Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 123.173 | EURUSD 1.07409 | AUDUSD 0.7043 | NZDUSD 0.65236 | USDCAD 1.3303 | USDCHF 1.00557 | GBPUSD 1.51047 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               123.26 | 123.03

EUR/USD             1.0762 | 1.07375

EUR/JPY               132.495 | 132.325

AUD/USD            0.7056 | 0.7041

NZD/USD             0.6542 | 0.6521

USD/CAD             1.3288 | 1.3264

EUR/CHF              1.0797 | 1.0782

USD/CHF             1.0047 | 1.0015

GBP/USD             1.5124 | 1.5103

EUR/GBP             0.71155 | 0.7110

For Today

• EUR: Euro’s struggled through the session, with light buying in pre-Tokyo seeing the market edge above the 1.0760 areas and then moving into the Tokyo the market gave up the limited gains and dipped back through the 1.0755 levels and slipped slowly into the 1.0740’s with little interest going through. Light topside offers likely into the 1.0780-1.0800 levels before the market opens a little however, I don’t expect there to be to many weak stops however, the chances of stops from people looking at the gap on the charts could see the market opening for a move to the 1.0880 areas and stronger offers appearing with sentiment really unchanged with the Fed assumed to be looking at a hike next month and the ECB talking about a cut, downside bids into the 1.0720 levels has seen plenty of profit taking and those bids are likely to continue to the 1.0700-1.0680 areas and possibly picking up continuing bids along the way before the downside 1.0600 becomes vulnerable once the market is through 1.0640 areas.
• GBP: Opening in the 1.5105 areas the market traded quietly through into the Tokyo session rising slowly through the 1.5120 before drifting steadily over the balance of the session as the Cable drifted with the Euro in a lacklustre session, Topside offers likely to be reasonably light to the 1.5200 levels where the chances are the offers stiffen however, with talk of lift off for UK interest rates by the OECD the downside potential has been limited somewhat however, any move through the 1.5200 levels does open up a move to the 1.5300 levels again and possibly stronger offers to be seen, downside bids light through the 1.5100 levels with those bids light through to the 1.5050 areas where better bids are likely and possibly continue through to the 1.5000 levels, a push through the level is likely to see downside breakout stops appearing however, there is limited congestion through to the 1.4800 levels. As with yesterday limited data for the European area including the UK so possibly a struggle until the US wholesale inventories.
• JPY: The USDJPY slipped a little lower from the opening around the 123.18 areas pushing to the 123.04 levels before early Tokyo moved in to rally the market back to those opening levels and finishing off the light profit taking seen, from there the market has been very quiet with the market pushing to the 123.25 areas before holding in the mid 123.20 levels as the market moves towards the grey hours, Topside offers are likely to be substantial still with any move into the 123.50 levels requiring strong impetus to grind through those offers to make any headway, a push to the 123.80 areas is again likely to see stronger offers moving into the figure area with the likelihood of further offers continuing through the 124 handle and the highs of the year threatened. Downside bids are likely to be congregated around the 123.00 areas however, a strong break through the level could possibly see a quick move through to the 122.00 levels with the gap from the 122.00-50 areas likely to be a target for the chartist types and once the gap is filled the market could possibly see stronger bids appearing to slow any decent but leaving the market back in the AUG-OCT ranges again.
• AUD: A very quiet range through the Asian session with early AUDJPY selling disappearing quickly and the market rising from the low 0.7040’s to above 0.7050 mirroring the same ranges in late NYK, and into the Tokyo session the market eventually started to find more buyers with the market pushing gradually through the session towards the 0.7060 levels but it was a pitiful sight given the Oz has a lot more going on generally in the market. Topside offers into the 0.7070 areas and likely to continue until the market pushes through 71 cents, even through the level the market struggles with continuing offers however until the market moves towards the 0.7150 levels it is lighter and a push through the light offers will allow the market a renewed test of the 72 cent levels. Downside bids through the 0.7050 areas and continuing to 70 cents, a push through the level could see stops however, as soon as its through the market is likely to see further concentrations of support with 0.6980 onwards seeing bids, and those bids getting stronger the lower you move towards 69 cents.

