Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 100.016 | EURUSD 1.34593 | EURJPY 134.60 | AUDUSD 0.93167 | NZDUSD 0.82848 | USDCAD 1.04652 | EURCHF 1.23321 | USDCHF 0.91635 | GBPUSD 1.60662 | EURGBP 0.83768 |

 

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               100.315 | 100.01

EUR/USD             1.3464 | 1.3446

EUR/JPY               134.93 | 134.60

AUD/USD            0.9352 | 0.9305

NZD/USD             0.8295 | 0.8269

USD/CAD             1.0473 | 1.0463

EUR/CHF              1.2347 | 1.2335

USD/CHF             0.9181 | 0.9165

GBP/USD             1.6074 | 1.6053

EUR/GBP             0.8378 | 0.8370

 

 

For today

  • EUR: A quiet day after several days of activity, opening around the 1.3460 area the market lacked conviction or ideas to move anywhere, touching below the 1.3450 area in early trading before rallying on some light EURJPY buying into the Tokyo session, before settling back to trade around the 1.3450 area for a few hours into the grey hours. While we have the Eurozone CPI numbers today one has to believe that the IP numbers in the US are probably of more importance but we could still see a twofold move over the course of the day.
  • GBP: Cable was just as quiet as the Euro’s however, moved slightly higher after the opening dip into Tokyo, even so the market was limited in range and we saw the early lows of 1.6052 erased in a move to above the 1.6074 area late into the session with some light EURGBP going through. Nothing of note for the UK and all focus will be on the Eurozone and US numbers and expectations for the GBP to remain buoyant.
  • JPY: Reasonable volumes moving through the USDJPY throughout the session however, it was unable to continue moving higher stalling at the 100.30 areas into the Tokyo session with decent offers showing in the market. We attempted over an extended period however after 3 or 4hrs of trying to push through the market gave ground and we sank back to the 100.10 level. The range belays the amounts going through however, a balanced order book remains in play even though we’ve pushed through the previous barriers. The long term focus of the market for the topside continues however, it is likely to be beset by barriers as we’ve seen.
  • AUD: The Oz opened strongly with the carry trade being the focus for the day as we moved into Tokyo opening and we saw the market in the cross moving steadily to above the 93.70 and old territory, before profit taking started to move into the market to take it back below the 93.50 area. Oz rose from the 0.9310 levels and struggled around the 0.9350 area where offers in the pair held the AUDJPY and AUDUSD from further gains. With only peripheral news and data the decline started to accelerate as we moved to London and weak stops now become an issue from day traders.

 

USDJPY
Topside: 100.30-100.50 decent offers  100.50-100.80 medium buy stops  100.80-101.10 medium buy stops
Downside: 99.70-100.00 light sell stops 99.40-99.70 mixed – light bids net 99.10-99.40 medium sell stops

EURUSD
Topside: 1.3480-1.3510 light buy stops  1.3510-1.3540 medium buy stops  1.3540-1.3570 light buy stops
Downside: 1.3400-1.3430 medium bids 1.3370-1.3400 light sell stops

EURJPY
Topside: 134.950-135.10 light offers  135.10-135.40 light buy stops
Downside: 134.00-134.30 light sell stops 133.70-134.00 light bids

AUDUSD
Topside: 0.9360-0.9390 light buy stops  0.9390-0.9420 medium buy stops
Downside: 0.9250-0.9280 medium bids 0.9220-0.9250 medium bids

 

Overnight News

JPY:

Amari: Forex Rates Moving in Reflection of Each Nation’s Economic Reality

Japan Fin Min Aso: Will Not Comment On Nikkei Stock Average’s Rise

Japan Govt Mulls Avoiding Bond Issuance for Stimulus: Nikkei

Japan firms applaud Abe growth plan but wary on capex, wages

USD/CNY:

Lew Says China Plenum Statement Outlines ‘Ambitious Agenda’

CNY:

China Plenum Document to Address 15 Areas, 60 Tasks: Daily

China key money rate rockets up, opening quote at 5.2%

China to Actively Promote Investment in U.S., Official Says

China to welcome private, foreign investment in green energy


Today’s data

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

10:00     EUR        Eurozone CPI M/M Oct (F) C -0.10% | P 0.50%

10:00     EUR        Eurozone CPI Y/Y Oct (F) C 0.70% | P 0.70%

10:00     EUR        Eurozone CPI – Core Y/Y Oct (F) C 0.80% | P 0.80%

13:30     CAD       Manufacturing Shipments M/M Sep C 0.20% | P -0.20%

13:30     USD       Import Price Index M/M Oct C -0.50% | P 0.20%

13:30     USD       Empire State Manufacturing Index Nov C 5 | P 1.52

14:15     USD       Industrial Production Oct C 0.10% | P 0.60%

14:15     USD       Capacity Utilization Oct C 78.20% | P 78.30%

15:00     USD       Wholesale Inventories Sep C 0.40% | P 0.50%

 

