Daily FX Market Commentary

Andy Harrison

Good Morning,

LMAX Close

USDJPY 113.679 | EURUSD 1.13663 | AUDUSD 0.73057 | NZDUSD 68616 | USDCAD 1.3275 | USDCHF 0.99404 | GBPUSD 1.2825 |

LMAX highs and Lows 06.00 GMT

                                Highs | Lows

EURUSD               1.13923 | 1.13632

USDJPY                 113.709 | 113.223

GBPUSD               1.28500 | 1.28191

USDCHF               0.99486 | 0.99184

AUDUSD              0.73183 | 0.72953

USDCAD               1.32868 | 1.32623

NZDUSD               0.68716 | 0.68383

EURCHF                1.13100 | 1.1288

EURGBP               0.88722 | 0.8860

EURJPY                 129.273 | 128.917

For Today

• GBP: A little drift from the opening and the Cable moving into the Tokyo session testing the 1.2820 level before rising slowly through the balance of the session to push through to the 1.2845 late into the session, light bids through to the 1.2740 level where stronger bids start to appear on any move through to the 1.2700 area, a dip through the level will likely see weak stops and possibly a few break out stops however, notwithstanding Brexit news the market would like see some congestion through to the 1.2630 level and the return of strong bids to the market, topside offers through the 1.2880 level likely to be congested however a push beyond the 1.2900 areas opens the market a little with limited stops and offers through the handle and into the more congested 1.3000 areas.
• JPY: USD weakness showed through with FOMC likely to be a catalyst of position lightening through to the release, USDJPY opened around the 113.65 areas before drifting into the Tokyo session holding the 113.50 level but finally succumbing to fresh momentum low chasing the market through to the 113.25 level before finding sufficient buyers to hold the market and the move into the grey hours,
• AUD: The Oz struggled through the session drifting lightly through the 73 cents levels basing around the 0.7295 areas before moving deeper into the Tokyo session to push back through to the 0.7315 level and continuing to rise into the grey hours, Topside offers into the 0.7340 areas likely to slow the market through to the 0.7360 however plenty of congestion in that area and any push through see’s the congestion increasing through into the 74 cents level. downside bids light back through the 73 cent areas with weak stops on a move through the level and opening another test to and through the 0.7250 areas with stronger bids then appearing on any dips lower through to the 72 cents area.
• EUR: A quiet few hours saw the market in a tight 1.1365-70 level before moving into the Tokyo session and a slow steady rise through to the 1.1390 level for the move into the grey hours, congestion through the 1.1400 areas and likely to continue through to the 1.1440-60 level and stronger offers likely to increase, into the 1.1480 areas with an old trend line in the area and likely to take the edge of any rally through to the 1.1500, limited congestion and weak stops through the 1.1520 area and the market likely to test the 1.1550 areas before running out of steam with increasing congestion likely to be building, downside bids light through to the 1.1300 areas weak stops are likely to be through the level however stronger congestion into the 1.1260 level and limited room with that congestion continuing through to the 1.1220 area.

 

Overnight News

AUD:

Australian Q3 Building CAPEX -2.8% QoQ Seasonally adjusted

Australian Q3 Plant machinery CAPEX 2.2% QoQ Seasonally adjusted

CNY:

Chinese banks asset growth falls to historic low

USD/CNY:

China specialists who long supported engagement, are now warning of Beijing’s efforts to influence US Society

US trade rep. China policies on auto tariffs egregious Lighthizer will examine tools to equalize tariffs on auto’s

JPY/KRW:

Japanese ForMin: Strongly demands S. Korea take appropriate steps including redressing violation of international law

ForMin Kino: S. Korean court decisions on Mitsubishi industries totally unacceptable

ForMin: Latest S. Korean supreme court decisions fundamentally overturn the legal basis of Japan’s S. Korea friendly ties

RUB/UAH:

Russia blocks Ukrainian ports of Azov Sea- transport minister

GBP:

Mark Carney accused of project hysteria for saying no del Brexit will cause worse financial crisis since WWII

OIL:

Oil slumps as US inventory rise adds pressure for supply cut

EUR:

ECB is said to see no need for new long-term loans in Dec

Today’s Data

Actual A | Consensus C | Previous P | Revised R | all timings GMT/UTC

JPY         Retail Trade Y/Y Oct A 3.50% | C 2.70% | P 2.10% | R 2.20%

NZD       ANZ Business Confidence Nov A -37.1 | P -37.1

AUD       Private Capital Expenditure Q3 A -0.50% | C 2.00% | P -2.50% | R -0.90%

