Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 119.217 | EURUSD 1.23824 | EURJPY 147.62 | AUDUSD 0.84449 | NZDUSD 0.7794 | USDCAD 1.1407 | EURCHF 1.20378 | USDCHF 0.97223 | GBPUSD 1.56399 | EURGBP 0.79173 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               119.44 | 119.13

EUR/USD             1.23905 | 1.2372

EUR/JPY               147.91 | 147.465

AUD/USD            0.8470 | 0.8388

NZD/USD             0.7808 | 0.7767

USD/CAD             1.1412 | 1.1390

EUR/CHF              1.2042 | 1.2037

USD/CHF             0.9729 | 0.9716

GBP/USD             1.5651 | 1.5635

EUR/GBP             0.7919 | 0.7908
For today

  • EUR: The Euro’s has been very quiet over the course of the session in Asia, moving from the opening 1.2380 areas the market was unable to find a clear way through the 1.2390 areas before dipping into the grey hours to 1.2370’s. Topside offers are light through to the 1.2470 levels and this is likely to see stronger offers into the 1.2500, a push through the 1.2530 levels will stall the market and maintain the range from last month. The downside sees bids at current levels and these bids are likely to continue to build into the 1.2350 areas before giving way to possible stops from break out traders. Light bids likely into the 1.2305-10 areas before giving way to further movement to the downside with the next supportive area around the 1.2250 areas. Unless there is a USD shake up the market is mired for the moment until the ECB Thursday meeting.
  • GBP: Cable pushes against the 1.5650 levels but with little impetus in either direction the market has moved off the 1.5640 levels and traded quietly through the session. A move above the 1.5670 level is likely to see some light weak stops before opening a test to the 1.5730 area and through to the 1.5760 levels, bigger picture is that opens up fresh attempts to the 1.5800 levels and the 1.59-1.60 levels. Downside still sees the strong bids that have been tested on 3 occasions over the past month or so around the 1.5600 levels, a push through the 1.5580 levels will open up only more sentimental levels as congestion to 1.5500 continues.
  • JPY: USDJPY opened around the 119.25 areas and pushed quickly from the opening Tokyo to the 119.40 level however, with the Oz on the back foot AUDJPY was forced lower and bottom pickers moved into the Carry trade supporting the 100.00 area and for the early session was sufficient to take the USDJPY higher but unable to push through leaving the market suspended around the level for a good portion of the session. Fresh selling in the Oz took the carry trade again to the 100.20 and through to test the 100.00 level into the grey hours and the USDJPY was forced back below 119.30 as a consequence. Margin calls in AUDJPY carry may be of some concern however, as long as the others hold IE gold, Nikkei that is only minor and the USDJPY is likely to continue pushing higher with offers all the way to the 120.00 level in the way and possible option plays around that level, downside is likely to see bidding into the 119.20-00 areas before giving way to a light mixture until 118.80 a push through here will likely see weak stops and a quick fall back to the 118.40 areas with a depth of bids into 117.80.
  • AUD: The market edged slightly higher from the opening in the 0.8450 area moving into Tokyo around the 0.8460 before posting a 3rd Qtr. Number much lower than expected at 0.30%, the market dropped like a stone to the 0.8400 level and although the market did push through onto the 83 cent handle the market was unable to push any lower than 0.8390, suggesting an option play of some kind, the bounce if you could call it that was limited to the 0.8420 and returned to test the lows for a second time before giving up and holding around the 0.8412 levels. With 4yr lows made the market is open to further loses however, the market I don’t think is ready for that and current levels were expected earlier in the year. Downside sees bids in the way for the moment with longer term shorts likely to be looking for partial profits on moves on to the 83 Cent level with the 0.8320 levels likely to hold bids. Topside offers now from the 0.8450 onwards nothing particularly strong but sufficient to probably slow the market on any recovery, and that is all dependent on the USD continuing its rise. Through the 0.8530 levels the market is likely to see stronger offers.

 

Overnight News

AUD:

Australia’s Economy Slowed Last Quarter; Currency Declines

Hockey Says 3Q GDP Figures Reflect Economy in Transition

CNY:

PBOC Won’t Resume Conducting Reverse Repos by Year-End: Survey

China’s Non-Manufacturing PMI Rises to 53.9 in Nov.

HSBC China Nov. Services PMI 53 vs. 52.9 in Oct.

