Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 104.861 | EURUSD 1.35748 | EURJPY 142.358 | AUDUSD 0.89017 | NZDUSD 0.82766 | USDCAD 1.08225 | EURCHF 1.23704 | USDCHF 0.91125 | GBPUSD 1.64493 | EURGBP 0.82532 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               104.985 | 104.74

EUR/USD             1.3592 | 1.3567

EUR/JPY               142.54 | 142.185

AUD/USD            0.8913 | 0.8864

NZD/USD             0.8269 | 0.8242

USD/CAD             1.0845 | 1.0819

EUR/CHF              1.23865 | 1.2370

USD/CHF             0.91235 | 0.9111

GBP/USD             1.6460 | 1.6441

EUR/GBP             0.8259 | 0.8248

 

For today

  • EUR: The Euro has been particularly quiet through the session moving from the opening 1.3580 area to a low just below 1.3570 before turning again north as selling pressure diminished into the Tokyo session. We since have moved falteringly higher however, the 1.3590 seems to be holding for the time being. Light offers on topside run for a while until the 1.3640 levels were weak stops start to make an appearance with offers thickening above there to the 1.3700 levels. Downside has only light bids and stops and for the moment seems to be the weak side. Barring some earth shattering news it will be quiet until the rate decisions are out of the way.
  • GBP: A tight range in Cable for the session so far, with the market opening around the 1.6450 areas and making lows pre-Tokyo to 1.6443 area before rallying from the Tokyo opening to above the 1.6460 before holding around the opening levels. EURGBP saw some weak buying during the session moving the market to above 0.8260 briefly but otherwise very quiet. For the moment the market is becoming congested around this level however, the downside is beginning to look a little attractive especially if we stay around here for the next week or so.
  • JPY: Having failed yesterday to capitalize on the move above 105.00 the market today has struggled from the opening in the mid 104.80’s dipping in Tokyo to below the 104.75 before having another go at the 105.00, finding it a step to far we’ve spent the balance of the session around those opening levels in quiet trading. With a mixture of stuff above the 105.00 with offers getting deeper as we move higher and into the 106.00 barrier area the market still seems to be stuck for the moment with a lack of momentum. Downside has weak stops below the 104.30 levels running to the better levels of 103.80 where sporadic bids start appearing.
  • AUD: The Oz moved lower on the opening in the Far East trading from the opening 89cent level to just below 0.8885 and holding into the Tokyo session to touch the highs as early AUDJPY buying entered the market, touching above the 0.8910 levels. The highs were short lived with good retail sales numbers and a better building approval number than expected the market should have been moving higher however it dropped back below the 89cent level and then on the release of the CNY fell again as the market tested the downside for the first time this week. We hold for the moment on the lows with light bids appearing below the 0.8850 levels running all the way down however, breakout players are likely to be hanging around below the 0.8825 level close to the previous lows from December. For the upside some light offers now make an appearance below the 90cent area and thicken as you move to 0.9050 with no real stops in sight.

Overnight News

CNY:

China Dec CPI slow to 2.5% YoY with the PPI number showing -1.4%

EUR:

European papers say the ECB is likely to keep rates on hold but to remind the markets they are ready to act (again:)

GBP:

Temporary staffs are being hired at a pace not seen in the past 15yrs.

JPY:

BoJ member Shirai says the BoJ should ease more without hesitation if necessary to reach 2% inflation.

Today’s data

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

NZD       Building Permits M/M Nov A 11.10% | P -0.60% | R 0.30%

AUD       Retail Sales M/M Nov A 0.70% | C 0.40% | P 0.50%

AUD       Building Approvals M/M Nov A -1.50% | C -3.00% | P -1.80% | -1.60%

CNY        CPI Y/Y Dec A 2.50% | C 2.70% | P 3.00%

CNY        PPI Y/Y Dec A -1.40% | C -1.30% | P -1.40%

09:30     GBP       Visible Trade Balance (GBP) Nov C -9.4B | P -9.7B

10:00     EUR        Eurozone Economic Confidence Dec C 99 | P 98.5

10:00     EUR        Eurozone Industrial Confidence Dec C -3.3 | P -3.9

10:00     EUR        Eurozone Consumer Confidence Dec (F) C -13.6 | P -13.6

11:00     EUR        German Industrial Production M/M Nov C 1.50% | P -1.20%

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

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

12:30     USD       Challenger Job Cuts Y/Y Dec P -20.60%

12:45     EUR        ECB Rate Decision C 0.25% | P 0.25%

13:15     CAD       Housing Starts Dec C 196K | P 192.2K

13:30     CAD       Building Permits M/M Nov C -2.30% | P 7.40%

13:30     CAD       New Housing Price Index M/M Nov C 0.20% | P 0.10%

13:30     USD       Initial Jobless Claims (JAN 4) C 337K | P 339K

 

