Forex News and Events

Fed Speakers Ahead (by Peter Rosenstreich)

FX markets have been treading water for most of the week as a lack of fresh news keeps traders on the sidelines. However, that should all change today. On the US calendar, five FOMC members are scheduled to speak. If this doesn’t spark USD volatility, nothing will. The lineup is expected to be Bullard (hawk), Yellen (dove), Lacker (hawk), Evans (dove), Dudley (dove) and Fischer (dove). Fed Chair Yellen will garner the most attention due to her position yet it’s likely that markets will be focused on Fischer’s talk titled: The Transmission of Exchange Rates to Output and Inflation, which could provide clues on how sensitive the Fed’s monetary policy is to USD price. As the market has almost fully priced in a December rate hike any indication of lower confidence in the strength of the US economy will have immediate ramifications for USD longs (IMM show USD spec longs has new highs). Moving forward it will be incoming US economic data that will ultimately define the direction of the Fed. This Friday’s retails sales will be critical in convincing the markets that the domestic consumer is actually benefiting from strong labor markets and lower oil prices. Interestingly, consensuses of a gradual Fed rate path could be called into question should the data start to truly accelerate. ECB Draghi’s comments to European parliament this morning increased our conviction levels. He sounded extremely dovish, while signaling further easing was likely in December. Draghi mentioned that inflation pressures had weakened and stating that economic softness has weighed on wage growth, which in turn will dampen inflation expectations. Despite the fact that these statements merely reiterated his comments made at the ECB press conference, the EUR weakened. Mr. Draghi indicated that all instruments could be used and asset purchase would extend past September if the path of inflation was not correct. We remain bullish on USD and anticipate that EURUSD bearish momentum should challenge 1.0660 (21/04/2015 base low). EURUSD upside corrections should be limited to 1.0774, which would provide a solid opportunity to reload EURUSD shorts.

Russia Q3 GDP (by Yann Quelenn)

In September, the Russian economy continued to contract. The last Q2 GDP printed at a very poor -4.6% year-on-year. The main drivers were the lingering low commodity prices. Indeed, oil prices accounts for a major part of Russian revenues. At the same time, economic data is still concerning. Last retail sales showed a 10% m/m decline in October. We only saw a deceleration in the contraction of capital investment and consumer spending, which shows sign of hopes in a recovery. In spite of this overall data is still very negative.

As a result, we clearly do not have high expectations for the Q3 GDP forecasted result, which is expected to contract to 4.3% y/y amid a crude oil barrel price below 47$. It is important to note that the correlation between the ruble and oil prices has never been so high. In addition, the greenback is worth a little over 65 rubles. The USDRUB is still driven upside by the stronger-than-expected last Friday’s NFP, U.S. December rate hike expectations and low crude oil prices

However, Russia’s economy is not in agony but inflation still remains a serious concern. This week, Russia’s inflation has risen by 0.2% for the fifth week in a row. Inflation remains very high and annual CPI should end up around 15%, which is seriously limiting the room for the Russian central bank to cut rates. Between very negative growth and high inflation, Russia is struggling. We believe that the key rate will hold at 11% at December meeting.

