Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close Wellington open

USDJPY 97.783 97.66-94 | EURUSD 1.36855 1.3682-87 | EURJPY 133.806 133.67-134.06| AUDUSD 0.9676 0.9665-79 | NZDUSD 0.8049 0.8493-0.8514 | USDCAD 1.02889 1.0291-1.0305 | EURCHF 1.23422 1.2340-46 | USDCHF 0.90177 0.9016-25 | GBPUSD 1.61675 1.6165-79 | EURGBP 0.84645 0.8455-73 |

 

Weekend News

USD:

Poll of Economists suggest Fed Tapering is not likely to happen until March BBG

EUR:

Draghi opposes the imposition of losses on bond holder in the event of bank failures

An Italian court barred Berlusconi for two years from holding public office

Bundesbank warns Merkel of keeping a lid on public spending as she forms a coalition

SPD lists demands for entering coalition with Merkel

GBP:

BoE official says rates have to rise a fair amount before borrowers run into difficulties Reuters

Osborne looks to split RBS leaving bad bank and waiting for Treasury report

 

Harry Hindsight

  • EUR: The market opened around the 1.3675 level and slowly traded lower trading down to the 1.3660 area and holding around the 1.3665 level for the balance of the Asian session. The move into the grey hours saw some strong buying from early Europeans taking the market to above the 1.3690 before holding in the area for a couple of hours as we slowly cleared the topside offers. Once the offers were cleared the market ran to above the 1.3700 before rejecting the level and dropping back to the 1.3680 level and then slowly back to the 1.3670. With very data for the day the market started to rally in NYK moving almost to the 1.3700 again before slowly moving back into the 1.3680’s into the close. With volumes off from the rest of the week however, the market still seems to be unfocused now that the US problems are out of the way until February of next year.
  • GBP: With very little information or news for the day the market was left to its own devices and spent most of the day following the Euro, dropping from an opening levels around the 1.6160 area to the mid 1.6140’s and struggling in the area into London. As with the Euro the market moved quickly higher in the grey hours stalling just above the 1.6180 level before making a further move higher to touch above the 1.6220 before dropping back again to the 1.6180 level, as with the Euro’s the market held this level for a short period before drifting lower to below the 1.6170 in slow trading. EURGBP cross traded for most of the day around the 0.8460 area dropping off as GBP outperformed the Euro during the move towards NYK touching down to nearly 0.8440 before rising back to move a little above the opening levels.
  • JPY: The market opened around the 97.90 level and after a minor dip to the 97.85 area the market started to rally, pushing above the 98.00 level to touch just above the 98.15 before holding in Asia around the 98.00 levels. A quiet London opening started to see strong selling moving into the market and taking the pair to below the 97.60 levels before being rescued by the NYK session and a renewal of buying. NYK slowly moved the market to the 97.90 area but was unable to make headway in a quiet session falling back into the close.
  • AUD: The Oz traded in line with the JPY for the majority of the day, while the AUDJPY did rise it was a steady grind higher moving from the 94.35 level to finish the day around the 94.60 level to so they say complete the break out on the charts however, it’s not that simple it would seem. As USDJPY went higher in the early part of the session Oz was moved lower and once the USDJPY dropped off the Oz was allowed to rise trading steadily to the 0.9670 area peaking in the 0.9675 levels to finish on its highs.

 

Friday’s premiership results

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

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%

CAD       CPI M/M Sep A 0.20% | C 0.10% | P 0.00%

CAD       CPI Y/Y Sep A 1.10% | C 1.00% | P 1.10%

CAD       BoC CPI Core M/M Sep A 0.20% | C 0.30% | P 0.20%

CAD       BoC CPI Core Y/Y Sep A 1.30% | C 1.40% | P 1.30%

 

For today

USDJPY:
Topside: 98.10-98.30 light mix 98.30-98.60 medium offers 98.60-99.00 light offers
Downside: 97.30-97.60 light mix 97.00-97.30 medium bids 96.60-96.80 medium bids

