Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 121.091 | EURUSD 1.10586 | AUDUSD 0.72486 | NZDUSD 0.6785 | USDCAD 1.3153 | USDCHF 0.98341 | GBPUSD 1.53513 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               121.105 | 120.48

EUR/USD             1.10695 | 1.1045

EUR/JPY               133.90 | 133.31

AUD/USD            0.7255 | 0.7228

NZD/USD             0.6788 | 0.6760

USD/CAD             1.3175 | 1.3152

EUR/CHF              1.0872 | 1.0854

USD/CHF             0.9835 | 0.9811

GBP/USD             1.5358 | 1.5347

EUR/GBP             0.7207 | 0.7198

For Today

• EUR: The market moved a little bit higher to the 1.1060 levels before EURJPY selling moved in on the opening in Tokyo and limited fall for the Euro to below the 1.1050 levels before the move became more of a USD move and the market in the Euro started to recover and pushed to the 1.1070 levels, topside offers through the 1.1080 levels however, a move through the level will likely confirm a rejection of the 1.1000 levels, a move through the 1.1110-20 areas will likely see weak stops and the market quickly opening to the topside and although there may be some congestion into the 1.1200 areas the spike could be stronger. Downside bids are weak through the levels already covered to the downside however, the downside bids into the 1.1000 are likely to be as strong as ever and only a strong push through the 1.0980 areas will open a further decline to test through to the 1.08 handle.
• GBP: Cable remains fairly resistant to any move lower with the market finding stronger bids on a move towards the 1.5300 levels a move through this level is likely to find weak support into the 1.5250 areas and then stronger bids into and through the 1.5200 levels with strong congestion from that point onwards, topside offers light into the 1.5400 levels and the market then starts to see offers building into the 1.5500 levels which has now become a key area to any move higher.
• JPY: From the move into the Tokyo session the USDJPY and EURJPY has been under pressure with what started out as being EURJPY quickly turning into stronger USDJPY selling moving through the 121.00 levels and holding the 120.80 levels for a while before tipping into weak stops and a move to the 120.50 levels before finding better bids sufficient to hold the market, having fallen to the area the market held in the areas for the move into the grey hours. Topside offers light through the 121.00 levels for the moment before the stronger offers start to appear above the 121.40-60 levels and likely to be larger into the 122.00 and limited possibilities of a move to the 124-125 areas. Downside bids into the 120.50 areas are likely to be light with stronger bids likely into the 120.00 areas however, a move through the level is likely to open a test into the 119.00 levels but the market seems to be stuck still in the 119-121.50 range we’ve seen over the past couple of months.
• AUD: Mixed USD movements with heightened tensions in the South China sea saw the market in Oz initially as the USD dipped however, those concerns eventually triggered movement in the regional currencies and the Oz dropped back from the 0.7255 areas to drop to 0.7230 levels before finding support and the market holding in a generally quiet session. Topside offers increase through the 0.7270 levels and build into the 73 cents, even a move through the level sees offers continuing through the level and likely to be stronger from the 0.7340 onwards. Downside bids are looking fairly strong to the 72 cents level and through the level the bids are likely to be patchy at best with bids every 20 pips or so likely slowing any move before stronger bids appear into sentimental levels.

Overnight News

USD/CNY:

U.S. Ship Sails near South China Sea Island Built by China

JPY/USD:

Japan Says No Plans Now for Physical Support of U.S. Mission

JPY/AUD:

Nippon Life to Acquire NAB Insurance Unit for 220b Yen: Yomiuri

JPY:

Japan LDP Farm Panel to Draft TPP Aid Measures by Nov. 17

CNY:

PBOC Adviser Sees Room for More Monetary Policy Easing This Yr

China Should Set GDP Growth Target at 6.5% for 2016-2020: Daily

China’s Economy Won’t Have ‘Hard Landing’ in Short Term: Daily

China’s Sept. Industrial Companies’ Profit Falls 0.1% Y/y

EUR:

