Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 110.905 | EURUSD 1.05899 | AUDUSD 0.73349 | NZDUSD 0.70089 | USDCAD 1.35059 | USDCHF 1.01027 | GBPUSD 1.23497 |

 

LMAX Ranges 6am London time

Highs    Lows

EURUSD               1.06139 | 1.05776

USDJPY                 111.189 | 110.652

GBPUSD               1.23658 | 1.23194

USDCHF               1.01106 | 1.00879

AUDUSD              0.73437 | 0.73112

USDCAD               1.35137 | 1.3465

NZDUSD               0.70233 | 0.69844

EURCHF                1.07210 | 1.06977

EURGBP               0.85953 | 0.85669

EURJPY                 117.812 | 117.335

For today

• EUR: Limited news of the weekend with French presidential elections supporting the Euro for the moment with the move into Tokyo seeing the Euro pushing above the 1.0600 level but struggling to push through the 1.0620 level and holding around the figure for the duration and into the grey hours. Topside offers likely weak through the 1.0620 levels and increasing on a test above the 1.0640-60 area with weak stops possibly through the level and limited congestion through the 1.0700 areas continuing to the 1.0750 levels. Downside bids into the 1.0520-1.0485 area with possible stops then appearing and the market open for a longer term test to the 1.0000 parity level not seen since beginning 2003.
• GBP: Opening around the 1.2350 levels the market held quietly into the early pre-Tokyo session with a dip to the 1.2320 levels and holding into the Tokyo session with a quick move higher from those lows and some of those shorts quickly taken out, testing to the 1.2360 levels the market held the early part of the Tokyo session drifted through the session to the 1.2335-40 areas for the move into the grey hours. Topside offers likely to be reasonably strong into the 1.2400 levels and congested through to the stronger 1.2500 areas, downside bids into the 1.2300 areas are likely to slow any descent however, a push through the 1.2250 areas will see congestion building into a stronger 1.2150 levels with 1.2100 possibly key to any further moves lower.
• JPY: USDJPY was kept in a narrow range with the market pushing from the opening to the 111.10 levels and struggling into the Tokyo session to hold the level, the market dipped back to the 110.70 areas to make the lows before returning to those 111.10-20 areas to hold into the Grey hours. Topside offers through to the 111.20 area and then some limited congestion from the earlier in the year likely to hold the market for the moment with a push through seeing stronger offers on any move above the 112.00 level. Downside bids likely to be weak on a move down to below the 1.0800 areas where the market is likely to see a little more strength with weak stops on a push through the 107.50 levels however, sentimental levels likely to dominate for the moment.
• AUD: The Oz traded quietly in a narrow range with the market moving around the 0.7330 levels for the most part opening just above the level and then dipping through to the 0.7310 levels on a couple of occasions and pushing just beyond the 0.7340 in weak trading for the Oz, Topside offers through the 0.7370 likely to be weak through to stronger 74 cent levels, from there though the market sees possibly weak stops appearing and then congestion from the 75 cent onwards with strong offers likely from there too the 77c Downside bids through the 73 cent levels with possible weak stops on a push through the 0.7280 areas and possible congestion into the lower levels with strength particularly strong through 72 cent.

Overnight News                                                                  

JPY/CNY:

Japan’s Abe Eyes Better Ties with China After Xi Talk: Spokesman

JPY:

Japan to Monitor Banks Securities Management, Nikkei Says

Japan Is Said to Discuss Elevating Role of Fiscal Policy in 2017

Japan Oct. Exports Fall 10.3% Y/y; Est. -8.5%

BOJ Should Be Careful Not to Raise Market Volatility, Masai Says

OIL:

Iraq Says Will Offer New Proposals for OPEC Output Cut: WSJ

Putin Sees Strong Likelihood OPEC May Reach Oil Deal

AUD/USD:

Boral Buys Headwaters For $1.8 Billion in Infrastructure Bet

CNY/HKD:

Xi Asks Hong Kong Govt to Safeguard China Sovereignty: Xinhua

NZD:

New Zealand 3Q Producer Output Prices Rise on Milk Payment

New Zealand 3Q Retail Sales Led Higher by Vehicles, Fuel

PHP/CNY:

Philippines, China to Implement Investment Commitments

Today’s data

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

JPY         Trade Balance (JPY) Oct A 0.47T | C 0.41T | P 0.35T | R 0.36T

JPY         All Industry Activity Index M/M Sep A 0.20 % | C 0.10% | P 0.20%

13:30     CAD       Wholesale Sales M/M Sep C 0.30% | P 0.80%

Weekend News

USD:

