Daily FX Market Commentary

Andy Harrison

Good morning,

NYK Close

USDJPY 83886 | EURUSD 1.31636 | EURJPY 110.428 | AUDUSD 1.05529 | NZDUSD 0.84389 | USDCAD 0.98366 | EURCHF 1.20786 | USDCHF 0.91763 | GBPUSD 1.62041| EURGBP 0.81231 |

 

Harry Hindsight

·         EUR: After a higher start in Asia trading above 1.3185 briefly before dropping back to fill the gap on the charts we traded for the rest of the day around the 1.3150 area not helped by a poor trade balance, more details of the bank supervision body were released and to be honest its very little different to the ad hoc system that most CB ran in the first place, however, it did attract some attention moving the Euro to just below 1.3180 but once it had done the rounds the market settled back again and we dropped back to 1.3160 into the close in NYK.

·         GBP: Cable rose on the opening but not to any great extent and quickly dropped back down to a more respectful 1.6155 area were we held for the rest of Asia, as we moved into London we saw early buying particularly against the USD and Euro as GBP started to play catch up to the moves of Friday, EURGBP dropped back some 30 tics from highs above 0.8150 and Cable moved to above the 1.6200 level for the first time in over 6months ahead of tomorrow’s inflation numbers. Having made highs above 1.6215 we drifted back in the second half of the day and held a tight range around the 1.6200 were we finished for the session.

·         JPY: Yen fell on the expectations of a more robust effort to stimulate the economy now the LDP have gained a majority in the Lower house having gained 325 seats out of the 480 available, we opened significantly higher trading above 84.25 on the opening before a steady drop over the session to just below 83.90, with EURJPY selling from exporters and retail profit taking, it held into London, but we saw fresh selling from some of the longer term longs as they took advantage of the situation and one suspects the cynical view that we’ve been here before and nothing changes, we dropped in early London to below the 83.65 mark and trading slowed into the NYK session with slow buying creeping in to take us back above 83.80 towards the close.

·         AUD: The Oz again traded quietly with very little to turn it either way as both sides seem to be staying away and allowing Gamma trades to move the market the meagre movements we’ve seen over the past week or so, we opened with a spike higher above the 1.0570 level and dropping back to the Fridays closing area and then a steady drift off as opportunities for retail Japan to sell some of the long term AUDJPY longs, we traded below 1.0530 in early London and then moved sideways until NYK walked in and bought smalls to take the market back to trade around the 1.0550 level throughout that session into the close.

Yesterday’s premiership results

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

NZD       Westpac NZ Consumer Confidence Q4 A 111.1 | P 102.5               

GBP       Rightmove House Prices M/M Dec A -3.30% | P -2.60% 

EUR        Eurozone Trade Balance Oct A 7.9B | C 10.8B | P 11.3B | R 11.0B

CAD       International Securities Transactions (CAD) Oct A 13.26B | C 9.81B | P 13.90B | R 14.12B

13:30     USD       Empire State Manufacturing Dec A -8.1 | C -1 | P -5.22   

14:00     USD       Net Long-term TIC Flows Oct A 1.3B | C $25.0B | P $3.3B

 

For today

USDJPY:
Topside: 83.95-84.20 light mix 84.20-84.50 medium offers 84.50-84.75 light mix
Downside: 83.40-83.70 medium bids 83.00-83.35 medium sell stops

EURUSD:
Topside: 1.3175-1.3190 light mix 1.3190-1.3220 medium buy stops 1.3220-1.3250 light buy stops 1.3250-1.3280 light offers
Downside: 1.3120-1.3150 light mix 1.3090-1.3120 light bids

EURJPY:
Topside: 110.75-110.80 light offers 110.80-111.20 light offers 111.40-111.70 light buy stops
Downside: 109.80-110.10 light bids 109.50-109.80 light sell stops

AUDUSD:
Topside: 1.0570-1.0600 light mix 1.0600-1.0640 medium buy stops 1.0640-1.0670 light buy stops
Downside: 1.0500-1.0530 light mix 1.0460-1.0490 light bids

 

