Andy Harrison
Good morning,
LMAX Close
USDJPY 118.482 | EURUSD 1.07798 | AUDUSD 0.70722 | NZDUSD 0.66321 | USDCAD 1.40756 | USDCHF 1.00721 | GBPUSD 1.4630 |
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Interbank Ranges as of 6am London time
Highs   Lows
USD/JPYÂ Â Â Â Â Â Â Â Â Â Â Â Â Â 118.755 | 117.66
EUR/USDÂ Â Â Â Â Â Â Â Â Â Â Â 1.0830 | 1.0774
EUR/JPYÂ Â Â Â Â Â Â Â Â Â Â Â Â Â 127.98 | 127.30
AUD/USDÂ Â Â Â Â Â Â Â Â Â Â 0.7087 | 0.7025
NZD/USDÂ Â Â Â Â Â Â Â Â Â Â Â 0.6655 | 0.6615
USD/CADÂ Â Â Â Â Â Â Â Â Â Â Â 1.4125 | 1.4065
EUR/CHFÂ Â Â Â Â Â Â Â Â Â Â Â Â 1.08655 | 1.08505
USD/CHFÂ Â Â Â Â Â Â Â Â Â Â Â 1.00745 | 1.00205
GBP/USDÂ Â Â Â Â Â Â Â Â Â Â Â 1.4640 | 1.4625
EUR/GBPÂ Â Â Â Â Â Â Â Â Â Â Â 0.7400 | 0.7366
For Today
- EUR: Another day in paradise for the equity markets or not, the Euro opened around the 1.0780 levels and traded quietly around that level into the Tokyo session, with China’s CSI dropping quickly from the opening with some strong selling seeing the market drop 7% before the market being suspended as you would expect all the indices’ where the same and the USD suffered, with the suspension the markets in FX and oil moved quickly with the Euro driving through the 1.0800 levels and continuing a steady rise to push through the 1.0820 levels before finding resistance to the move, Oil at the same point made new lows below $34 per barrel before the market stabilized with the Euro holding around the 1.0825 areas into the grey hours. Offers likely to continue into the 1.0840-60 levels and likely to continue to struggle with congestion likely through to the 1.0920 areas before the market opens a little however, the topside is a struggle, downside bids light through to the 1.0750 areas and then likely to increase on a push through the 1.0730 levels and particularly strong into 1.0700.
- GBP: Cable traded in a tight range throughout the session ranging to the 1.4640 areas and ben back to hold the 1.4625 level in a fairly quiet session for the pair, with the EURGBP again testing the 0.7400 level during the session. Topside offers light into the 1.4640 areas and a push through the 1.4650 levels should allow a test to the 1.4700 areas and the possibility of a little squeeze higher if it can move through the level cleanly with likelihood of weak stops through the 1.4720 areas. Downside bids into the 1.4600 held yesterday and were not truly tested so a strong test of the level could open a deeper move long term and with the chances of a rate rise receding further downside is possible however, a push through the 1.4600 levels will open up further technical weakness and the 1.4520 levels is possibly key to holding the market from those levels.
- JPY: USDJPY opened with early buyers taking the market through the 118.70 levels however, the events in the equity markets overtook the strength and the USDJPY quickly dropped on the suspension of trading in China and the flows to the JPY kicked in with the USDJPY dropping quickly to below the 117.70 levels before sufficient buying managed to kick in to bounce the market back to 118.00 however, the move back to the 118.20 levels had little effect on the market and as soon as Lunch arrived the market again started to drift back to the 118.00 and through the level into the grey hours. Topside offers into the 118.80 areas now seems to be key for the market to reverse the selling in USDJPY however, through the level the market is open for a further push to the 119.20 levels and further if the market has the momentum, downside bids are light now through the 117.80 areas and the market is likely to have very little in support until the 117.00 areas with the concerns of margins being squeezed by the equity market and strengthening JPY, if the market manages to break here then there is very little to stop the market moving onto the 115. Handle.
