Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 98.664 | EURUSD 1.35136 | EURJPY 133.331 | AUDUSD 0.95268 | NZDUSD 0.83874 | USDCAD 1.04189 | EURCHF 1.23272 | USDCHF 0.9122 | GBPUSD 1.60794 | EURGBP 0.84049 |

 

Harry Hindsight

  • EUR: Euro’s and the market in general were reasonably quiet for the first part of the trading session in Asia. The market opened around the 1.3475 levels drifting slightly lower until the AUD bond auction triggered movement in the markets. Euro’s moved up strongly triggering a small short squeeze taking the market to above the 1.3520 area before stalling; the market again drifted again dropping back to the 1.3500 area and traded around the level into the London session. Eurozone numbers were mixed at best with PMI services helping to support the market early on only for retail sales numbers to be ignored or balanced by the good German number, either way the market traded sideways with a general slow move higher to trade between 1.3510-20. A move higher from the NYK opening taking out some light stops on a run to above the 1.3545 before dropping back to the same 10-20 range we’d seen during late London. The market eventually settled around the midpoint of that tight range. The market remains slightly short before the ECB however; there was again a slight increase in real money buying in the market.
  • GBP: Cable was very little different to the Euro in movement overall having opened around the 1.6050 levels drifting slightly higher into the Tokyo session and the AUD bond auction helping the market move quickly to above the 1.6095 level. The market held the level for a few hours attempting to break through the 1.6100 levels before eventually giving up the ghost and drifting lower into the London opening to hold around the 1.6070 level, with another good set of numbers the market jumped back to push straight through the 1.6100 level and traded just short of 1.6120. EURGBP moved slowly higher as the Euro caught the move higher and kept the cross in line before Cable started to drift into the NYK session moving steadily lower and allowing the cross to move back above the 0.8400 levels. The NYK session saw the market holding around the 1.6080 and although the Euro saw real money entering the market the Cable lacked the interest and while we remained between 1.6085/1.6110 the move petered out before falling in the NYK session back to the 1.6070 levels and while we had a little flurry around the Wellington opening the market drifted quietly to finish just above the 1.6080 levels.
  • JPY: USDJPY moved steadily lower from the opening 98.50 during the pre-Tokyo session dipping to just above the 98.40 levels. The rally in the AUD saw the market move quickly higher as AUDJPY buying kicked in taking the USDJPY to above the 98.75 before failing in the face of the strong offers showing in the market. The downside move was gradual falling into the London opening around the day’s opening before seeing a steady rise into the NYK session to finish the day trading the 98.60-98.70 levels for the best part of the session.
  • AUD: The catalyst for the moves in Asia moving quietly into the Tokyo session in front of the Bond auction. The market initially drifted a little lower from the 0.9510 area pushing below 0.9490. The auction result with 4.5 coverage triggered a steady amount of buying taking the market up over the period of several hours to above the 0.9525 area and triggering movements in the other currencies, the markets steadily drifted into the London session where again we saw real money buying taking the pair to above the 0.9540 in strong buying. The market stayed in a tight range into NYK and only option expirations saw gamma and delta players selling into the market and taking the Oz back to 0.9510 areas. The run to the close was again a gentle move higher with the pair closing above the 0.9525 levels.

Yesterday’s premiership results

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

NZD       Unemployment Rate Q3 A 6.20% | C 6.10% | P 6.40%

NZD       Employment Change Q/Q Q3 A 1.20% | C 0.50% | P 0.40%

GBP       BRC Shop Price Index Y/Y Oct A -050% | P -0.20%

AUD       Trade Balance (AUD) Sep A -0.28B | C -500M | P -815M | R -0.69B

EUR        Italian PMI Services Oct A 50.5 | C 51.2 | P 52.7

EUR        Eurozone PMI Services Oct (F) A 51.6 | C 50.9 | P 50.9

GBP       Industrial Production M/M Sep A 0.90% | C 0.60% | P -1.10%

GBP       Industrial Production Y/Y Sep A 2.20% | C 1.80% | P -1.50%

GBP       Manufacturing Production M/M Sep A 1.20% | C 1.10% | P -1.20%

GBP       Manufacturing Production Y/Y Sep A 0.80% | C 0.80% | P -0.20%

EUR        Eurozone Retail Sales M/M Sep A -0.60% | C -0.40% | P 0.70% | R 0.50%

EUR        German Factory Orders M/M Sep A 3.30% | C 0.50% | P -0.30%

USD       Challenger Job Cuts Y/Y Oct A -4.20% | P 19.10%

CAD       Building Permits M/M Sep A 1.70% | C 7.80% | P -21.20%

GBP       NIESR GDP Estimate Oct  A 0.70% | C 0.50% | P 0.80%

CAD       Ivey PMI Oct A 62.8 | C 54.7 | P 51.9

USD       Leading Indicators Sep A 0.70% | C 0.60% | P 0.70%

USD       Crude Oil Inventories A 1.6M | C 1.7M | P 4.1M

 

For today

USDJPY:
Topside: 98.80-99.10 large offers 99.10-99.60 large offers 100.00-100.20 large offers
Downside: 98.25-98.40 large mix 98.10-98.25 light sell stops 97.80-98.10 light bids 97.40-97.60 light bids

EURUSD:
Topside: 1.3520-1.3550 light buy stops 1.3550-1.3580 light buy stops 1.3580-1.3610 light mixed bag
Downside: 1.3450-1.3490 light bids 1.3420-1.3450 medium sized bids 1.3380-1.3420 decent bids

EURJPY:
Topside: 133.90-134.40 light mixed bag
Downside: 132.60-133.00 light bids

AUDUSD:
Topside: 0.9550-0.9600 medium offers
Downside: 0.9450-0.9465 medium bids

 

AUD:

Australia October Employment Rose 1,100; Est. 10,000 Gain

Australian Construction Index Indicates Expansion

JPY:

Kuroda: Too Early Now to Debate BOJ Exit Strategy in Detail

Japan Needs More Fiscal Discipline, Moody’s Byrne Says

Japan Sept coincident indicator index improves 0.6 point

CNY:

China Seen Keeping Aa3 Rating After Local Govt Audit: Moody’s

China Approves 2 Chinese Fund Managers to Offer ETFs in U.S. – Source

NZD:

New Zealand house prices at record levels in October – QV

 

 

  • EUR: Euro’s dropped into the opening trading to a low to 1.3515 areas before climbing steadily back to 1.3520 into the Tokyo opening. EURJPY selling on the opening was then followed by the AUD employment data and Euro fell quickly to 1.3510 and then steadily over the next hour to its lows just above the 1.3500 levels. From there we’ve seen cross buying in the Euro and one suspect that some of the shorts have now closed their positions before today’s ECB. The market has slowly crept back up through the opening levels and currently sits on its highs for the day above the 1.3525 area in what has been a very quiet session for the pair.
  • GBP: A similar day for the Cable with very little going through as the markets adjust around the AUD movements the same as yesterday, the opening was around the 1.6080 level and the move into Tokyo saw the lows made just above the 1.6065 areas before a steady climb to above the 1.6090 areas into the grey hours as early players come in.
  • JPY: A very tight range for the USDJPY as the Oz remained the prime mover in Asia, moving from the opening 98.68 areas into the Tokyo market opening around 98.60 before moving quickly higher as AUDJPY stayed steady with the AUDUSD declining pushing USDJPY to make the high around 98.75 similar highs to yesterday. The rest of the session saw the market drift to set the lows below 98.56 leaving the market around the 98.60 area into the grey hours. Very light volumes, with no particular types showing.
  • AUD: The biggest mover of the day saw the Oz opening around the 0.9528 area and hold to 0.9520 into the Tokyo session, another set of poor employment figures saw the market drop off quickly moving from the 0.9520 areas to below 0.9470 before running into some meaningful bids which held the market for the rest of the session, we moved a little away from the lows but not anything you’d like to tag as a bounce and currently hold just below the 0.9485.

 

Today’s data

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

AUD       Employment Change Oct A 1.1K | C 10.0K | P 9.1K

AUD       Unemployment Rate Oct A 5.70% | C 5.70% | P 5.60%

JPY         Leading Index Sep (P) A 109.5 | C 109.4 | P 106.8

06:45     CHF        SECO Consumer Confidence Oct C -2 | P -9

08:00     CHF        Foreign Currency Reserves Oct P 432.4B

11:00     EUR        German Industrial Production M/M Sep C 0.00% | P 1.40%

12:00     GBP       BoE Rate Decision C 0.50% | P 0.50%

12:00     GBP       BoE Asset Purchase Target Nov C 375B | P 375B

12:45     EUR        ECB Rate Decision C 0.50% | P 0.50%

13:30     USD       ECB Press Conference

13:30     USD       Initial Jobless Claims (NOV 2) C 335K | P 340K

13:30     USD       GDP (Annualized) Q3 (A) C 2.00% | P 2.50%

13:30     USD       GDP Price Index Q3 (A) C 1.30% | P 0.60%

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               98.75 | 98.56

EUR/USD             1.3528 | 1.3500

EUR/JPY               133.43 | 133.22

AUD/USD            0.9528 | 0.9465

NZD/USD             0.8380 | 0.8350

USD/CAD             1.0424 | 1.0416

EUR/CHF              1.23285 | 1.23225

USD/CHF             0.9130 | 0.9112

GBP/USD             1.6085 | 1.6066

EUR/GBP             0.84105 | 0.84035
Good Luck

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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