Harry Hindsight

  • EUR: Early trading struggled to the 1.3630 areas running into light offers and unable to break through the level throughout the Asian session, the downside moves were limited to just above 1.3600 from the opening 1.3615. As we approached the London session the market again began to weaken in front of a number of reasonably important numbers. While the German trade balance dipped to below expected however, it still remained higher than the previous months and given the later Factory order number should have kept the Euro a little more buoyant. As it was the market dropped back to the opening levels and then dipped even further as the Eurozone employment numbers remained static for Nov. While the market seemed to expect more from the Fed minutes released late in the session, the US players didn’t and initially started to buy the Euro’s off the then lows from the 1.3570 level to back above the 1.3610. The release of the Fed data was no surprise however, some comments from officials looking for a more deterministic path again had the USD rallying somewhat and Euro’s fell to its lows below the 1.3560 level before stabilizing into the close just below the 1.3580.
  • GBP: Cable spent much of the day rallying from the lows around 1.6380 where the market dropped to from the opening just above 1.6400. Having absorbed the shop price index the market then slowly moved higher to push to the 1.6420 levels into the grey hours. London slowly moved Cable higher as Euro became the target for fresh selling in the cross EURGBP, the cross pair slowly moved from its highs above the 0.8315 level and channelled lower to base around the 0.8245 into late NYK. Cable in the meantime topped out above the 1.6470 before slipping back a little and trading in the 1.6440-60 levels for a good portion of the NYK session into a close just above the 1.6450 areas.
  • JPY: USDJPY spent the Asian session moving up in a tight channel moving from the opening 104.60 areas to above the 105.10 levels as we moved towards London. The movement saw strong buying and better than normal volumes going through as the market took out thickening levels of offers as we moved higher. The move into the London session was the opposite with selling appearing through the crosses against the Yen, the pullback however, was only to about the mid-range and the market held the 104.75-105.00 range for the remainder of the session. The movement was more indicative of a Euro selloff overall, although the ADP number was far better than expected and would indicate that maybe some of the Fed officials may have a point.
  • AUD: Again an reasonably quiet day for the AUD, opening around the 0.8920 levels we held a very tight range through Asia and only once we moved into the NYK session did the market start to see any reaction on the day with the pair rising to above the 0.8950 level before dropping off on the NYK option cut with expiry’s triggering delta selling to the 89cent levels. From there the market moved quietly to the end of day holding the 89cent level.

Yesterday’s premiership results

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

GBP       BRC Shop Price Index Y/Y Dec A -0.80% | P -0.30%

EUR        German Trade Balance (EUR) Nov A 17.8B | C 18.9B | P 16.8B | R 16.7B

EUR        Eurozone Retail Sales M/M Nov A 1.40% | C 0.10% | P -0.20%

EUR        Eurozone Unemployment Rate Nov A 12.10% | C 12.10% | P 12.10%

EUR        German Factory Orders M/M Nov A 2.10% | C 1.30% | P -2.20% | R -2.10%

USD       ADP Employment Change Dec A 238K | C 195K | P 215K | R 229K

USD       Crude Oil Inventories A -2.7M | C -1.6M | P -7.0M
Good Luck

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

Any opinions, news, research, analyses, prices or other information ("information") contained on this Blog, constitutes marketing communication and it has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Further, the information contained within this Blog does not contain (and should not be construed as containing) investment advice or an investment recommendation, or an offer of, or solicitation for, a transaction in any financial instrument. LMAX Group has not verified the accuracy or basis-in-fact of any claim or statement made by any third parties as comments for every Blog entry.

LMAX Group will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. No representation or warranty is given as to the accuracy or completeness of the above information. While the produced information was obtained from sources deemed to be reliable, LMAX Group does not provide any guarantees about the reliability of such sources. Consequently any person acting on it does so entirely at his or her own risk. It is not a place to slander, use unacceptable language or to promote LMAX Group or any other FX and CFD provider and any such postings, excessive or unjust comments and attacks will not be allowed and will be removed from the site immediately.