Overnight News

CNY:

PBOC’s Zhou Calls For Direct Financing: Caixin Cites Book

China Oct. Consumer Prices +1.3% Y/y; Est. +1.5%

China Should Maintain Money, Fiscal Policy Stance: Sec. Times

NZD:

New Zealand Dollar Still Remains Somewhat Overvalued, IMF Says

New Zealand October Median House Price Rises 7% Y/Y: REINZ

New Zealand October Card Spending Unchanged From September

JPY:

Abe Says He’ll Cut Corporate Tax More Than Planned Next Year

Japan Cabinet Approval Rating Rises 5 Ppts to 51%: Yomiuri Poll

Japan Sept. Current-Acct Surplus 1.5t Yen; Est. +2.15t Yen

Japan Oct bank loans rise 2.5% vs year ago

No Renegotiation of TPP Deal Before It’s Signed: Japan’s Amari

Japan National Debt Drops to 1,054.4t Yen at End Sept., MOF Says

Japan Oct. Economy Watchers Current Index Rises to 48.2

GBP:

U.K. LFL Oct. Retail Sales Fall 0.2% Y/y, BRC Says

AUD:

Australia Oct. Business Confidence Falls 3 Pts M/m to 2

Australia ANZ Weekly Consumer Sentiment Rises 1.2% to 116.6

G20:

G20 GDP Growth to Average 2.8% in 2015-17, Moody’s Says

Today’s data

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

JPY         Current Account (JPY) Sep A 0.78T | C 1.50T | P 1.59T

GBP       BRC Sales Like-For-Like Y/Y Oct A -0.20% | P 2.60%

AUD       NAB Business Confidence Oct A 2 | P 5

AUD       Home Loans Sep A 2.00% | C 0.10% | P 2.90% | R 1.50%

CNY        CPI Y/Y Oct A 1.30% | C 1.50% | P 1.60%

CNY        PPI Y/Y Oct A -5.90% | C -5.90% | P -5.90%

JPY         Eco Watchers Survey: Current Oct A 48.2 | C 48.2 | 47.5

06:45     CHF        Unemployment Rate Oct C 3.40% | P 3.40%

13:30     USD       Import Price Index M/M Oct C -0.30% | P -0.10%

15:00    USD       Wholesale Inventories Sep C 0.10% | P 0.10%

Harry Hindsight              

• EUR: A half decent range through the day but contained none the less, the market opened a little lower than Friday’s close around the 1.0735 levels and preceded to dip lower as early sellers pushed the market to the 1.0720 levels, the market failed to break and the Tokyo market started to recover the losses with the official opening taking the market to 1.0740 before holding quietly for a period of time, the market then started to pick up a little with cross JPY buying helping the Euro move along and it slowly moved to the 1.0770 levels and hold in the areas into the London session as profit taking and new longs moved in. London traded in a tight range for the most part with the market fairly noncommittal, light selling on the German trade balance number saw the markets low for the period before rising steadily towards the NYK session to test the 1.0790 levels, the move into the NYK session saw fresh selling with ECB officials were discussing a deposit rate cut of more than 0.1% reversing the move and sending the market back to the 1.0720’s before stabilizing and bouncing back towards the highs and then drifting to the close around the 1.0750 levels.
• GBP: Cable roughly opened in line with Friday’s close rising steadily through the session in Asia from the 1.5050 levels, the market pushing to 1.5080 before running into light selling into early London the move into the official opening saw the market push briefly higher before dipping back to the 1.5060 levels and news that the ECB are thinking about a 0.1% cut at least, thrown out there for the market to digest and enabling Cable to rise as the EURGBP dip lower into the NYK session, Cable pushed through the 1.5100 levels triggering light stops holding in the 1.5110-30 areas for the balance of the day.
• JPY: USDJPY opened higher than Friday’s close with the market holding around the 123.30 areas before trading quietly through the session holding the 123.20 levels through Asia and peaking in the 123.40 levels before again testing the topside as the market moved into the London session, London were limited buyers and the market continued to grind through topside offers managing to push through to the 123.60 levels by mid-morning and then generally holding the 123.40 levels into the NYK session, NYK profit taking then saw the USDJPY dip back to the 123.00 levels however, the selling eased off and the market was unable to move through the downside level with any conviction and held in a 123.00-20 area to the close.
• AUD: With a strong USD dominating the market from the opening the Oz opened around the 0.7030 and traded quietly until the Tokyo opening, the market then started a steady climb through the session to the 0.7065 areas peak with some light AUDJPY buying and some profit taking in the AUDUSD helping the market, the move into the grey hours saw quick sellers from early Europeans and although the market did dip it was negligible on the day and the recovery as early London buyers took the opportunity to go long increased the highs made to 0.7070, a resurgent USD saw the Oz give up about half its move with the market holding around the 0.7045 levels into the close.

Yesterday’s premiership results

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

JPY         Labour Cash Earnings Y/Y Sep A 0.60% | C 0.50% | P 0.50% | R 0.40%

EUR        German Trade Balance (EUR) Sep A 19.4B | C 22.3B | P 19.6B

EUR        Eurozone Sentix Investor Confidence Nov A 15.1 | C 12.4 | P 11.7

CAD       Housing Starts Oct A 198K | C 198K | P 230.7K | R 232K

 

Good Luck,

Andy

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