Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 110.13 | EURUSD 1.06262 | AUDUSD 0.74075 | NZDUSD 0.70312 | USDCAD 1.35239 | USDCHF 1.00712 | GBPUSD 1.24178 |

LMAX Highs and Lows 6am GMT

                                High | Low

EURUSD               1.06301 | 1.05819

USDJPY                 110.784 | 109.976

GBPUSD               1.24266 | 1.2385

USDCHF               1.01005 | 1.00664

AUDUSD              0.74168 | 0.73785

USDCAD               1.35646 | 1.35143

NZDUSD               0.70366 | 0.70001

EURCHF                1.07060 | 1.06882

EURGBP               0.85614 | 0.85419

EURJPY                 117.401 | 116.817

For Today

• EUR: Opening around the 1.0625 levels the market held through into the Tokyo session and a steady push through the 1.0600 levels trading into the 1.0580’s before holding and pushing steadily back above the level in good volume. Topside offers into the 1.0700 areas likely to be light with offers continuing through to the 1.0740 areas and possible weak stops appearing through that level, the market then opens to stronger offers into the 1.0780-1.0800 areas and likely to continue on a move towards the 1.0850 areas, Downside bids into the 1.0560-40 areas are likely to be light with stronger bids appearing on any move down to the 1.0500-1.0480 level and then sentimental levels from the break of that level with stops likely to appear on a move through.
• GBP: Cable drifted from the opening pushing into the Tokyo session around the 1.2410 levels and dropping back to the 1.2380 areas to hold for a period around the 1.2390 levels before slowly making its way back to the 1.2400 areas to range around the level into the grey hours. Topside offers light through the 1.2450 levels before increasing offers likely through the 1.2500 area, weak stops on a move through the 1.2520 areas will possibly see weak stops appearing and the market opening for a test back to the 1.2600 level. Downside bids into the current lows with a break through the 1.2380 levels possibly seeing stops appearing and the market vulnerable to a return to the 1.22 handle.
• JPY: Onwards and upwards for the USDJPY with the market continuing its rally opening around the 110.20 areas and slipping back into the Tokyo session to test the 110.00 level before the buying again moved in and then slowly rising to the highs close to 110.80 and holding through to the grey hours in the 110.60 areas with good volumes on a narrowing range. Topside offers into the current highs with the offers likely to continue through to the 111.20 areas, light stops from there onwards with the market possibly struggling through the 111.60 areas for further gains. Downside bids still probably playing catch up with the market and possibly strong into the 109.00 areas with weak stops on a move through the 108.80 levels and the market possibly vulnerable to the 107.00 level.
• AUD: The Oz was reasonably quiet through the day with the market slowly ebbing through the 74 cent area and holding in a narrow 0.7380-0.7400 range through to the grey hours. Topside offers through the 0.7480 areas with those offers strong into the 75 cent level increasing into the 0.7550 with weak stops likely through the 0.7560 levels to open a move back above 76 cent and the highs from earlier in the month. Downside bids into the current lows however, a break through the 0.7380 levels is likely to see some light stops and the market open to 73 cents with limited support from the 0.7320 areas and possible stops opening the downside for a good distance.

Overnight News

JPY:

PM Abe has great confidence in Trump as leader

USD:

Yellen says interest rate hike could come relatively soon

Obama says hopes Trump will stand up to Russia

Pence tells house GOP to get ready for sweeping legislation

US inflation increases pace in October

EUR/USD:

Merkel says EU-US trade deal won’t be concluded

EM:

Asian currencies tumble as green back soars on Yellen rate comments

Oil:

Saudis optimistic for Opec deal as oil nations hold more talks

Today’s data

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

07:00     EUR        German PPI M/M Oct C 0.20% | P -0.20%

07:00     EUR        German PPI Y/Y Oct C -0.90% | P -1.40%

09:00     EUR        Eurozone Current Account (EUR) Sep C 31.3B | P 29.7B

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

13:30     CAD       CPI Y/Y Oct C 1.50% | P 1.30%

13:30     CAD       BoC CPI Core M/M Oct C 0.20% | P 0.20%

13:30     CAD       BoC CPI Core Y/Y Oct C 1.80% | P 1.80%

15:00     USD       Leading Indicators Oct C 0.10% | P 0.20%

Harry Hindsight              

EUR: Opening around the 1.0690 areas the market pushed through to the 1.0710 areas before finding resistance to the 1.0720 levels and holding in a narrow range through to the London session, UK retail sales kicked the Euro higher with a move through to the 1.0740 with EURGBP cross holding around the 0.8600 levels for the move into NYK, slightly disappointing CPI numbers for the Eurozone saw the Euro eventually turning lower as the US numbers came out more or less in line with initial claims showing better and the USD rallying steady through to the close of the session and the Euro slipping back to the 1.0620 supportive area.

GBP: Cable made early highs through the 1.2450 levels before early Tokyo came in as sellers, the market moved quickly through the opening levels to hold the 1.2430 areas for a couple of hours and then drifting to the 1.2410 areas as Tokyo bought EURGBP quietly through the early part of the session, the move towards the London session saw the market briefly recover and then dip into the opening to the lows again, London saw the market move steadily higher from the opening and into the UK retail sales number with a large move higher helped by the lower GBP, the Cable pushed quickly off the 1.2450 areas and pushed through the 1.2500 peaking just above the level and then drifting back off to the 1.2470 areas and holding through into the NYK session and the turn of the USD with the market drifting back to trade for a long period around the 1.2450 areas and then slipping back into the close.

JPY: opening around the 108.80 levels the market tested to the 108.60 level into the early Tokyo session before starting a steady rise through the session with initial movement on the AUD numbers but then finding support through to the London opening to push up against the 109.40 levels, London were light sellers back to the 109.00 levels and the market moved through into the NYK session around the figure, US numbers triggered steady USD buying through the session and the market gradually moved to the 110.00 levels and broke through into the close.

AUD: Some movement around the employment numbers saw the market push to the 75 cent levels but that was the high for the day and the market ranged around the 0.7480-70 levels for the bulk of the session through into the NYK session, holding initially in a wider 0.7450-80  range before slowly declining through to the 74 cent level through the London close and hodling then in a tight range 0.7400-20 to the close.

Yesterday’s premiership results

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%

GBP       Retail Sales M/M Oct A 1.90% | C 0.40% | P 0.00% | R 0.10%

EUR        Eurozone CPI M/M Oct A 0.20% | C 0.30% | P 0.40%

EUR        Eurozone CPI Y/Y Oct (F) A 0.50% | C 0.50% | P 0.50%

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

CAD       International Securities Transactions (CAD) Sep A 11.77B | C 12.74B | P 12.75B

USD       Housing Starts Oct A 1.32M | C 1.151M | P 1.047M | R 1.05M

USD       Building Permits Oct A 1.23M | C 1.200M | P 1.225M

USD       CPI M/M Oct A 0.40% | C 0.40% | P 0.30%

USD       CPI Y/Y Oct A 1.60% | C 1.60% | P 1.50%

USD       CPI Core M/M Oct A 0.10% | C 0.20% | P 0.10%

USD       CPI Core Y/Y Oct A 2.10% | C 2.20% | P 2.20%

USD       Initial Jobless Claims (NOV 12) A 235K | C 259K | P 254K

USD       Philly Fed Survey Nov A 7.6 | C 8 | P 9.7

USD       Natural Gas Storage A 30B | C 34B | P 54B

Good Luck,

Andy

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