06:45     CHF        GDP Q/Q Q3 C 0.50% | P 0.70%

07:45     EUR        French GDP Q/Q Q3 (P) C 0.40% | P 0.40%

08:55     EUR        German Unemployment Change Nov C -10K | P -11K

08:55     EUR        German Unemployment Claims Rate s.a. Nov C 5.00% | P 5.10%

09:30     GBP       Mortgage Approvals Oct C 65K | P 65K

09:30     GBP       Money Supply M4 M/M Oct C 0.30% | P -0.30%

10:00     EUR        Eurozone Business Climate Indicator Nov C 0.96 | P 1.01

10:00     EUR        Eurozone Economic Confidence Nov C 109 | P 109.8

10:00     EUR        Eurozone Industrial Confidence Nov C 2.3 | P 3

10:00     EUR        Eurozone Services Confidence Nov C 13 | P 13.6

10:00     EUR        Eurozone Consumer Confidence Nov (F) C -3.9 | P -3.9

13:00     EUR        German CPI M/M Nov (P) C 0.00% | P 0.20%

13:00     EUR        German CPI Y/Y Nov (P) C 2.20% | P 2.50%

13:30     CAD       Current Account Balance (CAD) Q3 P -15.9B

13:30     USD       Personal Income Oct C 0.40% | P 0.20%

13:30     USD       Personal Spending Oct C 0.40% | P 0.40%

13:30     USD       PCE Deflator M/M Oct C 0.20% | P 0.10%

13:30     USD       PCE Deflator Y/Y Oct C 2.10% | P 2.00%

13:30     USD       PCE Core M/M Oct C 0.20% | P 0.20%

13:30     USD       PCE Core Y/Y Oct C 1.90% | P 2.00%

13:30     USD       Initial Jobless Claims (NOV 24) C 221K | P 224K

15:00     USD       Pending Home Sales M/M Oct C 0.80% | P 0.50%

15:30     USD       Natural Gas Storage P -134B

19:00     USD       FOMC Minutes

Harry Hindsight

• GBP: Opening around the 1.2750 level the market remained mired below the level through to the grey hours ranging in a tightly between the 1.2735-50 area until rising in the early part of the grey hours to test through to the 1.2760 areas before drifting back to the opening in London testing back to the lows, after a slow start the London market eventually started a slow but steady rise through to the 1.2800 levels holding quietly into the NYK session, NYK did very little initially but started a slow push back to the 1.2750 levels holding quietly through to the London close and a quick rise higher Mark Carney had a bit to say and possibly the resultant selloff reminds us of the last time he passed on the same message in the run to the Brexit vote in 2016 and all predictions proved worthless, either way once London was out of the way the Cable rose quickly back through the 1.2800 level and after a brief pause saw the market test to the 1.2850 areas on a second run and once there drifted to the close.
• JPY: Initially a quiet session with the Tokyo session opening around the 113.80 level and ranging around the level for most of the session pushing through to the 113.90 levels late into the session and through into the grey hours, the run into the London session saw the market drifting lower with the help of early day traders however the market struggled on a push through the opening lows in the mid 113.70’s before starting a slow rise through to the NYK session testing to the 114.00 levels a slight dip in the GDP numbers in the US elicited very little movement and only on the London close did the USD drop back quickly to test to the 113.40 areas bouncing and then attempting a second move to the area before running to the close slowly rising through to the 113.70 area.
• AUD: If USDJPY was quiet then doubly so for the Oz until the London close, the market based around the 0.7225 areas with only minor dips through the level however, for the most part it remained just above the 0.7230 level with limited tests above 0.7240 areas and that high remained intact through to the NYK session, the market settled back to the 0.7230 areas before moving quickly higher as the USD dropped back and the Oz quickly moved through to the 0.7320 levels dipping back to the figure and then running a second time to push to the 0.7325 for the high of the day and drifting through to the close remaining above 0.7300.
• EUR: As with the rest of the market the Euro struggled for direction through to the end of London, opening around the 1.1295 area the market remained above the 1.1285 level through the Tokyo session and dipped on the move into the grey hours slipping through to the 1.1270 area before pushing back above the 1.1280 for a long run to the NYK session, some light selling through to the lows again saw the market holding just above the 1.1280 level before quickly rising on the London close to test quickly through to the 1.1370 level dipping and rising to make the highs of the day just above the 113.85 area before slowly drifting through to the close.

Yesterday’s Premiership results

GBP       BRC Shop Price Index Y/Y Nov A 0.10% | P -0.20%

AUD       Construction Work Done Q3 A -2.80% | C 1.00% | P 1.60% | R 1.80%

EUR        German GfK Consumer Confidence Dec A 10.4 | C 10.6 | P 10.6

EUR        Eurozone M3 Money Supply Y/Y Oct A 3.90% | C 3.50% | P 3.50% | R 3.60%

USD       Trade Balance (USD) Oct A -77.2B | C -76.7B | P -76.0B | P -76.3B

USD       Wholesale Inventories M/M Oct (P) A 0.70% | C 0.50% | P 0.40%

USD       GDP Annualized Q/Q Q3 (S) A 3.50% | C 3.60% | P 3.50%

USD       GDP Price Index Q3 (S) A 1.70% | C 1.70% | P 1.70%

USD       New Home Sales Oct A 544K | C 583K | P 553K

USD       Richmond Fed Manufacturing Index Nov A 14 | C 16 | P 15

USD       Crude Oil Inventories A 3.6M | C 0.6M | P 4.9M

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