Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 84.205 | EURUSD 1.32284 | EURJPY 111.384 | AUDUSD 1.05343 | NZDUSD 0.84267 |USDCAD 0.98574 | EURCHF 1.20771 | USDCHF 0.91299 | GBPUSD 1.62519 | EURGBP 0.81393

Harry Hindsight

·         EUR: Asia made early gains from the opening levels of 1.3165 moving a big 10 tics as the market ponders whether it’s worth taking a position in the lead up to the holidays or sit back, as it was they missed the boat, early London sold the Euro back to the below 1.3160 before the UK numbers helped the Euro higher as EURGBP cross remained bid, by NYK opening the market was holding around the 1.3180 level and had been for a few hours with no real impetus to test offers at 1.3200 or move lower. The US position on the fiscal cliffs which was rumoured to be getting closer between Obama and Boehner and signals late in the day put risk back on the cards, the Euro’s leapt higher taking out the resistance around the 1.3200 area peaking just below 1.3240 before settling back into the sideways movement in the 1.3220-30 area for the remaining part of the session. S&P also upgraded Greece from selective default to B-

·         GBP: Cable had a steady day in Asia moving slowly higher of the course of the session, from the 1.6200 level to just below 1.6215 we moved lower as doom and gloom merchants moved into the market pre inflationary numbers only to be surprised a little and the market moved quickly from the 1.6195 area lows to above 1.2625 it was short lived as EURGBP buying kicked in and GBP was forced down to the 1.6200 level, as we moved into NYK the same dynamics took over the market as we’ve seen in the Euro and Cable rallied to just below 1.6270 before settling to a more realistic 1.6250 area.

·         JPY: USDJPY managed to move off its lows, we opened around the 83.85 area and moved in the early part of Asia above 84.00 London sold pushing it back below 83.85 but once, we moved into NYK we was buying of EURJPY and thus USDJPY was taken back above the 84.25 level for the day’s highs, we moved out of NYK holding to most of the gains.

·         AUD: Shhh don’t wake it up, we remain stuck in the Oz the market is reluctant to buy and take it any further as the fundamentals are being talked down by the politicians, sneaky back door selling of AUD by the RBA is removing certain liquidity from the market with a similar effect, and one suspects that the whole Pacific Rim area are comfortable manipulating their currencies in the meantime free flowing currencies receive the unwanted attractions of investors, if the RBA was so concerned they might want to run the risk of a little inflation and lower their interest rates to negate the carry trades. But enough of the cynicism AUD moved off its highs of 1.0555 and traded slowly lower over the course of the day again putting in lows just above the 1.0515 area we have become so familiar with, the Gamma boys just love this byplay each day, we settled the day just above 1.0530.

 

 

Yesterday’s premiership results

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

23:00     AUD       Conference Board Leading Index Oct A 0.20% | -0.30% | C -0.40%

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

09:30     GBP       PPI Input Y/Y Nov A -0.30% | C -0.10% | P 0.10%               

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

09:30     GBP       PPI Output Y/Y Nov A 2.20% | C 2.50% | P 2.50% | R 2.60%

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

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

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

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

09:30     GBP       RPI M/M Nov A 0.00% | C 0.20% | P 0.60%          

09:30     GBP       RPI Y/Y Nov A 3.00% | C 3.20% | P 3.20%              

13:30     USD       Current Account Balance Q3 A -108B | C -$103.6B | P -$117.4B   

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

 

For today

USDJPY:
Topside: 84.50-84.70 medium mix 84.70-85.00 decent offers 85.00-85.30 medium buy stops
Downside: 83.70-84.00 light mix 83.40-83.70 light bids EURUSD:
Topside: 1.3260-1.3290 light mix1.3300-1.3335 light mix 1.3340-1.3370 light buy stops
Downside: 1.3190-1.3220 light mix 1.3160-1.3190 light mix 1.3130-1.3160 light sell stops

