Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close Wellington open

USDJPY 108.154 108.15-20 | EURUSD 1.26703 1.2677-83 | EURJPY 137.036 137.13-18 | AUDUSD 0.87978 0.8796-0.8801 | NZDUSD 0.78564 0.7848-53 | USDCAD 1.12364 1.1230-35 | EURCHF 1.20614 1.2065-70 | USDCHF 0.95199 0.9415-20 | GBPUSD 1.60888 1.6098-1.6103 | EURGBP 0.78756 0.7873-78 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               108.38 | 107.86

EUR/USD             1.27145 | 1.26725

EUR/JPY               137.48 | 136.97

AUD/USD            0.8825 | 0.8797

NZD/USD             0.7884 | 0.7847

USD/CAD             1.1240 | 1.1214

EUR/CHF              1.2068 | 1.2060

USD/CHF             0.9519 | 0.9491

GBP/USD             1.6108 | 1.6083

EUR/GBP             0.78925 | 0.7876

 

For today

  • EUR: Euro’s opened higher on the official opening around the 1.2678 areas having traded up from the pre-market in Wellington. Brazilian elections shared the news with the 25 European banks that need extra funding. The market moved steadily higher pushing easily through the 1.2690 levels and breaking through weak stops through the 1.2700 levels to touch below the 1.2715 levels before settling back to the 1.2705 areas for an extended period. Light offers through the 1.2720 with slightly stronger moving into the 1.2740 levels, suspected stops through that area and into 1.2760 levels before becoming a little more mixed. 1.2780 is likely to provide a strong resistance into the 1.2800 levels and then the topside 1.2840 areas provides the next level and likely strong top pickers. Downside is really a mixed bag now to the 1.2640 level with patches of bids to the level but nothing to strong, the bids are likely to run to the 1.2600 areas before mixed interest below.
  • GBP: Cable moved steadily higher over the course of the day, the movement was not vast but continuous buying, moving from the 1.6085 levels and pushing steadily through the 1.6100 and unable to push through the 1.6110 level. The market has been held above the 1.6100 level driven more by the Euro’s rise more than anything. Having moved through the 1.6100 level the market above the 1.6150 is likely to be the first sticking point with possible medium size offers around that area and building in size through 1.6200. Even through that level every 50 pips or so the market is holding better offers. Downside has light bids through 1.6050 levels which strengthen towards the 1.6000 area; through there the market is mixed with stronger bids likely to dominate through 1.5950’s.
  • JPY: The USDJPY had more of a dramatic move, opening around the 108.30 levels some 15 pips above the Wellington opening only to find itself under pressure from the beginning. The move dropped steadily to the 108.20 and into the Tokyo session to trade 108.10 on the opening. The market dropped after a few minutes and moved to trade around the 108.00 level where the market has stayed steady around the 108.00 with only a brief move sub 107.90’s in mid-session. Downside push through the 107.80 level is likely to see weak stops through the level with a more supportive area through 107.20 and into the 107.00 levels before giving way for a deeper move into the 106 levels.
  • AUD: A slightly higher opening around the 0.8805 levels spiking above the 0.8820 on a couple of occasions but generally moving to above the 0.8810 level and holding above there in very slow trading with little movement of consequence. The downside is likely to see stops on any move through the 0.8780 level and the momentum is likely to test the immediate bids in the 0.8760 levels before opening the market to a move into stronger support from the 0.8720 levels down to the key level 0.8660-50. Topside offers continue from the 0.8720 levels and into the 0.8840 level before giving way to likely stops above there and going into the stronger offers into 89 cent, a push through there opens up a steady opening higher with 90 cent possibly offering the largest breakout area.

 

Overnight News

JPY:

Japan Cabinet Approval Rating Falls 5 %pts to 48%: Nikkei

USD/JPY:

Froman, Amari to Meet Again on TPP in Beijing in Nov.: Kyodo

JPY:

Miyazawa-Led Group Got Donation From Foreigner-Owned Company

CNY:

China to Promote Stable Growth in Employment: Xinhua

China Won’t Loosen Monetary Policy Comprehensively: Fin. News

GBP/CNY:

China Set to Invest GBP105b in U.K. Infrastructure by 2025: FT

BRL:

Brazil’s Rousseff pledges political reform in second term

UAH:

Ukraine Electoral Commission Counted 19.83% of Ballots

Pro-Europe parties secure big election win in Ukraine – exit poll

 

Today’s data

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

JPY         Corporate Service Price Y/Y Sep A 3.50% | C 3.50% | P 3.50%

09:00     EUR        German IFO – Business Climate Oct C 104.8 | P 104.7

09:00     EUR        German IFO – Current Assessment Oct C 110 | P 110.5

09:00     EUR        German IFO – Expectations Oct C 98.9 | P 99.3

09:00     EUR        Eurozone M3 Y/Y Sep C 2.20% | P 2.00%

11:00     GBP       CBI Reported Sales Oct C 35 | P 31

14:00     USD       Pending Home Sales M/M Sep C 1.00% | P -1.00%

 

