Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close Wellington open

USDJPY 98.706 98.61-615 | EURUSD 1.34889 1.3486-98 | EURJPY 133.151 133.00-41 | AUDUSD 0.94381 0.9439-49 | NZDUSD 0.82652 0.8226-75 | USDCAD 1.04234 1.0417-33 | EURCHF 1.2305 1.2300-07 | USDCHF 0.91213 0.9115-395 | GBPUSD 1.59248 1.5907-53 | EURGBP 0.84702 0.8462-80 |

 

Weekend News

CNY:

China Services Index Rises to Year’s High in Sign of Rebound
China Plenum to Lead to Comprehensive Reform, Economist Wu Says
China to Push Forward Reform Plan in Third Plenary, Xinhua Says
China’s Economic Situation Is Improving, MOF’s Zhu Says
JPY:

Japanese Trust Banks Lent to Gangs Via Credit Units, Asahi Says
Visitors to Japan Rose 22% Y/Y in July-Sept.; French Spent Most
Japan to Issue More Bonds for Fukushima Decontamination: Kyodo
Japan Is Eager for International Help at Fukushima, Moniz Says
JPY/RUB:

Japan and Russia Agree on Navy Cooperation in Bid to Build Trust
EUR:

Spain Outlook rose at Fitch as Financial Conditions Improve
GBP:

U.K. Growth Forecasts Raised by CBI as Recovery Builds Momentum
USD:

Fed Gives Banks New Set of Dire Scenarios for 2014 Stress Tests
EUR/USD:

Germany, U.S. to Sign Anti-Spy Pact Soon, Frankfurter Says
NZD:

Wheeler Says RBNZ May raise Key Rate 200bp by End 2015: Post

Harry Hindsight

  • EUR: A combination of verbal intervention and poor figures saw the market chased off its highs from mid-week on and Friday held little in the way of surprises to change the markets mind. Talk of increased liquidity provisions as well as interest rate cut speculation undermined the Euro from the opening around 1.3590 and we traded quickly to the 1.3540 in the Tokyo session, holding the 1.3540-60 levels into the London session where the market continued to decline. London sold on the opening to push the market to the near term bids around the 1.3520 area before breaking and continuing in a slow manner into the NYK session bottoming around the 1.3480 levels in a lacklustre finish to the day just off its lows.
  • GBP: Cable to some extent was joined at the hip once it moved into the London session however, with the EURGBP dipping in early Euro selling the Cable remained fairly well supported in Asia moving between the 1.6040 opening to lows around the 1.6020 area and regaining the highs into London. With support in the EURGBP around the 0.8450 the declines in the Euro meant Cable became firmly joined at the hip with the Euro and we started to see a phase of catching up. Cable quickly moved down through the 1.6000 level and then dropped a second time after a period of consolidation around the area to make a new low below 1.5960. from there the move into NYK was a slow move lower tagging along with the declines in the Euro for the pair to finish off its lows 1.5910 in a slow finish.
  • JPY: The Asia session opened around the 98.35/38 area and we saw selling in EURJPY dominating the market during the early part with a major selloff during mid-session to take the USDJPY from the 98.20 area to the 97.90 levels before finally dipping to just above the 97.80 and holding into the London session. While the Euro selling produced a broader based USD rally it still worth noting that it was all Euro weakness and the fact the market met EURJPY bids helped to keep the USDJPY bid from that point on. The market moved steadily higher in line with the Euro selling and as we moved into NYK the market had recovered its losses and was sitting above the 98.30 level. US ISM figures helped to push the market higher again taking the USDJPY to above the 98.80 before running into some stiff resistance and we held for several hours in a tight range with the market unable to break higher. The market eventually gave up trying and drifted in to a close just off the highs for the day.
  • AUD: The Oz was the exception to the broad USD rally and held its own for a good portion of the day, moving from an opening around the 0.9460 area to push higher through Asia to make the 0.9490 levels as we moved towards the London opening. London sold the Oz more as a reaction to the USDJPY rises than anything else and we saw the market back to its opening levels and once we moved into the NYK session and the decent ISM numbers the Oz was knocked back down to hold around the 0.9430 with some strong bids holding the market on the downside for the time being. The market dipped into the mid 0.9420’s but was fairly quiet into the close some 10 pips higher.

