Skip to content
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
Oil - US Crude
Mixed
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
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
More View more
Pound Eyes PMI Data, US Dollar Volatility Risk Skewed to the Upside

Pound Eyes PMI Data, US Dollar Volatility Risk Skewed to the Upside

Ilya Spivak, Head Strategist, APAC

Talking Points:

  • British Pound May Not See Follow-Through on PMIs as BOE Rate Decision Looms
  • US Dollar Volatility Risk Skewed to the Upside on ISM and ADP Data, Fed-Speak
  • Aussie Dollar Gains on China PMI, NZ Dollar Slumps on Disappointing Jobs Print

The final set of October’s UK PMI figures headlines the economic calendar in European trading hours, with the rate of overall cross-sector activity growth expected to accelerate for the first time in four months. The trend in UK news-flow has cautiously improved relative to consensus forecasts over recent months (albeit unevenly), opening the door for an upside surprise.

That may boost BOE policy bets, sending the British Pound higher. Near-term follow-through may be limited however, with investors probably reluctant to take firm directional views ahead to this week’s monetary policy announcement.

Later in the day, Fed “liftoff” speculation returns to the forefront as the ISM Non-manufacturing Composite gauge as well as ADP Employment data are released. If that were not enough, traders will also have to contend with a packed schedule of Fed commentary.

The markets have a sense of most Fed officials’ bias. Governor Brainard leans dovish while Chair Yellen, Vice Chair Fischer and New York Fed President Dudley are the core middle ground cautiously mulling a December hike. None of this ought to sound novel. Comments from Philadelphia Fed President Harker may be interesting however as markets learn about the newcomer replacing veteran hawk Charles Plosser.

As for the data, expectations call for slightly softer outcomes for both ISM and ADP but this is unlikely to spark much of a response since the markets’ outlook is already more dovish than Fed officials have signaled. On the other hand, upbeat results may encourage repositioning ahead of Friday’s payrolls data and push the US Dollar higher.

The New Zealand Dollar underperformed in overnight trade after a disappointing third-quarter jobs report drove RBNZ rate cut speculation. Employment unexpectedly fell 0.4 percent in the three months through September, marking the worst reading in three years. Wages growth also slowed, undermining medium-term inflation trends.

The currency fell alongside front-end New Zealand bond yields, hinting that the release inspired stimulus expansion bets. Traders now price in a 50 percent probability of a 25bps rate cut at the next RBNZ policy meeting, according to expectations implied in OIS.

By contrast, the Australian Dollar traded broadly higher following a supportive set of Chinese data. The Caixin Composite PMI gauge manufacturing- and service-sector activity growth stabilized in October after the fastest contraction in at least two years in the prior month. China is Australia’s top trading partner and signs of improvement there seemed to fuel hopes of positive spillover via improved export demand prospects.

Losing Money Trading Forex? This Might Be Why.

Asia Session

GMTCCYEVENTACTEXPPREV
21:45NZDUnemployment Rate (3Q)6.0%6.0%5.9%
21:45NZDEmployment Change (QoQ) (3Q)-0.4%0.4%0.2%
21:45NZDEmployment Change (YoY) (3Q)1.5%2.5%3.0%
21:45NZDParticipation Rate (3Q)68.6%69.3%69.3%
21:45NZDPvt Wages Ex Overtime (QoQ) (3Q)0.4%0.5%0.5%
21:45NZDPvt Wages Inc Overtime (QoQ) (3Q)0.4%0.5%0.5%
21:45NZDAverage Hourly Earnings (QoQ) (3Q)0.9%1.1%1.2%
22:30AUDAiG Perf of Services Index (OCT)48.9-52.3
23:50JPYMonetary Base (YoY) (OCT)32.5%-35.1%
23:50JPYMonetary Base - End of Period (OCT) ¥344.4T-¥338.4T
00:01GBPBRC Shop Price Index (YoY) (OCT)-1.8%--1.9%
00:30AUDTrade Balance (SEP)-2317M-2900M-2711M
00:30AUDRetail Sales (MoM) (SEP)0.4%0.4%0.4%
00:30AUDRetail Sales Ex Inflation (QoQ) (3Q)0.6%0.7%0.7%
01:35JPYNikkei Japan PMI Services (OCT)52.2-51.4
01:35JPYNikkei Japan PMI Composite (OCT)52.3-51.2
01:45CNYCaixin China PMI Composite (OCT)49.9-48
01:45CNYCaixin China PMI Services (OCT)52.0-50.5
05:00JPYConsumer Confidence Index (OCT)41.540.840.6

European Session

GMTCCYEVENTEXPPREVIMPACT
07:00CHFUBS Real Estate Bubble Index (3Q)-1.37Low
08:45EURMarkit/ADACI Italy Services PMI (OCT)53.553.3Low
08:45EURMarkit/ADACI Italy Composite PMI (OCT)53.653.4Low
08:50EURMarkit France Services PMI (OCT F)52.352.3Low
08:50EURMarkit France Composite PMI (OCT F)52.352.3Low
08:55EURMarkit Germany Services PMI (OCT F)55.255.2Medium
08:55EURMarkit/BME Germany Composite PMI (OCT F)54.554.5Medium
09:00EURMarkit Eurozone Services PMI (OCT F)54.254.2Medium
09:00EURMarkit Eurozone Composite PMI (OCT F)54.054.0Medium
09:30GBPOfficial Reserves Changes (OCT) $--321MLow
09:30GBPMarkit/CIPS UK Services PMI (OCT)54.553.3High
09:30GBPMarkit/CIPS UK Composite PMI (OCT)53.653.3High
10:00EUREurozone PPI (MoM) (SEP)-0.5%-0.8%Medium
10:00EUREurozone PPI (YoY) (SEP)-3.3%-2.6%Medium

Critical Levels

CCYSupp 3Supp 2Supp 1Pivot PointRes 1Res 2Res 3
EURUSD1.07891.08831.09231.09771.10171.10711.1165
GBPUSD1.52391.53241.53721.54091.54571.54941.5579

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

To receive Ilya's analysis directly via email, please SIGN UP HERE

Contact and follow Ilya on Twitter: @IlyaSpivak

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

DISCLOSURES