JPY: BOJ Shirakawa: did not discuss monetary policy with next PM Abe

BOJ to mull setting 2% inflation target by Jan -sources

Japan’s new PM to appoint LDP veteran Aso as fin min-media

JPY/USD:

Japan’s next PM, Obama agree to strengthen ties

USD:

In new ‘cliff’ bid, Obama seeks $1.2 trln in revenue – source

CNY:

PBOC Governor: Capital Account Convertibility Doesn’t Mean Free-Floating Yuan 

China bankers see easing ahead, PBOC Q4 survey shows

China Commerce Ministry: Facing Challenge to Keep FDI Growing

China 2013 New Yuan Loans May Rise to CNY9 Trillion -Report

China Sets 2013 Inflation Target of Around 3.5% – Report

China Jan-Nov FDI down 3.6% YoY at $100 bln

China home price rises quicken, uptrend takes hold

AUD:

Australia RBA: Last Rate Cut Prompted by Mining Slowdown, Jobs Outlook

NZD:

Moody’s Official: Smaller NZ Surplus Target Doesn’t Change Outlook

New Zealand Fin Min Sees Budget Surplus Of NZ$66 Mln In FY2015

NZ Treasury: Christchurch Rebuild Expected To Cost NZ$30B

 

 

·         EUR: A very quiet session with the market holding its opening levels around the 1.3160 level dipping below to around 1.3156 before EURAUD buying kicked in to take the Euro steadily into the 1.3170’s volumes were reasonable but the whole market was rather lacking in movement.

·         GBP: Cable climbed slowly from the 1.6200 level over the session however, there was really very little interest in GBP in particular and the market was pulled a little by Euro buying moving from the lows made just below 1.6196 to a peak just below the 1.6218 level with the gains being held onto into the London market

·         JPY: As the jobs get handed out the chatter starts we moved sideways in early trading with an upbeat in the market as comments were made over what they want and who’s going to do it. From 83.85 area we moved quietly to above the 84.00 area on the comments but failed to capitalize on the move above 84.00 we held onto most of the gains and look to be heading into Lodon just off the highs

·         AUD: Market opened around the 1.0550 level and traded lower on the conference leading index to just above the 1.0540 level in slow trading we moved quickly down to mid 1.0530’s on RBA minutes with concerns about Japan, Europe and Chinese economies all though they noted stabilisation in China, some of the domestic concerns showed through leaving the market to rally up then drop again as each segment was released we topped above the opening levels only just, and then moved to the mid 30’s again but this time with no bounce at all.

 

Today’s data

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

AUD                       Conference board leading index Oct A 0.20% | P -0.30% | R -0.40%

09:30     GBP       PPI Input M/M Nov C 0.10% | P 0.40%   

09:30     GBP       PPI Input Y/Y Nov C -0.10% | P 0.10%     

09:30     GBP       PPI Output M/M Nov C 0.20% | P 0.10%               

09:30     GBP       PPI Output Y/Y Nov C 2.50% | P 2.50%   

09:30     GBP       PPI Output Core Y/Y Nov C 1.50% | P 1.40%        

09:30     GBP       CPI M/M Nov C 0.20% | P 0.50%               

09:30     GBP       CPI Y/Y Nov C 2.70% | P 2.70%   

09:30     GBP       Core CPI Y/Y Nov C 2.70% | P 2.60%        

09:30     GBP       RPI M/M Nov C 0.20% | P 0.60%               

09:30     GBP       RPI Y/Y Nov C 3.20% | P 3.20%   

13:30     USD       Current Account Balance Q3 C -$103.6B | P -$117.4B       

15:00     USD       NAHB Housing Market Index Dec C 47 | P 46      

Ranges as of 6am London time

                                Highs   Lows

USD/JPY               84.08 | 83.83

EUR/USD             1.3178 | 1.3156

EUR/JPY               110.75 | 110.36

AUD/USD            1.0558 | 1.0532

NZD/USD             0.8452 | 0.8432

USD/CAD             0.9842 | 0.9832

EUR/CHF              1.2089 | 1.2079

USD/CHF             0.9181 | 0.91715

GBP/USD             1.6218 | 1.6194

EUR/GBP             0.81285 | 0.8123

 Good luck

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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