Daily FX Market Commentary

Andy Harrison

Good morning,

NYK Close SYD open

USDJPY 79.48 79.38-55 | EURUSD 1.27103 1.2708-13 | EURJPY 101.032 100.65-101.30 | AUDUSD 1.03835 1.0375-1.0400 | NZDUSD 0.81455 0.8132-58 | USDCAD 1.00153 0.9994-1.0018 | EURCHF 1.20573 1.2059-62 | USDCHF 0.94864 0.9471-99 | GBPUSD 1.58979 1.5895-1.5906 | EURGBP 0.79965 0.7989-985 |

Weekend News

CNY:

China Exports Gain Most Since May in Sign of Growth Rebound
China to Add 200 Billion Yuan in RQFII Quota: Securities News
China Plans Tax Changes to Boost Stock Investments, Xinhua Says
China’s sovereign wealth fund eyes neighbouring markets
China Commerce Minister Says 2012 Trade Target ‘Very Difficult’
CNY/USD:

China Investments in the U.S. Is No Trojan horse, Minister Chen Says
CNY/JPY:

China-Japan Trade, Economic Ties Affected by Dispute, Chen Says
EUR:

Greek Jan.-Oct. State Budget Deficit Narrows 42% to EU12.3 Bln
Schaeuble Doesn’t Expect Quick Greek Aid Payment, Welt Reports
more aid likely for Greece, says German Bundesbank president
Sawiris Bids EU5 Billion for Telecom Italia Stake, Corriere Says
CHF:

Zurbruegg Says SNB Could Expand Monetary Policy If Needed: NZZ
SNB’s Zurbruegg Says Swiss Economy Weakened, NZZ am Sonntag Says
USD:

Obama Joins Boehner in Openness to Compromise With Firm Stance
100,000 N.Y. Homes, Businesses Face Months without Power 
JPY:

Japan’s Noda Considering Elections on Jan. 20, Sankei Says
Japan to Discuss Allowing Deficit Bonds for 5 Years, Nikkei Says
JPY/IDR:

Toyota to Double Capacity, Build Engine Plant in Indonesia 
HUF:

Hungary Municipal Debt Haircut Would Be Default, Orban Tells MTI

Harry Hindsight

·         EUR: Chinese data helped the Euro in early trading in Asia moving it from the opening levels around 1.2750 to top above 1.2790 however, London had other ideas with French IP and manufacturing hit massively below expectations the Euro started a steady but firm decline moving off the highs to trade below 1.2700 for the first time in two months touching the 1.2690 level, as NYK entered the market they seemed reluctant to buy the Euros but did take it off the lows, US figures were mixed with the Michigan number higher than expected but inventories increased more than expected keeping a lid on any attempt for the USD to move higher, so the Euro went out just off its lows.

·         GBP: The Cable fared little different to the Euro gaining on the back of China data early in Asia moving from the 1.5980 level to above 1.6010 before dropping in early London as European number effected the area, we went into a steady decline moving from the highs to below 1.5900 on the day and unlike the Euro which moved back above the lows we never quiet moved away hanging around the 1.5900 level into the close having dipped below 1.5890 in the last couple of hours of trading, EURGBP cross having opened around 0.7975 moved quietly up during the mid-London session and late NYK to just below the 0.8000 level.

·         JPY: USDJPY held its own during the Asian session while USD was moving lower against the other majors, with the pair touching above 79.60 briefly helped by cross buying in AUDJPY and EURJPY in particular however, as London open the pair came under pressure and Euro started to be sold off dragging the EURJPY cross with it and triggering minor stop losses in the market USDJPY dropped to 79.10 the low as NYK opened for the day and a reversal of fortunes kicked in and US investors started to sell the YEN, we moved back to the opening levels over the course of the session to finish around the 79.50 level on the day slightly higher than the opening.

·         AUD: While the good news out of China helped the Oz rise during the Asian session moving from the 1.0410 level to above 1.0435 the news was taken cautiously and the weakness in Euro’s into London turned the market lower we briefly struggled with the 1.0400 level taking about an hour to push through and clear the bids but through we went and we dropped quiet quickly to hit 1.0360 as NYK entered the market, we moved up steadily on IMM buying but struggled to push back above the 1.0400 level with any conviction and spent most of the session around the 1.0390 level finally settling just below there.  

