Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close Wellington open

USDJPY 121.504 1.21.325-58 | EURUSD 1.22851 1.2278-905 | EURJPY 149.271 149.10-149.515 | AUDUSD 0.83235 0.8288-0.8291 | NZDUSD 0.77146 0.7702-10 | USDCAD 1.14346 1.1445-48 | EURCHF 1.20222 1.20255-26 | USDCHF 0.97868 0.97835-91 | GBPUSD 1.55837 1.5581-95 | EURGBP 0.78839 0.78725-975 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               121.86 | 121.34

EUR/USD             1.2304 | 1.22775

EUR/JPY               149.79 | 149.25

AUD/USD            0.8324 | 0.8275

NZD/USD             0.7707 | 0.7643

USD/CAD             1.1449 | 1.1419

EUR/CHF              1.2029 | 1.20205

USD/CHF             0.9793 | 0.9774

GBP/USD             1.5590 | 1.5556

EUR/GBP             0.7900 | 0.78815

 

For today

  • EUR: The market opened within the levels of Fridays close and pushed steadily to above the 1.2300 areas in pre-Tokyo, the move into Tokyo saw some light EURJPY selling however, the same pattern eventually emerged with a steady rise to the 1.2300 levels before drifting for the rest of the session with little interest in the market. While good US figures dominate the market for the foreseeable future the Euro still remains on a back burner with weekend discussions more on the terms of the Greek package. Bids into the 1.2280 levels give way to a mix below and light stops likely to dominate, the market is likely to be fairly mixed on any move down with the 1.2250 areas and then further bids 1.2220 and into the 1.2200 levels. Topside offers are likely to be light through to the 1.2320 areas and then opens up for a move to 1.2380 and possibly strong offers from there into the 1.2400 levels, the market would need to break through the 1.2460 areas to negate these lows and for the moment that is a little difficult to see.
  • GBP: Cable opened just a little lower than Friday’s close, opening below the 1.5580 and drifting into the 1.5560’s before moving back to the 1.5580 levels and then a steady drift lower and a light push through the 1.5560. Downside is likely to see bids into the 1.5550 levels and then the market opens up to the next level and more sentimental than anything, a push through that level see the 1.5480 levels and the 1.5430 areas being less defined but likely to be small sticking points. Topside now sees that 1.5600 levels as being topside resistance however, some momentum would push through easily enough and then a short move to the previous few weeks 1.5700-1.5850 range.
    JPY: USDJPY opened higher if only just above Fridays close moving from the 121.60 levels to above the 121.80 areas before slowly sagging into the Tokyo session, the highs were certainly attractive to some of the longs and the market moved steadily to the 121.40 before meeting some light buying sufficient to hold the market and a return to the 121.60 levels. Topside as with the 121.00 level the next big figure 122.00 is likely to be only lightly defended with only light stops through the level. 122.20 is likely to offer a better level and the market is likely to have offers into the 122.40-50 areas. Light bids through the 121.40 levels and running to the 121.00 areas beyond that stops are likely to appear below the 120.80 and the opening to a deeper move to better supportive areas around the 119.80.
  • AUD: The Oz was dominated by the carry trade today with steady selling in the AUDJPY pushing from the 101.20 early highs to move below the 101.00 areas and then a quicker pace lower to the 100.60, although the USDJPY dipped from the opening the Oz also came under pressure and after the lower start had only enough time to fill the gap on the charts before pushing to below the 0.8280 and near where the market moves into London. The solid move through 0.8500 levels opening up the deeper moves we’ve seen and the 0.8300 was the target levels for the market earlier in the year, the downside likely sees a mixed interest in a move towards the 0.8200 areas with support limited from the 0.8210 areas into that level and possible option plays, and the downside remains similar into the next levels around 0.8120’s, and through there a possible push below 0.8000. Topside has offers into the 0.8340 areas before opening up to chase back to the 0.8380 and strong offers thereafter to the 84 cent levels.

 

Overnight News

CNY:

China Trade Surplus Climbs to Record as Imports Drop in November

China Raises Yuan Fixing to Strongest Level Since March

JPY:

Japan Q3 GDP revised down to annualised 1.9% contraction

40.9% of Japan Corp. Chiefs Say 100-110 Yen Level Ideal: Nikkei

Japanese Investors Sell Most U.S. Treasuries in More Than a Year

Japan Oct current account surplus 833.4B yen

Japan manufacturers’ mood down as economy back in recession -Reuters Tankan

Japan ‘Economy Watchers’ Index at Lowest Since Abe Took Office

Japan Nov bank loans rise 2.7% vs year ago

EUR:

Greek Parliament Approves 2015 Budget, Speaker Says

AUD:

Australia job ads climb to 23-mth high in Nov-survey

NZD:

N.Z. Manufacturing Lifted by Metal Construction Materials

N.Z. November Card Spending Rises 5.2% Y/Y, Paymark Says

GBP:

U.K. Households Can Weather Gradual Rate Increases, BOE Says

BOE Says Banks May Need to Change Structure to Fit Bail-In Plan

 

