FOREX News Today

European Outlook: Asian stock markets are mostly down, as the positive confidence indicators out of Europe and the U.S. yesterday were overshadowed by weak GDP numbers from South Korea, which weighed on most markets. Topix and Nikkei outperformed, with a weaker Yen underpinning exporters. U.S. and U.K stock futures are also moving higher, oil prices are little changed, and the front end WTI future is trading at USD 50.51 per barrel. After the strong round of PMI readings for the Eurozone yesterday markets will be looking for upside surprises in the German Ifo and French business confidence data, which would keep pressure on Bund futures and continue to underpin Eurozone stocks. The FTSE 100 meanwhile seems set to recover some of yesterday’s losses as the Pound drops against USD and EUR, although Gilt futures should continue to outperform Bunds as strong confidence data fuels ECB tapering speculation.

BoC’s Poloz “Wait and See approach to rate cuts”:  saying that the bank’s “…best plan right now, we think, is to wait for the next 18 months or so.” A two track economy makes monetary policy more difficult, as it is challenging to speed up fast growing parts to offset the slower growing parts, he explained. He said the bank has to “weigh the risk of waiting longer against what are the costs associated with doing something more immediate.” He acknowledged that more easing would put the bank “very close to using unconventional tools. And that’s of course not a decision we take lightly.” As for last week, those uncertainties prevented a rate cut. The comments came in response to questions in his ongoing Q&A with the House of Commons Standing Committee on Finance. His comments appear to squash the prospects for a near term rate cut, which seemed to ramp up significantly with his dovish remarks following the announcement. The loonie firmed, as USDCAD backtracked from nearly 1.3400 to 1.3286 following his comments. Overnight the pair recouped the 1.3300 handle and currently trades at 1.3335.

US Data Reports: US flash Markit PMI jumped 1.7 points to 53.2 in October, after falling 0.5 points to 51.5 in September from 52.0 in August. This is the highest since last October’s 54.1 print. New orders rose to 54.7 from 51.1, though the employment component declined. The better than expected headline is consistent with expectations for a pick up in activity in Q4.

Fedspeak: Chicago Fed dove Evans was true to his leanings – the near-term growth outlook is relatively good, and the labor market improvement is solid. And though those should support higher inflation projections, he remains worried that inflation is still too low while the outlook is uncertain. That’s been his concern for some time, and he continues to stress the need for the Fed to show a commitment to its 2% inflation target. The FOMC should undershoot its employment projection, and overshoot on its inflation goal. Evans is not a voter this year, but he does vote in 2017, along with Harker, Kaplan and Kashkari. Fed’s Bullard reiterated one 25 bp rate hike is likely, though he gave no timing. He thinks that should be sufficient for now and expects the low rate environment to be the norm for the next several years. But he acknowledged that the St Louis Fed’s rate forecast is flatter than those of others on the Committee. That’s pretty much the market’s assessment, where implied Fed funds futures are pricing in about a 67% chance for one 25 bp rate increase in December, with the move not fully priced in until 2018.

Main Macro Events Today                

• German Ifo Business Climate – Expected to tick up slightly to 109.6 from 109.5 last time. A survey of 7,000 German businesses that has a strong track record of correlation to the German and wider Euro area economy. Other figures relate to current business Assessment and Expectations.

• US Consumer Confidence – September Consumer Confidence is expected to decrease to 101.0 from 104.1.This compares to a low of 25.3 in February of 2009. Forecast risk: downward, given the drop in the Michigan headline. Market risk: downward, as weaker data could impact rate hike timelines.

• Carney & Draghi  Speeches – The BOE Governor is up first at 14:30 in front of the House of Lords Economic Affairs committee around 14.30 GMT. He’s there to answer questions on “The economic consequences of the vote to leave the EU and the BOE’s response”. This will be one to keep an eye on as we might see Carney walking that fine line between politics and being an independent central bank.  The ECB President is scheduled at 15:30 for a lecture on stability, equity and monetary policy to the German DIW Economic Institute.

Janne Muta

Chief Market Analyst

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Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

FOREX News Today

European Outlook: Asian stock markets are narrowly mixed, with Japanese bourses managing marginal gains as the Yen falls against the Dollar. Stock futures in the U.S. are down, but U.K. futures are slightly in positive territory after the UK100 managed to close with a marginal gain on Thursday. Eurozone bond and stock markets outperformed yesterday after Draghi managed to dampen tapering fears, while postponing any decisions on future policy to December. Bund futures moved sideways in after hour trade, and oil prices are falling towards USD 50 per barrel, which will dampen investor appetite but Eurozone markets are likely to continue outperforming their U.K. counterparts in the wake of Draghi’s statement yesterday. The data calendar is relatively quiet, with only U.K. public finance data, but the ECB’s survey of professional forecasts will give clues about the inflation outlook and comments from Weidmann may add a more hawkish spin to Draghi’s message yesterday. The GER30 is awaiting earnings reports from Daimler as positive numbers from SAP are underpinning the index ahead of the official open.

Kuroda Speech: BOJ will evaluate appropriate yield curve at every meeting, “ideal” can change depending on economy, not immediately thinking of lowering 80tln yen goal and possible to revise reaching 2% inflation time frame (currently target is for Inflation to hit 2% during 2017) !! He also reemphasized that “buying, selling FX is under the jurisdiction of the Finance Ministry”.

ECB – Decisions on QE Postponed until December: Nothing new from the ECB, with major decisions postponed, pretty much as we expected. While Draghi initially spooked markets by saying that an extension to the QE program hasn’t been discussed today, he still managed to keep investors happy in the end, by adding that an abrupt halt to asset purchases is unlikely. With the current program, which runs until March, confirmed at EUR 80 bln per month, this implies an extension of the asset purchase schedule, even if it may come at somewhat reduced levels.

US Data Reports: Revealed firm Philly Fed component data despite a small headline drop to 9.7 in October from a 19-month high of 12.8, alongside a 13k bounce in initial claims in the BLS survey week to a still respectable 260k that remains consistent with a remarkably lean 253k October average. We also saw a 3.2% September existing home sales rise to a 5.47 mln rate that beat estimates, alongside a 0.2% September leading indicators bounce that reversed a 0.2% August drop. The monthly data appear poised for an upturn into Q4, as the bounce in oil prices is allowing a mining and factory output recovery just as the big six-quarter inventory headwind comes to a close.

Main Macro Events Today                

• Canada Retail Sales – Retail sales are expected to rise 0.3% in August after the 0.1% dip in July. The ex-autos sales aggregate is seen expanding 0.4% in August following the 0.1% dip in July. Gasoline prices dipped just 0.9% in August after the 5.6% plunge in July, according to the CPI . Hence we should see the gasoline station sales component exert a very slight drag on total and ex-autos sales. Vehicle sales downshifted to a slower pace in July, and that modest slowing persisted in August according to industry sales figures. Sales volumes grew 0.3% in July, suggestive of some awaking in the consumer after spending declines from March to June.

• Canada CPI – CPI is also expected to rise 0.2% m/m in September after the 0.2% drop in August. Total CPI is seen accelerating to a 1.4% y/y pace in September from the 1.1% rate in August. A pick-up in gasoline prices is expected to drive the gain in total CPI during September relative to August, contrasting with the hefty gasoline price declines that were a drag on total CPI in July and August. The Bank of Canada’s core CPI is seen rising 0.2% m/m in September after the flat reading in August, leaving a 1.8% y/y pace that is identical to the growth rate in in August.

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

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Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.