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USD/JPY Fundamental Analysis – November 5, 2015 – Forecast

Barry Norman
usdjpy wednesday bnsnla

Analysis and Recommendation:

The USD/JPY added 11 points as the greenback continued to gain. The pair is trading at 121.18 above its normal trading range. The U.S. dollar rose slightly in the lower 121 yen zone Wednesday morning in Tokyo, aided by improving market participants’ risk appetite due to higher Tokyo stocks and positive service-sector data out of China.

The dollar gained some footing against the yen on the back of a surge in the Nikkei stock index that ended the morning session 2.42 percent higher, dealers said.

Overnight in New York, the U.S. unit climbed to the 121 yen level on a rise in U.S. Treasury bond yields.

“Given rising U.S. long-term interest rates, it seemed that expectations of a U.S. rate hike (within the year) have reignited” ahead of the U.S. employment report for October due out on Friday, said Takuya Kanda, senior researcher at Gaitame.com Research Institute Ltd.

“Strong Chinese economic data had an impact on risk-on mood, benefitting the dollar,” said Kanda, referring to the Caixin/Markit China general services purchasing managers’ index, which rose to 52.0 in October from September’s 14-month low of 50.5.

Markets remained firmly fixed on Friday’s US non-farm payrolls report and whether the data will support the case for the Federal Reserve to hike interest rates in December.

Before Friday’s non-farm payrolls, the markets will have a chance to gauge the health of the US economy through the ADP employment data and the ISM report on services sector sentiment due later in the session.

“We’ve seen nonfarm payrolls go in a completely different direction from ADP or ISM and we’ve also seen average hourly earnings or the unemployment rate trigger a U-turn after the initial reaction to payrolls,” wrote Kathy Lien, managing director of FX strategy at BK Asset Management.

“So traders are rightfully skeptical about whether the labour market report will confirm the Federal Reserve’s hawkish bias until the actual report is released.”

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.

Today’s economic releases:

Cur.

 

Event

Actual

Forecast

Previous

 

  USD

 

API Weekly Crude Oil Stock

2.800M

 

4.100M

 

 

  NZD

 

Employment Change (QoQ) (Q3)

-0.4%

0.4%

0.3%

 

 

  NZD

 

Unemployment Rate (Q3)

6.0%

6.0%

5.9%

 

 

  AUD

 

Retail Sales (MoM) (Sep)

0.4%

0.4%

0.4%

 

 

  AUD

 

Trade Balance (Sep)

-2.317B

-3.000B

-2.711B

   

  CNY

 

Caixin Services PMI (Oct)

52.0

50.8

50.5

   

 

Upcoming Economic Events that you should be monitoring:

Wednesday, November 4, 2015

Cur.

 

Event

Actual

Forecast

Previous

 

  AUD

 

RBA Governor Stevens Speaks  

 

 

 

 

 

  JPY

 

Monetary Policy Meeting Minutes

 

 

 

 

 

  USD

 

FOMC Member Stanley Fischer 

 

 

 

 

 

  EUR

 

German Factory Orders (MoM) (Sep)

 

1.0%

-1.8%

 

 

  EUR

 

ECB Economic Bulletin  

 

 

 

 

 

  EUR

 

Retail Sales (MoM) (Sep)

 

0.2%

0.0%

 

 

  EUR

 

ECB President Draghi Speaks  

 

 

 

 

 

  GBP

 

Interest Rate Decision (Nov)

 

0.50%

0.50%

 

 

  GBP

 

BoE MPC Meeting Minutes

 

 

 

 

 

  GBP

 

BoE Gov Carney Speaks  

 

 

 

 

 

  USD

 

FOMC Member Dudley Speaks  

 

 

 

 

 

  USD

 

Initial Jobless Claims

 

262K

260K

 

 

  USD

 

Unit Labor Costs (QoQ) (Q3)  

 

2.3%

-1.4%

 

 

  USD

 

FOMC Member Stanley Fischer 

 

 

 

 

 

  USD

 

FOMC Member Lockhart Speaks 

 

 

 

   

Government Bond Auctions

Date Time Country

Nov 03 10:10 Austria Holds RAGB bond sale

Nov 04 15:30 Sweden Announces details of Bond on 11 Nov

Nov 04 N/A Holland Announces details of Bond on 10 Nov

Nov 05 09:30 Spain Auctions Bonos

Nov 05 09:50 France Auctions OATs

Nov 05 10:03 Sweden Holds I/L bond auction

Nov 09 12:00 Norway Details bond auction on 11 Nov

Nov 09 15:30 Italy Announces details of BTPs/CCTeu on 12 Nov

Nov 09 N/A US Holds 3-year note auction

Nov 10 10:30 UK 0.125% 2058 I/L Gilt auction

Nov 10 N/A Holland Eur 2.0-3.0bn 0% Apr 2018 DSL

Nov 10 N/A US Holds 10-year note auction

Nov 11 10:03 Sweden Holds bond auction

Nov 11 11:15 Norway Holds bond auction

Nov 11 10:30 Germany Eur 3bn 0.25% Oct 2020 Bobl

Nov 12 10:10 Italy Auctions BTPs/CCTeus

Nov 12 10:30 UK 4.25% 2039 Gilt auction

Nov 12 N/A US Holds 30-year bond auction

 

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