Monday was comparatively quiet as it traditionally happens recently. The trading week started with flat Retail Sales in Japan at 2.1% growth in September and binary options for USD/JPY currency pair were traded in the PUT-mode initially. Nevertheless, a risk appetite came back to stock markets and NIKKEI 225 was buoyant. So, USD/JPY followed the equities, being vulnerable to high-yield assets growth. Aussie and Kiwi, however, had a delayed reaction on the overall binary options market sentiment and kept declining on Monday. European trading session started with Italian PPI report which came in exactly in line with the expectations. EU Economic forecasts bulletin showed a certain slowdown in economists’ outlook and the market players were buying PUT options for EUR/USD mostly. The same story was in focus for the British pound currency pairs, as BoE Consumer Credit figures were published in red. The U.S. data was mixed with Core PCE Price index in line at 2.0% on yearly basis and slightly higher month-on-month (0.2% versus 0.1%). Personal income was slightly lower in September compared to previous months and Personal spending report showed the same level of consumer growth as before but previous reading was revised up. All that data was positive for USD binary options.
Reports from Japan showed an improvement in the jobs market in the country in September and that was the signal for traders to buy CALL options for USD/JPY which performed on bullish bias throughout the rest of the week, breaking through several technical resistance levels. AUD/USD reversed and stopped falling despite worth-than-expected building approvals in Australia. RBA Assistant Governor Bullock had his speech on Tuesday Asian session and he expressed a more hawkish view on the Australian economy as well as the global growth outlook. That helped New Zealand dollar to follow its neighbour. Both commodity currencies were gaining strength starting from Tuesday. In contrast, European data was not mixed but ugly. French Consumer spending declined by 1.7% in September while economists were forecasting a much moderate decline by 0.4%. German unemployment change failed to meet market expectations as well as Italian GDP showed stagnation on both quarterly and yearly basis. In addition, Eurozone reports came in even worse. Business and Consumer survey together with Business climate expectations for October slowed down. EU GDP grew at a much slower pace than it was anticipated: 0.2% QoQ (0.4% expected) and 1.7% YoY (1.9% forecasted). All that news were negative for EUR/USD binary options and the most popular currency pair re-tested yearly lows around 1.1300 on Tuesday. The U.S. consumer confidence report was also in favour of such a scenario, as it showed a sustainable growth in October.
The key event for the binary options market was Bank of Japan’s meeting and interest rates decision on Wednesday. ‘Unchanged’ verdict and the confirmation of the same monetary policy to remain convinced investors to start buying CALL options for high-yield assets and USD/JPY accelerated its growth. Europen Consumer Price index showed a significant improvement in October, with the final revision of 2.2%. Inflationary pressures picked up and that might reflect on ECB’s perspective to start hiking the interest rates. However, the market reaction was delayed and EUR/USD was hovering at the same levels as on Tuesday nearing important technical support. The overall volatility was down in New York initially. Although, CALL option buyers came back to equity markets with massive volume and that pushed major stock indices off multi-month low levels. One of the supportive factors was the ADP employment report which confirmed the robust growth in the U.S. jobs market. Canadian GDP report was also positive, however, USD/CAD failed to break the psychological support level around 1.3000 mark due to the declining WTI Crude oil prices on higher-than-expected inventories in the United States.
The first trading day of November was completely different. Global equities reacted on U.S. stock indices’ rebound with heavy buying of CALL options around the world. High-risk currency pairs also picked up the bullish momentum led by emerging markets. The biggest story was in Argentina as the worst performing currency in 2018 surged 19% on IMF deal and unprecedently high level of interest rates. Trade balance in Australia showed that the things are not so bad as it was previously predicted and AUD/USD soared. The same picture was seen for European currencies with the British pound leading the gains on Brexit negotiations progress between the UK and EU. Bank of England decided to leave the interest rates unchanged at the same low level due to economic uncertainty. However, GBP/USD was trading in CALL-mode, breaching 1.3000 technical resistance. The U.S. data was mixed, however, equities rallied.
Friday was comparatively quiet as traders were expecting the main event of the trading week - U.S. Non-Farm Payrolls report. The headline figure came in at a surprisingly strong level of 250 thousand jobs added in October. Other components of the employment report were also positive for the U.S. economy and the greenback as Average Hourly Earnings grew in October by 3.1% year-on-year. The unemployment rate of 3.7% confirmed the U.S. jobs market operating at almost full capacity. CALL options were in demand for USD/JPY despite a certain decline in U.S. stock indices on profit-taking.