Today’s data

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

NZD       Manufacturing Activity Q3 A -1.20% | C -1.90% | P -2.30%

JPY         Current Account (JPY) Oct A 0.95T | C 0.46T | P 0.41T

JPY         GDP Q/Q Q3 (F) A -0.50% | C -0.10% | P -0.40%

JPY         GDP Deflator Y/Y Q3 (F) A 2.00% | C 2.10% | P 2.10%

CNY        Trade Balance Nov A $54.5B | C $45.41B | P $45.41B

7:00        EUR        German Industrial Production M/M Oct C 0.40% | P 1.40%

8:15        CHF        CPI M/M Nov C -0.10% | P 0.00%

8:15        CHF        CPI Y/Y Nov C -0.10% | P 0.00%

8:15        CHF        Retail Sales (Real) Y/Y Oct C 0.90% | P 0.30%

9:30        EUR        Eurozone Sentix Investor Confidence Dec C -9 | P -11.9

13:15     CAD       Housing Starts Nov C 195.0K | P 183.6K

13:30     CAD       Building Permits M/M Oct C 3.90% | P 12.70%

 

Weekend News

AUD:

Australian Banks Seen Needing $25 Billion Capital after Inquiry
CNY:

China Regulator Urges Caution on Stocks as Trading Hits Record
China Party Expels Former Security Chief for Leaks and Graft
China Should Hold More Asian Currencies in FX Reserves: Adviser
JPY:

DPJ’s Edano: Bankruptcies Linked to Weak Yen Increasing Rapidly
Kansai Electric Considers Raising Household Power Rates: Asahi
Sony Tells Staff Hacking Attack Unprecedented, Unpreventable
EUR:

Greek Credit Line from Euro Area to be ~EU10b, Wieser Tells Real
Greece’s Syriza Opposition Widens Lead in Metron Analysis Poll
UAH:

Ukraine Eyes Agreement with Rebels for Talks amid Fighting

 

Harry Hindsight

  • EUR: The market opened around the 1.2380 levels and barely broke through the 1.2390 level during Asia before slowly drifting back and through to the 1.2370’s in very quiet trading. The move into London saw the market moving steadily lower and to the 1.2350 prior to the numbers, the market lifted off the lows as the early shorts took back there positions and the market was just below the 1.2380. A big jump in NFP to 321K turned the market back and the market moved quickly to the 1.2280 before finding some support with longer term profit taking entering the market and a bounce that was quickly subdued and sent down again through the 1.2280 levels, the market then held in a tight 1.2280-1.2300 levels declining in range and levels.
  • GBP: The Cable was little more choppy that the Euro, the market opened around the 1.575/80 areas and struggled into the Tokyo opening above the 1.5680 before dropping quickly as GBPJPY selling kicked in taking the market quickly to the 1.5640 level before holding and moving back to the 1.5660 areas. It was several hours before the market dipped again, gently pushing down through the previous lows before bouncing off the 1.5630 areas and then trading into London moving to above the opening and into the 1.5690 before holding the levels for a brief period. The release of the US session saw the market drop quickly to the previous lows pushing through to 1.5620 and then a tiny bounce before breaking lower once the downside had been cleared. The push through 1.5600 was easy enough and the market dipped to 1.5580 before the bids appeared to take the market back to the figure areas, once London left the scene the market drifted lower into a close just above the 1.5570 area lows.
  • JPY: Having already broken the 120.00 level in the previous session the move into the Asian session saw the market open around the 119.80 areas and the market rallied steadily from that point pushing gradually higher easily surpassing 120.00 and not even blinking on the move through the previous highs and trading to the 120.40 level to trigger light stops into the London session. As the market approached the US numbers it would look like there was some minor selling just before the release dipping the market to below 120.20 from above the 60 level before the market gapped higher with trading not appearing until the 120.80 level as the offers disappeared under the deluge of buying, 121.00 broke easily and the market was briefly steady above the level before breaking again to 121.60 as those waiting for a pullback took the market once it didn’t do. The market from then traded into the close around 121.40.
  • AUD: A quiet session through Asia holding in the 0.8380 areas and unable to push through the 0.8390 areas before dipping into the 0.8370-80 areas to trade for several hours. The move into London saw the steady decline before seeing light buying before the US figures. The market dropped on the NFP number from the 0.8380 levels to 0.8320 areas and was reasonable choppy over the next couple of hours before holding in the 0.8330-20 areas with a slight dip below the bottom before closing closer to the 30 level.

 

Friday’s premiership results

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

JPY         Leading Index Oct (P) A 104 | C 104.1 | P 105.6

EUR        German Factory Orders M/M Oct A 2.50% | C 0.50% | P 0.80% | R 1.10%

CHF        Foreign Currency Reserves Nov A 462.4B | C 465.5B | P 460.4B

EUR        Eurozone GDP Q/Q Q3 (P) A 0.20% | C 0.20% | P 0.20%

CAD       Trade Balance (CAD) Oct A 0.1B | C 0.20b | P 0.71B

CAD       Net Change in Employment Nov A -10.7K | C 5.0K | P 43.1K

CAD       Unemployment Rate Nov A 6.60% | C 6.60% | P 6.50%

CAD       Labour Productivity Q/Q Q3 A 0.10% | C -0.10% | P 1.80%

USD       Change in Non-farm Payrolls Nov A 321k | C 225K | P 214K | R 243K

USD       Unemployment Rate Nov A 5.80% | C 5.80% | P 5.80%

USD       Trade Balance Oct A -43.4B | C -$41.2B | P -$43.0B | R -43.6B

USD       Factory Orders Oct A -0.7% | C 0.00% | P -0.60%

 

Stay lucky

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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