Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 119.845 | EURUSD 1.1346 | AUDUSD 0.72606 | NZDUSD 0.67472 | USDCAD 1.29783 | USDCHF 0.95617 | GBPUSD 1.54444 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               120.015 | 119.76

EUR/USD             1.1368 | 1.1344

EUR/JPY               136.335 | 135.98

AUD/USD            0.7276 | 0.7257

NZD/USD             0.6760 | 0.6739

USD/CAD             1.2988 | 1.2969

EUR/CHF              1.0860 | 1.08515

USD/CHF             0.95615 | 0.95515

GBP/USD             1.5448 | 1.5437

EUR/GBP             0.7358 | 0.7347

For Today

• EUR: Another quiet Asian session with the Euro moving slightly higher from the close and testing the 1.1360 levels during the session but holding steady for the bulk of the session around the 1.1360 levels. Topside offers remain above the 1.1380 levels and through to the 1.1410 areas before the likelihood of weak stops appear on a break of 1.1420, the market then see’s patches of offers about every 20 pips or so building to a stronger offering level as you move towards the 1.1500 levels. Downside bids light through to the 1.1320 areas and then the market starts to get a little congested with a strong push through the 1.1280 levels likely to see stops appearing through 1.1270 with bids likely to absorb quickly that flow, the move through to the 1.1220 areas is likely to see support thickening the close to the level you get.
• GBP: Cable was stuck in a tight range moving from the opening 1.5445 areas deep into the Tokyo session before testing briefly below the 1.5440 level only to move back, topside offers remain above the 1.5500 levels and likely to continue to defining the resistance unless the market sees a very strong PSBR number, even so a push through the level is likely to see further offers into the 1.5550 levels before the topside opens for further larger gains. Downside are light through the 1.5400 levels and only begin to become stronger as the market moves towards the 1.5350 areas and through to 1.5300, a strong push through here will again open the downside with possible interference around the 1.5200 areas before exposing the lows of the beginning of the month.
• JPY: A quiet climb higher to test slightly through the 120.00 levels on quiet trading, having briefly tested below the 119.80 into the Tokyo opening, Topside offers are likely to continue through the level and the continues to be congested and unable to break out of the ranges we’ve seen for several weeks, those offers lighten a little on a push through 120.50 however, more offers are possibly not to far away on any move towards the 121.00 levels. Downside bids light into the 119.50 levels and as we’ve seen over the weeks only a strong move pushes the market down through the levels to test the 119.00 areas with possibly weak stops on a move through 118.80 likely to quickly meet yield flows moving in and the market likely to quickly turn higher again.
• AUD: The Oz moved with the rest of the market, quietly, trading from the opening 0.7260 levels to test briefly through the 0.7275 area before returning to the 0.7270 that it has spent much of Tokyo trading around. Topside offers likely to begin in earnest on a move above the 0.7280 levels and then continuing into the 73 cent levels, weak stops possibly through this level however, the offers quickly return on a move towards the 0.7350 areas and then stronger offers beyond 0.7380. Downside bids light into the 0.7240 areas before some gaps show in the bids however, moves to the 72 cent level will have a few stronger bids before the market opens up for a half decent move lower and possibly a test towards the low 71 cent level.

Overnight News

JPY/CNY:

Japan Exports to China Have First Back-to-Back Drop Since 2013

Japan, China to Hold Maritime Talks as Early as Nov., NHK Says

JPY:

Japan Sept. Exports Rise 0.6% Y/y; Est. +3.8%

Japan to Include TPP Farm Aid in Supplemental Budget, Asahi Says

Kuroda May Opt Not to Bolster Stimulus, Former MOF Official Says

Japan Aug. All Activity Index Falls 0.2% M/m; Matching Est.

