Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close Wellington open

USDJPY 106.904 106.96-99 | EURUSD 1.27593 1.2758-63 | EURJPY 136.401 136.48-53 | AUDUSD 0.87477 0.8748-53 | NZDUSD 0.79177 0.7920-25 | USDCAD 1.12808 1.1288-93 | EURCHF 1.20761 1.2075-80 | USDCHF 0.94645 0.9463-68 | GBPUSD 1.60902 1.6115-20 | EURGBP 0.79303 0.7915-20 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               107.395 | 106.95

EUR/USD             1.2770 | 1.2737

EUR/JPY               137.00 | 136.50

AUD/USD            0.8788 | 0.8748

NZD/USD             0.7962 | 0.7916

USD/CAD             1.1294 | 1.1262

EUR/CHF              1.2080 | 1.20735

USD/CHF             0.94805 | 0.94445

GBP/USD             1.6137 | 1.6083

EUR/GBP             0.7929 | 0.7912

 

For today

  • EUR: Euro’s was under pressure from the opening as USDJPY opened higher leaving EURJPY offers forcing the Euro lower, the market dipped just through the 1.2740 before holding and then rallying into the Tokyo opening. The move from there has been a steady grind higher to test the 1.2770 levels as the offers gave way in the EURJPY cross. The market in the cross ran into the 137.00 and a fresh set of offers and the USDJPY remained bid throughout. Topside offers remain above the 1.2840 levels and through 1.2860, weak stops are likely through that area however, stronger offers into the 1.2900 levels. Light bids from the 1.2740 levels but for the moment seem sufficient in holding the market, through that level suspected 1.2720 bids before the market openings through the 1.2680’s and light stops.
  • GBP: Cable opened around the 1.6095 pushing briefly through the 1.6100 levels before a slow drift as Euro’s dragged on the GBP. The market eased back to the 1.6085 before holding and heading back above the 1.6100 level with reasonable buying filtering through. A strong push through 1.6120 will trigger light stops with a mixture of interest above the 1.6150 levels and into the 1.6200 and better offers. Downside sees bids into the 1.6050 levels before giving way to a mixed interest that really doesn’t thicken to strong bids until below the 1.5950’s.
  • JPY: USDJPY opened higher from the close around the 107.15 areas in the official opening, selling in the EURJPY pushed it to the 107.00 from the open before rallying strongly to the 107.20 levels and trading around the area for several hours before attempting the 107.40 levels and remaining above the 107.30 in a quieter market. A push through the 107.50 level will likely see strong stops however, the market runs out of space there as the offers come into the market around the 107.80 levels and through the 108.00 handle in a congested area. While the downside has bids they don’t look all that impressive and the market is open to the 106.00 areas.
  • AUD: Carry trade buying into the Tokyo market helped to take the Oz higher; moving from the opening 0.8760 levels eventually gave way to a test into the high 0.8780’s before retreating a little. Downside sees bids below the 0.8750-40 areas with similar bids from 0.8720 before they start to increase the closer you get to 0.8660 areas. Topside sees light offers around the 0.8800 getting a little stronger above the 0.8810 area and into 0.8820. With limited data for the day what movement will be on a prayer and a whisper?

 

Overnight News

JPY:

Suga Says He Doesn’t Know Facts About GPIF Allocation Report

Suga: Don’t Think Abe Indicated He Would Delay Sales Tax Rise

Bank of Japan Downgrades Economic Assessment of 1 of 9 Regions

Kuroda Says Japan’s Economy Has Continued to Recover Moderately

Abe Says He Aims to Select Replacements for Ministers Today

Japan Minister Obuchi Resigns after Fund-Misuse Allegations

Japan’s Abe May Replace Justice Minister Matsushima, Kyodo Says

Japan’s Abe Says Consumption Tax Boost May Be ‘Meaningless’: FT

More Japanese Oppose Planned Sales Tax Increase: Mainichi Poll

BOJ Committed to Continue Easing Until 2% Inflation Stable: Miyao

CNY:

PBOC Eyes Structural Tools in Policy Tuning: Financial News

China Should Reduce Financial Intermediation Costs: Info. Daily

China May Relax Property Transaction Tax: Sec. Journal

AUD:

RBA’s Kent Says Policy Currently Set to Support Demand Growth

NZD:

New Zealand Consumer Confidence Drops to 12-Month Low, ANZ Says

N.Z. Inflation Remained Benign in 3Q, ANZ Prices Gauge Shows

SE Asia:

Moody’s: Household Debt Levels Manageable for Southeast Asia

KRW:

S. Korea Warns N. Korea to Stop ‘Reckless’ Military Provocation

EUR/GBP:

U.K. Risks Losing Global Influence If It Leaves EU, Barroso Says

GBP:

U.K. Consumer Confidence Rises for Third Quarter, Deloitte Says

U.K. October House Prices Rise 2.6% M/m, Rightmove Says

 

