Daily FX Market Commentary

Andy Harrison

Good morning,

NYK Close

USDJPY 79.276 | EURUSD 1.30667 | EURJPY 103.589 | AUDUSD 1.03655 | NZDUSD 0.8201 | USDCAD 0.98529 | EURCHF 1.20826 | USDCHF 0.92472 | GBPUSD 1.60441 | EURGBP 0.8144 |

Harry Hindsight

·         EUR: A choppy day with the run to the topside beginning to wane as the Spanish fail to come to the table as political face saving threatens their stability, Asia seemed in particular happy to sell Euro crosses especially against the JPY with Euro moving from its opening area of 1.3125 to below 1.3090 from this point the market starts to move in a ever decreasing range from 1.3080 area to the high just below 1.3130 making successive lows as we moved into the NYK session were we received a good Philly survey and leading indicator numbers sending the USD higher across the board the Euro at this point made its way down through the 1.3070 level that seems to be a key level triggering stop losses left behind from the move up at the moment we’ve recovered slightly from the lows around 1.3055 but looking to be going out below that 70 level.

·         GBP: With a gentle sell off in Asia as anything Euro seemed to be causing concern, the Cable drifted only slightly from its opening level of 1.6150 area drifting down to 1.6130 into London, we didn’t really push to much lower with the low in London being just below 1.6120 as the market was supported through the decent Retail sales numbers and EURGBP selling that materialised, pushing the pair down to 0.8110 area however, the catch up was from the US numbers and GBP tumbled quickly both against the USD and against the Euro, Cable dropped over the hour or so to below 1.6050 and EURGBP moved quickly above the 0.8145 level as GBP caught and passed the Euro with liquidity issues late into the session.

·         JPY: USDJPY continued to hold above the 79.00 area with talk of barriers around the 79.50 attracting attention, moving from the opening around 78.95 we moved up through 79.00 in early Asian trading triggering minor stop losses then fixing demand managed to push us to 79.20 and we held there into the London session, when we saw late Tokyo selling EURJPY but once the supply finished the USDJPY renewed its move higher steadily pushing above 79.35 with a spike to above 79.45 on the release in the US, we drifted back slightly after the numbers but seem comfortable around the 79.25 level into the close.

·         AUD: A choppy day for the Oz it moved steadily higher during Asia in anticipation of the Chinese data which the details of looked respectable even if the headline number was down for the 7^th month running, from the lows of 1.0370 area we headed steadily up to above 1.0395 after the number before struggling to go through the 1.0400 area, this took the London market to put it through touching above 1.0410 before it began to feel the drag of Euro’s pulling it all the way back to 1.0360 level, the US data seemed to inspire the Oz buyers to take the risk and it again pushed above the 1.0400 level why seems a little of a mystery as everything USD seemed to be rising apart from this pair, it has been suggested that a lot of EURAUD buying that happened over the past 24hrs was squeezed out however, it seems a little too much for me, the market having peaked dropped back again in mid NYK and moved to make a new low below 1.0355 before stabilising into the close around the 1.0365 area.

Yesterday’s premiership results

Actual = A | Consensus = C | Previous = P | Revised = R 

AUD       NAB Business Confidence Q3 A -2 | C -2 | P -3

CNY        Industrial Production Y/Y Sep A 9.20% | C 7.70% | P 8.90%           

CNY        Real GDP Q/Y Q3 A 7.40% | C 7.40% | P 7.60%    

CNY        Retail Sales Y/Y Sep A 14.20% | C 14.00% | P 13.20%        

CHF        Trade Balance (CHF) Sep A 2.01B | C 2.42B | P 1.73B | R 1.61B

GBP       Retail Sales M/M Sep A 0.60% | C 0.50% | P -0.30% | R -0.10%

GBP       Retail Sales Y/Y Sep A 2.90% | C 2.60% | P 3.10% | R 2.90%

GBP       Retail Sales w/Auto Fuel M/M Sep A 0.60% | C 0.60% | P -0.20% | R -0.10%

GBP       Retail Sales w/Auto Fuel Y/Y Sep A 2.50% | C 2.20% | P 2.70% | R 2.50%

CAD       Wholesale Sales M/M Aug A 0.50% | C 0.20% | P -0.60%               

USD       Initial Jobless Claims (OCT 13) A 388K | C 363K | P 339K | R 342K

USD       Philly Fed Survey Oct A 5.7 | C 0.2 | P -1.9            

USD       Leading Indicators Sep A 0.60% | C 0.10% | P -0.10%       

USD       Natural Gas Storage A 51B | C 46B | P 72B         

 

