05/ 11/ 2017

Week Ahead | Dollar Climb to resume soon?

It was a week full of high profile events and much volatility was seen. Sterling was the weakest one as markets responded negatively to the dovish BoE rate cut. Carney, and co. forecast only two hikes in three years and this sent the pound tumbling down. The crisis in Catalonia is far from a resolution as most of the ministers were sent to prison without a bail option but the euro investors seems to ignore it. 

Dollar ended the week mixed after all the events. FOMC delivered a forgettable statement, Jerome Powell was confirmed as President Donald Trump's nomination as next Fed chair, House released the tax bill. Nonetheless, resilience of the greenback after non-farm payroll miss could be seen as hint of underlying strength. And Dollar could be back into driving seat soon.

This week is a slow flow week with no top tier data coming from any region. So markets will be keen on looking at any political developments from USA or Catalonia Crisis.

02/ 11/ 2017

UK Interest Rates in Focus

Dollar weakens broadly after FOMC rate decision that provides little news to the markets. Instead, traders are keen awaiting US President Donald Trump's announcement on nominating Fed Governor Jerome Powell to take over Fed chair job next year. The announcement is expected at 3pm New York Time today. Also, after a day of delay, House is set to reveal the details of the tax bill. But the greenback could continue to stay in range and wait for tomorrow's non-farm payroll report. Meanwhile, Sterling remains the strongest one for the week as markets await the highly anticipated BoE rate hike.

The bigger market mover will be the Bank of England decision. The market is pricing in a 90% chance of a hike so the bigger driver will be signals about what's next. The BoE Minutes will show the extent of unanimity, the BoE inflation report should enlighten on inflation and growth revisions and forecast, while Carney's testimony never disappoints.

01/ 11/ 2017

ADP Report & FOMC in Focus

Dollar trades mildly firmer today as markets await FOMC rate decision. Nonetheless, that would likely be a non-event. Fed is widely expected to stand pat. And, December is the month for rate hike, not the current one. Also, traders mind is probably more on the path beyond December. And that heavily ties to who US President Donald Trump will nominate to succeed Janet Yellen as Fed chair after February. It's reported that Trump will announce to nominate Fed Governor Jerome Powell on Thursday. Meanwhile, House Republicans are delaying the rollout of the tax bill due to unresolved questions on some key elements. The announcement was originally scheduled for today but is now delayed by one day to Thursday.

Economic data to be released today will also be closely watched including ADP employment and ISM manufacturing from US and PMI manufacturing from UK. We're expecting a lot of volatility for the rest of the week.

31/ 10/ 2017

Markets Await the BOJ and the Fed

The forex markets opened the week rather steadily. Euro recovers mildly as there was no escalation in Catalonia tension. sacked regional president Carles Puigdemont remained calm and called for peaceful "democratic opposition" the Madrid's takeover. Dollar pares back some more of recent gains as markets await an eventful week. It's repeatedly reported that US President Donald Trump favors Fed Governor Jerome Powell for the job of Fed Chair after Janet Yellen's term expires early next year. And Powell is seen as someone who will speed up the pace of tightening. But it's far from being certain as some unnamed persons close to Trump were quote saying he changes his minds every day.

Furthermore, the markets are looking towards the BOJ later today which is expected to make its rate announcement and also give out a statement followed by GDP figures from Canada and releases regarding the Euro Zone economy, including the all-important October CPI. Investors will likely remain focused on first-tier events, including the Fed, the BOE and the US NFP report that will take place later in the week.