Friday’s premiership results

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

AUD       PPI Q/Q Q3 A 1.30% | C 0.30% | P 0.10%

AUD       PPI Y/Y Q3 A 1.90% | C 1.60% | P 1.20%

CNY        Manufacturing PMI Oct A 51.4 | C 51.1 | P 51.1

CNY        HSBC/Markit Manufacturing PMI Oct A 50.9 | C 50.7 | P 50.2

CHF        SVME-PMI Oct A 54.2 | C 55.3 | P 55.3

GBP       PMI Manufacturing Oct A 56 | C 56.4 | P 56.7 | R 56.3

USD       ISM Manufacturing Oct A 56.4 | C 55.1 | P 56.2

USD       ISM Prices Paid Oct A 55.5 | C 55.1 | P 56.5

 

For today

USDJPY
Topside: 98.80-99.10 medium offers  99.20-99.30 medium mix  offers 99.30-99.40 medium offers 99.60-99.80 light offers 100.00-100.20 medium offers
Downside: 98.40-98.70 light bids 98.00-98.30 medium bids 97.40-97.70 medium bids

EURUSD
Topside: 1.3500-1.3520 light offers 1.3520-1.3530 light mix 1.3530-1.3560 light offers 1.3560-1.3580 light buy stops
Downside: 1.3420-1.3440 light sell stops 1.3300-1.3340 medium bids

EURJPY
Topside: 133.30-133.60 light buy stops  133.60-133.90 light buy stops
Downside: Nothing of note
AUDUSD
Topside: 0.9490-0.9500 light buy stops 0.9500-0.9525 medium offers
Downside: 0.9390-0.9425 light mix 0.9360-0.9390 light bids

 

USD:

Fed Should Resume Normal Policy as Soon as Possible, Fisher Says

Dallas Fed’s Fisher Says U.S. Economy ‘Hog-Tied’ by Government

AUD:

Australian Retail Sales Rise in September

Australia inflation gauge still benign in Oct-TDMI

Australia job advertisements dip 0.1% in Oct-ANZ

NZD:

N.Z. Treasury Says RBNZ May Have More Flexibility on Rate Rises

N.Z. Export Commodity Prices Rise at Faster Pace, ANZ Says

CNY:

China’s Shenzhen toughens home-buying rules as prices surge

China banking regulator vows action to handle any rise in bad loans

 

  • EUR: The Euro opened around the 1.3490 and in early trading pushed slowly through the 1.3500 level with some light stops triggered during the push. As we ran deeper into Tokyo comments from the Fed’s Fisher helped the USD rally strongly and we saw weak stops triggered in the Euro as the market dropped quickly with decent flows going through as the market ran into some decent bids in the 1.3460-40 area before bottoming around the 1.3442 level and bouncing back to the 1.3475 area. The market then slowed and we moved gently back towards the opening levels and hold just below that area as we move to the London session.
  • GBP: Cable opened unchanged from the weekend and moved higher into the Tokyo session from the opening 1.5930 with some light GBPJPY buying going through the market to help the Cable to touch 1.5940. Early pre-market trading had already cleared the way higher, having hit 1.5955 however, with the Euro making a move lower the drag pulled Cable from the highs around 1.5940 to trade just below the 1.5905 levels before bouncing back to the opening levels where we currently hold.
  • JPY: A very quiet day for the USDJPY caught between a rising USD with substantial offers resting above the 98.90-99.10 level, the market opened around the 98.75 areas and managed a peak above the 98.84 levels but with very little give on the topside spent most of the day around those opening levels, with the Lows set on the opening around 98.68.
  • AUD: The market opened above Friday’s close around the 0.9450 levels and moved steadily higher in pre Tokyo to 0.9465 before early Tokyo saw AUDJPY buying to the 93.70 areas to push the Oz towards the 0.9495 area and some light resistance. Decent retail sales numbers helped the market to move and once we topped out we’ve held the 0.9470-0.9490 levels for the remainder of the session.

 

Today’s data

Actual = A Consensus = C  Previous = P Timings GMT

AUD       Retail Sales M/M Sep A 0.80% | C 0.40% | P 0.40%

AUD       House Price Index Q/Q Q3 A 1.90% | C 2.20% | P 2.40%

08:45     EUR        Italian PMI Manufacturing Oct C 51 | P 50.8

09:00     EUR        Eurozone PMI Manufacturing Oct (F) C 51.3 | P 51.3

09:30     EUR        Eurozone Sentix Investor Confidence Nov C 6.2 | P 6.1

09:30     GBP       PMI Construction Oct C 58.7 | P 58.9

15:00     USD       Factory Orders Aug C 0.20% | P -2.40%

15:00     USD       Factory Orders Sep P 1.80%

Ranges as of 6am London time including Sydney open

Highs    Lows

USD/JPY               98.84 | 98.60

EUR/USD             1.3502 | 1.3442

EUR/JPY               133.30 | 132.855

AUD/USD            0.9495 | 0.9430

NZD/USD             0.8289 | 0.8249

USD/CAD             1.0427 | 1.0412

EUR/CHF              1.2314 | 1.2300

USD/CHF             0.9152 | 0.9116

GBP/USD             1.5955 | 1.5904

EUR/GBP             0.84725 | 0.84525

 

 

 

Stay lucky

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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