Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 121.064 | EURUSD 1.0964 | AUDUSD 0.71854 | NZDUSD 0.6694 | USDCAD 1.30585 | USDCHF 0.99086 | GBPUSD 1.54233 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               121.385 | 121.05

EUR/USD             1.0968 | 1.0938

EUR/JPY               132.89 | 132.63

AUD/USD            0.7224 | 0.7177

NZD/USD             0.6669 | 0.6633

USD/CAD             1.3069 | 1.3045

EUR/CHF              1.0867 | 1.0852

USD/CHF             0.9921 | 0.9908

GBP/USD             1.5424 | 1.5414

EUR/GBP             0.71115 | 0.70965

For Today

• EUR: A quiet start saw the market move into the Tokyo session with a steady flow of EURJPY selling appearing in the market Euro’s having held above the 1.0960 levels for much of the early part drifted lower and eventually tested into yesterday’s lows around the 1.0940’s before recovering slowly through the rest of the session, Topside offers are likely to appear around the 1.1000 levels and become stronger as the market moves through the 1.1015-30 areas, weak stops are then likely however, the market has struggled each time its moved into the 1.1050 areas and stronger offers are likely in that area before the market opens to a test of the 1.1100 areas and a possible break higher with a strong push. Downside bids seem to be running from the current lows and into the 1.0900 levels even through the level the market is still likely to have a stubborn tone and only a push through the 1.0870 levels will open up further weakness on the downside with bids possibly weak until closer to the 1.0820 areas.
• GBP: A very quiet session for the Cable with EURGBP testing a little lower with Euro weakness and the Cable holding around the 1.5420 levels in light trading, topside offers strong into and around the 1.5500 levels and even through that level the 1.5550 areas could find further strong resistance before any meaningful stops are likely to appear however, this does open up the next big figure if the market were to move through the level and 1.5650 is possibly achievable on a strong move, downside bids light through the 1.5400 levels as was seen yesterday however, the 1.5350 has early indications of being a little stronger and any downside move would possibly initially struggle at the level before the 1.5300 appears again.
• JPY: Having opened through the 121.00 levels the market moved sideways into the Tokyo session and only lifted a little with EURJPY selling showing in early trading, USDJPY managed a steady rise though and pushed close to the 121.40 with strong two way flows moving through the market before the early buying subsided and the market dropped back from the 121.30 levels and then slowly drifted close to 121.00 in later trading, Topside offers continue to dominate through to the 122.00 levels with offers from the 121.40-60 levels and then a likely light offerings until the 121.80 areas open up, from there though the market it likely to see a stronger congregation of offers and then weak stops possibly through the level joined by break out stops. Downside bids light through to the 120.20-00 areas with those bids likely to increase through the level before opening the downside into the mid 119 areas as the market continues to play the 119-121.50 range.
• AUD: AUDNZD dominated the Oz today with the cross pushing through the 200DMA around 1.0790 and looks technically strong for a push eventually to 1.1000 however the Oz didn’t have it all its own way having moved steadily through the 72 cent levels from an opening 0.7180 area on the buying the market again struggled around the 0.7220 levels before slowly ebbing to the 72 cent levels in late trading as interest disappeared from the market. Topside offers likely to continue through the 0.7220 areas with light offers likely to increase in size once the market moves into the 0.7240-60 areas, possible weak stops before further offers appear around the 73 cent levels however, one would suspect only a push here will open up fresh tests above the 0.7350 levels and stronger offers. Downside bids into the 0.7150 levels are likely to be light with the 71 cent level seeing some support but more in depth to the 0.7070 areas, through this level though the market is likely to see stronger and stronger bids as you move towards the 70 cent level and while this level is approachable there is a possibility of the short term traders moving in with the market so stubborn below that level.

Overnight News

NZD:

New Zealand Employment Unexpectedly Falls, Jobless Rises

AUD/CNY:

Australia’s Exports to China Rebound to 17-Month High

AUD:

Australian Sept. Retail Sales Rose 0.4% M/M; Est. 0.4% Gain

Australia Oct. Services Index Falls 3.3 Pts M/m to 48.9

CNY/INR: C

hina Adds India’s Bonds to its Foreign Reserves: Economic Times

CNY:

Moody’s Poll Sees Muted China Growth Expectations, Yet No Crisis

China Plans to Set Up State Assets Investment, Operation Cos.

Caixin China Oct. Services PMI 52 vs 50.5 in Sept.

China May Give Some Insurers Portfolio Stress Test: Sec. News

PBOC Researcher Calls for Corporate Loan-Bond Swap: Sec. Journal

CNY/TWD:

China’s Xi, Taiwan’s Ma to Meet as ‘Leaders,’ Xinhua Says

CNY/HKD:

PBOC Says Shenzhen Link to Start in 2015 as China Opens Markets

JPY:

Suga: Hope Japan Post IPO Accelerates Shift to Investment

SGD:

Nikkei Singapore Oct. Whole Economy PMI 50.2 vs 51.4 in Sept.

