Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 104.483 | EURUSD 1.10408 | AUDUSD 0.77273 | NZDUSD 0.73248 | USDCAD 1.33632 | USDCHF 0.97425 | GBPUSD 1.23972 |

LMAX Highs and Lows 6am GMT

                                High | Low

EURUSD               1.10501 | 1.1030

USDJPY                 104.591 | 104.291

GBPUSD               1.24048 | 1.23856

USDCHF               0.97539 | 0.97406

AUDUSD              0.77247 | 0.7689

USDCAD               1.33911 | 1.33595

NZDUSD               0.73512 | 0.73184

EURCHF                1.07649 | 1.07522

EURGBP               0.89168 | 0.89021

EURJPY                 115.508 | 115.115

For Today

• EUR: A very quiet session today in front of the start to the US elections, some numbers out of Germany that may have some bearing on the day however, its likely to be a dull session until we start to see exit polls and then results hitting the wires. Opening around the 1.1045 levels the market drifted through the Tokyo session pushing down into the 1.1030 levels before rising again to the opening areas, Topside offers a little thin through to the 1.1100 levels with stronger offers likely through the level and into the 1.1140-60 levels and while there is a possibility of these levels being reached the congestion that would normally be in the area is likely to disappear as the market thins out in front of exit polls and opens the market to stronger pushes. Downside bids are likely to be very suspect with bids into the 1.1000 levels with light bids under the previous day’s lows increasing through the 1.1000 levels with particularly strong areas around the 1.0950 areas however, a break here is likely to open the market for a move below the 1.0900 levels, this is all of course before results start to appear in the market.
• GBP: Cable moved quietly through the session with very little in the range, moving from the opening around the 1.2395 level the market tested into the Tokyo session 1.2405 before steadily drifting back off to test below the 1.2390, that set the range for the most part and the Cable moves into the London session holding around the 1.2400 levels. Topside offers light through to the 1.2500 areas with a push through the 1.2550 areas likely to open the market to a bigger rise and the offers thinning until above the 1.2700 areas, downside bids a little better with the market congested from the 1.2300 levels some weak stops on a move through the level however, the market is likely to find some support around each sentimental levels this of course is dependent more on the US rumour mill than anything concrete, IP and MP numbers with GDP estimates late in the day however, unless there is any large changes these are likely to be moot with the backdrop of the US election.
• JPY: Nothing really in it with the market opening around the 104.50 areas and dipping through into the Tokyo session with the market eventually drifting to the 104.30 areas and apart from the pre-Tokyo market to trade close to the 104.60 levels, Topside offers light into the 105.00 areas with stronger offers likely through the 105.50 levels, a break here opens up the topside for a larger move with only light congestion possibly into the 107.00 levels, usual levels are possibly limited for the next 24hrs and the rumour mill could see movement through the day. Downside bids into the 103.00 levels increase as the market moves towards the 102.00 levels and while these are likely to be firmer than any of the topside offers they too are likely to be suspect on any strong exit polls or rumours.
• AUD: The Oz dipped from the opening around the 0.7720 levels with the market continuing the slow drift lower to the 0.7690 levels before holding round the 77 cent levels volumes have been very quiet through the session and one can only assume that the market is ready for any storm that may come its way. Topside offers remain into the 0.7740 levels and given that has been the resistance for 3 months or so it is still likely to hold plenty of interest, a break here though will see stops appearing and a quick run towards the 78 cent levels with possible congestion through into the 0.7850 areas before the market opens to the 80 cent level on a strong push. Downside bids light through the 76 cent levels with light bids likely through the 75 cent handle to a stronger 0.7520-0.7480 areas, a break here will see some congestion continuing however, the market is likely to be weak through the next big figure and a reaction to the US election.

