Currency movers for October 05, 2015

5 October, 2015


The EURUSD daily chart bull cross of the 10, 50 SMA moving average is proving to be a reliable indicator, as short term price action is holding above the 6 week lows since the cross was spotted. Short term bullish price momentum is expected to be maintained since price seems to be bouncing off the bottom end of the 1.1090 – 1.1460 expected trading range. Short term long position holders should be on alert for profit taking around the September 18th high (1.1460), while short traders should watch for a break below 1.1090 that could open up the way towards the 1.0920’s.

Growth worries will leave Fed, BoE on hold, while there is now an increase risk of European Central Bank and Bank of Japan stimulus after the September jobs data was a disappointment across the board. Data showed only a 142k payroll rise after 59k in downward revisions, a 0.2% hours-worked drop with a workweek downtick to 34.5, and a 13k payroll drop in the bellwether goods sector led by mining and factories that translated to a 1.0% hours-worked plunge. Hourly earnings were flat. The U.S. labor force dropped to a 5.05% new cycle-low, while the labor force participation rate plunged to a 62.4% 38-year low.

China is on a holiday through Wednesday and Australia is closed today for Labor Day.

The magnitude of slowing in the global economy is the biggest uncertainty facing investors and central banks at the moment. The disappointing U.S. jobs data, on the back of the FOMC’s decision to delay liftoff, decreases investor confidence. The upside is that consumer spending and record U.S. auto sales give a better picture of the U.S. economy. Investors will now focus on the upcoming data out this week for further short term direction.

Currency Pairs, Grouped Performance (% change)

The USD is weaker across the board and sold off immediately on the disappointing U.S. jobs report. The impact on the Fed rate-hike decision is more uncertainty and markets will increase in volatility with a growing feeling that the Fed has miscalculated.

The GBP is trading lower as the U.K. economy continues to look a little softer and expectations are that the BoE will not tighten monetary policy prior to a move by the Fed. The PMI fell slightly to 51.5 in September from 51.6 in August, which was revised up from 51.5. The reading has been running above 50 for thirty straight months. The pace of growth seen in the second and third quarters of this year have been weaker than seen earlier in the current growth sequence.

The CAD jumped immediately after the US employment numbers were released. The much smaller than expected numbers spooked the markets because the widely anticipated Fed rate hike now looks as though it will have to wait well into next year.

Significant daily support and resistance levels for these pairs are:

Main Macro Events Today

• GBP Services PMI: unexpectedly dove to a 29-moth low of 53.3 in the headline reading of the September survey. Total business activity and new business growth both came in at 29-month lows. Outstanding business activity consequently grew at only a fractional rate, and the long-term outlook fell to its weakest reading since August 2014. Input prices jumped, due to salary pressures, though output prices rose only slightly while overall price pressures remained weak by historical standards. The only bright spot was employment growth, with job creation the best since June.

• USD ISM Non-Manufacturing PMI: The U.S. ISM-NMI is expected to fall to 58.0 from 59.0 in August. The July spike set a new post-recession high. Forecast risk: downward, given weakness in earlier month releases. Market risk: downward, as a run of weak data could impact rate hike time-lines. The ISM-adjusted figure for the ISM-NMI tends to track that of the Philly Fed.

Source link  
US reports revealed modest upside surprises for December trade

Asian stock markets mostly moved higher overnight, with Nikkei and Topix was trading close to levels last seen in December 2015 as the Yen weakened...

The global stock rally continued in Asia overnight

Reuters reported, the fast-growing financial technology (Fintech) sector could hold big “systemic risks” for the banking sector and the broader economy which need to be addressed by bank regulators around the world, Bank of England Governor Mark Carney said on Wednesday...

Too-strong a dollar may hurt the economy

Japanese stock markets moved higher, led by Japanese bourses as the country managed to snap a 14-month long run of falling exports, which helped the Nikkei to close with a 1.4% gain...

Dollar found its feet after declining over the last day

Asian stock markets were mixed overnight, with Japanese bourses still under pressure (Nikkei closed down 0.55%). despite a dip in the Yen, as USD stabilised. Uncertainty over Trump’s regulatory and trade policies continues to weigh on investor sentiment...

The dollar has settled moderately lower

Asian stock markets were mixed overnight, after U.S. and European shares closed in the red Thursday. Japan and mainland China bourses managed to move higher (Chinese GDP beat expectations at 6.8%)...

Stock markets continued to stabilise

German HICP confirmed at 1.7% y/y, as expected, with prices up 1.0% m/m. The sharp acceleration from just 0.7% y/y in November was mainly due to base effects from lower energy prices and the breakdown showed that prices for heating oil jumped 21.9% y/y in December...

ECB policy was focused on avoiding deflation trap

Asian stock markets were mixed, with Japan and ASX heading south amid reports that U.K. Prime Minister May will announce plans for a hard Brexit at today’s keynote speech. Yen strength is also continuing to put pressure on the Japanese markets...

U.S. markets are closed Monday

U.S. markets are closed Monday for Martin Luther King Day. This will be a busy week for traders, with the inauguration of president-elect Trump on Friday headlining...

The dollar is trading softer into the London open

Aftershocks from President-elect Trump’s campaign-like press conference, which had weighed on global stock markets and yields started to recede late in the U.S. session and U.S. equities managed to recover part of their losses...