Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 122.53 | EURUSD 1.06429 | AUDUSD 0.7255 | NZDUSD 0.65426 | USDCAD 1.33072 | USDCHF 1.01672 | GBPUSD 1.50828 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               122.57 | 122.265

EUR/USD             1.0677 | 1.0641

EUR/JPY               130.595 | 130.36

AUD/USD            0.7276 | 0.7253

NZD/USD             0.6581 | 0.6553

USD/CAD             1.3310 | 1.3280

EUR/CHF              1.08415 | 1.0824

USD/CHF             1.01725 | 1.0153

GBP/USD             1.5115 | 1.5077

EUR/GBP             0.70685 | 0.70555

For Today

• EUR: The early market remained quiet and only started to rise once the Tokyo session opened, the Euro then steadily rose to above the 1.0675 level before running into offers before struggling and eventually slipping back to hold around the 1.0655 levels in quiet trading, Topside offers into the 1.0680 area and likely to continue through the 1.0720 areas, weak stops likely through the 1.0730 area and then further offers once those stops are cleared with the offers quickly appearing around the 1.0750 areas and then continuing to the 1.0800 levels. Downside bids light through the 1.0630 areas however, stronger bids are likely down through the 1.0600 levels and into the 1.0580 level, a push through the 1.0570 area sees weakness in the market and the move down through to the 1.0530 levels and stronger bids.
• GBP: From a very slow opening the market moved around the 1.5080-90 areas before moving deeper into the Tokyo session and moving through the 1.5100 areas to push above 1.5110 and hold the figure area for the rest of the session, Topside offers light through the 1.5140 areas and seeing only a minor increase into the 1.5150 areas before the market opens to the 1.5190 and stronger offers into 1.5200 levels, downside bids into the 1.5050 remain strong and those bids are likely to continue down through into the 1.5000 areas and a strong sentimental area, a break here will open the downside with limited support until pushing into congestion through the 1.4900 levels.
• JPY: Quiet sideways movement eventually gave way to light selling or I should say steady JPY buying as the market moved quietly to safe haven areas and the market slowly moving of the 122.55 areas to test again into the 122.20 levels before finding limited bids, downside bids from the 122.20 areas and continuing through the figure and those bids light into the 121.80 areas before the market opens to the 121.00 areas again. Topside offers light through the 122.50 levels and then increasing in strength as the market moves through the 123.00 areas with no let-up of offers with stronger offers appearing 123.50 areas.
• AUD: The Oz opened just below the 0.7250 areas and steadily pushed through the available offers triggering weak stops through the 0.7260 areas but unable to test to the 0.7280 areas in early trading, the market then drifted somewhat through the Tokyo session repeatedly testing the 0.7275 areas but with light volumes unable to test that little bit further and holding for several hours around the 0.7270 area. Topside offers through the 0.7180 levels and continuing into the 73 cent level however, as the market moves through that area the offers increase with better offers appearing from the 0.7340 area onwards. Downside bids light into the 0.7200 areas and the market able to move quickly around that area, better bids make an appearance on a dip to the 0.7150 levels and those bids likely to continue through 71 cents before finding stronger bids.

Overnight News

JPY:

Japan’s Underlying Inflation Trend Improving: Most BOJ Members

Further Monetary Policy Action Not Needed Now, Says BOJ’s Shirai

BOJ’s Shirai: Would Consider Policy Adjustment If It Was Needed

JPY/CNY:

Japan, China Officials May Hold Maritime Talks in Dec.: Asahi

CNY:

China May Invest Over $1t Overseas by 2020, Premier Says: Daily

SGD:

Singapore 3Q GDP +1.9% Q/q; Estimate No Change

Singapore Dollar ‘Comfortably’ Within Policy Band: MAS’s Loh

Singapore’s GIC Says Still Underinvested in Real Estate

CAD:

Patterson Says Canada Adjusting to Lower Commodity Price

GBP:

BOE’s Broadbent Sees Faster Deficit Reduction: Daily Mail

PLN:

Possible Polish Rate Cut Unnecessary But Not Catastrophic: Belka

NZD:

Foreign Tourist Spending in N.Z. Rises 38% in Yr Ended Sept 30

Today’s data

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

JPY         Corporate Service Price Y/Y Oct A 0.50% | C 0.60% | P 0.60% | R 0.50%

