Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 98.166 | EURUSD 1.35238 | EURJPY 132.768 | AUDUSD 0.95266 | NZDUSD 0.83663 | USDCAD 1.0382 | EURCHF 1.23414 | USDCHF 0.91252 | GBPUSD 1.59972 | EURGBP 0.84537 |

 

Harry Hindsight

  • EUR: Euro’s opened around the 1.3560 area and struggled through Asia with the market sticking in a 20 point range for the most part, moving from the open steadily lower to touch the 1.3550 area before rising as any compromise seemed to moving away in the US debacle to touch just above the 1.3570 levels. The move into London was quiet and the market had to wait for ZEW numbers, which were weaker than expected to make up its mind to what it was going to do. Dropping quickly from the 1.3560 area to 1.3510 before holding for a brief period and then triggering some minor stops below the 1.3500 level to touch 1.3480 as the market moved into the NYK session. The market held for the most part below the 1.3500 level struggling occasionally above the figure however, each move seemed to attract Johnny come lately players selling into the rally. With news from the US indicating the debacle was still afar the Euro started a recovery squeezing weak shorts to touch the 1.3530 level and then struggling to a close around that level.
  • GBP: Cable started on the back foot moving from the opening levels in the mid 1.5980’s to trade around the 1.5970 level for a couple of hours into the Tokyo fix where we saw some interest to sell GBPJPY moving the Cable to the mid 1.5950’s before recovering once the supply was over with and reversing with a follow through to trade up to 1.5990. The market held for the most part with Euro’s starting to rise the GBP kept pace and held just below the 1.6000. The move into the grey hours saw early sellers moving the market back to the 1.5970 before seeing the buyers starting to appear in front of the UK inflationary numbers, while the headline RPI number was in line with expectations the rest were better than expected and we started to see some movement to the downside which then coincide with selling in Euro’s to take the Cable to the 1.5930. The market dipped a little lower with expectations for the US to solve its problems, Cable touched below 1.5920 before starting a steady rise over the remainder of the session to move into the close around the 1.6000.
  • JPY: The market opened a little bit higher than the official close around the 98.68 levels and touching to just above the 98.70 this level seemed to be where the resistance for the day as we moved up to the level on 3 separate occasions one in each session. Having reached the highs early on the market slowly drifted lower as the US pain continued and one supposes that we’d have an early resolution if it would just snow and they could all go outside for a snowball fight. London took the market higher from the 98.40 level with hope stimulating some USD strength however, it failed at the 70 area and drifted into the NYK session before trading to the level for the final time and a definite not to day suspected to be released. The first move lower on the rumours saw the USDJPY drop to 98.20 with a minor bounce killed off with a definite not today sending it to touch below 98.00, settling the day at the 98.20 level.
  • AUD: A mixed day for the Oz with a good portion of the day dominated by the AUDJPY carry trade and it’s move through the 93.50/60 levels, rising quickly through the level from the opening, taking both USDJPY 98.72 high and Oz holding around the opening 0.9490, as USDJPY started to decline there was more room for the Oz to move higher and the AUDJPY pushed to the 93.90 area the next resistance area, which should have been a little weaker. Oz rose steadily over the course of the Asian session to above the 0.9545 level as we moved into the London session, game over London day traders started to pick the levels to start selling for a move lower and while they turned the market lower the dip back was limited to the 0.9520 for the move into NYK, late selling at the end of the Futures session saw the market holding around the 0.9500 area and a steady rise into the NYK close around the 0.9530.

Yesterday’s premiership results

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

JPY         Industrial Production M/M Aug (F) A -0.90% | P -0.70%

GBP       PPI Input M/M Sep A -1.20% | C -0.10% | P -0.20%

GBP       PPI Input Y/Y Sep A 1.10% | P 2.80%

GBP       PPI Output M/M Sep A -0.10% | C 0.20% | P 0.10%

GBP       PPI Output Y/Y Sep A 1.20% | C 1.50% | P 1.60%

GBP       PPI Output Core M/M Sep A -0.10% | C 0.10% | P 0.00%

GBP       PPI Output Core Y/Y Sep A 0.70% | P 1.00%

GBP       DCLG UK House Prices Y/Y Aug A 3.80% | P 3.30%

GBP       CPI M/M Sep A 0.40% | C 0.30% | P 0.40%

GBP       CPI Y/Y Sep A 2.70% | C 2.60% | P 2.70%

GBP       Core CPI Y/Y Sep A 2.20% | C 2.00% | P 2.00%

GBP       RPI M/M Sep A 0.40% | P 0.50%

GBP       RPI Y/Y Sep A 3.20% | C 3.20% | P 3.30%

EUR        Eurozone ZEW (Economic Sentiment) Oct A 59.1 | C 59.4 | P 58.6

EUR        German ZEW (Current Situation) Oct A 29.7 | C 30.4 | P 30.6

EUR        German ZEW (Economic Sentiment) Oct A 52.8 | C 51 | P 49.6

USD       Empire State Manufacturing Oct A 1.5 | C 8 | P 6.29

 

For today

USDJPY:
Topside: 98.60-99.00 light mix 98.90-99.30 decent offers 99.40-99.60 light offers 99.80-100.00 light buy stops
Downside: 97.70-98.00 large mix 97.40-97.70 medium sell stops  96.60-97.00 light bids

