Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 122.859 | EURUSD 1.07429 | AUDUSD 0.70615 | NZDUSD 0.65538 | USDCAD 1.32636 | USDCHF 1.00461 | GBPUSD 1.52127 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               123.04 | 122.735

EUR/USD             1.0781 | 1.0744

EUR/JPY               132.54 | 132.045

AUD/USD            0.7155 | 0.7061

NZD/USD             0.6579 | 0.6543

USD/CAD             1.3268 | 1.3225

EUR/CHF              1.0807 | 1.07925

USD/CHF             1.0046 | 1.0026

GBP/USD             1.5246 | 1.5212

EUR/GBP             0.7073 | 0.70645

For Today

• EUR: The market opened traded quietly higher again on a repeat of yesterday’s opening to test through to the 1.0760 levels in early trading then from the Tokyo opening to the 1.0780 levels with plenty of two play around the level, the market then slowly drifted back towards the 1.0750 levels and looks to be entering the grey hours in the same range as yesterday, Topside offers through the current highs and into the 1.0800 levels with the likelihood of stops making and appearance on a break through those levels and the market vulnerable to a quick rise into the 1.0860 levels as the market moves back to the Friday ranges, from the 1.0880 levels the market is likely to dominated by stronger offers through the level and deeper into 1.09. Downside bids are likely through the 1.0740 levels light at first but building through the 1.0720 levels with possibly strong bids on a move through the 1.0700 levels and into the 1.0680 areas, weak stops from the 1.0670 levels before bids start to appear through 1.0640.
• GBP: Cable has done very little moving a little higher as the Oz employment numbers hit the market and then trading steadily towards the 1.5250 levels before slowly drifting back to the 1.5220 levels. Topside offers into the 1.5250 levels are likely to be fairly strong and as with the Euro the push through the level could opening up a larger move back to last weeks ranges, one would suspect that a break in either the Euro or the Cable would have a similar effect dragging the others with it and causing a small USD selloff, a breakthrough is likely to see light offers into the 1.5300 levels before the 1.5400 areas become exposed. Downside light bids through to the 1.5200 levels will likely see weak stops appearing on a move through the 1.5190-80 areas and the market then open to the 1.5150 and possibly a little stronger, with plenty of congestion to the move towards the 1.5100 levels and beyond.
• JPY: USDJPY has limped along for the most part during Asia, opening around the 122.85 levels the market tested a little lower into the 122.75 areas in pre-Tokyo before holding steady to around the 122.80 levels, Oz employment data saw strong AUDJPY carry trade buying and this quickly realised the high for Asia with the market pushing briefly through the 123.00 levels before again slipping back and trading through the session around the 122.90 levels, Topside offers likely through the 123.20 areas again and as with the week with something likely to be waiting every 10 pips or so and people for the moment happy to fade any further rises to the 124.00, from this point it is less certain, yes there are possibly exporter offers running in the area however, there could be more interest in stops on a move through the 124.00 areas as the market awakes to a possibility of a run to the years highs however, it’s a slim chance as the market for a few months has seen less volatility on a normal day. Downside bids through the 122.80 areas and although the possibility of stops through the 122.70 levels once would suspect that during London and NYK the danger of a Euro move will possibly dominate the USD’s movement against everything and 122.00 is likely to become vulnerable on a volatile move.
• AUD: The Oz moved quietly into the Asian session holding around the 0.7070 levels for the most part and waiting for the data, a slight dip just before the release saw the market probing into the low 0.7060 levels and then the numbers hit and the market quickly moved with expectations being blasted out of the market by another ratio number well above the 15.2K and the Oz quickly rallied to 0.7130 with stops probably ripped to pieces in the move, the market continued to test higher over the next couple of hours with brief moves above the 0.7050 levels before slipping back and trading around the 0.7040 levels for the rest of the session into the grey hours. Topside offers possibly light through the 0.7150 levels and the offers possibly stronger once the market moves above the 0.7180 areas however, given the employment data a push through the 0.7220 areas could see the market again headway to trade into the 0.7250 areas and slightly stronger offers building to the 73 cent. Downside bids light through to the 0.7060 areas where the possibility of stronger bids appear and those bids increase the lower you go.