AUD:

Australia Treasury Says Needs Firms to Compete Even if A$ Rises

Australian Treasury Says Global Debt Build-Up a Major Risk

CNY:

Former PBOC Adviser Chen Yulu Said to Be Named Deputy Governor

China Has More Room for Govt, Corporate Bond Sales: Researcher

China Jan.-Sept. Tax Revenue Rises 7.6% on Year to 8.38t Yuan

NZD:

New Zealand Annual Immigration Rose to Record in September

Today’s data

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

23:00     AUD       Conference Board Leading Index Aug A -0.40% | P 0.30%

23:30     AUD       Westpac Leading Index M/M Sep A 0.10% | P -0.30%

23:50     JPY         Trade Balance (JPY) Sep A -0.36T | C -0.07T | P -0.36T | R -0.37T

04:30     JPY         All Industry Activity Index M/M Aug A -0.20% | C -0.30% | P 0.20% | R -0.10%

08:30     GBP       Public Sector Net Borrowing (GBP) Sep C 9.1B | P 11.3B

14:00     CAD       BoC Rate Decision C 0.50% | P 0.50%

14:30    USD       Crude Oil Inventories P 7.6M

Harry Hindsight              

• EUR: A quiet Asian session with very little data to really effect the Euro, opening around the 1.1325 levels the market moved quietly into the Tokyo session holding the level before making steady progress to test the 1.1340 levels before trading around the 1.1335 levels into the London session. London saw the market initially test the lows, before putting in a concerted rally as ECB’s bank lending data highlighted a positive for the last round of QE, the market managed to move to the 1.1385 areas before running into sufficient offers to turn it back lower, and as the market moved into the NYK session and strong selling took the market through the 1.1350 levels and weak stops stabbed the market lower to the 1.1335 areas before regaining some stability, the market saw minor fluctuations from then however, it was a quiet end to a really quiet session overall.
• GBP: Cable rose slightly through the Asian session moving from the opening 1.5465 to test into the 1.5480 level before drifting into the London session, a stronger Euro helped the Cable move higher and the market quickly tested above the 1.5500 levels with little problem until above the figure, the market continued to bounce around through the early part of London however the range was contained for the most part to 30 pips from the 1.5470-1.5500 levels before slipping lower on the move into the NYK session with pretty lacklustre volumes for GBP. The market dipped lower with the drag of the Euro and moved steadily through the opening levels and testing into the 1.5430 levels into the late session before finishing the day just off the lows.
• JPY: USDJPY was flat through the Asian session moving around the opening 119.50 the market, only once London opened did the market see strong USDJPY buying with what appeared to be a single ticket buy that caught the market flat footed and a move to the 119.75 levels before gradually drifting back to the 119.50 areas, the move into the NYK session saw buying renewed and the market steadily rose pushing through the highs and testing into the 119.90’s before the London close, the market then started to move sideways to the close trading around the 119.90 levels in quiet trading.
• AUD: The RBA minutes were fairly neutral in tone and the market moved off the lows of 0.7245 to move quickly to the 0.7275 levels before dipping back again as a second reading by many showed how neutral it was, the market then started a steady climb as cross Oz buying moved in and the push through the 0.7270 areas finally saw the Oz hit into the 0.7295 areas and light offers moving into the London session however, the market traded in a 20 pip range at the widest into the NYK session and as with most of the markets saw USD buying forcing the market back to close to its opening levels before finishing quietly around the 0.7260 levels.

Yesterday’s premiership results

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

06:00     CHF        Trade Balance (CHF) Sep A 3.05B | C 2.51B | P 2.87B

06:00     EUR        German PPI M/M Sep A -0.40% | C 0.00% | P -0.50%

06:00     EUR        German PPI Y/Y Sep A -2.10% | C -1.70% | P -1.70%

08:00     EUR        Eurozone Current Account (EUR) Aug A 17.7B | C 20.1B | P 22.6B | R 25.6B

12:30     CAD       Wholesale Sales M/M Aug A -0.10% | C 0.20% | P 0.00% | R -0.10%

12:30     USD       Housing Starts Sep A 1.21M | C 1.14M | P 1.13M

12:30    USD       Building Permits Sep A 1.10M | C 1.16M | P 1.17M

Good Luck,

Andy

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