Crude Oil - Weakening

Crude Oil



















































































Today's Key Issues Country/GMT
Oct Money Supply M1 YoY, exp 11,20%, last 11,40% CNY/08:01
Oct Money Supply M0 YoY, exp 3,60%, last 3,70% CNY/08:02
ECB's Draghi Testifies to Lawmakers in EU Parliament EUR/08:30
Oct CPI MoM, exp 0,10%, last 0,40% SEK/08:30
Oct CPI YoY, exp 0,10%, last 0,10% SEK/08:30
Oct CPI CPIF MoM, exp 0,10%, last 0,40% SEK/08:30
Oct CPI CPIF YoY, exp 1,10%, last 1,00% SEK/08:30
Oct CPI Level, exp 314,3, last 314,06 SEK/08:30
Sep Mining Production MoM, exp -0,60%, last -1,10% ZAR/09:30
Sep Mining Production YoY, exp -1,00%, last 3,80% ZAR/09:30
Sep Platinum Production YoY, last 63,00% ZAR/09:30
Sep Gold Production YoY, last -0,10% ZAR/09:30
Sep Industrial Production SA MoM, exp -0,10%, last -0,50% EUR/10:00
Sep Industrial Production WDA YoY, exp 1,30%, last 0,90% EUR/10:00
Sep Retail Sales MoM, exp -0,90%, last -0,90% BRL/11:00
Sep Retail Sales YoY, exp -7,20%, last -6,90% BRL/11:00
Sep Retail Sales Broad MoM, exp -2,50%, last -2,00% BRL/11:00
Sep Retail Sales Broad YoY, exp -12,20%, last -9,60% BRL/11:00
Sep Industrial Production YoY, exp 4,90%, last 6,40% INR/12:00
Oct CPI YoY, exp 4,90%, last 4,41% INR/12:00
nov..07 Initial Jobless Claims, exp 270k, last 276k USD/13:30
oct..31 Continuing Claims, exp 2155k, last 2163k USD/13:30
Sep New Housing Price Index MoM, exp 0,20%, last 0,30% CAD/13:30
Sep New Housing Price Index YoY, exp 1,30%, last 1,30% CAD/13:30
Fed's Bullard, Lacker Speak on Monetary Policy in Washington USD/14:05
Yellen Makes Welcoming Remarks at Fed Policy Conference USD/14:30
nov..08 Bloomberg Consumer Comfort, last 41,1 USD/14:45
Fed's Lacker Participates in Monetary Policy Panel USD/14:45
Sep JOLTS Job Openings, exp 5400, last 5370 USD/15:00
Fed's Evans Speaks on Economy and Policy in Chicago USD/15:15
ECB's Weidmann Speaks in Paris EUR/16:00
BOE Chief Economist Andy Haldane Speaks in London GBP/17:00
Fed's Dudley Speaks on Economy and Policy in New York USD/17:10
ECB's Mersch Speaks in Windsor, UK EUR/18:45
Oct Monthly Budget Statement, exp -$131.5b USD/19:00
Oct New Yuan Loans CNY, exp 800.0b, last 1050.0b CNY/23:00
Oct Money Supply M2 YoY, exp 13,20%, last 13,10% CNY/23:00
Oct Aggregate Financing CNY, exp 1050.0b, last 1300.0b, rev 1302.8b CNY/23:00


The Risk Today

Yann Quelenn

EURUSD is moving sideways. Hourly support lies at 1.0675 (10/11/2015 low). Hourly resistance can be found at 1.0897 (05/11/2015 high). The technical structure is clearly negative. Stronger resistance stands at 1.1095 (28/10/2015 high). Nonetheless we still expected a retracement of the pair above 1.0800 as it seems there are still some buying interest pressures. In the longer term, the technical structure favours a bearish bias as long as resistance holds. Key resistance is located region at 1.1453 (range high) and 1.1640 (11/11/2005 low) is likely to cap any price appreciation. The current technical deteriorations favours a gradual decline towards the support at 1.0504 (21/03/2003 low).

GBPUSD is pausing after its continuous increase over the past few days. Hourly support can be found at 1.5027 (06/11/2015 low). Hourly resistance at 1.5219 (05/11/2015 high) has been broken. Expected to show continued buying interest pressures. The long-term technical pattern is negative and favours a further decline towards the key support at 1.5089 , as long as prices remain below the resistance at 1.5340/64 (04/11/2015 low see also the 200 day moving average). However, the general oversold conditions and the recent pick-up in buying interest pave the way for a rebound.

USDJPY is moving sideways. Hourly resistance lies at 123.60 (09/11/2015 high). Nonetheless the short-term technical structure favours a further rise. Strong support lies at 120.80 (22/10/2015 low). Expected rise of the pair. 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).

USDCHF is still holding above 1.0000, confirming buying interest. The technical structure still shows a bullish momentum. Hourly support is given at 0.9944 (06/11/2015 low). Expected to further consolidate. In the long-term, the pair has broken resistance at 0.9448 and key resistance at 0.9957 suggesting further uptrend. Key support can be found 0.8986 (30/01/2015 low). As long as these levels hold, a long term bullish bias is favoured.


Resistance and Support:





















EURUSDGBPUSDUSDCHFUSDJPY
1.15611.56591.0676147.66
1.13871.55081.0240135.15
1.10951.52191.0129125.86
1.07211.51801.0038123.03
1.05041.50270.9739120.07
1.04581.48570.9476118.07
100001.45660.9384116.18

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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