GBP:

U.K. Nov. BRC Shop Price Index -1.9% YoY vs Oct. -1.9% YoY

NZD:

English Says N.Z. Economy Can Withstand Falling Dairy Prices

NZ Residential Construction Falls in Consecutive Quarters

 

Today’s data

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

AUD       GDP Q/Q Q3 A 0.30% | C 0.70% | P 0.50%

CNY        Non-Manufacturing PMI Nov A 53.9 | P 53.8

CNY        HSBC China Services PMI Nov A 53 | P 52.9

06:45     CHF        GDP Q/Q Q3 C 0.30% | P 0.20%

08:45     EUR        Italy Services PMI Nov C 50.2 | P 50.8

09:00     EUR        Eurozone Services PMI Nov (F) C 51.3 | P 51.3

09:30     GBP       Services PMI Nov C 56.5 | P 56.2

10:00     EUR        Eurozone Retail Sales M/M Oct C 0.50% | P -1.30%

13:15     USD       ADP Employment Change Nov C 224K | P 230K

13:30     USD       Non-Farm Productivity Q3 (F) C 2.20% | P 2.00%

13:30     USD       Unit Labor Costs Q3 (F) C 0.30% | P 0.30%

15:00     CAD       BoC Rate Decision C 1.00% | P 1.00%

15:00     USD       ISM Non-Manufacturing Composite Nov C 57.5 | P 57.1

15:30    USD       Crude Oil Inventories C 0.7M | P 1.9M

 

Harry Hindsight              

  • EUR: Euro’s traded slightly lower through the Asian session moving from the opening 1.2470 levels and moving into the mid 1.2460’s and holding the level for several hours in slow quiet trading, as soon as the early London guys sat down they sold the Euro a little lower to test the 1.2450’s and then through on the official opening to take the market through to 1.2430 on the release of the PPI numbers, with the MoM showing further declines. The move into NYK saw very little difference in the market and the market continued downwards. The bottom was the 1.2380 levels with the bids eventually stopping the decent but there was no bounce.
  • GBP: Cable slipped slowly lower during Asia in the same manner as the Euro with no real direction, dipping from the 1.5730 opening areas and into the mid 1.5720’s. As with the Euro the market dipped on the opening and became a little choppy over the opening in London and while the PMI number was worse than expected it held the 1.5700 levels. A choppy day in the EURGBP which looked to dominate the Cable over the session although the market held in the EURGBP cross over the session in a 40 pip range, moving lower to the 0.7910 areas before topping out above the 0.7940 levels on the Eurozone releases before settling back again.  Cables declines like the Euro halted in the NYK session holding around the 1.5640 areas and trading around that level for several hours into the close.
  • JPY: With USD in ascendency once again the market in USDJPY struggled during Asia pushing from the 118.40 levels and only able to make it to 118.50 over the course of the session, early buying into the London session broke the market higher and the resultant move only struggled once the market had made the 119.00 level again moving quietly into the NYK session holding around the level for a few hours, The 119.00 area eventually broke with weak stops and strong buying combining to take the market to just below the 119.30 area and clearing most of the offers far more easy than would have been expected last week. The market then held in the 119.20 area for much of the NYK session and unable to push any further.
  • AUD: A quiet start to the day before the RBA announcement moving quietly from the 0.8490 levels to move only slightly lower and trade around the 0.8480 areas, that is until the announcement. With no real change in the announcement leading the market higher from a quick low of 0.8470, triggering weak stops through the 0.8500 levels and pushing to 0.8520, the move into the grey hours saw further buying taking the market to above the 0.8540 to make the highs on the day however from that point on it was all about the USD and the Oz saw weak stop triggered through the 0.8510 levels and then a steady ride down to 0.8440 and just below for a quiet session to the close.

 

Yesterday’s premiership results

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

JPY         Monetary Base Y/Y Nov A 36.70% | C 37.20% | P 36.90%

AUD       Building Approvals M/M Oct A 11.40% | C 5.00% | P -11.00% | R -11.20%

AUD       Current Account (AUD) Q3 A -12.5B | C -13.7B | P -13.7B | R -13.9B

AUD       RBA Rate Decision A 2.50% | C 2.50% | P 2.50%

GBP       Construction PMI Nov A 59.4 | C 61 | P 61.4

EUR        Eurozone PPI M/M Oct A -0.40% | C -0.30% | P 0.20%

EUR        Eurozone PPI Y/Y Oct A -1.30% | C -1.30% | P -1.40%

USD       Construction Spending M/M Oct A 1.10% | C 0.60% | P -0.40%

 

 

Good Luck,

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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