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The is positive on the day but has given up some of its earlier gains as it prepares to stare down a quiet economic calendar for Monday. The has been the center of attention thus far, with more tension in the Catalan crisis emerging after Catalonia's regional president failed to clarify whether or not independence was declared. For now, risks have been contained to local assets like Spanish Bonos and the IBEX 30. The is holding onto its gains from last week as traders have an eye towards the September UK CPI report tomorrow, which should show +3% headline inflation, securing a 25-bps rate hike from the BOE at its November policy meeting in the process (overnight index swaps are currently pricing in a 76% chance of a hike).
: Monday, October 16, 2017 North American Releases
The North American economic calendar is light on Monday, with no ‘high' rated data releases or events, and the only ‘medium' ranked event the US Monthly Budget Statement is one that will likely be overlooked. In fact, for the first half of this week, the North American economic calendar will be on the lighter side, with both ‘high' rated data releases or events for Canada and the United States coming on Friday, in the form of the September Canadian CPI report and Fed Chair Janet Yellen's speech on monetary policy since the global financial crisis.
: Monday, October 16, 2017
Chart of the Day:
EURUSD: Retail trader data shows 39.0% of traders are net-long with the ratio of traders short to long at 1.56 to 1. In fact, traders have remained net-short since Apr 18 when EURUSD traded near 1.08123; price has moved 9.2% higher since then. The number of traders net-long is 9.2% higher than yesterday and 1.1% lower from last week, while the number of traders net-short is 11.7% higher than yesterday and 19.5% higher from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EURUSD prices may continue to rise. Traders are further net-short than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger EURUSD-bullish contrarian trading bias.
Five Things Traders are Reading
by Paul Robinson, Market Analyst by Christopher Vecchio, CFA, Senior Currency Strategist by Paul Robinson, Market Analyst by Martin Essex, MSTA, Analyst and Editor by Christopher Vecchio, CFA, Senior Currency Strategist The DailyFX US AM Digest is published every day before the US cash equity open - you can to receive this report in your inbox every day.
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