Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 121.03 | EURUSD 1.09924 | AUDUSD 0.72422 | NZDUSD 0.67789 | USDCAD 1.37321 | USDCHF 0.98527 | GBPUSD 1.51427 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               121.18 | 120.77

EUR/USD             1.1030 | 1.0990

EUR/JPY               133.38 | 133.04

AUD/USD            0.7283 | 0.7233

NZD/USD             0.6811 | 0.6758

USD/CAD             1.3735 | 1.3701

EUR/CHF              1.0841 | 1.0825

USD/CHF             0.9860 | 0.9821

GBP/USD             1.5185 | 1.5143

EUR/GBP             0.7272 | 0.7247

For Today

• EUR: Opening around the 1.0995 areas the market slowly rose from the lows around the 1.0990 levels to test to the 1.1030 levels with the help of a rising EURJPY with average volumes moving through the market, Topside offers again into the 1.1040-60 areas further offers quickly move in from the 1.1080 levels and through the 1.1100 with congestion likely through to the 1.1160 areas with a break through the 1.1180 levels opening the topside for a larger move, downside bids light through the 1.0950 levels and continuing to the 1.0900 with only slightly stronger bids, a move through the level is likely to see the 1.0860-40 areas being the stronger point defending the downside and a deeper move, inflationary data in the UK and US could see some movement if the market is out of line.
• GBP: Opening around the 1.5155 levels the market moved quickly higher from the owner to test above the 1.5185 areas with light EURGBP selling giving the Cable room however, once the rush was over and possibly from a single ticket the market tracked back to the opening levels and holding around the 1.5150 and then steadily rising to the 1.5170 levels with a busy inflation data day ahead, Topside offers light through the 1.5200 levels and slightly stronger levels through the 1.5250 with possibly better offers on a test of the 1.5300 area and very little from there until the market is testing the 1.5400 areas and limited congestion around the level. Downside bids light into the 1.5100 areas and although there is likely to be congestion to the downside through that level the market is still fairly weak until the market tests through the 1.4950 area where stronger bids remain.
• JPY: Early selling from the 121.10 areas back to the 120.90 before early Tokyo moved into the market with the market heading to the 121.15 areas before running out of steam as Cross selling started to dominate the market, Topside offers light through the 122.00 levels with weak stops are likely through the 122.30 and the market opening to the 123.00 levels and possibly stronger offers through that level and into the 123.40 area. Downside bids light through the 121.00 areas with stronger bid lightly through the 120.60-40 areas and possibly continuing into the 120.00 areas with stops likely through the 119.70 areas.
• AUD: The Oz moved into the new day with limited expectations and held the 0.7250 for the most part dipping to the 0.7240 levels before the RBA minutes were released and the market quickly moved to the 0.7260 levels and gradually moved steadily higher to test above the 0.7280 levels as the market read the headline fiscal position still deteriorating but eventually reading it could be worse and so a fairly neutral minutes, having tested the top the market then drifted into the grey hours pushing through the opening levels.

Overnight News

JPY:

Japanese Companies See Slower Inflation in Next Five Years

Japan Cabinet Approval Rating Rises 3.6 Ppts to 47.8%: Sankei

Japan Official: Govt. Business Partnership Won India Train Deal

S&P’s Tan Sees “Decent Chance” of Japan Meeting Fiscal Goal

AUD:

RBA Repeats Scope for Further Easing, Says Recent Data Positive

Australia Sees Deficit Widening by A$26.1B Over Next Four Years

Morrison: Path Back to Budget Balance Needs to Be Safe, Careful

Australian 3Q House Prices Rose 2% Q/Q; Est. 2% Gain

Australia ANZ Weekly Consumer Sentiment Falls 0.8% to 115.4

NZD:

New Zealand Treasury Cuts Budget Surplus Sees 2015/16 Deficit

RBNZ Revises Weights for Trade Weighted Currency Index

SGD:

Singapore October Retail Sales +2.7% Y/y; Est. +3.2%

IDR/AUD:

Bank Indonesia Signs A$10b Deal With Reserve Bank of Australia

Today’s data

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

AUD       House Price Index Q/Q Q3 A 2.00% | C 2.10% | P 4.70%

08:15     CHF        Producer & Import Prices M/M Nov C 0.10% | P 0.20%

08:15     CHF        Producer & Import Prices Y/Y Nov P -6.60%

09:30     GBP       CPI M/M Nov P 0.10%

09:30     GBP       CPI Y/Y Nov C 0.10% | P -0.10%

09:30     GBP       Core CPI Y/Y Nov C 1.20% | P 1.10%

09:30     GBP       RPI M/M Nov C -0.10% | P 0.00%

09:30     GBP       RPI Y/Y Nov C 0.90% | P 0.70%

09:30     GBP       PPI Input M/M Nov C -0.10% | P 0.20%

09:30     GBP       PPI Input Y/Y Nov P -12.10%

09:30     GBP       PPI Output M/M Nov C -1.20% | P 0.00%

09:30     GBP       PPI Output Y/Y Nov P -1.30%

09:30     GBP       PPI Output Core M/M Nov C 0.00% | P -0.10%

09:30     GBP       PPI Output Core Y/Y Nov C 0.10% | P 0.30%

09:30     GBP       DCLG UK House Prices Y/Y Oct C 6.40% | P 6.10%

10:00     EUR        German ZEW (Current Situation) Dec C 54.5 | P 54.4

10:00     EUR        German ZEW (Economic Sentiment) Dec C 15 | P 10.4

10:00    EUR       Eurozone ZEW (Economic Sentiment) Dec C 34.4 | P 28.3

13:30     CAD       Manufacturing Shipments M/M Oct P -1.50%

13:30     USD       Empire State Manufacturing Dec C -5.25 | P -10.74

13:30     USD       CPI M/M Nov C 0.00% | P 0.20%

13:30     USD       CPI Y/Y Nov C 0.50% | P 0.20%

13:30     USD       CPI Core M/M Nov C 0.20% | P 0.20%

13:30     USD       CPI Core Y/Y Nov C 2.00% | P 1.90%

15:00     USD       NAHB Housing Market Index Dec C 63 | P 62

21:00    USD       Net Long-term TIC Flows Oct P $33.6B

Harry Hindsight              

• EUR: Opening around the 1.0995 levels the market slowly drifted through the Asian session to test towards the 1.0950 levels in a reasonably quiet session moving quietly into the London session testing the 1.0950 levels before gradually rising as better Industrial production figures hit the market and pushing back towards those opening levels, the move towards the NYK session saw the market pushing against the 1.1000 levels and the push through quickly saw the market pushing towards the 1.1040 offers and a steady move to the 1.1050 levels before running out of steam and drifting steadily to the close holding below the 1.1000 areas.
• GBP: With the opening just below the 1.5240 levels the market quickly lost ground and held around the 1.5190 levels through the Asian session, the move into London saw the market ease lower through the session with EURGBP buying moving into the session with the better Eurozone numbers, with the cross rising towards the 0.7300 levels over the course of the day from the lows of 0.7210, forcing the Cable to the 1.5110 levels before trading quietly to the close with a tidy range of 1.5120-55 before finishing in mid-range.
• JPY: Early EURJPY selling saw the market dip from the opening 121.10 areas to test into the 120.70 before moving into the Tokyo session, the market continued to hold the areas before moving steadily back towards the 121.10 levels as the buyers returned in both the USDJPY and EURJPY cross and the move into the London session saw limited testing to the 121.20 level, the move into early London saw a slow continuation with the market rising to the 121.30 and then unable to push through after several hours slowly started to dip back, as the Euro tested higher after the IP numbers USDJPY was forced lower and the market pushed again to the 120.70 levels and holding the areas to deep into the NYK session, the break through the 120.70-60 level saw weak stops triggered and the market dipping quickly to the 120.30 levels before finding sufficient bids and a steady rise through the remainder of the session pushing back to those opening levels.
• AUD: A very quiet Asian session for the Oz with little news and only limited action with the early market opening around the 72 cent level and giving ground into the Tokyo session before steadily rising quietly through into the London session testing the opening levels again, the market continued to move quietly through into the NYK session holding the above the 72 cent levels, NYK opening sent the market steadily higher and the market slowly pushed through to the London close testing the 0.7270 levels before drifting in a quiet evening session just below the 0.7250 levels.

Yesterday’s premiership results

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

JPY         Tankan Large Manufacturers Index Q4 A 12 | C 11 | P 12

JPY         Tankan Non-Manufacturing Index Q4 A 25 | C 23 | P 25

JPY         Industrial Production M/M Oct (F) A 1.40% | C 1.40% | P 1.40%

JPY         Tertiary Industry Index M/M Oct A 0.90% | C 0.50% | P -0.40%

EUR        Eurozone Industrial Production M/M Oct A 0.60% | C 0.30% | P -0.30%

 

Good Luck,

Andy

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