Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 104.154 | EURUSD 1.10554 | AUDUSD 0.76523 | NZDUSD 0.71568 | USDCAD 1.33891 | USDCHF 0.97538 | GBPUSD 1.22431 |

LMAX Highs and Lows 6am GMT

                                High | Low

EURUSD               1.10752 | 1.10493

USDJPY                 104.180 | 103.623

GBPUSD               1.22544 | 1.22211

USDCHF               0.97559 | 0.97271

AUDUSD              0.76607 | 0.76128

USDCAD               1.34019 | 1.33854

NZDUSD               0.72319 | 0.71817

EURCHF                1.07876 | 1.07689

EURGBP               0.90498 | 0.9024

EURJPY                 115.138 | 114.715

For Today

• EUR: A steady day through the Asian session, with reasonable volumes as the market adjusts to the day’s events, namely FOMC rate decision later today, opening around the 1.1055 levels and quietly pushing to above the 1.1070 levels late into the session before dipping a little as the market moved into the London session, several PMI numbers for the Euro area first up with quiet expectations and German unemployment numbers, Topside offers through the 1.1080 areas and those offers likely to continue through to the 1.1100 areas before weak stops appear and the market opening to the 1.1150 areas and stronger offers then making an appearance in the market and congestion from there through to 1.1250 areas. Downside bids light on a push back to the 1.1000 areas with bids likely to appear through that level on any dips to the 1.0950 and then a little movement available from there too the downside.
• JPY: The market opened around the 104.00 levels and then quietly started a slow drift through the session to the 103.70 levels before slowing the descent and ranging from the lows through to the 103.90 levels to the London session, with the market now a little flatter position wise as the market adjusts to the today’s events, Downside bids are likely to be stronger through the 103.00 levels with congestive bids on any move towards the 102.00 levels however, with expectations for no change the risk would therefore be a rise or comments thereof, Topside offers through the 104.00 levels are likely to be light with the bulk of offers likely to be from there onwards into the 105.00 levels as those that covered their positions reset with market likely to see stronger offers through the level.
• GBP: Mixed session for Cable with initial selling into the Tokyo session taking the Cable down towards the 1.2220 levels before rallying back through the opening 1.2245 areas and pushing towards the 1.2255 levels into the run to the London session. Topside offers into the 1.2280-1.2300 levels with a little congestion through the levels and stronger offers likely to appear around the 1.2350 levels, limited offers into the 1.2400 level and the market then opening to a larger move from there with the market pushing through a month’s highs available. Downside bids through to the 1.2100 areas are likely to strengthen on a move to the level with possibly strong bids remaining in the market on any dips through, a break through the 1.2050 level though could see some weakness suddenly appear and expose dips to the 1.1800 however, any weakness or strength is going to be USD related and less volatile.
• AUD: The Oz continued to readjust into the new session with the market falling back from the opening levels above the 0.7650 areas and holding steady around the 0.7640 level until fresh selling in AUDJPY saw the market pushing back to the 0.7615 areas into mid-session, topside offers into the 77 cent levels and then stronger offers likely to dominate the market through to the 0.7760 areas before weakness appears for a short period and stronger offers into the 0.7800. Downside bids light through the 76 cent level and then seeing stronger bids appearing on dips to the 0.7550 areas and likely to increase on a move through the 75 cent level.

Overnight News

NZD:

New Zealand Employment Growth Exceeds Population Increase

Fonterra Chairman Says Buyers Wary of Low Global Milk Production

AUD:

Australia Sept. Building Approvals Drop 8.7% M/M; Est. -3%

JPY:

Kuroda: Hard to Think of Buying Local Bonds as Policy Tool

Kuroda: Will Adjust Policy Appropriately to Keep Momentum

Japan Megabank to Focus Ex-U.K. Europe Ops at Amsterdam: Yomiuri

Shirai: BOJ to Maintain Status Quo on Policy Unless Yen Surges

CNY:

China Hopes Germany Can Treat Chinese Investors Fairly: Mofcom

Today’s data

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

NZD       Unemployment Rate Q3 A 4.90% | C 5.10% | P 5.10% | R 5.00%

NZD       Employment Change Q/Q Q3 A 1.40% | C 0.60% | P 2.40%

NZD       Labour Cost Private Sector Q/Q Q3 A 0.40% | C 0.40% | P 0.40%

JPY         Monetary Base Y/Y Oct A 22.10% | C 21.80% | P 22.70%

GBP       BRC Shop Price Index Y/Y Oct A -1.70% | P -1.80%

AUD       Building Approvals M/M Sep A -8.70% | C -2.80% | P -1.80%

NZD       RBNZ 2-Year Inflation Expectation Q4 A 1.70% | P 1.65%

JPY         Consumer Confidence Index Oct A 42.3 | C 42.8 | P 43

08:45     EUR        Italy Manufacturing PMI Oct C 51.5 | P 51

08:50     EUR        France Manufacturing PMI Oct (F) C 51.3 | P 51.3

08:55     EUR        German Unemployment Change Oct C 0K | P 1K

08:55     EUR        German Unemployment Rate Oct C 6.10% | P 6.10%

08:55     EUR        Germany Manufacturing PMI Oct (F) C 55.1 | P 55.1

09:00     EUR        Eurozone Manufacturing PMI Oct (F) C 55.3 | P 53.3

09:30     GBP       Construction PMI Oct C 51.9 | P 52.3

12:15     USD       ADP Employment Change Oct C 160K | P 154K

14:30     USD       Crude Oil Inventories P -0.6M

18:00     USD       FOMC Rate Decision C 0.50% | P 0.50%

Harry Hindsight              

• EUR: Election jitters and the upcoming FOMC saw the Euro rally from the lows in Asia, having opened around the 1.0980 levels Asia steadily sold the pair down to the 1.0960 levels and so it remained through the session and into London with better volume but a tight range, London started the buying and through the morning session the 1.1000 levels were gradually worn away and weak stops through the 1.1010 areas saw the market rise to the 1.1030 levels before starting the steady climb again into the NYK session to test to the 1.1070 levels late in the session, the close saw the market just short of those highs in quiet trading.
• GBP: A reasonably quiet Asian session saw the Cable drift from the opening 1.2240 levels and testing steadily to the 1.2210 levels, the market made steady headway back towards the opening levels and holding steady around the 1.2235 levels before moving into the grey hours and limited selling to push the market slightly lower into the London opening, London were quick buyers and the market quickly rose through the 1.2250 levels triggering weak stops on the move higher and pushing to the 1.2280 levels and the release of the Manufacturing PMI numbers and while not as good as expected still show some resilience to the foretold slow down the media and experts continue to tell is will happen, maybe in a couple years when we have left the Euro circus for good. The fall back was a little steadier than the rise and the market pushed back to the NYK opening around the 1.2250 levels before dipping to the lows again before trading choppily through the rest of the session with the market regaining the 1.2240 levels into the close.
• JPY: A quiet day through the Asian session with no change to the monetary policy and therefore little movement from then on, the market traded around the 104.80-90 levels for the most part, the move into the London session saw a weak attempt through the 105.00 levels pushing too the 105.10 level before drifting too the NYK session and the steady fall of the USD as the market rebalances for the FOMC, the market saw weak stops through the 104.50 levels and again through 104.00 with only limited impact to be fair and then finishing the day holding above the 104.00 areas.
• AUD: Opening quietly the market eased through to the RBA announcement holding the 76 cent level rising only slightly on the lead into the release, the market quickly rose from the 0.7620 levels to above the 0.7650 areas and ran into the London session holding that level before breaking through with weak stops taking the market to 0.7670 level and climbing through to the NYK session and the 0.7690 areas, the fall of the USDJPY saw AUDJPY moving in as the market adjusted to the weak USD and the Oz tumbled back to the 0.7650 levels and ranged around the level through to the close.

Yesterday’s premiership results

JPY         BoJ Monetary Policy Statement

CNY        Manufacturing PMI Oct A 51.2 | C 50.4 | P 50.4

CNY        Non-manufacturing PMI Oct A 54 | P 53.7

CNY        Caixin China PMI Manufacturing Oct A 51.2 | C 50 | P 50.1

AUD       RBA Rate Decision A 1.50% | C 1.50% | P 1.50%

CHF        Retail Sales (Real) Y/Y Sep A -2.30% | C -2.30% | P -3.00% | R -2.80%

CHF        SVME PMI Oct A 54.7 | C 53.9 | P 53.2

GBP       PMI Manufacturing Oct A 54.3 | C 54.6 | P 55.4

CAD       GDP M/M Aug A 0.20% | C 0.20% | P 0.50% | R 0.40%

USD       Construction Spending M/M Sep A -0.40% | C 0.50% | P -0.70%

USD       ISM Manufacturing Oct A 51.9 | C 51 | P 51.5

USD       ISM Prices Paid Oct A 54.5 | C 54 | P 53

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.