Harry Hindsight

  • EUR: Having failed the topside in early trading just below the 1.3500 level the market drifted a little before settling into a period of steady selling in Tokyo moving to the 1.3465 area with some very good volumes going through. We held the area for a few hours before moving into the grey hours and some early selling pushing to just above the 1.3450 as French GDP numbers disappointed only for a bounce on the expected numbers out of Germany. The rally was short lived failing to push much further than the 1.3470 area before resuming the slide lower as the market changes its mind over the general numbers expected. Pre NYK the market had moved to the 1.3420 area with barely a blink as the Eurozone GDP number hit in line. Maybe Barroso should bemoan the fact that German GDP is keeping the Eurozone in line. Italian numbers were better than expected at a negative number. NYK changed the direction moving the market higher from pre-opening, with the US markets following through after the Dovish Yellen comments, it was interesting to note that macro sellers appeared in the market all the way through the rally limiting the moves to the 1.3490 areas before dropping back again with better numbers out of the US apart from the trade figures which were slightly worse than expected.  Again the market failed the topside and moved back holding in the mid 1.3450’s trading around the levels into the close.
  • GBP: Cable held its own after the rally into the close in NYK while everything drifted off from the USD after that rally Cable moved back from its highs above 1.6065 and held for the most part around 1.6030 moving slightly higher in the grey hours. Some two way action in front of the official opening, lead into the release of the retail sales numbers coming in worse than expected, which given the time of year might be indication of a bumper Christmas.  The market reacted violently and moved quickly down to the 1.5990 level, as with most moves nowadays it looked more like a knee jerk reaction by algo’s than sensible thinking through of what the number represents, the market held around the 1.6000 level and with the EURGBP spiking to above the 0.8415 against the run of plays the snap back in the cross was no less violent. Cable began a strong recovery into the NYK session and just after the opening there was pushing through the 1.6060 and making new highs for the day. EURGBP moved smartly off and by the time the dust settled Cable had traded above 1.6100 and EURGBP below 0.8365. The strength of GBP eventually waned as London came to a close and moved into a quiet close.
  • JPY: USDJPY eventually found the impetus required to push higher. Opening around the 99.30 area we moved higher on the GDP numbers which while better than expected still left the market floundering with a negative number. During the Asian shift the market struggled against the offers and held for the most part around the 99.70. The grey hours saw the market start to rise slowly and the London opening saw fresh strong buying moving steadily but determinedly through the 100.00 level. Although the market expected some decent stop orders it would appear that having driven through the offers the market was only slightly strong enough to continue rising. We reached the 100.10 level holding in a declining range into the close. The market was dominated early on by the retail market and while some medium term buyers were seen the sellers were made up of both macro and real money taking profit on positions.
  • AUD: The Oz opened around the 0.9370 levels after a late broad selling in the USD after the Yellen comments, while the market moved off the highs the move into Tokyo saw some strong AUDJPY buying pushing the Oz to close to the 0.9390 level before the USDJPY move took over and profit taking in the carry trade saw the Oz start to slide lower in line with the USDJPY rise. By the time we moved into London the market was pushing through the starting areas of the pre rally in NYK around the 0.9330 levels. Once through we triggered some weak stops and the market traded in a tight channel to through the 0.9290 level before holding and trading higher into the NYK session and a slow session to the close.

Yesterday’s premiership results

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

NZD       Business NZ Manufacturing Index Oct A 55.7 | P 54.3 | R 54.2

NZD       Retail Sales Q/Q Q3 A 0.30% | C 0.90% | P 1.70% | R 1.50%

JPY         GDP Q/Q Q3 (P) A 0.50% | C 0.40% | P 0.90%

JPY         GDP Deflator Y/Y Q3 (P) A -0.30% | C -0.50% | P -0.50%

AUD       Consumer Inflation Expectation Nov A 1.90% | P 2.00%

EUR        French GDP Q/Q Q3 (P) A -0.10% | C 0.10% | P 0.50%

EUR        German GDP Q/Q Q3 (P) A 0.30% | C 0.30% | P 0.70%

CHF        Producer & Import Prices M/M Oct A -0.40% | C 0.30% | P 0.10%

CHF        Producer & Import Prices Y/Y Oct A -0.30% | C -0.20% | P 0.00%

EUR        Italian GDP Q/Q Q3 (P) A -0.10% | C -0.20% | P -0.30%

GBP       Retail Sales M/M Oct A -0.70% | C 0.20% | P 0.60%

EUR        Eurozone GDP Q/Q Q3 (A) A 0.10% | C 0.10% | P 0.30%

CAD       New Housing Price Index M/M Sep A 0.00% | C 0.20% | P 0.10%

CAD       Trade Balance (CAD) Sep A -0.4B | C -1.30B | P -1.31B | R -1.1B

USD       Initial Jobless Claims (NOV 9) A 339K | C 330K | P 336K | R 341K

USD       Non-Farm Productivity Q3 (P) A 1.90% | C 1.20% | P 2.30%

USD       Unit Labour Costs Q3 (P) A -0.60% | C 1.00% | P 0.00%

USD       Trade Balance Sep A -41.8B | C -$39.0B | P -$38.8B | R -38.7B

USD       Crude Oil Inventories A 2.6M | C 0.7M | P 1.6M

 

Good Luck

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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