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.

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
EUR/USD
Mixed
Oil - US Crude
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
Wall Street
Bearish
Gold
Bearish
GBP/USD
Bearish
USD/JPY
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
More View more
Real Time News
  • Heads Up:🇺🇸 House Price Index MoM (AUG) due at 13:00 GMT (15min) Previous: 1% https://www.dailyfx.com/economic-calendar#2020-10-27
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.88%, while traders in NZD/USD are at opposite extremes with 70.65%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/N3lFhLUE67
  • Central banks often deem it necessary to intervene in the foreign exchange market to protect the value of their national currency. Learn how central bank intervention can impact your trading here: https://t.co/ZJOEtpGUIq https://t.co/mqU8ND0BqU
  • Forex Update: As of 12:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.41% 🇨🇦CAD: 0.36% 🇯🇵JPY: 0.20% 🇦🇺AUD: 0.16% 🇪🇺EUR: 0.16% 🇨🇭CHF: 0.01% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/sCW4DtQP6y
  • Heads Up:🇺🇸 Durable Goods Orders Ex Transp MoM (SEP) due at 12:30 GMT (15min) Expected: 0.4% Previous: 0.4% https://www.dailyfx.com/economic-calendar#2020-10-27
  • Heads Up:🇺🇸 Durable Goods Orders MoM (SEP) due at 12:30 GMT (15min) Expected: 0.5% Previous: 0.4% https://www.dailyfx.com/economic-calendar#2020-10-27
  • White House spokeswoman says administration is confident that it can reach COVID aid package in coming weeks - Fox News
  • 🇲🇽 Balance of Trade (SEP) Actual: $4.385B Expected: $3.795B Previous: $6.116B https://www.dailyfx.com/economic-calendar#2020-10-27
  • Heads Up:🇲🇽 Balance of Trade (SEP) due at 12:00 GMT (15min) Expected: $3.795B Previous: $6.116B https://www.dailyfx.com/economic-calendar#2020-10-27
  • EU Commission says both the EU and UK are engaging intensively to reach a deal $GBP
Will Risk Trends and Dollar Take to Recession, Trade Wars or Stimulus?

Will Risk Trends and Dollar Take to Recession, Trade Wars or Stimulus?

2019-09-23 22:30:00
John Kicklighter, Chief Strategist
Share:

Fundamental Talking Points:

  • A run of major central bank policy updates these past week has focused the market's attention on systemic risks and shortcomings
  • Major central bank leaders are due to speak this week and effectiveness is a familiar topic, meanwhile economic health and trade wars are key
  • Key event risk this week includes Monday's PMIs, the RBNZ rate decision and US PCE deflator

This is the recording of the Monday live webinar discussing key themes for the week ahead. Do you trade on fundamental themes or event risk? See what live events we will cover on DailyFX in the week ahead as well as our regular webinar series meant to help you hone your trading.

Monetary Policy Carries Over as Volatility Source This Week

This past week, the top fundamental theme was the state of global monetary policy. With the Fed at the center of eight significant central bank updates - all within a 24 hour period - it was difficult to miss the pressure. Ultimately, the rate cut from the US central bank moved along our transition to a more dovish policy course. Yet as much support as was mustered between the rate cuts (including the ECB's the week before) and the commitment to hold up existing, aggressive programs; there wasn't much in the way of progress for the speculative markets. Perhaps the concern of effectiveness has gained more traction than the traditional formula of 'more stimulus means more market gains' has entailed previously. If that is the case, there is a significant risk to market buoyancy moving forward.

Growth A Headline Theme Already

One of the rotating fundamental themes of overriding importance, the general state of global growth took on significant importance this past session. The run of global PMIs for the month of September has already started as of Monday between the release of the Australian, European and US updates. To represent Asia for the week (Japanese figures were deferred a day), the Aussie update was mixed owing to a strong recovery in services but the manufacturing measure slipped into contractionary territory - a reading below 50.0. The Eurozone measures were unmistakably poor with a particularly troubling showing for manufacturing that seems heavily anchored to Germany's own collapse in factory activity. As for the US, the data was all above water even if the service sector reading (the bulk of GDP) was short of forecasts. Ahead, keep tabs of the market's interest in growth troubles more than the data listings themselves - speculative responsiveness is the most important criteria to fundamental influence bar none. Three Charts for

Top Themes: USDCNH; Treasury Yield Curve; Gold

As we move into a new week likely populated with just as many unscheduled pitfalls as calendar updates in data, it is worth holding out benchmarks to keep quick tabs on all the critical rotating themes. For recession fears, the market has truly seized on the state of the US Treasury curve. I place greater emphasis on the 10-year to 2-year spread. Though it didn't flip as quickly as the economist-favorite 10yr3mth, it has moved back above the zero mark which makes it prone to sharp interpretation should it drop back below the benchmark. For monetary policy effectiveness, there is no better measure than gold. The precious metal is considered a safe haven but its more remarkable value for current conditions is as an alternative to traditional currency that is being uniformly devalued as side effect of accommodation aimed at economic objectives. In particular, I place higher value on gold priced in a mix of the most liquid currencies. As for trade wars, the most sensitive and liquid measure without controls may be AUDUSD; but it is exactly those curbs behind USDCNH which make it a better barometer of our particular situation.

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

DISCLOSURES