Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 109.076 | EURUSD 1.0691 | AUDUSD 0.74808 | NZDUSD 0.70822 | USDCAD 1.34466 | USDCHF 1.00193 | GBPUSD 1.24429 |

LMAX Highs and Lows 6am GMT

                                High | Low

EURUSD               1.07146 | 1.06891

USDJPY                 109.285 | 108.55

GBPUSD               1.24572 | 1.2409

USDCHF               1.00234 | 1.0001

AUDUSD              0.75024 | 0.74668

USDCAD               1.34454 | 1.34201

NZDUSD               0.71075 | 0.70756

EURCHF                1.07223 | 1.06983

EURGBP               0.86254 | 0.85908

EURJPY                 116.860 | 116.256

For Today

• EUR: A quiet session with the market moving around the 1.0700 levels unable to push much beyond the 1.0710 levels and holding above the 1.0690 levels, Topside offers light through the 1.0730 areas with offers likely to increase on a move to the 1.0760 areas with weak stops likely through the level opening weak offers through the 1.0800 area with stronger offers not likely towards the 1.0900 levels. Downside bids into the 1.0650 areas with some dated congestion through the levels but opening the downside potential to the 1.05 levels and the lows of 2015 becoming open. Eurozone CPI of note today with US CPI and initial claims later in the day.
• GBP: Opening around the 1.2440 levels the market moved slightly above the 1.2550 areas before slipping back into the Tokyo session to trade through the first half of the session around the 1.2420 levels but holding the 1.2410 areas before recovering a little into the grey hours. Topside offers into the 1.2500 levels with weak stops likely on a push through the 1.2520-30 areas and the market possibly seeing weak offers through to the 1.2600 levels and stronger offers from there. Downside bids into the 1.2400 levels and likely to run through to the 1.2350 areas with weak stops likely to appear on a break through the level and opening a test back towards the 1.2250 areas.
• JPY: Testing lower from the opening the market moved to the 108.60 levels before recovering a little into the Tokyo opening, fixing supply saw the market test the lows once more before bouncing back quickly and catching the market a little short to spike to the 109.30 levels before ranging through the day around the 109.00 levels moving gradually to test towards the 109.20 area into the grey hours. Topside offers light through to the 109.70 areas and larger offers likely to be building through to the 110.00 levels and congestion through the level. Downside bids light through to the 108.60 areas however, a push through the 108.40 will likely see weak stops appearing and the market the struggling with weakness down to the 107.00-20 areas.
• AUD: Movement around the employment numbers saw the market moving from the opening levels to test briefly above 75 cents on knee jerk reaction before falling back to test the 0.7470 level as the market absorbed the revisionary number rather than the headline number with the market then holding around the 0.7480 through to the grey hours in very quiet trading. Topside offers light through the 75 cent levels with possible weak stops above the level and onwards and the market seeing limited resistance to the 0.7530 level, a push through the level will see congestion in the mid 0.75 handle with the market likely to struggle on any rise to the 76 cents level. Downside bids into the 0.7450 areas likely to be strong with weak stops on a move through that level, then light congestive bids through to the 73 cent only.

Overnight News

USD:

Trump transition team gives detailed update amid infighting

JPY:

Abe seeks to charm Japan bashing Trump in NYK meeting

AUD:

Employment gains below expectations and previous month revised sharply worse.

