Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 104.223 | EURUSD 1.08882 | AUDUSD 0.76462 | NZDUSD 0.71654 | USDCAD 1.33509 | USDCHF 0.99451 | GBPUSD 1.2189 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.08921 | 1.08742

USDJPY                 104.390 | 104.016

GBPUSD               1.21934 | 1.21590

USDCHF               0.99586 | 0.99419

AUDUSD              0.77092 | 0.76273

USDCAD               1.33589 | 1.33344

NZDUSD               0.71758 | 0.71475

EURCHF                1.08346 | 1.08247

EURGBP               0.89550 | 0.89342

EURJPY                 113.657 | 113.268

For Today

• EUR: Moving quietly through the session edging only a touch higher into the Tokyo session, the release of the Oz CPI numbers saw EURAUD selling move into the market and the Euro dip quickly to the 1.0875 areas and the low for the session posted the market moved right back to the 1.0890 levels and quietened down again. Topside offers light through the 1.0900 levels with slightly stronger offers from there through to the 1.0920 levels with possible weak stops on a move through the area with possibly stronger into the 1.0950 areas and congestive offers from there into the stronger 1.1000 level. Downside bids into the 1.0860-40 areas still with bids likely to be a little stronger than previously however, a push through is possibly going to see weak stops leaving the 1.0800 level vulnerable to a strong test and the lows of last year under threat.
• GBP: Opening just below the 1.2190 levels the market slid lower through the session with Oz CPI numbers seeing Oz rising against the market and the Cable sliding to hold the 1.2160 levels and then ranging tightly in the 1.2160-70 levels for the remainder of the day into the London session, Topside offers light into the 1.2250 areas with stronger offers likely not to appear until a push through the 1.2320 areas, possible weak stops mixed with congestive offers and the market then open for a test to the 1.2400 level. Downside bids likely to reappear into the 1.2100-1.2080 levels however, any push through to the 1.2000 will leave the market exposed to another bout of weakness.
• JPY: USDJPY drifted through the session however, with Oz on the rise the market attracted the carry trade buyers and the USDJPY moved off the lows just above the 104.00 level pushing through the opening 104.20 areas and too the 104.40 level before ranging for the balance of the session around the 104.30 levels with little movement. Topside offers weak through the 104.50 levels with stronger offers moving in above the 104.80 levels and into 105.00 areas a break here sees less congestion and the market likely to see stops appearing on a move through the 105.20 levels with stronger offers likely to appear on a move through towards the 105.80 area. Downside bids into the 104.00 level a little bit firmer than previous with those bids likely to continue through to the 103.80 areas and weak stops below setting up a possible drop back through the 103.00 areas with the correct momentum in the market before finding stronger bids.
• AUD: Today was about the Oz with early trading quiet in the lead up to the release of the CPI data, rising from the opening 0.7645 areas the market pushed to the 0.7650 area before dropping quickly back on the release touching the 0.7630 level before quickly rising through the 77 cent levels while the full extent of the stronger inflationary numbers were measured in the market, the Oz touched through towards the 0.7710 areas before the offers stopped the rally and the market then drifted through the balance of the session holding the 0.7680 levels to the London session. With the stronger numbers the market obviously believes that the RBA will be less likely to cut before the year end and a return to normality will eventually move into the market however, for the moment one set of numbers is not likely to hold the RBA in place or dissuade them from cutting if they believe it’s necessary to cut to control the Oz. Topside offers into the 0.7740-60 areas have foiled the market for the past 3 months so probably a strong set of offers through that level with stops following closely a likely reason to be cautious a push beyond the 0.7780 areas will see the market open a little with 0.7840 likely to be a strong level.

Overnight News

AUD:

Australian 3Q Trimmed Mean CPI Rose 0.4% Q/Q; Est. 0.4% Gain

CNY:

China Hard Landing Risks Recede, Yuan to Float Downward: Fitch

Westpac-MNI China Oct. Consumer Sentiment +1.7% M/m to 117.1

China Sets Up Ministry-Level Committee to Cut Corporate Debt

JPY: Japan Post Insurance to up holdings of domestic, foreign stocks

Japan Ruling Party to Change Rules to Allow Abe to Extend Term

Japan Mulls Spinning off Tepco’s Nuclear Business: Nikkei

GBP:

May Said to Want Carney to Stay at BoE as He Reflects on Role

May Privately Warned Cos. Would Leave U.K. on Brexit: Guardian

SGD:

Singapore September Factory Output +6.7% Y/y; Est. +1%

TWD/CNY:

Taiwan May Ease Rules on Individual Chinese Tourists: EDN

NZD:

New Zealand Home-Loan Approvals Fall 4.9% From Year Ago: RBNZ

MXN/USD:

Mexican Cos. Created 123k Jobs in U.S., Ministry Says

PHP/USD:

Duterte: Foreign Troops Out in 2 Years, to Survive Without U.S.