EURUSD:
Topside: 1.3550-1.3560 light buy stops 1.3560-1.3575  light mix  1.3575-1.3590 light offers 1.3600-1.3620 light buy stops 1.3620-1.3670 light mix
Downside: 1.3480-1.3510 medium bids 1.3450-1.3480 light mix 1.3430-1.3450 light sell stops 1.3400-1.3425 light bids

EURJPY:
Topside: 133.30-133.70 light offers
Downside: 132.00-132.30 light sell stops

AUDUSD:
Topside: 0.9550-0.9570 decent buy stops 0.9575-0.9580 light buy stops 0.9580-0.9600 medium offers 0.9620-0.9630 light buy stops
Downside: 0.9480-0.9500 medium bids 0.9380-0.9420 light bids

 

USD:

Panel delayed because it does not have the votes to pass the latest GOP house debt bill

Powerful conservative Heritage Action Group has urged the house to defeat the latest House GOP bill

House likely to take up, approve Senate bill Dent

House Speaker Boehner to allow “clean” Senate bill vote Dent

NZD:

CPI lifts 0.9% that’s 1.4% YoY a 2yr high

CNY:

China’s economy grew 7.8% in third quarter AFP survey

China is unlikely to join TPP trade talks anytime soon NZ trade minister

China able to achieve major economic targets this year Premier

CHF:

Switzerland signs OECD tax convention

GBP:

UK lawmakers are to launch an inquiry into Royal Mail shares as price rises to 48% above flotation.

 

  • EUR: The Euro moved quietly in early trading opening around the 1.3530 however, once the market moved into the Tokyo session it began to drift lower with EURJPY sellers to the topside and USDJPY pushing against those levels something had to give and it was the Euro to some extent drifting to below the 1.3510 level, we held on the lows for a while with several US comments buoying the market until the final rumour that it will be voted on today and is likely to be passed (been here). The rally was short lived and we currently hold just off the lows as we move towards the grey hours with moderate volume over the session.
  • GBP: A pattern similar to the Euro opening just below the 1.6000 and a weak attempt to move through the level met with failure after an hours effort, the market moved off the highs and dipped slowly into the Tokyo session before dropping a little faster to make lows around the mid 1.5960’s before holding as USD seemed to be taking tentative moves higher against most pairs. As with the Euro we hold just off the lows.
  • JPY: USDJPY took a little bit of a beating into the close in NYK and once we moved into Asia the market struggled in the pre-Tokyo session moving from the opening levels 98.20 to above the 98.30 in slow trading, the move into Tokyo initially saw the USDJPY moving lower with cross sellers appearing in the market however, with rumours and commentary that the situation will be resolved tomorrow (never comes) the market moved quickly to the 98.63 levels and has spent most of the session trading around that level in a fairly active market. For the moment the market holds around the 98.50 levels.
  • AUD: The market opened around the 0.9530 level and local sellers sold fairly strongly in the AUDJPY carry taking it back down through the 93.50-60 levels in what appeared early on to be a rejection of that topside 96.10-20. However, the retail market had more to say and we saw strong buying entering the market as soon as we stepped into the Tokyo session with a quick rally in the carry to above 94.10. In Oz terms the market traded to the 0.9500 area before bouncing quickly to the highs around 0.9544. Similar selling appeared in the carry and the market took its time to move back to the lows before holding in the mid 0.9525 levels as we move to London.

 

Today’s data

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

21:45     NZD       CPI Q/Q Q3 A 0.90% | C 0.80% | P 0.20%

21:45     NZD       CPI Y/Y Q3 A 1.40% | C 1.20% | P 0.70%

23:30     AUD       Westpac Leading Index M/M Aug A -0.10% | P 0.60%

08:30     GBP       Claimant Count Change Sep C -21.0K | P -32.6K

08:30     GBP       Claimant Count Rate Sep C 4.20% | P 4.20%

08:30     GBP       ILO Unemployment Rate (3M) Aug C 7.70% | P 7.70%

09:00     CHF        ZEW (Expectations) Oct P 16.3

09:00     EUR        Eurozone CPI M/M Sep (F) C 0.50% | P 0.10%

09:00     EUR        Eurozone CPI Y/Y Sep (F) C 1.10% | P 1.10%

09:00     EUR        Eurozone CPI – Core Y/Y Sep (F) C 1.00% | P 1.00%

09:00     EUR        Eurozone Trade Balance (EUR) Aug C 12.4B | P 11.1B

12:30     CAD       Manufacturing Shipments M/M Aug C -0.30% | P 1.70%

14:00     USD       NAHB Housing Market Index Oct C 57 | P 58

14:30     USD       Crude Oil Inventories P 6.8M

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               98.635 | 98.135

EUR/USD             1.35315 | 1.3506

EUR/JPY               133.34 | 132.75

AUD/USD            0.9544 | 0.9499

NZD/USD             0.8408 | 0.8375

USD/CAD             1.0385 | 1.0364

EUR/CHF              1.2363 | 1.2338

USD/CHF             0.91525 | 0.9118

GBP/USD             1.5995 | 1.5967

EUR/GBP             0.8462 | 0.84565

 
Good Luck

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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