Overnight News

EUR:

Coeure Says ECB Has Yet to Decide on More Asset Buying: Figaro

JPY:

Japanese Bought Net 1 Trillion Yen Overseas Debt Last Week

Japan May Insure Farmers’ Lost Income From TPP, Nikkei Says

Japan Sept. Core Machine Orders Rise 7.5% M/m; est. +3.1%

Japan’s Maehara, Hosono to Seek Dissolution of DPJ Party: Kyodo

AUD:

Australian Oct. Employment Rose 58,600 M/M; Est. 15,000 Rise

Australia Boosts Scrutiny of Foreign Investment in Agriculture

CNY:

China Oct. Fiscal Revenue Up 8.7% Y/y to 1.44t Yuan

GBP:

U.K. Oct. RICS House Price Index at 49 vs Est. 45

NZD:

New Zealand November Consumer Confidence Rises to Six-Month High

New Zealand Manufacturing Growth Eased in October, PMI Shows

Today’s data

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

NZD       Business NZ Manufacturing Index Oct A 53.3 | P 55.4

JPY         Domestic CGPI Y/Y Oct A -3.80% | C -3.50% | P -3.90% | R -4.00%

JPY         Machine Orders M/M Sep A 7.50% | C 3.40% | P -5.70%

AUD       Consumer Inflation Expectation Nov A 3.50% | P 3.50%

GBP       RICS House Price Balance Oct A 49% | C 46% | P 44%

AUD       Employment Change Oct A 58.6K | C 15.2K | P -5.1K | R -0.8K

AUD       Unemployment Rate Oct A 5.90% | C 6.20% | P 6.20%

07:00     EUR        German CPI M/M Oct (F) C 0.00% | P 0.00%

07:00     EUR        German CPI Y/Y Oct (F) C 0.30% | P 0.30%

10:00     EUR        Eurozone Industrial Production M/M Sep C -0.10% | P -0.50%

13:30     USD       Initial Jobless Claims (NOV 7) P 276K

13:30     CAD       New Housing Price Index M/M Sep C 0.20% | P 0.30%

16:00     USD       Crude Oil Inventories P 2.8M

19:00    USD       Monthly Budget Statement Oct C -130.2B | P 91.1B

Harry Hindsight              

• EUR: A limited range for the day however, the moves were fairly decent with the market moving from the 1.0720 areas testing slightly lower before beginning a steady rise through the session to test above the 1.0770 levels into the mid-session in Tokyo, the market drifted through the session into the London market and tested into the 1.0730’s, early London had very little interest and only as the market moved deeper into the session and the UK numbers had been released did the market start to react and attempt a move towards the 1.0700 levels, NYK opening so light buying to the 1.0750 areas and the market then ranged through the remainder of the session to finish around the 1.0740 levels.
• GBP: Opening around the 1.5120 levels the market eased into the 1.5140 levels into the Tokyo session before finding a lack of liquidity on a quick move higher towards the 1.5190 levels before drifting for the rest of the Tokyo session, the market dipped a little into the London opening testing a little lower with weak longs deciding to cut positions before the numbers, the employment numbers saw the market initially spark higher and back to the 1.5170 levels before dropping back to the 1.5140 levels and then a steady climb through the day, the move through 1.5200 saw some small stops and a quick stab at the 1.5220 levels however, although the market continued testing that level it was not able to move through cleanly and held the 1.5210-20 levels to the close
• JPY: A little movement but a limited range overall, dropping back from the opening and early highs around the 123.20 to touch through the 122.80 in early Tokyo as profit taking in the USD moved into the market, having reached those lows the market ran out of those sellers and the move back to the opening was a steady struggle through the rest of the session and into the London opening testing back towards the highs and then holding above the 123.00 levels into the NYK session, NYK saw light selling however at this point the data for the day was out of the way and the market drifted ever lower through the session as cross selling lightly impacted however, the lows were never in trouble and the market finished just below the 122.90 levels.
• AUD: The Oz made early gains pushing through the 0.7050 levels into early Tokyo having opened around the 0.7030 levels and continuing to the 0.7080 levels into the mid-session in Tokyo, however, from that point the market remained in a tight and quiet range to the close trading around the 0.7060 levels and barely breaching and only stepping out of a 20 pip range once in the move to NYK before returning to that level.

Yesterday’s premiership results

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

AUD       Westpac Consumer Confidence Nov A 3.90% | P 4.20%

JPY         Japan Money Stock M2+CD Y/Y Oct A 3.60% | C 3.80% | P 3.80%

CNY        Retail Sales Y/Y Oct A 11.00 %| C 10.90% | P 10.90%

CNY        Industrial Production Y/Y Oct A 5.60% | C 5.80% | P 5.70%

CNY        Fixed Assets Ex Rural YTD Y/Y Oct A 10.20% | C 10.20% | P 10.30%

JPY         Machine Tool Orders Y/Y Oct (P) A -23.10% | P -19.10%

GBP       Jobless Claims Change Oct A 3.3K | C 1.6K | P 4.6k

GBP       Claimant Count Rate Oct A 2.30% | P 2.30%

GBP       ILO Unemployment Rate 3M Sep A 5.30% | C 5.40% | P 5.40%

 

Good Luck,

Andy

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