Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close Wellington open

USDJPY 98.576 98.05-10 | EURUSD 1.3542 1.3540-45 | EURJPY 133.493 133.45-55 | AUDUSD 0.94693 0.9438-43 | NZDUSD 0.83248 0.8310-15 | USDCAD 1.03525 1.0346-56 | EURCHF 1.23497 1.2339-50 | USDCHF 0.91185 0.9095-0.9105 | GBPUSD 1.59521 1.5955-65 | EURGBP 0.8489 0.8488-93 |

 

Weekend News

USD:

Fiscal Impasse Widens as Focus Turns to U.S. Senate Leaders
U.S. Said to Open Criminal Probe of Currency Market Rigging
CNY:

China Exports Unexpectedly Decline in Limit to Nation’s Rebound
China to Continue Reforms to Improve Quality of Growth: Xinhua
China to Set Up Cross-Strait Equity Exchange: National Radio
China Says Doesn’t Object to Trade Ties Between EU, Taiwan
China Says BRICS Nations Concerned About U.S. Debt Ceiling Issue
IMF:

IMF Says it’s ready to Help Nations Face Capital-Flow Volatility
JPY:

Aso: Yen Has Weakened Reflecting Japan’s Trade Deficits
Kuroda Says Developing Nations Worried About Monetary Tapering
Japan to Outsource Part of Forex Reserves Management: Nikkei
IMF’s Shinohara Says More BOJ Easing ‘Dangerous’ Without Reforms
INR/USD:

Rajan Says India Is Not Selling Its U.S.-Dollar Assets
EUR:

Germany Sees Global Risk Shift from Europe to Emerging Economies
CHF:

SNB’s Jordan Says Swiss Franc Is a ‘Highly Valued’ Currency
SNB’s Jordan Says Cap ‘Crucial Tool’ to Protect Swiss Economy
GBP:

Osborne Vows Budget Rigor as Autumn Statement Set for Dec. 4
AUD:

Australia Needs to Tap Private Money for Infrastructure: Hockey
RUB:

Russia Not Planning to Spend From Reserve Fund This Yr: Siluanov

Harry Hindsight

  • EUR: The market opened around the 1.3520 level and struggled in the first part of the session moving to above the 1.3530 in the pre-Tokyo market before ranging between the two levels deep into the Tokyo session. As the meeting between the antagonists in the US broke up with no real result the Euro started to climb again moving to just below 1.3545 before settling into a 1.3535-42 range for the balance of the session and through the grey hours, London came in buying with flat CPI numbers pushing the market quickly higher to above 1.3560 before pausing for a short period and another move this time peaking above the 1.3580 levels and running into resistance. The market began to drift from the highs as we moved into the NYK session trading to the 1.3550 level. As the market reached the NYK option cut the market rallied sharply to the 1.3575 level before falling quickly back to the 1.3525 level as gamma and delta hedges were dealt with in a quiet  market, from the lows the market again started to rise towards the close with a long weekend approaching for the US to settle around the 1.3540 levels.
  • GBP: A less exaggerated day for the Cable in comparison to the moves in the Euro with the Cable rising from the opening 1.5965 areas in a reasonably tight channel to just above the 1.6000 just after the London opening, from here though the market started a steady decline coming off only slightly quicker than its rise. As we moved into NYK the market had pulled back to the opening levels and didn’t look like stopping, we continued into the later part of the NYK session before trading the lows and bouncing off the lows below 1.5925 to move some 20 pips higher into the close. The whole move seem predominately EURGBP led with the pair rising from the 0.8962 areas to push above the 0.8510 in late NYK before drifting a little into the close.
  • JPY: The market saw early Selling in the AUDJPY carry, taking the USDJPY to below 97.95 from the opening 98.20 levels only to rebound as early Japanese retail moved into the market, once the Tokyo session opened the market had recovered most of its losses and we started to see similar flows to the previous two days with large Japanese banks buying steadily through the first four hours of the session lifting the USDJPY to above the 98.55 level before the demand petered out. While the USDJPY started to drift the move back lower was slow through the Asian session and only once we’d moved into the London session did the market approach the opening levels. We ranged quietly from that point in the NYK session holding around the 98.30 level for several hours before moving higher in the later part of the session, moving back to above the 98.55 but unable to push above the 98.60 level with a late push to the levels into the close.
  • AUD: The Oz opened around the 0.9450 level and early carry trade selling mentioned above set the low for the Oz when in this early part of the session the market moved to the 0.9435 level before quickly reversing to the opening ranges. We held around the 0.9455 level into Tokyo until the market in AUDJPY made another attempt at what seems to be a key pivotal point around the 93.50/60 area on the cross, this took the Oz to its highs just short of the 0.9485 level. We saw an attempt on the 0.9485 level on a further four pushes however the market failed each time between the 0.9480-85 level and having rejected it the 4th time dropped back to the 0.9450. The last attempt was a few hours before the close however; this one seemed to just run out of interest and slipped into a closing range around the 0.9465 areas.

