Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 103.303 | EURUSD 1.10978 | AUDUSD 0.76611 | NZDUSD 0.73025 | USDCAD 1.33924 | USDCHF 0.97326 | GBPUSD 1.23038 |

LMAX Highs and Lows 6am GMT

                                High | Low

EURUSD               1.11260 | 1.10917

USDJPY                 103.447 | 102.544

GBPUSD               1.23417 | 1.22982

USDCHF               0.97346 | 0.96962

AUDUSD              0.76830 | 0.76377

USDCAD               1.34010 | 1.33705

NZDUSD               0.73104 | 0.72784

EURCHF                1.08029 | 1.07846

EURGBP               0.90240 | 0.90058

EURJPY                 114.766 | 114.021

For Today

• EUR: With the topside a little open and looking attractive the market moved from the opening levels and pushed steadily through to the 1.1125 levels before stalling and drifting a little in the move towards the London session, Topside offers increase on a move towards the 1.1150 levels and are likely to dominate the next big figure with possibly larger offers around the 1.1200 levels and then 1.1250 before stops are likely to appear even then the topside is likely to remain stiff with resistance. Downside bids light through the 1.1100 areas with only limited bids to the 1.1080 areas and then the market likely to see weak stops and opening for a retest of the 1.1000 levels and stronger bids below the level.
• GBP: Limited gains for the Cable with the market opening around the 1.2300 levels and then heading quietly into the Tokyo session before rising quietly to the 1.2320 levels and then drifting higher from then for the session to test the 1.2340 levels and holding in a quiet range from then onwards with the market moving along the 1.2330 level into London. Lighter offers on a push through the 1.2350 levels will allow the market to push towards the stronger offers around the 1.2400 areas, with some weak congestion around the 1.2450 levels with weakness likely to appear as the market pushes through the 1.2500 areas with likely stops appearing and a possible free move to the 1.2600 levels and onwards. Downside bids light through to the 1.2200 levels with the level possibly seeing bids moving up from lower down a push through the level too quickly will possibly see a quick revisit to the lows of last month however, for the moment the focus is on the USD and not GBP.
• JPY: A quiet move into the Tokyo session saw the full weight of the retail market selling quickly just after the opening and testing through the 103.00 levels no real stops to show and the market steadily hit the 102.60 levels before finding better bids and eventually pushing back to the 102.80 areas as the market moves into the London session, Topside offers weak until the 104.00 levels and then some resistance to further moves higher with possible weak stops on a move through the 104.20 levels before stronger offers appear through the 104.50 areas, from there the market is likely to struggle with strong offers through to the 105.00 levels. Downside bids into the 102.60-40 areas with possible light stops on a move through the area and then reasonable bids appearing into 102.00 with stronger bids then on any dips through the level and into the 101.50-00 areas.
• AUD: Opening around the 0.7660 levels the market gyrated through the session with a better than expected Trade balance deficit however, it was still a deficit and the market initially pushed off the 0.7650 lows and tested above the 0.7680 levels before falling sharply back as the market realised this to touch through the 0.7640 and the range was defined for the day bouncing off the lows to trade around the 0.7670 areas to hold into the London session, Topside offers likely to be reasonably strong into the 77 cent levels with a move through the level seeing stronger offers appearing on a move towards the 0.7740-60 levels with several months of selling in the area topping the market, a break through the 0.7760 levels will likely see weak stops and breakout stops appearing and the market quickly challenging the 78 cent levels and beyond. Downside bids into the 76 cent levels are likely not particularly strong however, the last few month have seen congestion building through the level and the market really needs to push beyond the 0.7500 areas to trigger any weakness.

Overnight News

CNY:

Caixin China Oct. Services PMI 52.4 vs 52 in Sept.

Caixin China Oct. Composite PMI 52.9 vs 51.4 in Sept.

USD/JPY:

U.S. naval base in western Japan on lockdown after reported shots

JPY:

Japan’s Ruling Bloc Drops Plan for Friday Trade Vote: Jiji

Japanese Favour Constitution Change over Status Quo: Nikkei Poll

AUD:

Australia Sept. Trade Deficit A$1.23b; Est. A$1.7b Deficit

Australia Oct. Services Index Rises 1.6 Pts M/m to 50.5

NZD:

English Says Financial Stability Risk Being Well Managed by RBNZ

SGD:

Nikkei Singapore Oct. Whole Economy PMI 50.5 vs 52.9 in Sept.

HKD:

Nikkei Hong Kong Oct. Whole Economy PMI 48.2 vs 49.3 in Sept.

