Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 97.912 | EURUSD 1.36754 | EURJPY 133.90 | AUDUSD 0.96357 | NZDUSD 0.85048 | USDCAD 1.02912 | EURCHF 1.23403 | USDCHF 0.9024 | GBPUSD 1.61642 | EURGBP 0.84602 |

 

Harry Hindsight

  • EUR: With everyone going back to work you’d have been forgiven for thinking the market would drift lower from that point however, like all good plans the mice had been at it and there were lots of holes in it. Opening around the 1.3530 area the market in Asia was reasonably quiet unable to break above the 1.3540 level and barely pushing through the 1.3520 level on the downside in early trading. Once it appeared that all the news was out we started to focus on the aftermath with a hole in the US 4th Quarter GDP and given that carrying it further a little you can understand that tapering is not likely to happen quickly now. Asia moved a little higher breaking to the 1.3550 level. The move into the grey hours had early Europeans buying from the ticking over into the period and taking the market to above 1.3560 before serious buying appeared in the market triggering some light stops and pushing to the 1.3620. The market stalled with some decent offers appearing from long term longs and we had to wait until the NYK session came on for the final push higher taking around 4hrs to reach the next level of 1.3680 and holding between this high and 1.3660 into the close.
  • GBP: A storming day for Cable opening around the 1.5945/50 and trading slowly to a low around 1.5940 in early trading before the market started a steady rise high trading to the 1.5980 level before moving into the London session and a good leap higher with decent retail sales above expectations and far above the previous months number. The market moved quickly to test the 1.6100 level with the numbers and the pull of a rising Euro. EURGBP started the day holding around the 0.8480 level before a spike higher to above the 0.8495 before sending the rest of the session dropping back as the GBP continued a rise through into the NYK session to peak close to the 1.6170 and pushing the EURGBP back to the 0.8450 levels. The remaining 6 or so hours in NYK was a drab affair with the market holding around the 1.6160 levels into the close.
  • JPY: While the other majors moved quietly for the most part in Asia the USDJPY was not the same opening around the 96.75 area the market moved initially higher with AUDJPY carry trade the focus of attention with USDJPY touching above the 99.00 however, with strong resistance lined up it would have taken a brave man than me to be a buyer. Once the high was made it was all one way dropping steading through the session to the 98.50 area into the grey hours, the London session opened and the market dropped quickly with early sellers taking the market quickly lower to just above the 97.80 level where the market had some minor support. Having led the USD selling the market ran out of steam and although we extended the lows over the course of some 14hrs to below 97.80 the market remained pretty quiet outside of the Asian session.
  • AUD: The Oz had two factors going for it, the general weakness in the USD as the market focuses on the follow on fundamentals and also the resurgence of the carry trade which is stuck for the moment just below a congested area dating from Jan, Mar and Jun. and the bottom line obviously the question is will the RBA surprise or not before the end of the year. On the day the market remained fairly quiet trading in early play to just below 0.9570 as early players tried to break through the topside offers in AUDJPY failing and dropping back to the 0.9545, overall once the AUDJPY moved away from the topside both USDJPY as we’ve seen and the Oz moved lower over the session however, the Oz was unable to push below 0.9530 through the grey hours and then moving as London opened with the general USD selloff over the period into the NYK session where the market peaked above the 0.9645 before drifting into the close.

Yesterday’s premiership results

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

AUD       NAB Business Confidence Q3 A 3 | P -1

EUR        Eurozone Current Account (euros) Aug A 17.4B | C 17.7B | P 16.9B

GBP       Retail Sales M/M Sep A 0.60% | C 0.40% | P -0.90%

CAD       International Securities Transactions (CAD) Aug A 2.08B | C 7.21B | P 6.09B

USD       Initial Jobless Claims (OCT 11) A 358K | C 357K | P 374K

USD       Philly Fed Survey A 19.8 | C 16 | P 22.3

 