Today’s data

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

GBP       Rightmove House Prices M/M Oct A 2.60% | P 0.90%

06:00     EUR        German PPI M/M Sep C 0.00% | P -0.10%

06:00     EUR        German PPI Y/Y Sep C -1.00% | P -0.80%

08:00     EUR        Eurozone Current Account (EUR) Aug C 21.3B | P 18.7B

12:30     CAD       Wholesale Sales M/M Aug C 0.20% | P -0.30

 

Weekend News

JPY:

Obuchi Resignation Threatens Abe’s Womenomics, Cabinet Stability
Japan Abe Cabinet Approval Rating Falls to 48.1%, Kyodo Says
Japan GPIF to Boost Stock Allocation to About 25%: Nikkei
Japan to Downgrade Economic Assessment for October, Nikkei Says
Japan Panel on Further Sales Tax Hike to Convene Nov. 4: Nikkei
Three Japan Cabinet Members Visit Yasukuni Shrine: Kyodo
Mitsubishi Aircraft Unveils Japan’s First Passenger Jet
EUR:

Full Employment May Only Be Possible With Negative Rates: Visco
EU Plans Syria Sanctions That May Target Oil, Weapons
CNY:

China’s PBOC Said to Plan About $32.7 Billion Bank Injection
GBP:

U.K. Growth to Slow in 2015 as Political Risks Mount, EY to Say
GBP/EUR:

Cameron Urges EU States to Pledge 1 Billion Euros to Ebola Fight
AUD:

Australian Foreign Minister Says Govt. Won’t Send Troops to Iraq
HUF/USD:

Hungary Foreign Minister to Travel to U.S. to Discuss Entry Ban

 

Harry Hindsight

  • EUR: Asia opened quietly and moved from the 1.2810 slightly lower and through 1.2790 in pre-Tokyo before trading off and around the 1.2800 level for the balance of the session, volumes were much reduced from the movements we’d seen early in the week however, given the lack of data in Europe this would have been somewhat expected. London opening saw the market again testing down through the 1.2790 levels however, the downside was resilient in early trading and the market eventually started to move higher pushing through the 1.2810 level which had been limited resistance in the quiet session. Topside eventually attempted the 1.2740 and the point we’d failed several times previously during the week. Positive numbers from the US led to the USD strengthening with the Euro’s dipping from the highs and steadily making its way through to the 1.2760 levels with weak stops through the 1.2790 causing more damage than the initial moves. The market traded eventually through the 1.2750 levels before finding some respite with light profit taking moving into the market before settling down to a quiet finish around that level.
  • GBP: Apart from the London opening the Cable remained in a fairly quiet range, opening around the 1.6090 levels the market attempted a high move as the early Tokyo session entered the market and the GBPJPY cross was quickly bid taking the Cable leg through 1.6100 in a quick move before again drifting to the 1.6080 levels. London was a quick seller of Cable as impatience crept in to the EURGBP cross profit taking from shorts sparked the cross higher and the Cable was forced to the 1.6040 levels in a quick move, this was then corrected in a short period of time with Cable rising back through the 1.6100 levels. NYK saw the market again falling back however, the market returned to the median of the day finishing were it had begun.
  • JPY: Quiet for the most part in Asia with some early cross buying the only interest to really show, and while the Euro had a reasonable range the USDJPY remained drifting from the Tokyo opening high of 106.50 to the 106.20 levels. London eventually saw buying enter the market, from that point onwards the market trended higher through London and NYK only making the high’s above 106.90 into the final hour.
  • AUD: While the range play for the day was the best of the bunch the range was limited even then with the downside 0.8660 the key point the market refused to go anywhere near it. Opening around the 0.8755the market dipped to below the 0.8740 level into the Tokyo opening before recovering as strong retail buying in the AUDJPY taking the Oz to above the 0.8790 levels for the first time, once the market settled down and the initial run was over the market fell back again and the market held the 0.8740 levels into the London session, London bought from the lows and we saw the next push up through 0.8790 this time the market continued pushing to the upside into the release of the US numbers and USD took the reins and the Oz slipped back a little quicker than it rose dipping back to just through 0.8750 levels and then a tight range between 0.8750-70 into the close.

 

Friday’s premiership results

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

CAD       CPI M/M Sep A 0.30% | C 0.00% | P 0.00%

CAD       CPI Y/Y Sep A 2.00% | C 2.00% | P 2.10%

CAD       BoC CPI Core M/M Sep A 0.20% | C 0.10% | P 0.50%

CAD       BoC CPI Core Y/Y Sep A 2.10% | C 2.00% | P 2.10%

USD       Housing Starts Sep A 1.02M | C 1.02M | P 0.96M

USD       Building Permits Sep A 1.02M | C 1.04M | P 1.00M

USD       U. of Michigan Confidence Oct (P) A 86.4 | C 84 | P 84.6

 

Stay lucky

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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