- AUD: The Oz made early gains from the 0.7070 levels to push towards the 0.7090 levels that is before the Chinese market suspensions and the equity market showing red across the board, while Oz was sold it was mainly the carry trade AUDJPY that did the damage and the Oz quickly dropped to test the 0.7030 levels again before holding through the balance of the session basing of that level, topside offers light through the 0.7080-0.7100 areas and one would suspect that the market on a sharp move higher is vulnerable to the 72 cent level however, at the moment it is all about the safe haven of JPY and as long as that is dominant then the Oz is again on the back foot and really as the RBA would prefer it. Downside bids increase on a move through the 70 cent levels although there is likely to be plenty to stand in the way of the market before then and those bids are likely to appear all the way through to the 69 cent level which in all likelihood will be loaded and difficult to break.
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Overnight News
CNY:
Chinese stocks regulator said to call unscheduled meeting to discuss the market
CSI 300 index falls 7% and trading in Shanghai and Shenzhen suspended for the day
USDCNH reputedly sold from 6.76 to 6.70 in a 10 min period with unofficial estimates of $10B Intervention
Oil:
WTI hits 12yr low below $34 pb
Today’s data
Actual = A | Consensus = C | Previous = P | Revised = R All timings GMT
AUDÂ Â Â Â Â Â Trade Balance (AUD) Nov A -2.91B | C -2.98B | P -3.31B
AUDÂ Â Â Â Â Â Building Approvals M/M Nov A -12.70% | C -3.00% | P 3.90% | R 3.30%
07:00Â Â Â Â EURÂ Â Â Â Â Â Â German Factory Orders Y/Y Nov C 1.10% | P -1.40%
09:10Â Â Â Â EURÂ Â Â Â Â Â Â Eurozone Retail PMI Dec P 48.5
10:00Â Â Â Â EURÂ Â Â Â Â Â Â Eurozone Unemployment Rate Nov C 10.70% | P 10.70%
10:00Â Â Â Â EURÂ Â Â Â Â Â Â Eurozone Business Climate Indicator Dec C 0.39 | P 0.36
10:00Â Â Â Â EURÂ Â Â Â Â Â Â Eurozone Consumer Confidence Dec (F) C -5.7 | P -5.7
10:00Â Â Â Â EURÂ Â Â Â Â Â Â Eurozone Economic Confidence Dec C 106 | P 106.1
10:00Â Â Â Â EURÂ Â Â Â Â Â Â Eurozone Industrial Confidence Dec C -2.9 | P -3.2
10:00Â Â Â Â EURÂ Â Â Â Â Â Â Eurozone Services Confidence Dec C 12.6 | P 12.8
10:00Â Â Â Â EURÂ Â Â Â Â Â Â Eurozone Retail Sales M/M Nov C 0.20% | P -0.10%
12:30Â Â Â Â USDÂ Â Â Â Â Â Challenger Job Cuts Y/Y Dec P -13.90%
13:30Â Â Â Â USDÂ Â Â Â Â Â Initial Jobless Claims (JAN 2) C 271K | P 287k
15:00Â Â Â Â CADÂ Â Â Â Â Â Ivey PMI Dec C 56.7 | P 63.6
Harry Hindsight             Â
- EUR: Opening around the 1.0750 areas the market drifted into the Tokyo session eventually testing the 1.0740 levels until the release of a contrary service PMI number in CNY and the USD was sold quickly off, with the Euro rallying quickly to above the 1.0770 levels before holding between there and the 1.0760 levels for several hours, lunch time in Asia saw the market again drift back to the opening levels and the market then eased into the grey hours with early London selling the Euro to test the resolve of the buyers, the market traded eventually to the 1.0720 levels and continued testing the levels with Eurozone services PMI doing little to help the market recover, an expected PPI number saw the market rising again and by the time the market moved into the NYK session the market had recovered the opening levels and traded around that level for the most part with a quick stab lower on the ADP employment number which came in a lot higher than expected causing some quick USD buying and again the Euro dipped to and through the 1.0720 levels before snapping back with the market being caught a little short. The run through to the FOMC minutes saw nothing specifically exciting and the market slowly moved to focus on to the 1.0760 levels into the minutes, with some FOMC members believing the rate hike was a close call the overall tone of the minutes was dovish and this allowed triggered a further rally towards the 1.0800 levels before the day saw the market drifting to the close around the 1.0780 areas.
