Daily FX Market Commentary

Andy Harrison

Good morning,

NYK Close

USDJPY 83.264 | EURUSD 1.30739 | EURJPY 108.868 | AUDUSD 1.05548 | NZDUSD 0.84472 | USDCAD 0.98454 | EURCHF 1.21107 | USDCHF 0.9263 | GBPUSD 1.61486 | EURGBP 0.80966 |

 

Harry Hindsight

·         EUR: Euro traded sideways throughout the Asian session in a tight range with about 15tics covering the market just above the 1.3000 area, as we moved into London German numbers in line with expectation helped buoy the market and IP numbers for the Eurozone were ignored as being better than the previous month, the market continued slowly to touch above 1.3050 level before slowing before the FOMC commentary was released, and roughly speaking with no change to the stance coming out of their mouths Euro shot upwards to trade just below 1.3100 from there we drifted off from the highs to settle the day around the 1.3066 level

·         GBP: Cable moved quietly in Asia with a very tight range and in the early London run in dipped below the 1.6100 level before following the Euro higher, we moved to just below the 1.6150 level into the early part of NYK and then saw some buying of EURGBP and selling of straight Cable in the pre FOMC moving it back to the 1.6115 area before the announcement, post non-event we again moved back higher and hit 1.6170 a couple of times as real money offers sat at the level, we drifted from there back to the mid 30’s, a steady rise in the EURGBP from the 0.8070 area compounded the GBP woes as the cross moved steadily higher to struggle to penetrate 0.8100 however, we didn’t drop away from the level so remained ominously positioned to break higher triggering some minor stops.

·         JPY: We moved steadily higher throughout the day with below expectations bur well up on the September number the market sold JPY on the back of expectations and increased fever over coming elections and the dominance in opinion polls of the LDP, we moved from the opening levels around 82.50 to just below 82.70 in the Asian session, London followed through with the buying to take it above 82.90 where we flat lined up until the FOMC when we again leapt higher taking out minor stops above the resting offers left by exporters rising to just above the 83.30 level before settling back a little into the close.

·         AUD: The Oz was again controlled by Gamma traders during the Asian session. We moved from the 1.0530 area to above 1.0540 and down to just below 1.0525 which was the low of the session, once London moved into the market we rose steadily to above the 1.0550 area before dipping just before FOMC, from there we spiked higher to above 1.0585 before moving back less quickly to the London highs around 1.0555.

Yesterday’s premiership results

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

AUD       Westpac Consumer Confidence Dec A -4.10% | P 5.20%

JPY         Machine Orders M/M Oct A 2.60% | C 3.00% | P -4.30%

JPY         Tertiary Industry Index M/M Oct A -0.10% | C -0.40% | P 0.30% 

JPY         Domestic CGPI Y/Y Nov A -0.90% | C -0.90% | P -1.00%  

EUR        German CPI M/M Nov (F) A -0.10% | C -0.10% | P -0.10%             

EUR        German CPI Y/Y Nov (F) A 1.90% | C 1.90% | P 1.90%      

GBP       Claimant Count Change Nov A -3.0K | C 5.0K | P 10.1K   

GBP       ILO Unemployment Rate 3M Oct A 7.80% | C 7.90% | P 7.80%    

CHF        ZEW (Expectations) Dec A -15.5 | P -27.9              

EUR        Eurozone Industrial Production M/M Oct A -1.40% | C 0.00% | P -2.50% | R -2.30%

USD       Import Price Index M/M Nov A -0.90% | C -0.50% | P 0.50%        

USD       Crude Oil Inventories A 0.8M | P -2.4M 

USD       FOMC Rate Decision A 0.25% | C 0.25% | P 0.25%

For today

USDJPY 
Topside: 83.70-84.00 decent offers  84.00-84.30 medium buy stops 
Downside: 82.70-83.00 medium sell stops 82.20-82.50 light sell stops 81.80-82.10 light bids 

