Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 106.664 | EURUSD 1.08566 | AUDUSD 0.75468 | NZDUSD 0.71156 | USDCAD 1.35403 | USDCHF 0.98811 | GBPUSD 1.26082 |

 

LMAX Ranges 6am London time

Highs    Lows

EURUSD               1.08425 | 1.07725

USDJPY                 107.636 | 106.733

GBPUSD               1.26002 | 1.25089

USDCHF               0.99380 | 0.98837

AUDUSD              0.75614 | 0.75237

USDCAD               1.35638 | 1.35097

NZDUSD               0.71452 | 0.70752

EURCHF                1.07183 | 1.07011

EURGBP               0.86252 | 0.85807

EURJPY                 116.162 | 115.548

For today

• EUR: Opening at the bottom of Fridays range the market traded around the 1.0840 levels and as the Tokyo traders moved into the market it dropped back through the 1.0800 levels to test into the 1.0770 areas before slowly pushing back above the 1.0800 level, the market saw reasonable volumes through the early part of the session however, the Tokyo Lunch the sellers in Euro reappeared and the market again tested towards the lows before holding around the 1.0780 levels through into the grey hours, Topside offers light through the 1.0840 levels with a little more resistance to the 1.0860 area but still limited until the market tests above the 1.0900 levels with better offers likely into the 1.0940 levels with a mix of stops just before, a push through will leave the 1.1000 areas vulnerable to a rising market. Downside bids light through the current lows with weak stops likely on a break of the 1.0740 areas and the 1.0700 levels possibly weak to a stronger probe lower.
• GBP: The USD opened higher as concern about the EU payments raises its head before Brexit is dealt with the current levels of payments having of course risen with the weakness of the GBP since the referendum and likely to cause a little bit of a hole in the Government’s finances and possibly a good a reason as any for Article 50 to be delivered quickly with the difference in rates meaning a possible €2.5B difference in payments. Opening around the 1.2580 levels early buying was unable to push through the 1.2600 levels and the market drifted into the Tokyo session trading down through the 1.2520 levels in a fairly active market for Cable in Asia, the lows were short lived and the market soon tested back to the opening levels and then ranged around the 1.2560 levels through to the grey hours after Moody’s raises growth expectations for the UK, Weak offers through the 1.2600 levels with historical 1.2630 areas breached on Friday the topside is more sentimental than anything else and the offers are likely to be light through to the 1.2800 areas. Downside bids light through to the 1.2520 levels with only slightly stronger bids around the level before weak stops appear and the market sees possibly the stronger 1.2400 levels of being more supportive importance on the move higher.
• JPY: USD opened slightly stronger with the USDJPY holding around the 106.80 levels through into the Tokyo session, pushing quickly into the session to trigger weak stops and running quickly to the 107.30 levels with a better GDP numbers did little for the market and just the growing US yields helping the USD higher, the market held the 107.40-50 areas for the most part eventually entering the grey hours holding the 107.50. A strong push the current highs will likely see the market pushing through to the 108.00 levels and more of a sentimental level than particularly strong in offers a break through the level will see limited congestion through to the 109.00 levels and then stronger congestion moving along. Downside bids light through the 106.00 levels with better bids on a dip through the 105.00 levels and then becoming stronger on a dip lower.
• AUD: Very quiet through the session with the market opening around the 0.7545 levels and pushing through to the 0.7560 areas before seeing USD buying forcing the Oz back into the 0.7520’s before recovering and holding in mid-range for the most of the day. Downside bids through the 75 cent levels likely to become stronger on any push through the 0.7450 areas before weak stops appear on any move to the 0.7400 levels. Topside offers weak through to the 77 cent levels and increasing on a move above the 0.7750 areas.

Overnight News                                                                  

JPY:

Kuroda Says BOJ Has Great Interest in FX Market Moves

Kuroda Says Paying Close Attention to Spring Wage Negotiations

Japan 3Q GDP Rose Annualized 2.2% Q/q; Est. +0.8%

Kuroda: Public Need to Experience Inflation Above 2% Target

JPY/USD:

Abe: Want to Discuss Thinking over Free Trade With Trump

CNY/USD:

Xi Says Cooperation Is ‘Only Choice’ in Call with Trump: CCTV

CNY:

China Oct. Industrial Output Rises 6.1%; Est. 6.2%

China Jan.-Oct. Property Development Investment Rises 6.6%

China’s Economic Fundamentals to Support Yuan Rate: Sec. Journal

China’s Monetary Policy to Be More Focused on Balance: News

NZD:

Key Sees N.Z. Earthquake Damage Bill at a ‘Couple of Billion’

EUR/USD:

Mogherini Says EU Wants Strong Partnership with Trump Government

GBP:

U.K. November House Prices Fall 1.1% M/m, Rightmove Says

Moody’s Revises 2017 Growth Forecast Lower on Uncertainty Effect having revised current levels higher

