Forex News and Events
Imports slump (by Peter Rosenstreich)
Disappointing Chinese trade data has taken the wind out of the dominant risk recovery story. China trade surplus was solid, yet weak imports raised concerned that the engine of economic growth remains in first gear. The weak import read again highlights that the domestic economic situation remains fragile. On the topline, trade surpluses expanded to $60.3bn in September against concerns for a tightening to $48.2bn. China’s imports collapsed 20.4% in September, lower than the expected fall of 16.0% and following the deterioration of 13.8% in August. Imports into China from ASEAN dropped 26.6% and imports from Japan dropped 19.3%. However, exports came in slightly better falling only -3.7% y/y against expectations for a contraction of -6.0% y/y. The negative reaction was clear in commodity currencies. China is Australia and New Zealand’s largest export destination by far, therefore the weaker read suggests that the current recovery rally has limited upside scope. NZDUSD dropped from 0.6715 to 0.6657 with the bearish target of 0.6586 in traders’ sights. Traders ignored the NAB business confidence, which increased to 5 in September against a 1 in August, to focus on the weaker China results. AUDUSD declined from 0.7364 to 0.7294 on the soft Chinese import numbers. AUDUSD traders will now be focused on the 0.7220 support (38% Fibo retracement from Sept rally), while 0.7380 will cap the upside. That said, taking a midterm view the measure taken (fiscal and monetary actions) by Chinese policy makers will stabilize domestic demand, allowing imports to improve. Eventually lifting regional trading partners.
German ZEW set to decline (by Yann Quelenn)
German economic conditions are declining. The ZEW, economic sentiment indicator, is likely to reveal the truth behind this statement today. Data is expected to print lower than the previous figure of 67.5 in September.
Earlier this morning, the final inflation data for September was released and is now back to zero. The decline in energy prices has weighed on the CPI. The fundamentals remain positive nonetheless, as Germany has been able to run a budget surplus for the past three years. However the current Volkswagen issue is becoming increasingly serious. As of now there are approximately 500’000 Americans VW owners whose cars are now illegal to drive. In addition, German exports fell 5.2% in August as the overall German car industry, which includes a non-negligible number of suppliers are hit by this scam. There are growing reasons to worry.
Nevertheless, Germany remains the most competitive European economy. From our point of view, Germany is the only European country capable of controlling its debt-to-GDP ratio, which remains below 80%. Other European countries struggle with the inability to debase the currency and see their debt growing. We remain bearish on the EURUSD and we target the pair to head back towards 1.1200.
Today's Key Issues | Country/GMT |
Sep Producer & Import Prices MoM, exp -0.10%, last -0.70% | CHF/07:15 |
Sep Producer & Import Prices YoY, exp -6.80%, last -6.80% | CHF/07:15 |
Sep CPI MoM, exp 0.30%, last -0.20% | SEK/07:30 |
Sep CPI YoY, exp 0.00%, last -0.20% | SEK/07:30 |
Sep CPI CPIF MoM, exp 0.40%, last -0.10% | SEK/07:30 |
Sep CPI CPIF YoY, exp 0.90%, last 0.80% | SEK/07:30 |
Sep CPI Level, last 312.81 | SEK/07:30 |
3Q House Price Index QoQ, last 1.20% | NOK/08:00 |
Bank of England Credit Conditions & Bank Liabilities Surveys | GBP/08:30 |
Sep CPI MoM, exp 0.00%, last 0.20% | GBP/08:30 |
Sep CPI YoY, exp 0.00%, last 0.00% | GBP/08:30 |
Sep CPI Core YoY, exp 1.10%, last 1.00% | GBP/08:30 |
Sep Retail Price Index, exp 260, last 259.8 | GBP/08:30 |
Sep RPI MoM, exp 0.10%, last 0.50% | GBP/08:30 |
Sep RPI YoY, exp 1.00%, last 1.10% | GBP/08:30 |
Sep RPI Ex Mort Int.Payments (YoY), exp 1.10%, last 1.20% | GBP/08:30 |
