27 Oct 2015
USD facing data risk but re-enter longs into pullback - BNP
FXStreet (Delhi) – Research Team at BNP Paribas, suggest that to the extent that data expectations are already subdued and the FOMC meeting and subsequent Fed speeches are unlikely to eliminate the possibility of a December hike, we favour to buy into USD pullbacks.
Key Quotes
“This week the USD’s trading theme has been one of consolidation following its sizeable gains in the previous week. The calendar turns more US-centric events over the next three days with data and FOMC policy meeting.”
“Today we expect September durable goods orders to continue to reflect global headwinds to the manufacturing sector. Our economists are forecasting a 1.2% m/m decline in the headline orders, while core orders and shipments should also have slipped as indicators from regional Fed manufacturing surveys have clearly weakened.”
“We also expect October Conference Board measure of consumer confidence to have ticked down to 101 due a slower pace of job market improvement. The data should thus not be of much help to the dollar although markets will probably reserve full judgement until the Q3 GDP report on Thursday.”
“We see USDJPY as having the most upside scope this week as the BoJ (similar to the ECB last week) has the largest potential for a dovish surprise this week and as market is net long JPY according to our positioning indicator.”
Key Quotes
“This week the USD’s trading theme has been one of consolidation following its sizeable gains in the previous week. The calendar turns more US-centric events over the next three days with data and FOMC policy meeting.”
“Today we expect September durable goods orders to continue to reflect global headwinds to the manufacturing sector. Our economists are forecasting a 1.2% m/m decline in the headline orders, while core orders and shipments should also have slipped as indicators from regional Fed manufacturing surveys have clearly weakened.”
“We also expect October Conference Board measure of consumer confidence to have ticked down to 101 due a slower pace of job market improvement. The data should thus not be of much help to the dollar although markets will probably reserve full judgement until the Q3 GDP report on Thursday.”
“We see USDJPY as having the most upside scope this week as the BoJ (similar to the ECB last week) has the largest potential for a dovish surprise this week and as market is net long JPY according to our positioning indicator.”