Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 122.704 | EURUSD 1.06247 | AUDUSD 0.7252 | NZDUSD 0.65717 | USDCAD 1.32885 | USDCHF 1.02188 | GBPUSD 1.51296 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               122.95 | 122.555

EUR/USD             1.0627 | 1.0616

EUR/JPY               130.35 | 130.165

AUD/USD            0.7262 | 0.7216

NZD/USD             0.6598 | 0.6561

USD/CAD             1.3304 | 1.3285

EUR/CHF              1.08615 | 1.0851

USD/CHF             1.0228 | 1.0217

GBP/USD             1.5130 | 1.5117

EUR/GBP             0.70265 | 0.7020

For Today

• EUR: A very quiet session as you would expect for a US Thanks giving, with the Euro trading around the 1.0620 levels throughout the session and barely putting in a 10 pip range, Topside offers from the 1.0680 level continue through to the 1.0720 areas before opening a little with likely weak stops mixed through those offers on a break above the 1.0710 areas, once the 1.0720-30 area is cleared the market finds further congestion from the 1.0740 areas and through to the 1.0760 areas, with the stronger offers appearing into the 1.0800 levels. Downside bids into the 1.0600 levels likely to be light but present and stronger bids on a dip into the 1.0580 areas, further bids to the downside likely into the 1.0550 level before the market opens a little to the 1.0500 area.
• GBP: Cable like the Euro has been quiet but a little more movement with the market testing into the 1.5115 areas before pushing briefly above the 1.5130 levels for a slightly wider range but nonetheless quiet Asian session, the market is likely to continue through the day with the downside bids light through the 1.5100 levels and then opening up for a fresh test of the 1.5050 areas and stronger support, Topside offer from the current levels and into the 1.5150 areas before opening a little with weak offers to the 1.5200 levels exposed however, a test through is likely to find congestion slowing the market however, the topside is likely to be weak to the 1.5300.
• JPY: A steady drift lower for the USDJPY as the market moved through the session, opening around the 122.75 areas the market slowly dipped to the 122.55 areas into the grey hours before finding light bids sufficient to stop any more declines and trades into the grey hours around those lows. Topside offers light into the 123.00 levels with offers likely to increase as the market rises towards the 123.50 areas. Downside bids into the 122.20 levels have held so far this week and are likely to dominate the market today with the US Bank holiday, a push through the 121.80 areas will likely open the downside a little with the 121.50 areas likely to contain light bids with strength likely into the 121.20 areas.
• AUD: The Oz opened around the 0.7255 areas and slowly moved into the Tokyo session testing above the 0.7260 levels in quiet trading, until the 31 Business investment number was released falling 9.2% for the 3Q against the 2.9% estimate, this caused the Oz to quickly drop back to test the 0.7220 levels and create the best range of the day for one of the majors, the market having tested for an hour or so those lows then started to move steadily higher to push to the 0.7245 areas, once has to say Capex data is not one of the strong numbers the market looks for, yes its important however, a slow news day has definitely allowed the market to look at the numbers in a critical light given we already know how mining investment has been cut so really shouldn’t have been so surprising. Topside offers from the 0.7280 level and through 73 cent then sees weak stops appearing and the market then weak until the 0.7340 areas and then offers likely to appear through to 0.7360 and then concentrated about every 20 pips to the 74 cent level, downside bids into the 72 cent levels are likely to be a little stronger but nothing particularly special through the level and indeed not until the market moves to the 71 cent level is the market likely to see stronger bids appearing.

Overnight News

AUD:

Australian Business Investment Falls Most on Record in 3Q

JPY:

Amari Says Keidanren’s Wages Call Is More Ambitious Than Rengo’s

Japan’s A1 Rating Supported by Fundamentals, Moody’s Says

CNY/IMF:

IMF’s Furusawa: China Must Communicate Intentions to Guide Mkts

CNY:

PBOC’s Sheng Expects China Net Capital Inflows in Long Run: MNI

China Names Yang Guozhong vice Head of State Forex Regulator

NZD:

New Zealand Exports Decline amid Weak Dairy Prices

RUB/TRY:

Russia May Limit Imports From Turkey, Kommersant Says

CNH:

HK Banks Raise Interest Rates for Yuan Deposits: the Standard

Today’s data

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

NZD       Trade Balance (NZD) Oct A -963M | C -1000M | P -1222M | R -1140M

09:00     EUR        Eurozone M3 Y/Y Oct C 4.90% | P 4.90%

12:00    EUR        German GfK Consumer Sentiment Dec C 9.2 | P 9.4

Harry Hindsight              

• EUR: Early trading saw the market slowly rise through the Asian session pushing into the 1.0675, the market held the levels for a few hours before falling above toward the 1.0650 levels but remaining above the opening ranges, the move into London again saw steady buying with the grey hours market trading steadily through the 1.0680 levels to touch the 1.0690 area, the move into the London session saw the market steadily falling back to the opening levels and weak stops through the 1.0640 levels to send the market to the 1.0600 levels, the market struggled for a period before eventually pushing through and then spent several hours and into the NYK session probing the 1.0580 levels, US data had little impact on the market and although the market did trade a little lower triggering some light stops the market was unable to really push through the level and moved steadily higher again once the market failed to break the downside pushing close to the opening levels before slipping to the 1.0620 areas and trading those levels to the close.
• GBP: Cable made meagre gains during the Asian session moving from just below the 1.5080 areas and rose slowly to push through the 1.5110 levels before holding quietly around the 1.5100 areas, the move into the London session saw the Euro falling back and taking the EURGBP cross with it however, the move was too strong in the Euro not to effect the Cable and the market move steadily through the opening levels to test the 1.5060 areas before it started to recover, the move back to the highs was a little more hurried and tested above the 1.5120 levels before chopping around through the NYK session with the mix of numbers affecting the market, the move to the close again saw the market moving to the highs and the EURGBP negating the previous 24hrs of gains and the cross tested to the 0.7000 levels before bouncing a little and taking the GBP back higher to the 1.5130 areas for the close.
• JPY: The USDJPY repeatedly tested the 122.20 areas through the Asian session having opened around the 122.50 areas with light safe haven flows and long closing into the long US weekend, London opening saw the market moving off the lows as the market rejected the lows and moved steadily back to the opening levels, the market then slowed its ascent and slowly gained further ground moving into the NYK session to test the topside offers, the market spent several hours in the 122.80 areas and pushed briefly above the 122.90 levels before drifting off once the London session disappeared from the market to hold around the 122.70 levels to the close.
• AUD: The Oz rose slowly from the opening 0.7250 and gradually moved through the Asian session to test briefly above the 0.7280 before moving towards London and saw the market dip back to test back to the opening levels, a quiet session saw the market drift lower over the course of the session to push to the 0.7230 levels before the last of the US numbers went through the market, the market recovered to the opening levels from that point and the market went out almost unchanged on the day.

Yesterday’s premiership results

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%

CHF        UBS Consumption Indicator Oct A 1.6 | P 1.65

GBP       BBA Mortgage Approvals Oct A 45.4K | C 45.5K | P 44.5K | R 44.8K

USD       Personal Income Oct A 0.40% | C 0.40% | P 0.10% | R 0.20%

USD       Personal Spending Oct A 0.10% | C 0.30% | P 0.10%

USD       PCE Deflator M/M Oct A 0.10% | C 0.10% | P -0.10%

USD       PCE Deflator Y/Y Oct A 0.20% | P 0.20%

USD       PCE Core M/M Oct A 0.00% | C 0.10% | P 0.10% | R 0.20%

USD       PCE Core Y/Y Oct A 1.30% | C 1.30% | P 1.30%

USD       Durable Goods Orders Oct A 3.00% | C 1.50% | P -1.20%

USD       Durables Ex Transportation Oct A 0.50% | C 0.40% | P -0.40%

USD       Initial Jobless Claims (NOV 21) A 260K | C 273K | P 271K | R 272K

USD       House Price Index M/M Sep A 0.80% | C 0.50% | P 0.30%

USD       New Home Sales Oct A 495K | C 500K | P 468K | R 447K

USD       U. of Michigan Confidence Nov (F) A 91.3 | C 93.1 | P 93.1

USD       Crude Oil Inventories A 1.0M | C 1.2M | P 0.3M

 

Good Luck,

Andy

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