Weekend News

EUR:

25 Lenders Said Set to Fail European Central Bank’s Health-Check
Merkel Changes Tone as She Hints at Euro-Area Investment Needs
Italians Rally in Rome to Protest Renzi’s Labor Rules Change
GBP/EUR:

Cameron’s Budget Blues Raise EU-Exit Spectre as UKIP Marches on
GBP:

BOE’s McCafferty Sees ‘More Moderate Pace of Growth over winter’
USD:

Ebola Patient’s Fiancée Leaves Hospital, States Order Quarantine
Hundreds Give up U.S. Passports after Tax-Disclosure Rules Start
RUB/USD:

Putin Accuses U.S. of Blackmail, Warns World Order May Collapse
RUB:

S&P Keeps Russia’s Credit Rating above Junk on Foreign Reserves
UAH:

Ukraine Voters Set to Elect Pro-EU Parliament amid conflict
JPY: Abe’s Approval Rates Drop to 53% After Ministers Resign: Yomiuri
Tepco FY Pre-tax Profit May Nearly Triple to 125b Yen: Nikkei
USD/JPY:

Yelp Expressed Interest in Buying Tabelog Website

CNY:

China State Economist Sees 2015 Growth Slowest in Over 2 Decades
HKD:

Hong Kong Tensions Rise as Protesters, Opposition Campaign
AUD:

Australia’s Robb: Trying to Conclude TPP Deal by Year’s End

Harry Hindsight

  • EUR: The Euro opened around the 1.2650 areas and gradually moved to trade around the 1.2655 areas and was unable to push through the 1.2660 levels for most of the Asian session only managing a push to 1.2665 into the grey hours before dipping back through the opening levels during the move into London. A German confidence number surprisingly better than expected saw the market move back to the opening levels from 1.2635 and hold around that area for the move into the NYK session. The volumes throughout the day were a little off from the normal. NYK’s opening saw the market moving strongly higher as the to trade just above the 1.2695 level before the offers held the market in place, dipping back to 1.2670 levels and holding in place into the close.
  • GBP: Cable traded quietly during the Asian session moving from the 1.6030 opening levels to dip towards 1.6020 in the early part of the session before recovering into the Tokyo session and slowly pushing to above the 1.6040 levels. The market drifted back lower into the London sessions as concern about the forthcoming GDP reading had the market closing early long positions. The release of an expected number sent the market quickly higher pushing through the 1.6050 and triggering weak stops and chasing the market to above 1.6070 before dropping back to trade for several hours through the 1.6040 levels. While volumes were a little better the market managed to steadily advance back to the 1.6070 into the NYK session and further weak stops were triggered through the levels before driving to close to the 1.6100 levels before trading in the 1.6080-90 levels into a quiet close.
  • JPY: The USDJPY had a choppy but limited range over the course of the day, moving from the opening 108.30 levels the market was unable to make it back there again. The market dropped off from the 107.90 levels into the Tokyo session with cross trading driving the early selling before basing off the 107.90 levels through the Asian session. The move higher was partly driven into the early part of the London session by cross GBPJPY buying taking the USDJPY back towards the 108.30 levels before holding the 108.10-20 levels into NYK and a reversal of fortune. The market moved off and through the 107.90 triggering some weak stops but failing miserably and unable to move through the 107.80 level the market bounced just as quickly back to the 108.00 levels. The finish for the day was a quiet affair with the market moving to the mid-teens on 108 and trading the 108.00-15 levels all the way to the close.
  • AUD: Opening around the 0.8760 levels the market moved steadily lower as the drag from the NZD into the Tokyo session moving the market from the opening levels to touch the 0.8720, movements in crosses as USD weakened translated into Oz selling to add to the pressure however, with the Oz only peripherally damaged the bounce appeared taking steps higher until pushing through the open and trading to above the 0.8770 levels. The move towards London saw quietly supply coming to the market before London officially opened and ran the market quickly higher and through the highs and to the 0.8780 levels to hold quietly into NYK. NYK opened as strong buyers and the market war taken back above the 88 cents and held around the 0.8810 levels into the end of session.

 

Friday’s premiership results

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

NZD       Trade Balance (New Zealand dollars) Sep A -1350M | C -620M | P -472M | R -489M

CNY        Conference Board Leading Index Sep A 0.90% | P 0.70%

EUR        German GfK Consumer Sentiment Nov A 8.5 | C 8.1 | P 8.3

GBP       GDP Q/Q Q3 (A) A 0.70% | C 0.70% | P 0.90%

GBP       Index of Services 3M/3M Aug A 0.80% | C 0.90% | P 1.00%

USD       New Home Sales Sep A 467K | C 475K | P 504K | R 466K

 

Stay lucky

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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