RJO FuturesCast 10/20/2017 – Currencies

Good morning traders, John Caruso coming
to you here for the morning of October 20th with your currency outlook for the
day. First we’ll take a peek back in the overnight. Big news coming out last night
was that the Senate did pass their budget plan, and obviously that is a
steady progression towards tax reform. So tax reform could possibly be next. Barring any hiccups from there it looks like it’s smooth sailing as far as
stocks are concerned. The stock market’s up 0.5 percent here in the overnight.
We’re trading about 25 70 on the S&P 500. We are gonna have some resistance,
probably up around 25 82 2590 up in that zone, so keep that in mind. Looking at the
dollar, the dollar is rocking higher right now, it’s up 33 points.Again, that’s kind
of drafting support off of the the Senate passing its budget. So right now
you got interest rates higher, you’ve got the dollar higher, you’ve got the Feds
rate hike odd sitting at 92%. We’re trading about 93 60 in the cash market
for the US dollar, once again up 33 points. I do think the dollar is kind of
largely trapped between 94 and 93 over the past couple of weeks. I think what
they’re waiting for, this is another big event coming down the pipe that’s next
week, next Thursday, is the ECB meeting. And what are they going to do as far as
trimming back their quantitative easing? I’ve heard both sides. I’ve heard they
could leave it intact for the time being and I’ve also heard heard that they
could cut it to 30 billion in sovereign debt purchases a month, but
extend it out for another year. So we’re keeping our ear to the ground, that’s
coming out next Thursday, so we’ve got to watch for that. Hitting on the Euro,
retreating 118 26 and a half, trading down 39. Once again, much like the dollar,
the euro has been trapped in a sideways range, largely looking for its next
breakout either to the upside or to the downside, coming from the ECB next
Thursday. The thing about Europe right now is
Northern Europe looks excellent. The German economy, German
GDP is accelerating, German inflation seems to be picking up as well. We did
see a bead on the repeat p.i numbers in the overnight. However,
southern Europe looks disastrous right now. Italian banks are
struggling at the moment, and we’re also hearing there’s a lot of noise coming
out of Spain and Catalonia, and there’s more that could develop on that front. And I think that’s best to assume that more chaos could could come out of that
Spain and Catalonia ordeal. So once again, ECB on Thursday, that’s gonna be very
important. I’m gonna hit on the the Canadian dollar. The Canadian dollar is the
biggest loser here today. It’s down 70 points trading at 79 42. So a big failure
on the chart as it failed to push above 80 40 in the last few trading
sessions. We have the one thing about the the Canadian, we’ve heard a lot of
hawkish dialogue coming out of the Bank of Canada in recent weeks. Kind of
steering and preparing the market for an interest rate hike. However this morning
we did see a big drop in Canadian retail sales, and we also saw a miss on the
Consumer Price Index. The Consumer Price Index missed by 10 basis points. So
whether or not that’s going to deter any interest rate talk and hawkish dialogue
from the BOC moving forward, I think it’s probably safe to assume that that’s
going to be the case. But the wild card of course for all the currency markets
is going to be Thursday’s ECB report, I really can’t stress that enough. So we’ll
look forward to that, feel free to reach out to me at the desk if you have any
other questions on some of the other foreign currencies, I’m around all day.
Once again, I’m John Caruso, thank you for tuning in.

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