Duterte Says Talks with China All Economics, No Military Deals

Philippines Must Keep Relations with U.S. Solid: Business Group

GOLD:

Kazakhstan, Russia Add to Gold Reserves in Sept.: IMF Data

Today’s data

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

JPY         Corporate Service Price Y/Y Sep A 0.30% | C 0.20% | P 0.20%

AUD       CPI Q/Q Q3 A 0.70% | C 0.50% | P 0.40%

AUD       CPI Y/Y Q3 A 1.30% | C 1.10% | P 1.00%

AUD       CPI RBA Trimmed Mean Q/Q Q3 A 0.40% | C 0.40% | P 0.50%

AUD       CPI RBA Trimmed Mean Y/Y Q3 A 1.70% | C 1.70% | P 1.70%

AUD       CPI RBA Weighted Median Q/Q Q3 A 0.30% | C 0.40% | P 0.40% | R 0.50%

AUD       CPI RBA Weighted Median Y/Y Q3 A 1.30% | C 1.40% | P 1.30% | R 1.50%

06:00     EUR        German Import Price Index M/M Sep C 0.00% | P -0.20%

06:00     EUR        German GfK Consumer Confidence Nov C 10 | P 10

08:30     GBP       BBA Mortgage Approvals Sep C 37.3K | P 37.0K

12:30     USD       Advance Goods Trade Balance Sep C -60.6B | P -59.2B

12:30     USD       Wholesale Inventories Sep (P) C 0.10% | P -0.20%

14:00     USD       New Home Sales Sep C 590K | P 609K

14:30     USD       Crude Oil Inventories P -5.2M

Harry Hindsight              

• EUR: Volumes were reasonable through the day however, the range was similar to the rest of the week with the Euro opening around 1.0880 levels and drifting to the 1.0870 levels on the move into Tokyo and then moved steadily back to the opening levels into the London session, better IFO numbers saw the market rising a little and the market managed to rise towards the 1.0900 levels before starting to drift again into the NYK session, and the move into the session saw the USD rising with early US numbers a little better than expected with Euro’s drifting too the 1.0850 areas and the low of the days, the end of the London session saw the Euro reverse the dipper catching some weak stops and forcing itself back to the 1.0890 levels with a final rally pushing to the 1.0905 levels before slipping back a little for the close.
• GBP: Cable held through the Asian session just below the opening levels in a tight range trading around the 1.2220 areas pushing slowly too the 1.2240 levels into the London session. The move into the NYK session saw quick selling in Cable and the market dropping quickly down through to the 1.2100 levels finding some support before a final dip to the 1.2080’s before starting a steady reversal back to the 1.2200 levels into the close in London, after the sharp moves the market again settled down into a tight range to close just below the 1.2200 areas.
• JPY: USDJPY pushed up to the 104.50 levels through the Asian session but never able to push through the level, the move into the London session eventually saw the level break and the market then range through into the NYK session holding the 104.50-60 areas, early US numbers helped the USD higher and the USDJPY pushed quickly to the 104.90 levels before being chased lower with the weaker consumer confidence numbers and a return to the 104.20 levels, ranging around that level the market tested repeatedly into the 104.10 areas but was unable to push through and held till the close.
• AUD: A steady quiet rise through the day, initially dipping back from the opening 0.7610 levels to test the 0.7590 areas before starting the rise pushing through the Asian session to the 0.7630 level and then ranging through the day to the 0.7650 areas and holding the level eventually to the close.

Yesterday’s premiership results

EUR        German IFO – Business Climate Oct A 110.5 | C 109.5 | P 109.5

EUR        German IFO – Current Assessment Oct A 115 | C 114.8 | P 114.7

EUR        German IFO – Expectations Oct A 106.1 | C 104 | P 104.5

USD       House Price Index M/M Aug A 0.70% | C 0.50% | P 0.50%

USD       S&P/Case-Shiller Composite-20 Y/Y Aug A 5.10% | C 5.10% | P 5.02%

USD        Consumer Confidence Oct A 98.6 | C 101 | P 104.1 | R 103.5

Good Luck,

Andy

Any opinions, news, research, analyses, prices or other information contained on this Blog, whether by LMAX, its employees, partners or contributors, does not constitute investment advice nor has it been prepared in accordance with legal requirements designed to promote the independence of investment research. Further, the material contained within this Blog does not contain (and should not be construed as containing) investment advice or an investment recommendation, or an offer of, or solicitation for, a transaction in any financial instrument. Whilst information provided on this Blog may help with your investment research you must consider carefully whether you should make (or refrain from making) investment or other decisions based on what you see without doing further research on the investments you are interested in. Participating in this Blog cannot be a substitute for obtaining advice from an appropriate expert independent adviser who takes into account your circumstances and specific investment needs in selected investments that are appropriate for you. LMAX has not verified the accuracy or basis-in-fact of any claim or statement made by any third parties as comments for every Blog entry.

LMAX will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. No representation or warranty is given as to the accuracy or completeness of the above information. While the material produced in this Blog was obtained from sources deemed to be reliable, LMAX does not provide any guarantees about the reliability of such sources.

Consequently any person acting on it does so entirely at his or her own risk.

If you currently hold an account with LMAX for the purposes of trading FX and CFD’s, you are encouraged to use a different Username and Password to access the Blog or any other online systems. The Blog is a place to learn, discuss and share information and ideas with Blog followers. It is not a place to slander, use unacceptable language or to promote LMAX or any other FX, Spread Betting and CFD provider and any such postings, excessive or unjust comments and attacks will not be allowed and will be removed from the site immediately.