RJO FuturesCast

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Transcript for: Daily Market Update – Currency Futures – 10/20/2017

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 its 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 going to have some resistance, probably up around 25 82 2590 up in that zone, so keep that in mind.


US Dollar Market

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 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 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.


Euro Market

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 come out of that Spain and Catalonia ordeal. So once again, ECB on Thursday, that’s going to be very important.


Canadian Dollar Market

I’m going to hit on 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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John Caruso

Senior Market Strategist
Follow John on Twitter @JCarusoRJO. John began his career at Wilshire Quinn Capital, a Wealth Management Firm based out of Los Angeles, California. John made his move to the commodity industry at the end of 2005, and began his path at Lind Waldock, at the time the largest retail brokerage division worldwide. John did his undergraduate work at Robert Morris University in Pennsylvania from 1999-2003, where he was a 4 year varsity basketball letterman.  A self-professed “Macro Trader”, John uses a multi-factor fundamental and “quantamental” trading model in distinguishing market cycles based upon the accelerations or decelerations of growth and inflation metrics. His technical and quantitative approach is heavily reliant upon trend and market range analysis via a custom built standard deviation system in helping him make probability-based market decisions. John is an avid reader of all things pertaining to finance, and behavioral economics. Click here to sign-up for John Caruso's Trading Coach Insights. Daily information and insight on all futures marketsin ranging from metals to equities.
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