Greece Creditors Refuse to Pay Next Loan Tranche: Sueddeutsche Z

USD:

Fed Said to Strive for ‘Clear Signal’ on Interest Rates: WSJ

IDR/USD:

Widodo Finalizes $20.3b in Investment Deals in U.S. Visit

SGD:

Singapore Economy to Expand at Modest Pace in 2016, MAS Says

Lee Says Singapore Must Prepare for Economic Slowdown: Times

NZD:

N.Z. September Trade Deficit NZ$1.22b; Est. NZ$825m Deficit

AUD:

Australia ANZ Weekly Consumer Sentiment Rises 0.1% to 113.4

Today’s data

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

NZD       Trade Balance (NZD) Sep A -1222M | C -822M | P -1035M | R -1079M

JPY         Corporate Service Price Y/Y Sep A 0.60% | C 0.70% | P 0.70% | R 0.80%

07:00     CHF        UBS Consumption Indicator Sep P 1.63

09:00     EUR        Eurozone M3 Y/Y Sep C 5.00% | P 4.80%

09:30     GBP       GDP Q/Q Q3 (A) C 0.60% | P 0.70%

09:30     GBP       Index of Services 3M/3M Aug C 1.00% | P 0.80%

12:30     USD       Durable Goods Orders Sep C -1.30% | P -2.00%

12:30     USD       Durables Ex Transportation Sep C 0.00% | P 0.00%

13:00     USD       S&P/Case-Shiller Composite-20 Y/Y Aug C 5.10% | P 5.00%

14:00    USD       Consumer Confidence Oct C 102.8 | P 103

Harry Hindsight              

• EUR: The market opened just off the lows from Friday and although lower than the close the market moved steadily higher through the Asian session, pushing through to the 1.1040 levels before holding into the grey hours and into London testing to the 1.1050 levels before the market dipped with steady sellers willing to test the downside. The market struggled through the session more or less ignoring the German IFO numbers which were mixed to some extent and eventually testing to the lows again into the NYK session, the market rejected the level and moved up steadily to again struggle around the 1.1050 levels peaking towards the 1.1070 levels before again returning to play quietly around the 1.1050-60 areas to the close.
• GBP: A little bit better on the start saw the market moving slowly higher not quiet keeping up with the Euro but steadily moving off the lows of 1.5310 areas to push into the early London session touching 1.5350 areas and unable to push through until the move into the NYK session and weak stops allowed a quick rise to trade above the 1.5380 before slipping back to trade to the late part of the session before trading down to hold the 1.5350 levels to the close.
• JPY: A general USD sell off in a limited fashion with the early market dropping back from early highs around the 121.50 levels and dipping into the Tokyo session to the 121.10 levels before holding for several hours through to the grey hours, early London continued the selling pushing through the 120.80 levels and bouncing back above 121.00 and trading quietly through to the NYK session and then the market followed through triggering some weak stops on a drop through the 120.80 level and touching to the 120.60 level and a bounce back to slowly rise and hold the 121.00 areas to the close.
• AUD: As the USDJPY dipped so the Oz managed to rise moving from the opening 0.7210-20areas to test through to the 0.7260 level having triggered weak stops on the move through the 0.7260 levels and then spending much of the day trading above the 0.7250 levels and only seeing light selling as the market moved towards the close of the day and then only to the 0.7240 areas.

Yesterday’s premiership results

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

EUR        German IFO – Business Climate Oct A 108.2 | C 108 | P 108.5

EUR        German IFO – Current Assessment Oct A 112.6 | C 113.3 | P 114

EUR        German IFO – Expectations Oct A 103.8 | C 102.3 | P 103.3

GBP       BBA Mortgage Approvals Sep A 44.5K | C 46.2K | P 46.7K

GBP       CBI Trends Total Orders Oct A -18 | C -8 | P -7

USD       New Home Sales Sep A 468K | C 547K | P 552K | R 529K

Good Luck,

Andy

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