Friday’s premiership results

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%         

EUR        German CPI M/M Oct (F) A 0.00% | P 0.00%       

EUR        German CPI Y/Y Oct (F) A 2.00% | C 2.00% | P 2.00%       

USD       Import Price Index M/M Oct A 0.50% | C 0.00% | P 1.10%             

USD       U. of Michigan Confidence Nov (P) A 84.90% | C 82.9 | P 82.6     

USD       Wholesale Inventories Sep A 1.10% | C 0.40% | P 0.50%

For today

USDJPY 
Topside: 79.70-80.00 light offers  80.00-80.30 light offers  80.30-80.60 light offers 
Downside: 79.00-79.30 medium sell stops 78.70-79.00 medium sell stops 78.40-78.70 medium sell stops  EURUSD 
Topside: 1.2740-1.2760 light buy stops  1.2770-1.2800 light buy stops  1.2800-1.2830 light offers 
Downside: 1.2680-1.2710 medium bids 1.2650-1.2680 medium sell stops 1.2620-1.2650 light bids 

EURJPY 
Topside: 101.30-101.60 light offers  101.70-102.00 light buy stops  102.00-102.30 light buy stops 
Downside: 100.50-100.80 light bids 100.20-100.50 light bids  AUDUSD 
Topside: 1.0430-1.0460 light buy stops  1.0470-1.0500 light offers 

 Downside: 1.0350-1.0380 light bids 1.0300-1.0330 light bids

CNY:

China CB fix gives yuan room to move to record high

Retiring will not change China central bank direction-Zhou

China Oct new loans at 505.2 bln yuan, below forecast

China eyes 600bln yuan rail backbone spend in 2013-exec

China says no timeframe on giving out more gold import licenses

Ex-PBOC Official: China Not Headed for Hard Landing

EUR:

Greek coalition approves 2013 budget in parliament

JPY:

BOJ Gov Shirakawa: To Proceed With Powerful Easing at Most Appropriate Speed

Japan’s 1st Monthly C/A Deficit Credit Negative, Moody’s Says

Japan third-quarter GDP shrinks 0.9% QoQ

Japan PM: GDP figures severe, will respond with sense of urgency

Econ Min Maehara: Possibility Cannot Be Ruled Out Japan Already in Recessionary Phase

AUD:

Moody’s Analyst Sees No Threat to Australia’s AAA Rating

USD:

Moody’s: Need to See US Commitment to Budget Agreement, Credible Timetable to Maintain AAA Rating

 

·         EUR: Euro’s opened quietly in Sydney and traded around the opening levels until just after the Asian opening when we heard that the Greeks had agreed the 2013 budget and the market moved up from the 1.2710 level trading to 1.2735, while the budget is agreed for next year we will still have to wait to see if the bailout is forthcoming which is why it didn’t move much further, in fact having hit 1.2935 we dropped quickly back to the 1.2920 level then we spent several hours struggling to make the 1.2930 area again. A very slow day, with Singapore and Malaya out tomorrow we are seeing some long weekend absenteeism in the market.

·         GBP: A little bit of EURGBP buying in the early part of the session forced Cable lower from the opening above 1.5905 pushing us down some 15tcs before the market turned back on small correctional buying to 1.5910, overall though very quiet for the GBP in general.

·         JPY:   USDJPY opened around the 79.40 level and started to move higher with the help of cross EURJPY buying going through the market, having moved up a few tics demand for the fix saw some exporters buying small to take the USDJPY to above 79.56 but the rally was only half hearted and once the fixing demand disappeared so did the pair back to below 79.50 in a lacklustre day.

·         AUD: Opened below 1.0400 and remained mired below until the Greek vote went through and was announced this gave the Oz room to move back above 1.0400 pushing to the 1.0420 on light volumes but with said light volumes it found itself unable to capitalise on the move up and stalled at the 1.0420 level.

 

Today’s data

Actual = A Consensus = C  Previous = P Timings GMT

JPY         Tertiary Industry Index M/M Sep A 0.30% | C 0.00% | P 0.40% | R 0.30%

JPY         GDP Q/Q Q3 (P) A -0.90% | C -0.90% | P 0.20%  

JPY         GDP Deflator Y/Y Q3 (P) A -0.70% | C -0.70% | P -0.90% 

JPY         Domestic CGPI Y/Y Oct A -1.00% | C -0.80% | P -1.40% | R -1.50%

AUD       Home Loans Sep A 0.90% | C 1.10% | P 1.80%    

JPY         Machine Tool Orders Y/Y Oct (P) A  -6.70%  | P   -2.80%

Ranges as of 6am London time

                                Highs   Lows

USD/JPY               79.565 | 79.405

EUR/USD             1.2737 | 1.2701

EUR/JPY               101.255 | 100.97

AUD/USD            1.0423 | 1.0386

NZD/USD             0.8163 | 0.8140

USD/CAD             1.0010 | 0.9988

EUR/CHF              1.20644 | 1.2056

USD/CHF             0.9496 | 0.94695

GBP/USD             1.5912 | 1.5891

EUR/GBP             0.8007 | 0.7997

 

 Stay lucky

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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