Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 101.68 | EURUSD 1.3517 | EURJPY 137.434 | AUDUSD 0.9161 | NZDUSD 0.81989 | USDCAD 1.0544 | EURCHF 1.23253 | USDCHF 0.91187 | GBPUSD 1.6155 | EURGBP 0.83671 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               101.72 | 101.33

EUR/USD             1.3541 | 1.3515

EUR/JPY               137.58 | 137.15

AUD/USD            0.9204 | 0.9157

NZD/USD             0.8261 | 0.8213

USD/CAD             1.0543 | 1.0523

EUR/CHF              1.23295 | 1.2323

USD/CHF             0.91175 | 0.9102

GBP/USD             1.6174 | 1.6147

EUR/GBP             0.83785 | 0.8358

 

For today

Topside: 101.70-102.00 light buy stop 102.00-102.30 medium offers  102.30-102.60 large offers
Downside: 101.20-101.40 light bids 100.90-101.20 medium bids 100.60-100.90 medium sell stops

EURUSD
Topside: 1.3540-1.3550 light mix 1.3550-1.3580 medium offer
Downside: 1.3470-1.3500 light  bids 1.3440-1.3470 light  sell stops

EURJPY
Topside: 137.80-138.10 light  buy stop 138.10-138.40 light  buy stop
Downside: 136.50-136.80 light bids 136.00-136.30 light bids

AUDUSD
Topside: 0.9200-0.9220 light offers 0.9220-0.9250 light mix

Downside: 0.9090-0.9130 light sell stop 0.9020-0.9050 light bids

 

  • EUR: The Euro continued its small rally from the NYK session, moving steadily into the Tokyo session and touching above the 1.3540 levels before slipping back a little as we moved towards the London opening. Volumes were fairly brisk in early trading but slackened off as we moved through the session with little news now or later.
  • GBP: Cable was quiet over all moving a little higher from the 1.6160 levels on the opening rising quickly on light GBPJPY buying to touch just below the 1.6175 level before drifting off with the Euro to move steadily through the opening levels to trade below the 1.6150 levels.
  • JPY: USDJPY finished in NYK on its highs just above the 101.70 level and we never reached there again, with the market reasonably choppy over all with strong selling from the opening helped along with no change in policy according to the BoJ minutes. The market traded to a low of 101.35 this set the range for the day and we then settled down to trade around the 101.50 as a centre line. The market moved towards London holding just above that centre line. Japanese retail dominated today and we were unable to get close to those highs.
  • AUD: Oz rose quickly in the Sydney part of the session moving from the 0.9160 levels to above 0.9190 before Tokyo stepped into the fray from there its been a slow day with the market pushing to just below the 0.9200 levels and then holding the 0.9180/0.9190 levels for the remainder of the session. The whole lot for the moment seems to be fresh out of ideas however, may be the topside in USDJPY isn’t over with.

 

Overnight News

JPY:
BoJ’s Shirai proposed that attention needed on downside risks

BoJ’s Shirai saw high degree of uncertainty in global economy

BoJ’s Shirai high degree of uncertainty in household income

BoJ’s Sato proposed saying 2% inflation will come in sight

Kiuchi proposed saying BoJ to review policy flexibly in 2yrs

Some BOJ members called for focus on downside risks -Oct 31 mtg minutes

Amari: Market Principles Reflected in Weak Yen Under Abenomics

Japan MOF to target bigger deficit reductions in FY 2014, 2015 -source

EUR/CNY:

Zhou Says Euro Important to China Reserve Management: MNI

CNY:

China Said to Plan Crackdown on Banks’ Evasion of Lending Limits

China to Cut Central Government Investment Approvals by 60% -NDRC

China Should Slightly Loosen Monetary Policy: Securities Journal

China Needs to Develop Derivatives to Hedge Risk: PBOC’s Xu

China home price rises seen slowing to 5 pct in 2014

EUR:

ECB’s Noyer Says Euro Area Recovery Weak, Fragile: MNI

AUD:

Australia’s RBA official expects to see lower A$ in time

RBA’s Lowe Says Threshold for FX Intervention Fairly High


Today’s data

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

JPY         Corporate Service Price Y/Y Oct A 0.80% | C 0.90% | P 0.70%

13:30     USD       Housing Starts Sep C 0.91M | P 0.89M

13:30     USD       Building Permits Sep C 0.94M | P 0.93M

13:30     USD       Housing Starts Oct P 0.92M

13:30     USD       Building Permits Oct P 0.94M

14:00     USD       S&P/Case-Shiller Composite-20 Y/Y Sep C 13.00% | P 12.80%

14:00     USD       House Price Index M/M Sep C 0.40% | P 0.30%

15:00     USD       Consumer Confidence Nov C 72.1 | P 71.2

 

Harry Hindsight

  • EUR: Euro’s opened in line with Friday’s close and slowly drifted lower from the opening 1.3555 levels moving into the grey hours to a low around 1.3535 for 20 pips one would have been surprised at the amounts changing hands. With USDJPY driving continually higher in the face of cross JPY selling the Euro was slowly pushed lower. The move into London saw the moves continued with no data with the biggest selloff of 21 pips attributed to Hansson’s comment that the ECB is technically ready for negative deposits. Moving off the London lows to move into the NYK session around the 1.3525 area it was a short period before the move continued driving to below 1.3500 and stopping just above the 1.3490. The run to the close was a quiet affair as the market moved to a close around the 1.3525. Volumes were reasonable considering the range.
  • GBP: Cable moved in line with the Euro during Asia opening around the 1.6220 area and pushing to a high above 1.6240 areas before Tokyo opened and the declines started to set in with a steady move. We dipped to 1.6210 into the grey hours and early buyers were seen but alas a false dawn and the move continued lower into the London opening. The single data had little bearing on matters and apart from a longer pause the market held the 1.6190/1.6200 before EURGBP buying moved into the market help the GBP to move lower across the board. The move into NYK saw the market accelerate in its fall and we moved to the 1.6135 areas before finding some support. We closed around the 1.6160 levels having recovered a little. EURGBP moved steadily higher in the later part of the day moving from the 0.8340’s to above the 0.8370’s to leave GBP weaker across the board.
  • JPY: USDJPY opened in line with Friday’s close around the 101.30 levels and struggled in the Sydney period, the market moved slowly to the opening before slipping a little on the opening to 101.15. From there I’d like to say it was all one way, with retail players selling heavily into the rally. The market moved strongly higher briefly pausing around strong supply before moving on again. Volumes were reasonably large for the time of day and we eventually paused for a greater period above the 101.80. Real money notably Importers were seen as good buyers with funds and algo’s jumping into the market, this was counterbalanced by retail even if imperfectly. With tapering on everyone’s tongue and no real change in Japanese Abenomics until early next year leaves the JPY on the weak side still. The market started to move higher for the second time however, having used a lot of volume moving up we eventually crawled to a stop in the face of further offers just above the 101.90 level and failed to move any further. The market into London saw some strong selling from day traders and top pickers forcing off the highs but for a great portion of the day the market stayed in touch with the highs and only in late NYK did the market see strong selling enter and a return to below the 101.50 areas bouncing immediately back. The market finished the day around the 101.70 area.
  • AUD: AUDJPY selling played its role in the day as it was unable to push through previous levels particularly the 93.50 levels with some strong selling appearing each time we moved up. The Oz with no data or news to speak of moved into early Tokyo from the opening 0.9170 level to a high just short of the 0.9190 level before moving steadily lower as the USDJPY moved, a lot of those out there are calling this a USD move, its debatable at best. Having been forced down to the 0.9120 levels into the grey hours the market started to recover from this point and moved steadily back to just below 0.9170 before settling down to a quiet NYK session finishing around 0.9160.

Yesterday’s premiership results

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

GBP       BBA Mortgage Approvals Oct A 42.8K | C 45K | P 43K | R 43.2K

USD       Pending Home Sales M/M Oct A -0.60% | C 2.00% | P -5.60% | R -4.60%
Good Luck

Andy

 

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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