EURUSD:
Topside: 1.3690-1.3710 light offers 1.3710-1.3730 light buy stops 1.3730-1.3760 light mix 1.3760-1.3790 light offers
Downside: 1.3640-1.3650 light sell stops 1.3580-1.3640 light bids

EURJPY:
Topside: 134.20-134.50 light offers 134.60-134.90 light offers
Downside: 133.00-133.30 light sell stops

AUDUSD:
Topside: 0.9680-0.9700 light mix 0.9700-0.9730 light offers 0.9750-0.9770 medium offers
Downside: 0.9600-0.9630 light bids 0.9560-0.9600 light sell stops

 

CNY:

China looks to municipal bonds to clean up local Govt. debt

PBoC Q4 economic growth could slow down

China policy may tighten up if CPI stays above 3%

China may enter phase of negative real rates

Curbing inflation not pressing issue in 4Q

JPY/CNY:

Japan coast guard reportedly issued a warning for China ships not to enter disputed waters

JPY:
Japan Sep exports rise 11.5% YoY MoF

EUR:

German tax revenues rise 7.8% YoY in September

 

 

  • EUR: Market opened in line with Friday’s close and traded quietly into the Tokyo opening having touched above the 1.3689, the move into Tokyo saw some light selling taking the market lower in the Euro as it was forced lower by EURJPY selling in the face of USDJPY buying. The Euro dropped to below the 1.3672 level and has held around the lows since that point with very light volumes going through.
  • GBP: Cable opened a touch higher than the close on Friday, moving into the Tokyo session the market initially held before the Euro dropped dragging the GBP with it. The cable dropped to the 1.6158 levels with a brief spike to 1.6154 and currently holds around the lows. With volumes extremely low the whole session has been limited in action.
  • JPY: The USDJPY started quietly slightly higher than the close on Friday and quietly moved into Tokyo before we started to some light buying taking the market to the 98.10 area before running into some light selling that held the market. We dipped back to the 97.95 areas however, the market still seems happier for the moment above the 98.00 level, and is currently holding there.
  • AUD: The Oz opened a little lower from Fridays close and immediately closed the gap on the charts moving from the 0.9664 areas to the 0.9675 levels before moving into Tokyo with some light AUDJPY selling kicking in as retail Japan is still in flux as one portion take advantage to pare back some longs while new buyers make an appearance to reverse the lows around the 0.9645 to move back to the top of the range again.
  • USD: As expected after the capitulation of the Republicans they are now trying a different tack, having failed to repeal and defund Obamacare they are now aiming at glitches in the roll out. If it were a child you’d tell it off for being spiteful. Some of these people are in charge of the most powerful weapon delivery systems in the World. Do you feel safe.

 

Today’s data

Actual = A Consensus = C  Previous = P Timings GMT

GBP       Rightmove House Prices M/M Oct A 2.8% | P -1.50%

JPY         Trade Balance (JPY) Sep A -1.09T | C -1.06T | P -0.79T

JPY         All Industry Activity Index M/M Aug A 0.30% | C 0.20% | P 0.50%

06:00     EUR        German PPI M/M Sep C 0.10% | P -0.10%

06:00     EUR        German PPI Y/Y Sep C -0.70% | P -0.50%

12:30     CAD       Wholesale Sales M/M Aug P 1.50%

14:00     USD       Existing Home Sales Sep  C 5.30M | P 5.48M

21:00     USD       Crude Oil Inventories C 3.4M | P 6.8M

 

Ranges as of 6am London time including Sydney open

Highs    Lows

USD/JPY               98.11 | 97.80

EUR/USD             1.3690 | 1.36705

EUR/JPY               134.14 | 133.88

AUD/USD            0.9679 | 0.9643

NZD/USD             0.8508 | 0.8475

USD/CAD             1.0299 | 1.0290

EUR/CHF              1.2352 | 1.2343

USD/CHF             0.9034 | 0.9017

GBP/USD             1.6180 | 1.6153

EUR/GBP             0.84645 | 0.84595

 

 

Stay lucky

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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