Today’s data

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

AUD       Employment Change Oct A 9.8K | C 20.0K | P -9.8K | R -29.0K

AUD       Unemployment Rate Oct A 5.60% | C 5.60% | P 5.60%

09:30     GBP       Retail Sales M/M Oct C 0.40% | P 0.00%

10:00     EUR        Eurozone CPI M/M Oct C 0.30% | P 0.40%

10:00     EUR        Eurozone CPI Y/Y Oct (F) C 0.50% | P 0.50%

10:00     EUR        Eurozone CPI – Core Y/Y Oct (F) C 0.80% | P 0.80%

13:30     CAD       International Securities Transactions (CAD) Sep P 12.74B

13:30     USD       Housing Starts Oct C 1.151M | P 1.047M

13:30     USD       Building Permits Oct C 1.200M | P 1.225M

13:30     USD       CPI M/M Oct C 0.40% | P 0.30%

13:30     USD       CPI Y/Y Oct C 1.60% | P 1.50%

13:30     USD       CPI Core M/M Oct C 0.20% | P 0.10%

13:30     USD       CPI Core Y/Y Oct C 2.20% | P 2.20%

13:30     USD       Initial Jobless Claims (NOV 12) C 259K | P 254K

13:30     USD       Philly Fed Survey Nov C 8 | P 9.7

15:30     USD       Natural Gas Storage P 54B

Harry Hindsight              

• EUR: Early gains in the Tokyo session saw the market moving to the 1.0750 levels testing eventually through to the 1.0760 levels before dropping back and holding quietly into the London session, with limited data the market moved on editorials mostly in the UK media as strong talk on Brexit bounced back and forth between the UK and Europe, one can assume it will end up being messy at the end. Euro’s dropped quickly from the opening in London pushing through to the 1.0700 levels before finding some support, before pushing gradually through the level into the NYK session, the movement through the early part of the NYK session was centred around the 1.0700 levels before dropping quickly back as the London session finished to test the 1.0670 levels and triggering weak stops on the move, the market bounced off the level and again returned through the 1.0700 levels only to dip back for a final attempt at the level the market eventually finishing the day around the 1.0690 areas.
• GBP: As with the Euro the Asian session saw the market testing higher pushing from the opening 1.2460 levels to test only to the 1.2480 levels before moving into the London session to push through to the 1.2500 levels before running out of steam and the Cable drifting lower through into the Tokyo session testing the 1.2410 levels, the move through into the NYK session saw the market slowly rising with USD PPI numbers coming in lower than expected and the market ranging around the 1.2440 levels to the close on another busy day.
• JPY: Opening around the 109.20 levels the market slipped slowly to the 108.80 levels into the Tokyo session before pushing off the lows and ranging to the London opening around the 109.10 areas, London were quick buyers of the USDJPY and the market pushed back to 109.50 before meeting resistance into the next 30 pips eventually hitting the 109.75 areas before holding the level into the NYK session, the failure saw the market eventually drift off those highs and apart from one brief attempt at the highs the market held above the 109.00 into the close.
• AUD: The Oz drifted in the early part of the session pushing to the 0.7570 levels before slowly drifting off to the 0.7540 areas into the London session, sellers quickly moved in pushing the market back through the lows but struggling for several hours around the 0.7520 levels before quickly moving through the 0.7500 levels and weak stops on the break through to the level, the decent continued in a more sedate manner as the Oz dipped to the 0.7460 level and holding around the 0.7480 areas in a long run to the close pushing towards the 75 cent level.

Yesterday’s premiership results

AUD       Westpac Leading Index M/M Oct A 0.10% | P 0.10%

AUD       Wage Cost Index Q/Q Q3 A 0.40% | C 0.50% | P 0.50%

GBP       Jobless Claims Change Oct A 9.8K | C 2.3K | P 0.7K | R 5.6K

GBP       Claimant Count Rate Oct A 2.30% | P 2.30%

GBP       Average Weekly Earnings 3M/Y Sep A 2.30% | C 2.30% | P 2.30%

GBP       ILO Unemployment Rate 3M Sep A 4.80% | C 4.90% | P 4.90%

CHF        ZEW (Expectations) Nov A 8.9 | P 5.2

CAD       Manufacturing Shipments M/M Sep A 0.30% | C -0.20% | P 0.90%

USD       PPI M/M Oct A 0.00% | C 0.30% | P 0.30%

USD       PPI Y/Y Oct A 0.80% | C 1.20% | P 0.70%

USD       PPI Core M/M Oct A -0.20% | C 0.20% | P 0.20%

USD       PPI Core Y/Y Oct A 1.20% | C 1.50% | P 1.20%

USD       Industrial Production Oct A 0.00% | C 0.10% | P 0.10% | R -0.20%

USD       Capacity Utilization Oct A 75.30% | C 75.40% | P 75.40%

USD       NAHB Housing Market Index Nov A 63 | C 63 | P 63

USD       Crude Oil Inventories A 5.3M | C 0.4M | P 2.4M

USD       Net Long-term TIC Flows Sep A -26.2B | P 45.5B

Good Luck,

Andy

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