EURUSD 
Topside: 1.3090-1.3110 light buy stops 1.3120-1.3150 two way better buy stops  1.3170-1.3200 – medium buy stops 
Downside: 1.3030-1.3050 light sell stops 1.2990-1.3020 light bids 

EURJPY
Topside: 109.50-109.80 decent offers 
Downside: 108.50-108.80 light bids  AUDUSD 
Topside: 1.0590-1.0610 light buy stops  1.0620-1.0650 light buy stops 
Downside: 1.0500-1.0530 light bids 1.0470-1.0500 light bids

 

JPY/VND:

Japan’s MUFG to buy 20% stake in VietinBank for $720 mio-source

JPY:

Japan’s LDP, partner on track for 2/3 majority in polls

CNY:

China National Pension Fund: Should Put More in Stocks in 2013 – Report

EUR:

EU agrees new ECB banking supervisory role

European bank supervisory to be operational from March 2014

NZD:

NZ Manufacturing Activity Contracts Slightly in November

New Zealand food prices extend slide in November – Stats

 

·         EUR: Nothing really changes the market slowly sold off from the opening with a push towards the 1.3065 level before an announcement that FinMins had agreed to allow ECB to supervise banks in the Eurozone according to an EU official, the market took this as a step in the right direction and Euro’s moved above the 1.3090 level quickly and has held above the 1.3080 level for the hour into London.

·         GBP: Cable moved steadily lower during the early part of the session trading down from the 1.6150 area to just above 1.6125 as cross GBP was deemed to be above its fair value for the moment, and real money moved in, on the FinMin new the market moved higher regaining some of its losses pushing into the 1.6145 area but is taking second place as squabbles are likely to erupt over London’s dominance in the Euro market and FX markets in general. Many moons ago I seem to remember the same arguments about the LIFFE exchange and dubious goings on to try and undercut the dominance of the exchange.

·         JPY: The USDJPY continued its rise throughout the session with minor stops being triggered in both USDJPY and EURJPY as we moved from the opening levels around 83.20 pushing to a high just below 83.65 before stalling,

·         AUD: The Oz opened slightly lower from the NYK close but close enough to the 1.0555 area where we went out not to matter as with previous days this week we saw the market drift in early selling moving to the 1.0540 area before recovering on the back of the Euro move to new highs and for the moment we remain towards the NYK closing area as we still see Gamma players dominating the market.

Today’s data

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

NZD       Business NS Manufacturing index Nov A 48.8 | P 50.5 | R 50.3

AUD       Consumer Inflation Expectation Dec A 1.80% | 2.20%

08:15     CHF        Producer & Import Prices M/M Nov C -0.30% | P -0.10%

08:30     CHF        SNB Rate Decision C 0.00% | P 0.00%

09:00     EUR        ECB Monthly Bulletin                     

13:30     CAD       New Housing Price Index M/M Oct C 0.10% | P 0.20%

13:30     USD       PPI M/M Nov C -0.50% | P -0.20%

13:30     USD       PPI Y/Y Nov C 1.80% | P 2.30%

13:30     USD       PPI Core M/M Nov C 0.20% | P -0.20%

13:30     USD       PPI Core Y/Y Nov C 2.20% | P 2.10%

13:30     USD       Advance Retail Sales Nov C 0.40% | P -0.30%

13:30     USD       Retail Sales Less Autos Nov C 0.00% | P 0.00%

13:30     USD       Initial Jobless Claims Dec 8 C 370K | P 370K

15:00     USD       Business Inventories Oct C 0.30% | P 0.70%

15:30     USD       Natural Gas Storage P -73B         

Ranges as of 6am London time

                                Highs   Lows

USD/JPY               83.655 | 83.13

EUR/USD             1.3091 | 1.3055

EUR/JPY               109.465 | 108.66

AUD/USD            1.0557 | 1.0541

NZD/USD             0.8449 | 0.8424

USD/CAD             0.9849 | 0.9838

EUR/CHF              1.2122 | 1.21045

USD/CHF             0.9273 | 0.9257

GBP/USD             1.6148 | 1.6125

EUR/GBP             0.8113 | 0.8097

Good luck

Andy