EURJPY:
Topside: 111.90-112.20 light offers
Downside: 110.60-110.90 light sell stops AUDUSD:
Topside: 1.0540-1.0570 light mix 1.0570-1.0600 light mix 1.0600-1.0630 light buy stops
Downside: 1.0490-1.0505 light sell stops 1.0450-1.0485 light sell stops

 

JPY:

Nikkei rises above 10,000 for first time since April

Japan Nov Trade Deficit Y953.4B; Expected Deficit Y1.03T

CNY:

China Expected to Allow QFIIs to Trade Stock Index Futures by End-Jan

EUR:

EU Juncker Rules Out Role as EU Commission President

Asia:

World Bank raises E.Asia outlook, sees China growing 8.4% in 2013

 

·         EUR: Euro’s started off quietly moving from the opening levels around 1.3225 to peak above 1.3235 and back again, however, we saw some EURAUD cross buying triggering minor stops in the Euro and pushing the Oz lower, we moved to above 1.3255 briefly before slipping back into the mid 1.3240’s on what could be called a quiet day.

·         GBP: Cable held its own moving from the opening 1.6250 to reach for the stars well 1.6265 level at least in a quiet session driven mostly by AUD and JPY cross trading. We’re currently holding onto most of those gains but 15 tics could be gone by the time I’ve finished this sentence. EURGBP still remains fairly bid holding the 0.8145 level as we move to London.

·         JPY: USDJPY opened around the 84.20 level and immediately went bid, moving quickly up to above 84.42 in what is a decent move for the USDJPY however, it was short lived and we moved back down almost as quickly rumoured to be unsavoury types taking machines at the same time. Since the move we’ve seen very little movement and we remain just below 84.30 as we move towards London

·         AUD: EURAUD crosses dominated early in the session moving the Oz from the opening highs around 1.0535 to hit a low of 1.0505 area before a little bit of a recovery as Gamma buyers sit on the bid down there. For the moment we’ve been quiet for about 3hrs into the 6am cut off and steady around the 1.0515 level.

 

 

Today’s data

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

21:45     NZD       Current Account Balance Q3 A 04.418B | C -4.400B | P -1.797B    

23:30     AUD       Westpac Leading Index M/M Oct A 0.10 | P 0.70% | R 0.60%       

23:50     JPY         Trade Balance (JPY) Nov  A -0.87T | C -0.81T | P -0.62T   

04:30     JPY         All Industry Activity Index M/M Oct A 0.20% | C 0.20% | P -0.30%             

09:00     EUR        Eurozone Current Account Oct C 5.8B | P 0.8B   

09:00     EUR        German IFO – Business Climate Dec C 102 | P 101.4          

09:00     EUR        German IFO – Current Assessment Dec C 108.1 | P 108.1               

09:00     EUR        German IFO – Expectations Dec C 96.5 | P 95.2   

09:30     GBP       BoE Minutes C 0—0—9 | P 0—0—9            

11:00     GBP       CBI Reported Sales Dec C 25 | P 33          

13:30     CAD       Wholesale Sales M/M Oct C 0.40% | P -1.40%    

13:30     USD       Housing Starts Nov C 873K | P 894K         

13:30     USD       Building Permits Nov C 875K | P 866K     

15:30     USD       Crude Oil Inventories C -0.9M | P 0.8M                 

 

Ranges as of 6am London time

                                Highs   Lows

USD/JPY             84.44 | 84.16

EUR/USD             1.3256 | 1.32235

EUR/JPY             111.73 | 111.34

AUD/USD             1.0535 | 1.0504

NZD/USD             0.8417 | 0.8378

USD/CAD             0.9868 | 0.9856

EUR/CHF             1.20845 | 1.2073

USD/CHF             0.9138 | 0.9115

GBP/USD            11.6267 | 1.6246

EUR/GBP            0.8149 | 0.8136

 

Good luck

Andy