Trump Will Roll Back Part of Financial Regulation, Bair Says
Trump Says His Potential Hires Are ‘Really Talented People’
Fed’s Powell: Global Economy at Critical Juncture as Trade Slows
Fed’s Powell: Won’t Speculate on Impact of Tariffs Against China
CNY/RUB:

China, Russia to Push for Free-Trade Area in Asia-Pacific
CNY:

China’s Xi Pledges Open Trade Despite Trump Protectionism
Xi Says He Wants Foreign Companies to Share in China’s Growth
CNY/USD:

China’s Xi Says Now Is ‘Hinge Moment’ in Relations With U.S.
RUB/JPY:

Putin, Abe Meet on Side lines of Economic Summit in Peru: Kyodo
JPY:

Japan May Cut Beer Taxes, Raise Other Alcohol Levies: Nikkei
Japan Plans to Ease Requirement for Permanent Residency: Kyodo
Japan to Make Wealthy Elderly Pay More for Health Care: Nikkei
SGD:

Singapore Stamp Duty Fell 28% in Last 2 Years to S$2.96b: Times
GBP:

U.K. PM to Give Pro-Business Speech at CBI Monday: FT
U.K. Plc Urges May Not to Push Them Off Brexit ‘Cliff Edge’
EUR:

Merkel’s CSU Allies See Her Running for Fourth Term: Rheinische
AUD:

World Bank Arm Concerned by Rio Tinto Scandal, Australian Says
TRY:

Turkey’s Zeybekci Sees No Need for Lira Intervention: Anadolu
Turkish Business Group Concerned by Lira Drop, Chairwoman Says
Erdogan Says Possible Trump Meeting in December Could Relax Lira
TRY/RUB:

Erdogan Speaking to Putin About Turkey Joining Shanghai Five: HT
MXN:

Mexico Seeks Trump Talks to Modernize Nafta, Pena Nieto Says
Nafta Can Be Modernized but Not Renegotiated, Pena Nieto Says
Mexico Jan.-Sept. FDI -8.4% from Yr. Earlier $19.8b: Ministry

Harry Hindsight

• EUR: Early selling into the Tokyo session saw the Euro dropping back in the first couple of hours to test through towards the 1.0580 levels from the opening 1.0625 areas, then move through into the London session saw the market holding around the 1.0600 levels in reasonably quiet trading, London eventually saw limited buying with the market rising through to the 1.0640 areas in a slow move to the NYK session, a short period saw the market drop quickly back as the market again tested back through the 1.0600 levels this time pushing to the 1.0570 levels however, with little data for the day the market again returned towards the 1.0600 levels to the close.
• GBP: Cable drifted in the Asian session slipping from the opening levels around the 1.2415 areas to trade along the 1.2390 level through to the London session where the early market took the market back above the 1.2400 levels to test repeatedly through the 1.2430 areas with EURGBP cross made a move back above the 0.8600 levels topping above the 0.8630 levels after the release of the European numbers and the continuing negativity of Brexit weighs a little, the move into the NYK session saw the Cable holding around the 1.2350 levels for the most part have attempted a brief move towards the 1.2300 levels before really recovering and holding the area into the close.
• JPY: Early USDJPY buying saw the market moving off the 110.00 levels and pushing into the Tokyo market testing the 110.30 levels and after a short pause the market pushed steadily through to the 110.80 areas holding through into the London session with early buyers taking the market through the 110.90 levels and still unable to make the break, the failure saw the market quickly turning lower for the move  into the NYK session testing to the 109.80 levels before bouncing on the NYK opening and testing steadily back to the 110.80 levels and again pushing to the close testing the 110.90.
• AUD: Having resisted the USD move for several days the market eventually started a steady leg lower pushing from the opening levels to trade below the 74 cent level and drifting steadily lower through the day, with the move into the NYK session at 74 cents and then dipping through the 0.7370 level to trigger weak stops on a move to the 0.7330 areas and holding through to the close just off those lows.

Friday’s premiership results

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

EUR        German PPI M/M Oct A 0.70% | C 0.20% | P -0.20%

EUR        German PPI Y/Y Oct A -0.40% | C -0.90% | P -1.40%

EUR        Eurozone Current Account (EUR) Sep A 25.3B | C 31.3B | P 29.7B | R 29.1B

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

CAD       CPI Y/Y Oct A 1.50% | C 1.50% | P 1.30%

CAD       BoC CPI Core M/M Oct A 0.20% | C 0.20% | P 0.20%

CAD       BoC CPI Core Y/Y Oct A 1.70% | C 1.80% | P 1.80%

USD       Leading Indicators Oct A 0.10% | C 0.10% | P 0.20%

Stay lucky

Andy

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