Sep PPI Input NSA MoM, exp 0.30%, last -2.40% | GBP/08:30 |
Sep PPI Input NSA YoY, exp -13.00%, last -13.80% | GBP/08:30 |
Sep PPI Output NSA MoM, exp -0.10%, last -0.40% | GBP/08:30 |
Sep PPI Output NSA YoY, exp -1.80%, last -1.80% | GBP/08:30 |
Sep PPI Output Core NSA MoM, exp 0.00%, last 0.00% | GBP/08:30 |
Sep PPI Output Core NSA YoY, exp 0.20%, last 0.10% | GBP/08:30 |
Aug ONS House Price YoY, exp 5.00%, last 5.20% | GBP/08:30 |
Oct ZEW Survey Current Situation, exp 64, last 67.5 | EUR/09:00 |
Oct ZEW Survey Expectations, exp 6.5, last 12.1 | EUR/09:00 |
Oct ZEW Survey Expectations, last 33.3 | EUR/09:00 |
BOE's Gertjan Vlieghe Testifies in Front of U.K. Lawmakers | GBP/09:00 |
Sep NFIB Small Business Optimism, exp 95.5, last 95.9 | USD/10:00 |
BOE's Ian McCafferty Testifies in Front of U.K. Lawmakers | GBP/10:00 |
Central Bank Weekly Economists Survey | BRL/11:25 |
Fed's Bullard Speaks on Final Day of NABE Annual Meeting | USD/12:00 |
oct..09 Bloomberg Nanos Confidence, last 55.6 | CAD/14:00 |
Central Bank Currency Swap Auction Results | BRL/14:50 |
Bank of England official Andrew Haldane speaks in London | GBP/17:00 |
oct..11 Trade Balance Weekly | BRL/18:00 |
RBNZ Governor Wheeler Speaks at INFINZ | NZD/20:10 |
Sep New Yuan Loans CNY, exp 900.0b, last 809.6b | CNY/22:00 |
Sep Money Supply M2 YoY, exp 13.10%, last 13.30% | CNY/22:00 |
Sep Aggregate Financing CNY, exp 1200.0b, last 1080.0b, rev 1082.3b | CNY/22:00 |
Sep Money Supply M1 YoY, exp 9.80%, last 9.30% | CNY/22:00 |
Sep Money Supply M0 YoY, exp 3.00%, last 1.80% | CNY/22:00 |
Sep Monthly Budget Statement, exp $95.0b, last $105.8b | USD/22:00 |
The Risk Today
Yann Quelenn
EUR/USD keeps pushing higher and is now consolidating. Hourly resistance can be found at 1.1460 (18/09/2015 high). Support can be found at 1.1087 (03/09/2015 low). Stronger support lies at 1.1017 (18/08/2015 low). In the longer term, the symmetrical triangle from 2010-2014 favored further weakness towards parity. As a result, we view the recent sideways moves as a pause in an underlying declining trend. Key supports can be found at 1.0504 (21/03/2003 low) and 1.0000 (psychological support). We remain in a downside momentum.
GBP/USD's momentum is fading. Hourly resistance can be found at 1.5383 (22/09/2015 low). Hourly support can be found at 1.5087 (05/05/2015 low). Stronger support can be found at 1.4960 (23/04/2015 low). In the longer term, the technical structure looks like a recovery. Strong support is given by the long-term rising trend-line. A key support can be found at 1.4566 (13/04/2015 low).
USD/JPY is moving sideways. There is no clear momentum. The pair is still moving around the 200-day moving average. Hourly support is given at 118.61 (04/09/2015 low). Stronger support can be found at 116.18 (24/08/2015 low). Hourly resistance can be found at 121.75 (28/08/2015 high). A long-term bullish bias is favored as long as the strong support at 115.57 (16/12/2014 low) holds. A gradual rise towards the major resistance at 135.15 (01/02/2002 high) is favored. A key support can be found at 116.18 (24/08/2015 low).
USD/CHF is declining but has failed to hold below 0.9600. Hourly resistance can be found at 0.9844 (25/09/2015 high). Expected target of the hourly support at 0.9528 (18/09/2015 low). In the long-term, the pair has broken resistance at 0.9448 suggesting the end of the downtrend. This reinstates the bullish trend. Key support can be found 0.8986 (30/01/2015 low).
Resistance and Support:
EURUSD | GBPUSD | USDCHF | USDJPY |
1.1714 | 1.5819 | 1.0676 | 135.15 |
1.1561 | 1.5659 | 1.024 | 125.86 |
1.146 | 1.5383 | 0.9903 | 121.75 |
1.1387 | 1.5259 | 0.9603 | 119.67 |
1.1106 | 1.5089 | 0.9513 | 118.61 |
1.1017 | 1.496 | 0.9259 | 116.18 |
1.0809 | 1.4566 | 0.9151 | 115.57 |
This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.
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