Today’s data

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

AUD       Trade Balance (AUD) Sep A -1.23B | C -1.71B | P -2.01B | R -1.89B

CNY        Caixin China PMI Services Oct A 52.4 | C 52.5 | P 52

06:45     CHF        SECO Consumer Confidence Oct C -13 | P -15

09:00     EUR        ECB Monthly Bulletin

09:30     GBP       Services PMI Oct C 52.5 | P 52.6

10:00     EUR        Eurozone Unemployment Rate Sep C 10.00% | P 10.10%

11:30     USD       Challenger Job Cuts Y/Y Oct P -24.70%

12:00     GBP       BoE Rate Decision C 0.25% | P 0.25%

12:00     GBP       BoE Asset Purchase Target C 435B | P 435B

12:00     GBP       MPC Official Bank Rate Votes C 0–0—9 | P 0–0–9

12:00     GBP       MPC Asset Purchase Facility Votes C 0–0—9 | P 0–0–9

12:00     GBP       BoE Inflation Report

12:30     USD       Non-Farm Productivity Q3 (P) C 1.70% | P -0.60%

12:30     USD       Unit Labour Costs Q3 (P) C 1.50% | P 4.30%

12:30     USD       Initial Jobless Claims (OCT 29) P 258K

14:00     USD       ISM Non-Manufacturing Composite Oct C 56 | P 57.1

14:00     USD       Factory Orders Sep C 0.20% | P 0.20%

14:30     USD       Natural Gas Storage P 73B

Harry Hindsight              

• EUR: Opening around the 1.1060 levels the market struggled through into the opening in Tokyo testing down to the 1.1050 levels before rising steadily higher as the USD weakened through the session with the market testing to the 1.1075 levels just before the Europeans entered the fray, the move into London again saw the USD under pressure and the Euro quickly pushed through to test the 1.1100 areas before drifting through into the NYK session ranging between the 1.1080-1.1100 levels, mixed PMI results did nothing for the market with the Eurozone dipping again and showing very little gain on the previous month and well below expectations, early employment change fell short of expectations and again we saw the USD under pressure and the Euro pushing beyond the 1.1100 areas and rising to test through the 1.1120 levels before running out of steam and then a short run to the FOMC release, a little bit of movement around the number with the result as expected before settling back to hold just below the figure area to the close.
• GBP: Cable saw limited movement through the Asian session, opening around the 1.2245 levels and then dipped back into the 1.2220 areas and then slowly recovered through the balance of the session pushing through to the 1.2250 areas for the move into London, pushing through the highs and too the 1.2280 levels with light stops going on the rise, the market then held through to the pre NYK period before another leap higher pushing quickly through the 1.2300 triggering some further weak stops on the move through to test briefly to above the 1.2350 levels before settling back and hold through to the close, trading around the 1.2300 levels.
• JPY: With the USD falling back in the past 24hrs the market moved into the new session continuing that drift with the market opening around the 104.10 levels and pushing through the 104. Levels as the market moved into the Tokyo session, trading around the 103.80 levels for the bulk of the Asian session before drifting off through the 103.50 levels into the London session and holding the 103.10-20 levels on the move into the NYK session and struggling to move back to 103.40 into the late post FOMC period.
• AUD: Moving through into the Asian session holding around the 0.7650 levels the market initially saw steady selling as the AUDJPY cross came under pressure with strength in the JPY against the USD as well as the Oz, the market quickly pushed to the 0.7615 levels before finding limited support once the adjustments for the day were over with and a steady rise higher for the Oz as the weak USD started to take precedence over the cross selling, the move into the London session saw the market recapturing most of its losses and into the mid part of the London session was already pushing through the opening levels in a quiet move into the NYK session holding the 0.7675 levels, post FOMC the market drifted back a little and finished the day around the 0.7660 areas in quiet trading.

Yesterday’s premiership results

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

EUR        Italy Manufacturing PMI Oct A 50.9 | C 51.5 | P 51

EUR        France Manufacturing PMI Oct (F) A 51.8 | C 51.3 | P 51.3

EUR        German Unemployment Change Oct A -13K | C 0 | P 1K

EUR        German Unemployment Rate Oct A 6.00% | C 6.10% | P 6.10%

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

EUR        Eurozone Manufacturing PMI Oct (F) A 53.5 | C 55.3 | P 53.3

GBP       Construction PMI Oct A 52.6 | C 51.9 | P 52.3

USD       ADP Employment Change Oct A 147K | C 160K | P 154K | R 202K

USD       Crude Oil Inventories A 14.4M | C 1.6M | P -0.6M

USD       FOMC Rate Decision A 0.50% | C 0.50% | P 0.50%

Good Luck,

Andy

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