Friday’s premiership results

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

JPY         Japan Money Stock M2+CD Y/Y Sep A 3.80% | C 3.70% | P 3.70% | R 3.80%

JPY         Domestic CGPI M/M Sep A 0.30% | C 0.20% | P 0.30% | R 0.20%

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

EUR        German CPI Y/Y Sep (F) A 1.40% | C 1.40% | P 1.40%

GBP       Construction Output M/M Aug A -0.10% | C 0.80% | P 2.20% | R 2.80%

CAD       Unemployment Rate Sep A 6.90% | C 7.10% | P 7.10%

CAD       Net Change in Employment Sep A 11.9K | C 15.0K | P 59.2K

USD       U. of Michigan Confidence Oct (P) A 75.2 | C 77 | P 77.5

 

For today

USDJPY:
Topside: 98.35-98.50 light offers 98.50-98.80 light mix 98.80-99.20 medium offers
Downside: 98.00-98.05 medium bids 97.80-98.00 light bids 97.70-97.80 light mix 97.40-97.70 light bids 96.80-97.10 light bids

EURUSD:
Topside: 1.3580-1.3600 light offers 1.3600-1.3640 light mix 1.3640-1.3670 medium offers
Downside: 1.3480-1.3530 light bids 1.3450-1.3480 light bids 1.3430-1.3450 light sell stops

EURJPY:
Topside: 133.50-133.80 light offers
Downside: 132.00-132.30 light sell stops

AUDUSD:
Topside: 0.9470-0.9500 light mix 0.9500-0.9520 light buy stops
Downside: 0.9370-0.9410 light bids

 

SGD:

Singapore Central Bank Keeps Currency Stance Unchanged

Singapore 3Q GDP -1.0% On Qtr., Adjusted, Annualized

CNY:

PBOC fixes yuan mid-point at record 6.1406/dollar

China September CPI +3.1% on Year; Market Expected +2.9%

GBP/CNY:

UK’s Osborne Says He Seeks London Role in International Yuan

EUR/USD:

Noyer Say US Debt ‘Accident’ Would Have Violent Results: Figaro

AUD:

Australian Housing Finance Posts Surprise Fall

NZD:

NZ House Prices, Sales Continue to Rise in September

 

 

  • EUR: The market opened higher on the opening around the 1.3560 level with the weekend news indicating a widening gap between the two sides in the US, the market moved to the mid 1.3560’s before a short attempt by the market to fill the gap on the charts however, the market could only move to the 1.3550 levels before holding for a few hours just above the level. China CPI numbers moved the USD lower and the Euro’s moved to highs above the 1.3565 level in very quiet trading overall. For the moment the market holds just off its highs as we move towards the grey hours.
  • GBP: Cable as with the Euro opened higher than Fridays close around the 1.5973 area and held between 1.5965 and the opening for a few hours moving into the Tokyo session and then rising with the Chinese data and a minor selloff of the USD, topping around the 1.5984 area and holding the levels as we move towards the grey hours. EURGBP for the moment has very little movement drifting a mere 5 pips lower from the opening areas.
  • JPY: USDJPY opened around the 98.33/34 areas and apart from a quick dip in pre-Tokyo to just below the 98.15 has remained in the 98.25-35 area in very quiet trading with some Asian markets closed for the day as well as the US for Columbus day. So volumes are much reduced and we are trading slowly in tight ranges. For the moment the USDJPY holds around the 98.30 area as we move towards the London session.
  • AUD: The Oz has been the active currency today, having opened below the Fridays close, it is the only one to have closed the gap in the charts having moved from a low 0.9430 open into a steady climb moving to above the 0.9470 and towards some mix around the market, the market remains very quiet and holding just off its highs while the carry trade has moved back above the 93.00 level and holds around the 93.10 areas.

Today’s data

Actual = A Consensus = C  Previous = P Timings GMT

AUD       Home Loans Aug A -3.90% | C -1.30% | P 2.40%  | R 2.10%

CNY        CPI Y/Y Sep A 3.10% | C 2.80% | P 2.60%

CNY        PPI Y/Y Sep A -1.30% | C -1.40% | P -1.60%

07:15     CHF        Producer & Import Prices M/M Sep C 0.30% | P 0.20%

07:15     CHF        Producer & Import Prices Y/Y Sep P 0.20%

09:00     EUR        Eurozone Industrial Production M/M Aug C 0.50% | P -1.50%

 

Ranges as of 6am London time including Sydney open

Highs    Lows

USD/JPY               98.35 | 98.05

EUR/USD             1.3566 | 1.3545

EUR/JPY               133.34 | 132.90

AUD/USD            0.9473 | 0.9410

NZD/USD             0.8344 | 0.8285

USD/CAD             1.0376 | 1.0353

EUR/CHF              1.2344 | 1.2332

USD/CHF             0.9110 | 0.90925

GBP/USD             1.5987 | 1.5960

EUR/GBP             0.8492 | 0.84845

 

 

 

Stay lucky

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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