For today

USDJPY:
Topside: 98.10-98.40 light mix 98.40-98.70 medium offers 98.70-99.00 light offers 99.00-99.30 medium offers
Downside: 97.60-97.80 medium sell stops 97.40-0.9760 light bids 97.10-97.40 medium bids

EURUSD:
Topside: 1.3680-1.3700 light buy stops 1.3700-1.3730 light mix 1.3730-1.3760 light buy stops 1.3760-1.3790 light offers 1.3800-1.3820 light offers
Downside: 1.3620-1.3660 light bids 1.3580-1.3620 light bids

EURJPY:
Topside: 134.10-134.50 light offers 134.60-134.90 light offers
Downside: 133.00-133.30 light sell stops

AUDUSD:
Topside: 0.9650-0.9660 light offers 0.9680-0.9700 light offers 0.9750-0.9790 light mix 0.9700-0.9730 light offers
Downside: 0.9560-0.9600 light bids 0.9540-0.9560 light bids

 

AUD:

RBA governor Stevens: higher A$ not sustainable (which was a correction)

Stevens: US shutdown effect probably won’t linger

Stevens: Direction of currency not entirely surprising

Stevens: Chinese currency will increase in prominence

Stevens: Lower currency would be helpful to rebalance the economy

Stevens: daunting task ahead in global financial reform

USD:

US jobless claims fall, mid-Atlantic manufacturing expands

Crisis averted, Obama says Americans “completely fed up” with Washington (well done Sherlock)

 

 

  • EUR: The market slowly drifted from the opening moving slowly lower from the opening 1.3675 area touching the 1.3660 level where the market sees weak bids. Having fallen to the level the market continues to hold in the region as we move towards the grey hours.
  • GBP:  A similar movement in Cable as the Euro holding into the Tokyo session around the opening levels 1.6160, Tokyo sold the pair lower with some cross GBPJPY selling dropping to the 1.6142 lows before holding and moving around those lows into the close.
  • JPY: Very quiet session overall with some bids showing to the downside holding the market up and early buyers of the carry trade running into problems with a drifting Oz, USDJPY moved to above the 98.05 level into the opening of Tokyo and a further round of buying into the fixing before running out of life around the 98.15 area and drifting back to trade around the figure area from that point on and holding close to the level into the grey hours.
  • AUD: AUDJPY had a choppy day moving between the 94.12/94.51 area throughout the session. The Oz however, gradually moved lower opening just below 0.9640 and gradually easing to the 0.9605 level on the Steven comments with a brief spike higher to set the AUDJPY high and trade above the 0.9630 level before dropping down to the lows. The market from that point has been very quiet and drifting around the 0.9620 areas.

 

Today’s data

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

CNY        GDP Y/Y Q3 A 7.80% | C 7.80% | P 7.50%

CNY        Industrial Production Y/Y Sep A 10.20% | C 10.20% | P 10.40%

CNY        Fixed Assets Ex Rural YTD Y/Y Sep A 20.20% | C 20.30% | P 20.30%

CNY        Retail Sales Y/Y Sep A 13.30% | C 13.40% | P 13.40%

12:30     CAD       CPI M/M Sep C 0.10% | P 0.00%

12:30     CAD       CPI Y/Y Sep C 1.00% | P 1.10%

12:30     CAD       BoC CPI Core M/M Sep C 0.30% | P 0.20%

12:30     CAD       BoC CPI Core Y/Y Sep C 1.40% | P 1.30%

14:00     USD       Leading Indicators Sep C 0.60% | P 0.70%

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               98.16 | 97.855

EUR/USD             1.36805 | 1.36595

EUR/JPY               134.11 | 133.78

AUD/USD            0.9633 | 0.9604

NZD/USD             0.8477 | 0.8448

USD/CAD             1.0301 | 1.0293

EUR/CHF              1.2346 | 1.2340

USD/CHF             0.90365 | 0.9021

GBP/USD             1.6163 | 1.6142

EUR/GBP             0.84645 | 0.84585

 

 
Good Luck

Andy

 

 

 

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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