GBP:

U.K. Oct. BRC Shop Price Index -1.8% Y/y vs Sept. -1.9% Y/y

Niesr Sees BOE Rate Increase in Feb., Chance of Delay to May

 

Today’s data

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

NZD       Unemployment Rate Q3 A 6.00% | C 6.00% | P 5.90%

NZD       Employment Change Q/Q Q3 A -0.40% | C 0.40% | P 0.30% | R 0.10%

NZD       Labour Cost Private Sector Q/Q Q3 A 0.40% | C 0.50% | P 0.50%

JPY         Monetary Base Y/Y Oct A 32.50% | C 36.20% | P 35.10%

GBP       BRC Shop Price Index Y/Y Oct A -1.80% | P -1.90%

AUD       Trade Balance (AUD) Sep A -2.32B | C -2.85B | P -3.10B

AUD       Retail Sales M/M Sep A 0.40% | C 0.40% | P 0.40%

CNY        Caixin China PMI Services Oct A 52 | C 51 | P 50.5

JPY         Consumer Confidence Oct A 41.5 | C 41 | P 40.6

8:45        EUR        Italy Services PMI Oct C 53.5 | P 53.3

9:00        EUR        Eurozone Services PMI Oct (F) C 54.2 | P 54.2

9:30        GBP       Services PMI Oct C 54.5 | P 53.3

10:00     EUR        Eurozone PPI M/M Sep C -0.50% | P -0.80%

10:00     EUR        Eurozone PPI Y/Y Sep C -3.30% | P -2.60%

13:15     USD       ADP Employment Change Oct C 180K | P 200k

13:30     CAD       Trade Balance (CAD) Sep C -1.90B | P -2.53B

13:30     USD       Trade Balance Sep C -$41.20B | P -$48.33B

15:00     USD       ISM Non-Manufacturing Composite Oct C 56.5 | P 56.9

15:30    USD       Crude Oil Inventories P 3.4M

Harry Hindsight              

• EUR: A quiet session for the Euro through Asia, trading slowly between the 1.1010-20 levels with only a minor breach of the downside 1.1010 before rising into the grey hours to test the 1.1030 levels. The move into London saw steady selling with various types of sellers leaning on the market and steadily moving it to the 1.0980 areas before gradually pushing through the level and continuing into the NYK session falling steadily to the 1.0940 areas before finding a base, the market managed to move slightly higher as the US numbers failed to impress the market and the return was short lived testing only the 1.0970 levels before holding around the 1.0960 levels to the close.
• GBP: With little information the market gradually rose through the Asian session to test into the 1.5445 levels with only a minor fluctuation during the RBA decision, the move into the London session saw strong selling on the back of Euro selling however, the EURGBP continued to weaken dipping 30 pips lower, Cable continued steadily lower and into the NYK session testing into the 1.5360 levels before the market started to turn with better selling in the EURGBP cross helping the Cable to trade back above the 1.5420 opening levels with weak stops through the level triggering to test towards the highs before finishing the day almost unchanged.
• JPY: After the Asian session of steady selling the market moving from the 120.75 levels trading into the London session holding around 120.60 the market found willing buyers in London and the market again started a slow climb into the NYK session, with the market again pushing close to the 121.00 levels, this lead to a quick move on the NYK opening and the market trading through the level to push against the 121.20 levels before sufficient offers appeared in the market to hold the topside, the release of the US numbers had little impact initially however, the failure to push through the topside caused the market to return to the 121.00 levels and trade in that range to the close.
• AUD: The market opened around the 0.7150 levels and steadily pushed into the Tokyo opening rising to the 0.7160 levels and slowly pushing higher, the market stalled in the 0.7170 areas, the release of the RBA decision initially saw the market drop quickly with interbank prices touching the 0.7110 levels before quickly rallying higher to trade the 0.7210 levels with the presentation offering something for everyone, the market then settled down to continue trading around the highs pushing into the early London session testing the 0.7220 levels before the main body of the London market entered buying USD and the Oz dropped back triggering weak stops to the 0.7180 areas, the market then continued drifting in London and slipped close to the opening levels into early NYK, mixed fortunes for the USD with commodity currencies faring better through the NYK session with WTI crude rising and the Oz was again challenging the 72 cent levels into the close.

Yesterday’s premiership results

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

AUD       RBA Rate Decision A 2.00% | C 2.00% | P 2.00%

GBP       Construction PMI Oct A 58.8 | C 58.8 | P 59.9

USD       ISM New York Oct A 45.5 | P 44.5

USD       Factory Orders Sep A -1.00% | C -0.90% | P -1.70% | R -2.1%

 

Good Luck,

Andy

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