Today’s data

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

JPY         GDP Q/Q Q3 (P) A 0.50% | C 0.20% | P 0.20%

JPY         GDP Deflator Y/Y Q3 (P) A -0.10% | C 0.30% | P 0.70%

CNY        Industrial Production Y/Y Oct A 6.10% | C 6.20% | P 6.10%

CNY        Retail Sales Y/Y Oct A 10.00% | C 10.70% | P 10.70%

CNY        Fixed Assets Ex Rural YTD Y/Y Oct A 8.30% | C 8.20% | P 8.20%

JPY         Industrial Production M/M Sep (F) A 0.60% | C 0.00% | P 0.00%

08:15     CHF        Producer & Import Prices M/M Oct C 0.20% | P 0.30%

08:15     CHF        Producer & Import Prices Y/Y Oct P -0.10%

10:00     EUR        Eurozone Industrial Production M/M Sep C -0.90% | P 1.60%

Weekend News

USD:

Trump Now Wants to Keep Popular Obamacare Provisions, Scrap Rest
Trump Adviser Takes Aim at Conservatives’ Budgetary Restraint
Fed to Retain Independence under Trump Presidency, Adviser Says
Obama Defends EU, NATO, amid doubts about Trump’s Intentions
JPY/USD:

Vital to Build Trust with Trump, Japan’s Kishida Says
JPY:

Japanese Listed Cos.’ Combined Annual Profit Seen Rising: Nikkei
JPY/AUD:

Meiji Yasuda Life to Acquire ANZ’s Insurance Unit, Sankei Says
CNY/USD:

China’s U.S. Envoy Confident of Cooperation w/ Trump Government
CNY/EUR:

China Says Concerned About EU ‘Trade Protectionism’ in Steel
INR/JPY:

India, Japan Ink Accord to Cooperate on Civil Nuclear Power
SGD/IDR:

Singapore, Indonesia to Ink Tourism MOU, Open Industrial Park
EUR:

Potential IMF Aid for Greece Less Than EU10 Billion: Spiegel
USD/AUD:

U.S. to Consider Taking Australia’s Asylum Seekers, Kerry Says
TRY:

Turkey’s Kurtulmus Sees ‘Chance for Syria Solution’ With Trump

Harry Hindsight

• EUR: Early trading saw steady sideways trading before some cross buying moved in to take the market off the lows to push through to the 1.0920 levels and the highs for the day, the move into the London session saw decent volumes through into London and the market held the 1.0910 areas, an unchanged CPI number was sufficient to upset the market and the market again saw selling moving in and the Euro’s quickly pushed through the 1.0900 levels and held into the 1.0860 levels recovering into the opening in NYK and a quick push to the highs again before seeing steady selling back through the lows and holding the 1.0830 levels and finishing around the 1.0860 levels.
• GBP: Cable struggled through the Asian session moving from the 1.2550 areas testing to the 1.2520 areas before recovering in the early part of the Tokyo session and holding around the 1.2560 levels through into the London session, strains possibly building between Europe and the US seemed to be a little premature at best however, the European politicians of course rise up to the media to make fools of themselves, the Rhetoric from them hasn’t been lost on the market and Euro again came under pressure with EURGBP again seeing strong selling and this helped the Cable to rally through the 1.2600 levels triggering some stops and opening up another leg higher pushing to the 1.2670 areas before running out of steam as the market moved into the NYK session, NYK sold on the better than expected Michigan number and for the first time in the day GBP actually disengaged from the USD and slowed its ascent and dipped back towards the opening levels before finishing the day holding the 1.2600 levels to the close.
• JPY: USDJPY ranged through the day unable to push through to the 107 level and limited to the downside, opening around the 106.80 levels the market drifted a little lower through the early part of Tokyo to hold in the 106.40-60 areas into the London session, initially pushing back towards the highs the market then started to drift lower more because of cross movements in EURGBP than anything else with Cable pushing higher and an opportunity for some profit taking in the GBPJPY cross however, the USDJPY was unable to push through the 106.00 levels and the steady climb back towards the opening levels saw the market just a little lower than the opening.
• AUD: The Oz moved through the Asian session trading around the 76 cent levels initially testing too the 0.7570 areas before rebounding and pushing back towards the 0.7630 levels, the move into the London session saw some early selling setting the tone and the range from Asia continued through to the NYK session, strong Oz selling from the opening saw the market pushing quickly through the lows triggering light stops on a move to the 0.7530 levels before ranging through the to the close around the 0.7550 levels.

Friday’s premiership results

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

NZD       Business NZ Manufacturing Index Oct A 55.2 | P 57.7 | R 57.5

JPY         Domestic CGPI Y/Y Oct A -2.70% | C -2.60% | P -3.20%

JPY         Tertiary Industry Index M/M Sep A -0.10% | C -0.20% | P 0.00%

EUR        German CPI M/M Oct (F) A 0.20% | C 0.20% | P 0.20%

EUR        German CPI Y/Y Oct (F) A 0.80% | C 0.80% | P 0.80%

GBP       Construction Output M/M Sep A 0.30% | C 0.20% | P -1.50% | R -1.10%

USD       U. of Michigan Confidence Nov (P) A 91.6 | C 87 | P 87.2

Stay lucky

Andy

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