Daily FX Market Commentary

Andy Harrison

Good morning,

NYK Close

USDJPY 79.478 | EURUSD 1.27466 | EURJPY 101.297 | AUDUSD 1.04054 | NZDUSD 0.81751 | USDCAD 0.99964 | EURCHF 1.20566 | USDCHF 0.94584 | GBPUSD 1.59828 | EURGBP 0.79757 |

Harry Hindsight

·         EUR: Early Asia sold off the Euro as the Greek question continues to undermine the market and although the Greeks voted for further austerity measures the bailout remains in question, we moved off the 1.2780 highs dropping to below 1.2745, London reversed the losses pushing back upto the 1.2775 level with German trade balance numbers, down beat comments from Super Mario on the state of the economy of the Eurozone again turned the market lower and we quickly dropped to the 1.2720 level from there we ranged roughly 1.2720-50 for the rest of the session on good volumes into the close, no change from the ECB kept the market subdued.

·         GBP: A quiet session for the Cable during Asia as the pair moved in a tight 1.5970-90 range, performing better than the Euro we saw the EURGBP cross declining, eventually though the weight of the selling in Euro’s dragged the GBP lower and we broke to the 1.5930 level in early London, no change from the BoE on interest rates and the recent decent data we’ve seen meant QE was side-lined this allowed GBP to rise again to the previous levels and touching above 1.6000 briefly in early NYK before drifting slowly to a close in the 1.5980 level.

·         JPY: A quiet session in Asia saw the market holding between 79.80-80.00, we saw a better current account deficit however, poor machine orders left the market balanced, London was nonplussed by the numbers and the 20 point range extended deep into the session, only when NYK came in did Yen buying really move in and USDJPY dropped down to below 79.35 area where we closed.

·         AUD: During Asia the Oz attempted to break below the 1.0400 level on a couple of occasions however, while the drag of poor NZ numbers didn’t help matters decent employment numbers in Australia only balanced out the regions flip flopping. We struggled each time we moved to the 1.0425 level however, we saw good levels of profit taking appearing in the NYK session as short term guys who took shorts in the high 1.04’s started buying back once the third attempt lower failed to make it to 1.0400, we climbed back above 1.0440 only for IMM sellers move in towards the close of the futures market to sell heavily into the close leaving the market declining towards the 1.0400 level again into the close of the North American session.

Yesterday’s premiership results

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

NZD       Unemployment Rate Q3 A 7.30% | C 6.70% | P 6.80%     

NZD       Employment Change Q/Q Q3 A -0.40% | C 0.30% | P -0.10% | R -0.20%

JPY         Machine Orders M/M Sep A -4.30% | C -2.10% | P -3.30%            

JPY         Current Account (JPY) Sep A -0.14T | C 0.21T | P 0.72T   

AUD       Employment Change Oct A 10.7K | C 0.5K | P 14.5K | R 15.5K

AUD       Unemployment Rate Oct A 5.40% | C 5.50% | P 5.40%   

JPY         Eco Watchers Survey: Current Oct A 39 | C 40.5 | P 41.2

CHF        Unemployment Rate Oct A 3.00% | C 3.00% | P 2.90%   

EUR        German Trade Balance (EUR) Sep A 17.0B | C 15.5B | P 16.3B | R 18.1B

GBP       BoE Rate Decision A 0.50% | C 0.50% | P 0.50%  

GBP       BoE Asset Purchase Target Nov A 375B | C 375B | P 375B              

EUR        ECB Rate Decision A 0.75% | C 0.75% | P 0.75%  

CAD       Housing Starts Oct A 204K | C 213.0K | P 225.2K 

CAD       New Housing Price Index M/M Sep A 0.20% | C 0.20% | P 0.20%               

CAD       Trade Balance (CAD) Sep A -0.8B | C -1.50B | P -1.06B    

USD       Trade Balance Sep A -41.5B | C -$45.0B | P -$44.2B          

USD       Initial Jobless Claims (NOV 3) A 355K | C 365K | P 363K   

USD       Natural Gas Storage A 21B | C 27B | P 65B

For today

USDJPY 
Topside: 79.60-79.80 decent buy stops 80.00-80.30 light offers  80.50-80.80 medium offers 
Downside: 79.00-79.30 medium bids 78.70-79.00 decent sell stops 78.30-78.60 medium bids 

