Today was another usual Monday without too much catalysts to drive the market. As mentioned in our Weekly Outlook, GBP has been largely sold off over the weekend due to concern for another Scotland Independent Referendum.
AUD on the other hand was well supported due to the surprising result of Company Operating Profits q/q which came at 20.1%, largely beat the expected 8% and previous 1.5%.
This alone has increased the GDP upbeat probability and was matched with RBA’s previous statement that Q3 GDP contraction was only temporary. The GDP result is due tomorrow.
We also saw Durable Goods Orders m/m from U.S which was better than expected and previous. However, the Core Durable number was worse than expected and previous. The overall USD picture was soft from this report.
The Pending Home Sales m/m from U.S was also a big drop from expected and previous numbers. The explanation can be the higher mortgage rate possibility in the future, or it can simply be lack of inventories.
Fed member Kaplan also made some hawkish comments but nothing was too different from his previous comments last week.
He expected U.S GDP of 2.25% growth this year and the Fed should hike sooner rather than later.
For EUR
The French Poll in favour of Macron due to the drop of Central candidate has eased the political unstableness over Eurozone and lifted the sentiment for EUR. We saw recovery over EUR from the London session, most notably in EUR/GBP due to the GBP weakness.
However, the fundamental side of EUR remains weak due to ECB’s firm stance on QE regardless of the better economic picture and inflations in European nations.
For USD
USD is still in this ups/downs movement from the political unstableness. Donald Trump is about to make a speech tomorrow and all eyes are on it. The Bear thinks there wouldn’t be enough details in his speech and the whole thing will be vague again which will sink USD. The Bull thinks that regardless of the speech, he’s going to spend more money on infrastructure and military and these alone will boost a strong dollar.
Dollar has been sold off during the Asian session all the way until London session finished, but had a large recovery in NY afternoon with Bond Yield climbed higher and U.S equities also closed higher. Market has once again regained confidence and tomorrow’s speech will be another new catalyst for us.
For GBP
The Brexit uncertainty is back on in the game as we’re approaching March. The news for Scotland Independence Referendum and reports on PM May’s planning to curb freedom of movement for EU citizens as soon as she triggers Article 50 are all contributing to GBP sell-offs.
As mentioned previously, March is be a sentimental month for GBP and we should see large movement to the downside but also large recovery to the upside.
For CAD
The BOC rate decision is on Wednesday and although largely expects to hold rate, the comments of BOC will provide more insight for future of Canada. Fundamentally the recent datas have been promising. We should start seeing some more price in/out CAD from now until Wednesday.
We also had another positive comment today from OPEC secretary general stating that all members have committed to output curb deals.
For AUD
The surprisingly data over the weekend really gave AUD a boost, especially ahead of the GDP report tomorrow. AUD has once again regained its strength and is looking for a nice ride up. The risk will be a disappointed GDP which will really sink AUD as it is already in a very high levels in many pairs.
For NZD
We had a negative Trade Balance today that was a large miss, the ANZ Business Confidence was also lower than previous.
For JPY
We had the Prelim Industrial Production m/m fell to 6 months low to indicate a worry sign for sustaining recent economic growth of Japan. The Retail Sales y/y was much better than expected and previous number. Overall Japan’s economy is still on a tough recovery path and a deflationary environment. Yen has been enjoying a good ride from the safe heaven inflows and will continue to enjoy that benefits with the current unstable geopolitical environment.
For CHF
same position as Yen but less attractive for safe heaven inflows.
Today was another usual Monday without too much catalysts to drive the market. As mentioned in our Weekly Outlook, GBP has been largely sold off over the weekend due to concern for another Scotland Independent Referendum.
AUD on the other hand was well supported due to the surprising result of Company Operating Profits q/q which came at 20.1%, largely beat the expected 8% and previous 1.5%.
This alone has increased the GDP upbeat probability and was matched with RBA’s previous statement that Q3 GDP contraction was only temporary. The GDP result is due tomorrow.
We also saw Durable Goods Orders m/m from U.S which was better than expected and previous. However, the Core Durable number was worse than expected and previous. The overall USD picture was soft from this report.
The Pending Home Sales m/m from U.S was also a big drop from expected and previous numbers. The explanation can be the higher mortgage rate possibility in the future, or it can simply be lack of inventories.
Fed member Kaplan also made some hawkish comments but nothing was too different from his previous comments last week.
He expected U.S GDP of 2.25% growth this year and the Fed should hike sooner rather than later.
For EUR
The French Poll in favour of Macron due to the drop of Central candidate has eased the political unstableness over Eurozone and lifted the sentiment for EUR. We saw recovery over EUR from the London session, most notably in EUR/GBP due to the GBP weakness.
However, the fundamental side of EUR remains weak due to ECB’s firm stance on QE regardless of the better economic picture and inflations in European nations.
For USD
USD is still in this ups/downs movement from the political unstableness. Donald Trump is about to make a speech tomorrow and all eyes are on it. The Bear thinks there wouldn’t be enough details in his speech and the whole thing will be vague again which will sink USD. The Bull thinks that regardless of the speech, he’s going to spend more money on infrastructure and military and these alone will boost a strong dollar.
Dollar has been sold off during the Asian session all the way until London session finished, but had a large recovery in NY afternoon with Bond Yield climbed higher and U.S equities also closed higher. Market has once again regained confidence and tomorrow’s speech will be another new catalyst for us.
For GBP
The Brexit uncertainty is back on in the game as we’re approaching March. The news for Scotland Independence Referendum and reports on PM May’s planning to curb freedom of movement for EU citizens as soon as she triggers Article 50 are all contributing to GBP sell-offs.
As mentioned previously, March is be a sentimental month for GBP and we should see large movement to the downside but also large recovery to the upside.
For CAD
The BOC rate decision is on Wednesday and although largely expects to hold rate, the comments of BOC will provide more insight for future of Canada. Fundamentally the recent datas have been promising. We should start seeing some more price in/out CAD from now until Wednesday.
We also had another positive comment today from OPEC secretary general stating that all members have committed to output curb deals.
For AUD
The surprisingly data over the weekend really gave AUD a boost, especially ahead of the GDP report tomorrow. AUD has once again regained its strength and is looking for a nice ride up. The risk will be a disappointed GDP which will really sink AUD as it is already in a very high levels in many pairs.
For NZD
We had a negative Trade Balance today that was a large miss, the ANZ Business Confidence was also lower than previous.
For JPY
We had the Prelim Industrial Production m/m fell to 6 months low to indicate a worry sign for sustaining recent economic growth of Japan. The Retail Sales y/y was much better than expected and previous number. Overall Japan’s economy is still on a tough recovery path and a deflationary environment. Yen has been enjoying a good ride from the safe heaven inflows and will continue to enjoy that benefits with the current unstable geopolitical environment.
For CHF
same position as Yen but less attractive for safe heaven inflows.