- GBP: The Sydney session saw the highs for the day with the opening around the 1.4670 levels leading to an initial test to the 1.4680 levels before a steady drift through the session, the selling continued slowly through into the London opening and the focus into London seemed to be the 1.4600 levels with the market unable initially to penetrate the 1.4620 levels, while Cable did recover some of its losses after the UK PMI services numbers it lagged behind the Euro and was unable to make it to the opening levels, and while the Euro drifted steadily higher to the FOMC minutes Cable was unable to maintain its levels with the ADP numbers in the US sending the Cable to a hare’s whisker from the 1.4600 levels and the pair remaining under pressure through the session, the Dovish FOMC did very little for Cable and the push through the 1.4630 level was the focus of the market to the close, EURGBP as you would expect rose steadily through the session to the 0.7370 levels.
- JPY: USDJPY opened around the 119.05 areas and traded quietly higher into the Tokyo session pushing the 119.15 levels, the release of the PMI services saw the USDJPY drop quickly to the 118.40 levels and I’m afraid that was about it for the day with the market then trading in a very tight range through the day, testing to the 118.30 levels on the downside but repeatedly failing to push back above the 118.80 levels with any conviction and for great portions of the day trading around the 118.60 levels, the move through London saw the lows tested before a slow rise into the NYK session, even the FOMC made little difference and the market went out around the 118.50 levels.
- AUD: The Oz suffered with the release of the CNY PMI numbers having opened around the 0.7160 levels and struggled 10 pips higher before dropping quickly on the release to test the supportive 0.7130 areas, the level lasted for a short period before moving through and testing to the 0.7110 levels and holding into the grey hours before steady selling through the London session pushing steadily to the 0.7050 levels and support, FOMC did little for the market and the Oz was contained for the most part through the rest of the session.
Yesterday’s premiership results
Actual = A | Consensus = C | Previous = P | Revised = R All timings GMT
CNYÂ Â Â Â Â Â Â Caixin PMI Services Dec A 50.2 | C 52.3 | P 51.2
EURÂ Â Â Â Â Â Â Italy Services PMI Dec A 55.3 | C 53.6 | P 53.4
EURÂ Â Â Â Â Â Â France Services PMI Dec (F) A 49.8 | C 50 | P 50
EURÂ Â Â Â Â Â Â Germany Services PMI Dec (F) A 56 | C 55.4 | P 55.4
EURÂ Â Â Â Â Â Â Eurozone Services PMI Dec (F) A 54.2 | C 53.9 | P 53.9
GBPÂ Â Â Â Â Â Services PMI Dec A 55.5 | C 55.6 | P 55.9
EURÂ Â Â Â Â Â Â Eurozone PPI M/M Nov A -0.20% | C -0.20% | P -0.30%
EURÂ Â Â Â Â Â Â Eurozone PPI Y/Y Nov A -3.20% | C -3.20% | P -3.10% | R -3.20%
USDÂ Â Â Â Â Â ADP Employment Change Dec A 257K | C 198K | P 217K | R 211K
USDÂ Â Â Â Â Â Trade Balance Nov A -42.4B | C -44.0B | P -43.9B | R -44.6B
CADÂ Â Â Â Â Â Trade Balance (CAD) Nov A -1.99B | C -2.60B | P -2.76B | R -2.76B
USDÂ Â Â Â Â Â ISM Non-Manufacturing Composite Dec A 55.3 | C 56 | P 55.9
USDÂ Â Â Â Â Â Factory Orders Nov A -0.20% | C -0.20% | P 1.50%
USDÂ Â Â Â Â Â Crude Oil Inventories A -5.1M | C 0.7M | P 2.6M
Good Luck,
Andy
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