EURUSD 
Topside: 1.2790-1.2810 medium buy stops  1.2820-1.2850 light offers 
Downside: 1.2700-1.2730 decent sell stops 1.2670-1.2700 medium sell stops 1.2620-1.2650 light bids 

EURJPY 
Topside: 101.70-102.00 light buy stops  102.20-102.50 light buy stops 
Downside: 100.70-101.00 light sell stops 100.20-100.50 light sell stops  AUDUSD 
Topside: 1.0430-1.0450 light offers 1.0450-1.0480 medium buy stops  1.0480-1.0510 medium offers 
Downside: 1.0370-1.0380 decent bids 1.0320-1.0350 decent bids 1.0280-1.0310 medium bids

 

JPY:

Fin Min Jojima: Need to Closely Watch Direction Of Current Account

Econ Min Maehara: Electronics Makers Should Revive Selves by Own Efforts

Japan PM Noda Mulling Option Of Dec Election After TPP Decision – Aides

CNY:

China Oct inflation at 1.7 pct versus year ago

AUD:

Australia’s RBA Cuts Growth Forecasts as Mining Investment Slows

USD:

Fed could be stoking next asset bubble – Fed’s Bullard

NZD:

New Zealand house prices and sales rise in October REINZ

 

·         EUR: Chinese data helped the Euro to move up into the stop losses just below 1.2800, call me a cynic, the Euro rose strongly having started the session holding a tight range after the NYK session, from 1.2750 area we moved quickly into the stops before holding at the 1.2780 level and again squeezing into more stops to 1.2790.

·         GBP: Same story as the Euro a quiet start with the market moving lower slowly from the start only for good China numbers helping the market to rise as USD took the brunt of the action, we moved from the 1.5970 level rising quickly to above the 1.6000 level holding around the 1.6010 level and peaking just below 1.6020.

·         JPY: As risk was back on USDJPY rose moving off the closing lows of 79.40 rising slowly to above 79.60 over the session.

·         AUD: With the Chinese numbers AUD saw a brief respite from the 1.0400 area, release of the RBA minutes saw the market dive lower through 1.04 briefly dipping below 1.0380 we saw the market rebound back above 1.04 and then the release of the China data saw the market move higher again flirting with the 1.0435 area before the market cooled and we dipped back 10 tics going into the London session. 

Today’s data

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

JPY         Japan Money Stock M2+CD Y/Y Oct A 2.30% | C 2.40% | P 2.40%               

CNY        CPI Y/Y Oct A 1.70% | C 1.90% | P 1.90%               

CNY        PPI Y/Y Oct A -2.80% | C -2.80% | P -3.60%           

JPY         Consumer Confidence Oct A 39.7 | C 39.7 | P 40.1            

CNY        Industrial Production Y/Y Oct A 9.60% | C 9.50% | P 9.20%            

CNY        Fixed Assets Inv Excl. Rural YTD YoY Oct A 20.70% | C 20.60% | P 20.50%

CNY        Retail Sales Y/Y Oct A 14.50% | C 14.30% | P 14.20%         

07:00     EUR        German CPI M/M Oct (F) P 0.00%            

07:00     EUR        German CPI Y/Y Oct (F) C 2.00% | P 2.00%            

13:30     USD       Import Price Index M/M Oct C 0.00% | P 1.10% 

14:55     USD       U. of Michigan Confidence Nov (P) C 82.9 | P 82.6            

15:00     USD       Wholesale Inventories Sep C 0.40% | P 0.50%

Ranges as of 6am London time

                                Highs   Lows

EUR                        1.2791 | 1.2733

JPY                         79.61 | 79.43

GBP                       1.6020 | 1.5970

AUD                       1.0435 | 1.0378

NZD                       0.8177 | 0.8125

CAD`                      1.0010 | 0.9985

CHF                        0.9469 | 0.9430

EURJPY                 101.75 | 101.195

EURCHF                1.2060 | 1.20545

EURGBP               0.7987 | 0.7972

 Good luck

Andy