rate (OCT)

The key issue surrounding the September US Nonfarm Payrolls report is whether or not the US labor market will remain strong enough to justify a more aggressive pace of Fed tightening in 2018. Current expectations for the data are modest, with the Unemployment Rate expected to hold at 4.2%, and the headline jobs figure to come in at +310K – a clear ‘give-back’ after Hurricanes Harvey and Irma distorted the August payroll figures (producing the first negative NFP in seven years). The trend of +200K jobs growth per month has recently been a psychological level for markets, but Fed leaders and centrists (the Goldilocks of the Fed; not too hawkish or too dovish) tend have another number in mind.

In October 2015, San Fran Fed President John Williams wrote in a research note that he believed growth of +100K jobs per month was enough to sustain the growth in the labor force and maintain the current unemployment rate. In December 2015, Chair Janet Yellen reiterated this same view. And, in late-February 2016, she noted that the economy can maintain its current unemployment rate by producing between 75K and 125K jobs per month. By the Atlanta Fed Jobs Growth Calculator, assuming a 4.3% longer term unemployment rate, the economy only needs +112K job growth per month to sustain that level through the end of 2017.

Read more: After ECB Policy Meeting, Euro Adrift Looking for a Life Boat

--- Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher, email him at cvecchio@dailyfx.com.

Follow him in the DailyFX Real Time News feed and Twitter at @CVecchioFX.

To receive this analyst’s reports, sign up for his distribution list.

Don’t trade FX but want to learn more? Read the DailyFX Trading Guides.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES