Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 99.163 | EURUSD 1.34069 | EURJPY 132.934 | AUDUSD 0.93606 | NZDUSD 0.82319 | USDCAD 1.04749 | EURCHF 1.23266 | USDCHF 0.91942 | GBPUSD 1.5988 | EURGBP 0.83855 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               99.595 | 99.10

EUR/USD             1.3414 | 1.3386

EUR/JPY               133.46 | 132.87

AUD/USD            0.9368 | 0.9325

NZD/USD             0.8260 | 0.8206

USD/CAD             1.0487 | 1.0464

EUR/CHF              1.2335 | 1.2326

USD/CHF             0.9212 | 0.9192

GBP/USD             1.5992 | 1.5964

EUR/GBP             0.8389 | 0.8377

 

For today

USDJPY

Topside: 99.50-99.80 light mix  99.80-100.10 light mix, talk of option barriers all the way to 100
Downside: 98.70-99.10 medium sell stops 98.40-98.80 medium bids 98.10-98.40 light sell stops

EURUSD
Topside: 1.3420-1.3430 medium offers  1.3450-1.3480 light mix  1.3500 light buy stops
Downside: 1.3340-1.3370 light bids 1.3300-1.3325 light bids

EURJPY
Topside: 133.50-133.80 light offers
Downside: 132.60-132.90 light sell stops

AUDUSD
Topside: 0.9390-0.9420 light mix  0.9420-0.9450 light offers 0.9450-0.9470 light buy stops
Downside: 0.9320-0.9350 light mix  0.9260-0.9320 light bids

 

  • EUR: With some light offers in the EURJPY the Euro struggled from the opening with a strong USDJPY, the Euro moved from the opening 1.3408 areas to touch briefly above the 1.3414 before Tokyo started the day pushing the Euro lower in slow trading for the pair to trade steadily back through the 1.3400 area and triggering some minor stops. The market bounced in mid-session but the damage was already done and the market failed at 1.3400 and again steadily started to drift lower as the JPY weakened moving into the mid 1.3380’s as we move towards the grey hours.
  • GBP: A very tight range for the Cable over night with the market opening around the 1.5988 area and holding quietly into the Tokyo session. The market saw a minor move low to below 1.5966 real money selling moving the market, only for it to reverse just as quickly as the supply was absorbed. Having recovered the market then went into a steady slide lower with the EURGBP cross having very little bearing during the session the market moves into the grey hours just above the lows of the day.
  • JPY: USDJPY was the mover for the day having opened around the 99.20 level the market dipped to just above the 99.10 area in pre Tokyo, once we moved into the Tokyo session the market saw some steady buying from the retail market and we rose quickly through the 99.30 triggering some minor stops before running into what the market suspects as being option barriers from the 99.60 to 100.00, while the barriers don’t show up so well as the general run of the mill orders the market will need to find some impetus to drive to the 100.00 for the time being and its likely to be hard going if the last few hours show anything, the market has managed to push to just below the 99.60 area and has spent a large portion of time holding around this 99.55 level where we enter London.
  • AUD: As the USDJPY rises so the Oz falls, early trading saw the market move from the opening 0.9360 levels to top at the 0.9368 areas before moving into the Tokyo session and the grind higher for USDJPY and the push lower in the Oz, the initial trigger was the NAB number sending the Oz below 0.9340 however, it continued lower albeit more slowly and stalled just above the 0.9325 level before ranging from there to 0.9340 areas which is quiet close to where we enter the grey hours. AUDJPY cross has been steady remaining towards the top of yesterday’s tight range and holding just below the 93.00 level for the most part.

Overnight News

JPY/USD:

Japan, U.S. reaffirms G7/G20 commitment on Forex

JPY:

Japan PM Abe: Hopes U.S. Resolves Fiscal Uncertainties

Japan’s Aso Urges U.S. To Work to Resolve Debt Ceiling Issue

Amari: Confirms With Lew Further Cooperation on TPP Conclusion

Japan Amari: Will tell U.S. Lew “Abenomics” not targeting FX

Koizumi’s Nuclear-Free Call Has Majority Support: Asahi Survey

Japan consumer mood worsens in October

CNY:

China May Raise Bar for LGFV to Issue Debt: Economic Info. Daily

China Considering Changes to One-Child Policy – Report

Beijing Considers Bigger Private Role in State Companies

China Approves 7 Institutions for QFII Licenses in Oct.

AUD:

Australia business confidence fades from highs in Oct-survey


Today’s data

JPY         Japan Money Stock M2+CD Y/Y Oct A 4.10% | C 3.90%    | P 3.80%

JPY         Tertiary Industry Index M/M Sep A -0.20% | C 0.20% | P 0.70%

GBP       RICS House Price Balance Oct A 57% | C 58% | P 54%

AUD       NAB Business Confidence Oct A 5 | P 12

JPY         Consumer Confidence Index Oct  A 41.2 | C 46.3 | P 45.4

JPY         Machine Tool Orders Y/Y Oct (P) A 8.40% | P -6.30%

07:00     EUR        German CPI M/M Oct (F) C -0.20% | P -0.20%

07:00     EUR        German CPI Y/Y Oct (F) C 1.20% | P 1.20%

09:30     GBP       PPI Input M/M Oct C -0.40% | P -1.20%

09:30     GBP       PPI Input Y/Y Oct C 0.30% | P 1.10%

09:30     GBP       PPI Output M/M Oct C 0.00% | P -0.10%

09:30     GBP       PPI Output Y/Y Oct C 1.00% | P 1.20%

09:30     GBP       PPI Output Core M/M Oct C 0.10% | P -0.10%

09:30     GBP       PPI Output Core Y/Y Oct C 0.70% | P 0.70%

09:30     GBP       CPI M/M Oct C 0.40% | P 0.40%

09:30     GBP       CPI Y/Y Oct C 2.50% | P 2.70%

09:30     GBP       Core CPI Y/Y Oct C 2.00% | P 2.20%

09:30     GBP       RPI M/M Oct C 0.50% | P 0.40%

09:30     GBP       RPI Y/Y Oct C 3.00% | P 3.20%                    

 

Harry Hindsight

  • EUR: The market initially traded lower from the opening moving from the 1.3370 area back to the 1.3345 as the market saw early Asians playing catch up. Once we moved into the Tokyo session the market began to pick up and make steady headway with real money doing particularly well. By the time we’d moved into the grey hours we started to see early Europeans buying steadily over the next 4hrs or so with short term players taking the market in a tight channel to the 1.3405 area, with very little data and the usual gossipers unwilling to speak before the Armistice ceremonies were completed the short term players then started to take profits and the market moved along around the 1.3400 levels. With the Early papers discussing dissension in the ranks of Europe with national views on the recent rate cut was more or less ignored to some extent, before ECB’s Coeure rubbed salt into the division with dovish comments. The market moved a little pushing to the 1.3415 area however, spent the rest of London and NYK hovering around the 1.3410 levels into the close.
  • GBP: Cable spent the Asian session holding around the 1.6015 in quiet trading with very little going on, we opened below Friday’s close around the 1.6005 area and drifted to the figure before catching the Euro move higher. EURGBP stayed in line at this point and Cable remained topped just above the 1.6020 levels. The move into London was unimaginative before EURGBP started to move in towards the end of the Euro rally, Cable was forced to the 1.5980 level and the move towards NYK was little different with both Euro and USD making gains and Cable testing the 1.5970 areas a few times before pushing a little into the close for a finish around the 1.5985 areas.
  • JPY: The USDJPY did a lot of work over the day with selling interest holding the market in check throughout the whole day. It has to be said with no data in the northern hemisphere to note and very little said or done to interfere with the day. We opened around the 99.15 level and while Asia sold with some weak cross selling doing most of the damage it was unable to break through 98.95 with any conviction and hung in for the move into London, EURJPY buying seemed to be the name of the game as both legs held tight channels and USDJPY moved to the 99.30 area for the highs. We then drifted into the close in NYK holding around the 99.20 area.
  • AUD: The Oz was very quiet with only and early round of AUDJPY selling accounting for the only move taking the market from the opening 0.9385 to just below 0.9370 before Tokyo bought the market back and Oz ranged around the 0.9380-0.9390 into London, as the USDJPY rose so the Oz dropped as the AUDJPY levels remained steady, Oz moved slowly to the 0.9350 areas and eventually pushing on a secondary move to just below the area. The close was a quiet affair moving to the 0.9360 levels.

 

Yesterday’s premiership results

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

JPY         Current Account (JPY) Sep A -0.13T | C -0.10T | P 0.35T

AUD       Home Loans Sep A 4.40% | C 3.50% | P -3.90% | R -4.00%

JPY         Eco Watchers Survey: Current Oct A 51.8 | C 54.2 | P 52.8             

 
Good Luck

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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