07:00     CHF        UBS Consumption Indicator Oct P 1.65

09:30     GBP       BBA Mortgage Approvals Oct C 45.5K | P 44.5K

13:30     USD       Personal Income Oct C 0.40% | P 0.10%

13:30     USD       Personal Spending Oct C 0.30% | P 0.10%

13:30     USD       PCE Deflator M/M Oct C 0.10% | P -0.10%

13:30     USD       PCE Deflator Y/Y Oct P 0.20%

13:30     USD       PCE Core M/M Oct C 0.10% | P 0.10%

13:30     USD       PCE Core Y/Y Oct P 1.30%

13:30     USD       Durable Goods Orders Oct C 1.50% | P -1.20%

13:30     USD       Durables Ex Transportation Oct C 0.40% | P -0.40%

13:30     USD       Initial Jobless Claims (NOV 21) C 273K | P 271K

14:00     USD       House Price Index M/M Sep C 0.50% | P 0.30%

15:00     USD       New Home Sales Oct C 500K | P 468K

15:00     USD       U. of Michigan Confidence Nov (F) C 93.1 | P 93.1

15:30    USD       Crude Oil Inventories P 0.3M

Harry Hindsight              

• EUR: The market peaked around the 1.0645 levels early into the Tokyo session before drifting to the London session testing the supportive 1.0620 levels, the move into the London session saw the market rallying on the back of better than expected IFO numbers in Germany with GDP figures remaining in line with expectations, moving steadily higher the market eventually peaked around the 1.0670 levels before drifting around the 1.0650 levels for much of the session better US numbers did little for the market with the market dipping to the 1.0630 levels before recovering as the market struggled with the news that a Russian fighter was shot down by the Turkish while flying through Turkey’s airspace and so while the equity markets saw strong movement the FX markets were caught with nowhere to go.
• GBP: Cable traded quietly through the Asian session moving up from the opening 1.5125 areas to hold in the 1.5130-40 area into the grey hours on very quiet trading, early pre-market buying saw the Cable break above the 1.5150 levels briefly as EURGBP buying initially dragged the GBP higher with the Euro however, once the cross nudged the 0.7050 level Cable was forced lower and pushed through to the opening levels and a quiet drift through to the NYK session testing the 1.5100 levels, the move towards the NYK session saw the 1.5100 level give way and the limited weak stops triggered to the 1.5080 levels before slowing, the market did continue trading lower and the market moved down to test into the 1.5050 areas before finding some strength and slowly rising in the late part of the session to hold above the 1.5080 levels to the close.
• JPY: The opening around the 122.80 market saw a limited attempt into the Tokyo session above 122.90 before giving ground and drifting through Asia basing off the 122.70 levels, early London were brief sellers and the market tested to the 122.40 levels in early trading before holding around the 122.50 levels and into the NYK session, US numbers while good was balanced against events in Europe saw the JPY becoming a haven to balance out the USD interest and the market drifted to the 122.30 level before showing a small recovery to the close.
• AUD: The Oz saw steady buying through the day with JPY strength and followed by indifferent western currencies allowed the Oz to gradually move up taking out the offers through the 0.7240 and finishing the day around the 0.7250 levels.

Yesterday’s premiership results

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

JPY         PMI Manufacturing Nov (P) A 52.8 | C 52.1 | P 52.4

EUR        German GDP Q/Q Q3 (F) A 0.30% | C 0.30% | P 0.30%

EUR        German IFO – Business Climate Nov A 109 | C 108 | P 108.2

EUR        German IFO – Current Assessment Nov A 113.4 | C 112.3 | P 112.6

EUR        German IFO – Expectations Nov A 104.7 | C 103.5 | P 103.8

USD       Trade Balance Oct A -58.4B | C -61.8B | P -58.6B

USD       GDP (Annualized) Q3 (S) A 2.10% | C 1.90% | P 1.50%

USD       GDP Price Index Q3 (S) A 1.30% | C 1.20% | P 1.20%

USD       S&P/Case-Shiller Composite-20 Y/Y Sep A 5.50% | C 5.20% | P 5.09%

USD       Consumer Confidence Nov A 90.4 | C 99.2 | P 97.6 | R 99.1

 

Good Luck,

Andy

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