For today

USDJPY:
Topside: 79.40-79.60 light mix 79.60-79.90 light scaled offers 79.90-80.30 decent buy stops
Downside: 78.90-79.20 light bids 78.50-78.85 medium sized bids

EURUSD:
Topside: 1.3130-1.3165 decent offers 1.3165-1.3200 light offers
Downside: 1.3020-1.3050 light mix  1.3000 bids

EURJPY:
Topside: 104.00-104.35 light offers 104.40-104.70 light offers
Downside: 102.90-103.20 light sell stops AUDUSD:
Topside: 1.0400-1.0430 light buy stops 1.0430-1.0460 light mix
Downside: 1.0330-1.0360 light sell stops 1.0300-1.0330 light mixed bag

 

EUR:

EU agreed to a banking union so they report however, Germany says there’s no rush?

Fr. Source Potential for direct bank recapitalisation from bailout funds in 2013

Fr. Source Eurozone bank supervisor to be complete, cover all banks Jan 2014

German source Suggest that direct bank recapitalisation can only occur once single EU banking supervisor is in place

French government accuse S.Korea of dumping as French car makers suffer after cash for old is scrapped

Italian banks nearing bad loans peak UniCredit

Moody’s keep negative outlook for German banking system

Hollande says, worst has passed for crisis

Eurogroup’s Juncker says decision on recapitalisation on Spanish banks will be taken in the next few weeks

Merkel says Dec summit will set timeframe for deeper Eurozone economic intergration

CNY:

China’s Jan-Sep FDI down 3.8% YoY at USD 83.4b

Sep FDI down 6.8% on year ago at USD 8.4b

Outbound investment to US up by 14.3% to Japan up by 22.2% and down by 30.3% to EU to Australia down by 40%

USD:

Chinese company Ralls Corp is suing Mr Obama after planned building of wind farms was blocked in Oregon the fact it overlooked a major Naval base has no bearing on the discrimination said CEO Wu-Jiadiang.

WTO hands Obama victory in US-China steel case, where China were placing tariffs on specialist steel products.

·         EUR: A very quiet and lacklustre day with volumes way off from any day this week, moving between 1.3060-70 for the most part with nothing to write home about one suspects that no one has a clue how to take what has been said with the French saying one thing and the Germans saying another but then we should be used to it by now it has been going for the past 4yrs.

·         GBP: Just as good as the Euro, at least Cable moved generally in one direction moving from the opening area of 1.6042 to eventually trade above 1.6064 during the session, with slight gains in the EURGBP cross down from around the 0.8146 area to trade a low of 0.8134.

·         JPY: A tight range with a steady move up from the opening area of 79.25 to peak above 79.40 before drifting off after the Tokyo opening to the 79.30 area where we look to be heading into London at.

·         AUD: Early trading saw carry trades being bought AUDJPY in particular taking the Oz from the 1.0360 area to above 1.0380 but that all that happened and once Tokyo opened we slowly drifted back down to the opening levels moving into London.

Today’s data

Actual = A | Consensus = C | Previous = P | Revised = R 

JPY         All Industry Activity Index M/M Aug A 0.10% | C 0.10% | P -0.60%            

06:00     EUR        German PPI M/M Sep C 0.30% | P 0.50%              

06:00     EUR        German PPI Y/Y Sep C 1.60% | P 1.60%  

08:00     EUR        Eurozone Current Account (EUR) Aug C 11.3B | P 9.7B   

08:30     GBP       Public Sector Net Borrowing (GBP) Sep C 11.0B | P 12.4B              

12:30     CAD       CPI M/M Sep C 0.30% | P 0.20%               

12:30     CAD       CPI Y/Y Sep C 1.20% | P 1.20%   

12:30     CAD       BoC CPI Core M/M Sep C 0.40% | P 0.30%            

12:30     CAD       BoC CPI Core Y/Y Sep C 1.50% | P 1.60%

14:00     USD       Existing Home Sales Sep C 4.70M | P 4.82M        

Ranges as of 6am London time

                                Highs   Lows

EUR                        1.3058 | 1.3077

JPY                         79.26 | 79.42

GBP                       1.6051 | 1.6064

CHF                        0.9239 | 0.9255

AUD                       1.0357 | 1.0383

NZD                       0.8179 | 0.8203

CAD                       0.9846 | 0.9859

EURGBP               0.8135 | 0.8145

EURCHF                1.2082 | 1.20886

EURJPY                 103.60 | 103.80

 Stay lucky

Andy