Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 117.739 | EURUSD 1.25062 | EURJPY 147.245 | AUDUSD 0.85496 | NZDUSD 0.78773 | USDCAD 1.12479 | EURCHF 1.20218 | USDCHF 0.9612 | GBPUSD 1.57921 | EURGBP 0.79192 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               117.74 | 117.26

EUR/USD             1.2512 | 1.24955

EUR/JPY               147.23 | 146.63

AUD/USD            0.8604 | 0.8530

NZD/USD             0.7922 | 0.7862

USD/CAD             1.1270 | 1.1246

EUR/CHF              1.2024 |1.20205

USD/CHF             0.96195 | 0.96095

GBP/USD             1.5800 | 1.5778

EUR/GBP             0.7922 | 0.79165
For today

  • EUR: Another quiet session as the market runs to a long weekend for the US Thanksgiving weekend. Opening around the 1.2506 area the market held into Tokyo with a brief push to the 1.2510 levels before giving ground and dipping back to the 1.2500 areas. The market recovered on nothing special and remains trapped in the 00-10 levels for the moment with the EURJPY providing the movement. Topside offers around the 1.2530 areas are likely to stretch to the 1.2550 levels, even through this level there is likely to be a mixture but 1.2600 will be the next level of contention. With a raft of numbers either side could be open to strong moves. Through the 1.2600 level the market has light offers into the 1.2650’s. To the downside sees bids from the current levels and into the 1.2450 levels, through there a possibility of light/weak stops before hitting the stronger bids into the 1.2400-1.2350 levels.
  • GBP: Cable has held around the 1.5790 areas for most of the session with only a brief move to above the 1.5800 just after the Tokyo opening and dipping to the 1.5780 levels to define the range. Offers through the 1.5800 level likely to see further offerings going back into the 1.5850 areas before the market opens up for a test to the 1.5900 levels. Downside has more opening to the 1.5700 levels and then congestion through that level with buying appearing all the way back to the strong points around the 1.5600 levels.
  • JPY: Steady USDJPY selling before the long weekend forced the market steadily lower from the opening above the 117.70 levels, the market moved in two waves down through the 117.50 levels before tripping further through that level on weak stops to push to the 117.30 levels before finding some support. Immediate bids from this point down to the 117.00 levels however, technically a move through the 117.20 area will open the downside to more pressure and although the 117.00 will provide some strong support and opening up the downside to a deeper move to the 116.00 as an immediate target.
  • AUD: With the USDJPY in decline the carry trades continued to hold and Oz in particular traded fairly actively in the cross market against NZD and the JPY, moving only slightly lower from the opening around 0.8550 the market bottomed quickly at the 0.8530 levels to trade quickly higher as the Capital expenditure number came in worse than expected and the Oz acted against the information pushing quickly to 0.8560 and triggering weak stops through the level a few hours later and moving in small waves to the 86 cent level, and then drifting back a little in strong trading. Offers through the 86 cent levels and congestion over the next 50 pips provide some resistance to the upside. Downside has bids below the 0.8550 levels now and although they are weak at the moment they strengthen towards the 85 cent levels and below.

 

Overnight News

JPY:

GPIF Must Add Stocks on Abenomics Boost, Research Head Says

Japan Opposition Party Policy Chief Ohtsuka Says Yen Is Too Weak

CNY:

China Sets Yuan Reference Rate at Strongest Since March 13

China Sees No Need to Change Prudent Monetary Policy, Hu Says

China to Accelerate Capital Account Opening, PBOC’s Hu Says

China’s Industrial Profits Drop Most in Two Years Amid Slowdown

AUD:

Australia 3Q Business Investment Rises 0.2% Q/Q; Est. 1.9% Fall

Australia’s Oct. Private New Home Sales Rise 3% M/m

NZD:

New Zealand Central Bank Says It Sold Net NZ$1m in October

NZD/CNY:

New Zealand’s Exports to China Tumble Most in Almost Two Decades

 