Overnight News

JPY:

Aso Says FX Stability Is Important When Asked About U.S. Vote

CNY:

China Oct. Exports Fall 3.2% Y/y in Yuan; Est. -0.8%

China’s Oct. Exports Fall 7.3% Y/y in Dollar; Est. -6.0%

CNY/RUB:

China, Russia to Encourage Local-Currency Settlement in Trade

TRY:

Zeybekci Says Turkey Will Never Fall Into FX Intervention Trap

NZD:

Spencer Says RBNZ Developing New Oversight Framework for FMIs

AUD:

Australia ANZ Weekly Consumer Confidence Rises 3.2% to 117.8

Australia Oct. Business Confidence Falls 2 Pts M/m to 4

GBP:

U.K. LFL Oct. Retail Sales Up 1.7% Y/y, BRC Says

U.K. Demand for Staff at Highest Since May: Markkit/REC

Today’s data

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

GBP       BRC Retail Sales Monitor Y/Y Oct A 1.70% | P 0.40%

AUD       NAB Business Confidence Oct A 4 | P 6

CNY        Trade Balance (USD) Oct A 49.1B | C 51.9B | P 42.0B

CNY        Trade Balance (CNY) Oct A 325B | C 366B | P 278B

JPY         Leading Index Sep (P) A 100.5 | C 100.2 | P 100.9

6:45        CHF        Unemployment Rate Oct C 3.30% | P 3.20%

7:00        EUR        German Industrial Production M/M Sep C -0.40% | P 2.50%

7:00        EUR        German Trade Balance (EUR) Sep C 23.4B | P 22.2B

9:30        GBP       Industrial Production M/M Sep C 0.10% | P -0.40%

9:30        GBP       Industrial Production Y/Y Sep C 0.80% | P 0.70%

9:30        GBP       Manufacturing Production M/M Sep C 0.40% | P 0.20%

9:30        GBP       Manufacturing Production Y/Y Sep C -0.20% | P 0.50%

13:15     CAD       Housing Starts Oct C 195K | P 220.6K

13:30     CAD       Building Permits M/M Sep P 10.40%

15:00     GBP       NIESR GDP Estimate Oct  P 0.40%

Harry Hindsight              

• EUR: The USD opened stronger as the media reported the fact that there was no charges to be bought against Hillary Clinton over the email saga, with the Euro opening around the 1.1090 levels and then rising into the Tokyo opening to the 1.1110 levels however, the USD buying continued from the opening and the Euro pushed down to the 1.1070 levels before holding the levels into the London session, continuing selling through the session saw the market steadily decline through the day and while the volumes had been reasonable through the Asian session it dropped off through rest of the day with the move into the NYK session seeing the initial market stalled above the lows and holding deep into the session before it dropped again to the 1.1030 levels and slowing and holding, rising only a little into the 1.1040 for the close.
• GBP: Cable caught the same USD bid tone from the opening pushing to the highs just below 1.2500 levels before dropping back through the opening 1.2460 levels and then pushing through into the London session testing the 1.2420 levels, London opening continued the selling and the market pushed through the 1.2380 levels this however, was the base and the market moved off the level for the balance of the day with brief pushes to the 1.2440 levels but really contained in a quiet session to close just short of the 1.2400.
• JPY: Opening just below the 104.00 the market pushed quickly to the 104.40 areas before slipping back to the opening areas only to start a more steady climb back through the levels and move into the London session testing the 104.60 levels, the market then for the rest of the session remained in a tight range basing off the 104.40 for the most part and unable to really push through the 104.60 levels.
• AUD: One of the only currencies that did not open with a gap and the market dipped from the opening around the 0.7680 levels back to 0.7660, the move through the Asian session was quiet and ranged from the recovered 0.7685 areas to 0.7675 through into the London session, the highs were extended as the market moved through towards the NYK opening, the Oz started a steady rise through the NYK opening and pushed steadily through the 77 cent levels stalling for a brief period before continuing a slow rise to the close testing the 0.7730 levels.

Yesterday’s premiership results

JPY         BoJ Minutes

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

EUR        German Factory Orders M/M Sep A -0.60% | C 0.20% | P 1.00% | R 0.90%

CHF        Foreign Currency Reserves Oct A 630B | P 628B

CHF        CPI M/M Oct A 0.10% | C 0.20% | P 0.10%

CHF        CPI Y/Y Oct A -0.20% | P -0.20%

EUR        Eurozone Retail PMI Oct A 48.6 | P 49.6

EUR        Eurozone Sentix Investor Confidence Nov A 13.1 | C 8.7 | P 8.5

EUR        Eurozone Retail Sales M/M Sep A -0.20% | C -0.30% | P -0.10% | R -0.20%

USD       Labour Market Conditions Index Change Oct P -2.2

Good Luck,

Andy

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