Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 103.113 | EURUSD 1.11403 | AUDUSD 0.76742 | NZDUSD 0.73275 | USDCAD 1.34025 | USDCHF 0.9682 | GBPUSD 1.25191 |

 

LMAX Ranges 6am London time

Highs    Lows

EURUSD               1.11300 | 1.10670

USDJPY                 104.572 | 103.356

GBPUSD               1.25030 | 1.24232

USDCHF               0.97763 | 0.97297

AUDUSD              0.76845 | 0.76608

USDCAD               1.33947 | 1.33440

NZDUSD               0.73408 | 0.73026

EURCHF                1.08302 | 1.07966

EURGBP               0.89089 | 0.88857

EURJPY                 115.927 | 114.900

For today

• EUR: With the FBI investigation out of the way for the moment and nothing to answer to the Euro opened lower and then made an attempt to close the gap on the charts with a push from the opening 1.1080 levels to test to the 1.1110 levels into the Tokyo session however, it was never able to make it to Fridays opening so that gap remains open as the Euro fell steadily back once the Tokyo session had entered the market and the US election bites took over, trading back to the 1.1070 levels into the grey hours the market holds briefly as we wait for London to enter the fray. Topside offers through the 1.1140 levels with congestive offers continuing through to the 1.1200 areas and likely to be stronger and more congestive above there with limited data for the day. Downside bids light through to the 1.1050 areas with limited bids into the area and then the market again opening to test through the 1.1000 levels and the stronger 1.0950 level.
• GBP: With a pattern almost the same as the USD dominates the market and the voting gets closer the market initially opened around the 1.2460 areas and then into the Tokyo opening pushed back towards the 1.2500 levels never quiet reaching before spending the rest of the day sliding lower to push through the 1.2450 areas into the late session and holding the 1.2440 levels into the grey hours, Topside offers light through to the 1.2550 areas, with possibly a little stronger offers showing having failed there once however, the market could well push through the level with some stops appearing and there is little in the way for it to test strongly higher if the news or momentum appeared. Downside bids light through the 1.2400 levels with weak stops possibly showing on a move back through the level and a quick move to the stronger 1.2300 levels with congestive bids from then on.
• JPY: A stronger USD on the opening with the USDJPY opening around the 103.90 levels and quickly rising towards the 104.50 levels into the opening in Japan, the market corrected a little with the USDJPY slipping back through the early part of the session with little support having made the early move however, the market was unable to push through the opening levels and after a short period started a steady climb higher to test to the 104.60 areas late in the session before holding steady around 104.40 into the grey hours, topside offers likely to be light through to the 105.00 levels with the offers increasing again through the level into the 105.40-60 areas for the moment a push through the level will likely see some weak stops and a quick move to the 106.00 areas with offers slightly in front of the level and better stops likely through the level. Downside bids light through to the 104.00 areas with stronger bids just below the level however, the bulk of the bids for the moment are possibly below the 103.00 areas and running from the 102.50 areas.
• AUD: The Oz opened in line with Fridays close and traded from the opening quickly lower as the USD caught up with the premarket move in the other pairs, Oz traded back to the 0.7660 areas before starting a steady climb back to the opening 0.7675 levels and testing through briefly to the 0.7685 areas, while the market has seen reasonable volume through the day the Oz became mired in the 0.7670-85 levels for the session and moved into the grey hours in mid range. Topside offers through the 77 cent levels and likely to increase the closer you get to the 0.7740 areas where the market has repeatedly failed a push through the 0.7760 levels will likely see stops appear and the market quickly moving towards the 78 cent level and some stronger offers behind that level. Downside bids into the 76 cent areas are likely to be light with the stronger bids moving in on a move through the 0.7560-40 levels with weak stops likely to appear and stronger bids thereafter.

Overnight News                                                                  

USD:

FBI Says Its Conclusions on Clinton’s E-Mails ‘Not Changed’

CNY:

China Names Xiao Jie Finance Minister to Replace Lou Jiwei

China Banks May Face 4.9t Yuan Loss Over Zombie Companies: HKET

CNY/USD:

China May Let Wall Street Banks Run Own Mainland Units, WSJ Says

JPY:

Asakawa: If We See Speculative Movements in FX, May Have to Act

Asakawa: Worried About Excessive FX Volatility After US Election

Asakawa: Wage Increases Important to Success of Abenomics

Many BOJ Members: New Framework to Enhance Sustainability

Japan to Expand Tax Break for SMEs That Raise Wages: Yomiuri

Japan’s Sept. Cash Earnings Rise 0.2%; Est. +0.2%

NZD:

New Zealand Corrects Third-Quarter Inflation Data Upwards

AUD:

Australia ANZ Oct. Job Advertisements Rise 1% M/m

Australia’s Oct. Construction Index Falls 5.5 Pts M/m to 45.9

Today’s data

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

JPY         BoJ Minutes

JPY         Labour Cash Earnings Y/Y Sep A 0.20% | C 0.20% | P -0.10% | R 0.00%

07:00     EUR        German Factory Orders M/M Sep C 0.20% | P 1.00%

08:00     CHF        Foreign Currency Reserves Oct P 628B

08:15     CHF        CPI M/M Oct C 0.20% | P 0.10%

08:15     CHF        CPI Y/Y Oct P -0.20%

09:10     EUR        Eurozone Retail PMI Oct P 49.6

09:30     EUR        Eurozone Sentix Investor Confidence Nov C 8.7 | P 8.5

10:00     EUR        Eurozone Retail Sales M/M Sep C -0.30% | P -0.10%

15:00     USD       Labor Market Conditions Index Change Oct P -2.2

Weekend News

USD:

Trump Rushed From Stage in Reno as Clinton Allies Mobilize
Clinton Will Make Another Michigan Stop to Shore Up Position
Clinton Leads Trump 48% to 43%: ABC News/Washington Post Poll
Clinton at 44%, Trump at 43% in McClatchy-Marist Election Poll
CNY:

China’s Monetary Policy Is ‘Prudent’, Prime Minister Li Says
CNY/HKD:

China to Make Interpretation on Hong Kong Law, Xinhua Reports
EUR:

Tsipras Reshuffles Greek Cabinet Ahead of Bailout Review
Juncker Says Wallonia Exposed Serious EU Governance Problem: Soir
EU’s Juncker Says He Was ‘Shocked’ by Oettinger’s Comments: Soir
GBP:

U.K.’s May Writes in Telegraph Brexit Critics Should Accept Vote
U.K. Companies See Faster Growth Before Brexit Slowdown: CBI
JPY/INR:

Japan to Pitch Bullet Trains For India Rail Project: Nikkei Says
GBP/INR:

May Flies to India to Prepare Ground for Post-Brexit Trade Deal
EUR/TRY:

Juncker: Turkey Must Meet All Benchmarks for Visa Waiver: Soir
HUF:

Hungary’s Ratings Raised to Investment Grade by Moody’s
Hungary Sees Public Debt/GDP Dropping Further This Year: Varga
HKD:

Hong Kong’s Tsang Says Cooling Property Measures ‘Appropriate’
RUB/CNY:

Russia’s Medvedev, China’s Li to Hold Oil, Gas Talks: Prikhodko
IDR/CNY: Indonesia’s Widodo Tells China No Compromise on Sovereignty
AUD/IDR: Australia’s Turnbull Says Jokowi’s Visit to Be Rescheduled

Harry Hindsight

• EUR: With the UK court case about legality of PM May issuing article 50 without parliamentary approval and the US election and FBI/Clinton emails floating around the day was dominated as with much of the week, Eurozone PPI improved for the month helping the market in Euro a little higher having opened around the 1.1105 areas and drifted through the Asian session to hold the 1.1090 levels through into the London session pushing back to the opening, with the release the market straddled the 1.1100 areas through to the NYK session with the market edging higher into the US numbers to test to the 1.1115 levels before dropping back with the better numbers with NFP higher than expected and a strong revision of the previous month however, from the Euro lows into the 1.1080’s the market saw a steady climb higher with voting again playing its part in the US and the Euro pushed through the 1.1120 levels to finish the day around the 1.1140 levels.
• GBP: Opening around the 1.2460 levels the market pushed a little higher on the move into the Tokyo session pushing the 1.2480 levels and holding in a tight range for several hours before drifting into the London session back to the opening levels dipping slightly to test the 1.2450 level just before the open in London, a gradual move higher through the session saw the market testing the 1.2500 levels as the NYK session, initial dip into the numbers with better numbers showing before the election story again took over the market, and while its all going to be moot in a couple of days’ time the USD saw some choppiness in the market and Cable pushed through the 1.2550 before slipping back as the London session squared up before the end of the day leaving the market to run quietly to the close holding above the 1.2500 levels.
• JPY: USDJPY saw little movement with the day range bound holding the 102.80 downside and unable to push above the 103.40 levels, early Tokyo tested the downside holding the 102.80’s for several hours before moving back above the 103.00 level and pushing into the London session to set the highs however, for the rest of the day the market did very little with the market holding around the 103.00 levels for the most part to the close.
• AUD: As with the USDJPY the Oz was caught in a tight range through the day with a little more chop to the movement but nonetheless unable to push the early highs above the 0.7695 levels and then trading down to the 0.7650 level on the NYK opening to set the low and Finishing the day little changed around the 0.7675-80 areas.

Friday’s premiership results

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

AUD       RBA Statement on Monetary Policy

AUD       Retail Sales M/M Sep A 0.60% | C 0.40% | P 0.40% | R 0.50%

EUR        Italy Services PMI Oct A 51 | C 51.6 | P 50.7

EUR        France Services PMI Oct (F) A 51.4 | C 52.1 | P 52.1

EUR        Germany Services PMI Oct (F) A 54.2 | C 54.1 | P 54.1

EUR        Eurozone Services PMI Oct (F) A 52.8 | C 53.5 | P 53.5

EUR        Eurozone PPI M/M Sep A 0.10% | C 0.00% | P -0.20%

EUR        Eurozone PPI Y/Y Sep A -1.50% | C -1.80% | P -2.10% | R -1.90%

USD       Trade Balance Sep A -36.4B | C -39.2B | P -40.7B | R -40.5B

USD       Change in Non-farm Payrolls Oct A 161K | C 150K | P 156K | R 191K

USD       Unemployment Rate Oct A 4.90% | C 4.90% | P 5.00%

USD       Average Hourly Earnings M/M Oct A 0.40% | C 0.30% | P 0.20%

CAD       International Merchandise Trade (CAD) Sep A -4.1B | C -1.7B | P -1.9B | R -2.0B

CAD       Net Change in Employment Oct A 43.9K | C -10.0K | P 67.2k

CAD       Unemployment Rate Oct A 7.00% | C 7.00% | P 7.00%

CAD       Ivey PMI Oct A 59.7 | C 56.2 | R 58.4

Stay lucky

Andy

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