Today’s data

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

NZD       Trade Balance (NZD) Oct A -908M | C -642M | P -1350M | R -1367M

AUD       Private Capital Expenditure Q3 A 0.20% | C 1.90% | P 1.10% | R 1.60%

08:55     EUR        German Unemployment Change Nov C -1K | P -22K

08:55     EUR        German Unemployment Rate Nov C 6.70% | P 6.70%

09:00     EUR        Eurozone M3 Y/Y Oct C 2.60% | P 2.50%

10:00     EUR        Eurozone Economic Confidence Nov C 100.3 | P 100.7

10:00     EUR        Eurozone Industrial Confidence Nov C -5.5 | P -5.1

10:00     EUR        Eurozone Consumer Confidence Nov (F) C -11.6 | P -11.6

10:00     EUR        Eurozone Services Confidence Nov C 4 | P 4.4

10:00     EUR        Eurozone Business Climate Indicator Nov C 0.02 | P 0.05

12:00     EUR        German GfK Consumer Sentiment Dec C 8.6 | P 8.5

13:00     EUR        German CPI M/M Nov (P) C 0.00% | P -0.30%

13:00     EUR        German CPI Y/Y Nov (P) C 0.60% | P 0.80%

Harry Hindsight              

  • EUR: A slow start to the day with the Asian market holding in the 1.2470-80 levels for the session with only brief moves through the levels and into the London session with the market rising to above 1.2490’s. The market drifted from the highs until an ECB source suggested that the ECB would prefer to assess the situation before introducing any measures, as if they have a choice of various tools other than QE. The market pushed slowly higher as the start of the US numbers started to hit the markets with a mixed durable goods set of numbers lower than expected personal income spending, the day didn’t get that much better either with Chicago PMI and Michigan confidence numbers all showing a dip and the USD weakened across the board. Euro’s rally was limited in some respects and the market again reached the 1.2530 area before drifting back and holding the 1.2510 levels into the close.
  • GBP: Cable slowly weakened in Asia moving from the opening 1.5705 levels and easing back to below the 1.5700 in very slow trading  before recovering and moving to above the 1.5720 levels into the early London session. The market dipped pre-GDP moving down to make the lows for the day around the 1.5680 levels. GDP remained in line with expectations for the 3rd Qtr. The market pushed to the 1.5730 levels quickly ad then a steady rise to the 1.5750 and the trigger of light stops to 1.5770 areas. While the market slowed appreciably it did push to the 1.5800 and trade a couple of times through the level however, with little conviction and the offers both profit taking and fresh shorts holding the level in place.
  • JPY: USDJPY did very little and held in a tight range with the Tokyo market open after their bank holiday however, heading into a long weekend with Thanksgiving in the US. The market drifted from the 117.90 through the Asian session and although the market held the 117.70 level and traded only in the 20 pip range it never quite made it back to the opening area until early London, the release of LDP’s plans for the election did have some limited impact as the plans were a little lacking in detail and left the market wanting. Early London bought off the 117.60 lows however, as with the Asian session the market was unable to push through the 117.90 levels. A slow drift into the NYK session and the market trading through the lows on the data releases saw the market move to below 117.50 before bouncing and moving back to the 117.80 levels and a close little different to the Asian session range.
  • AUD: With expectations that China is likely to lower its growth target to around the 7%, this weighted on the Oz eventually, the market was initially buoyed by comments from BREE which all seemed well for the Mining and Energy companies however, the market was unable to move beyond the 0.8560 levels having rallied from 0.8530’s opening. The move into London saw strong selling and the market pushing through the 85 cent areas as strong EURAUD buying moved into the market before holding in the 0.8480 area for an hour or so, the downside tested the market started to climb steadily over the course of the day trading back to the 0.8550 areas into the close.

 

Yesterday’s premiership results

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

CHF        UBS Consumption Indicator Oct A 1.29 | C 1.41 | P 1.39

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

GBP       Index of Services 3M/3M Sep A 0.80% | C 0.70% | P 0.80%

GBP       CBI Reported Sales Nov A 27 | C 29 | P 31

USD       Durable Goods Orders Oct A 0.40% | C -0.60% | P -1.30% | R -1.10%

USD       Durables Ex Transportation Oct A -0.90% | C 0.50% | P -0.20% | R -0.10%

USD       Initial Jobless Claims (NOV 22) A 313K | C 287K | P 291K | R 292K

USD       Personal Income Oct A 0.20% | C 0.40% | P 0.20%

USD       Personal Spending Oct A 0.20% | C 0.30% | P -0.20% | R 0.00%

USD       PCE Deflator M/M Oct A 0.10% | C 0.00% | P 0.10%

USD       PCE Deflator Y/Y Oct A 1.40% | C 1.40% | P 1.40%

USD       PCE Core M/M Oct A 0.20% | C 0.20% | P 0.10%

USD       PCE Core Y/Y Oct A 1.60% | C 1.50% | P 1.50%

USD       Chicago PMI Nov A 60.8 | C 63 | P 66.2

USD       U. of Michigan Confidence Nov (F) A 88.8 | C 90 | P 89.4

USD       Pending Home Sales M/M Oct A -1.10% | C 1.00% | P 0.30%

USD       New Home Sales Oct A 458K | C 470K | P 467K

USD       Crude Oil Inventories A 1.9M | C 0.4M | P 2.6M

 

Good Luck,

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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