Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 110.812 | EURUSD 1.06293 | AUDUSD 0.73684 | NZDUSD 0.70578 | USDCAD 1.34191 | USDCHF 1.00878 | GBPUSD 1.24922 |

LMAX Highs and Lows 6am GMT

                                High | Low

EURUSD               1.06500 | 1.06251

USDJPY                 110.920 | 110.266

GBPUSD               1.25140 | 1.2481

USDCHF               1.00971 | 1.00685

AUDUSD              0.74045 | 0.73622

USDCAD               1.34244 | 1.3397

NZDUSD               0.70863 | 0.70648

EURCHF                1.07288 | 1.07151

EURGBP               0.85158 | 0.85027

EURJPY                 117.890 | 117.39

For Today

• EUR: Early trading saw the market pushing to the 1.0650 levels but unable to push through the level slipped slowly back to range around the opening 1.0630 areas into the grey hours with volumes not too shabby but contained more in the crosses and USDJPY. Topside offers into the highs through to the 1.0660 areas with limited stops through the level, with a push through then running into the sentimental 1.0680-1.0720 areas and possibly stronger offers beginning to build in the area, weak stops through the levels with limited congestion through the 1.07 handle and possibly a struggle to the 1.0800 levels. Downside bids into the 1.0600-1.0580 levels are likely to be stronger having pushed a little away however, the downside remains weak too the 1.0500 levels, stops likely to appear through the 1.0480 areas and the downside opening for rhetoric of parity.
• GBP: Cable was very quiet through the session with yesterday’s move having not found the usual follow through from the opening with the market rising from the 1.2490 into the 1.2510 levels in Tokyo the only real movement and the market then drifting back to the opening levels and then holding in the 1.2490-1.2500 areas through into the grey hours. Topside offers through the 1.2500 levels sees possibly weak stops on a move through the 1.2520 areas however, congestion remains in the 1.2550 areas and only then will the market weaken as the market moves through the 1.2600 levels, downside bids into the 1.2450 levels is likely to be weak however, the bids are possibly deep with the congestion running through the downside and into the 1.2400 levels.
• JPY: USDJPY opened on the back foot with model sellers having moved into the market above the 111.30 area and tumbling the market back to 110.50 before the close, with the 7.1 Earthquake largely passed with little damage and the initial Tsunami warnings reduced to advisory and with the risk removed from the market the USDJPY having traded below the 110.50 areas tested towards the 100dma before pushing back higher through to the 110.80 levels and possibly a fresh push above 111.00, topside offers through the 111.30 and possible weak stops opening the market to the 111.80-112.00 areas and stronger offers. Downside bids light through to the 110.00 levels with some light bidding continuing through to the 109.00 levels and stronger bids likely into that level
• AUD: A quiet day for the Oz with the market opening around the 0.7365 areas and starting a slow rise through the session to push a little above the 74 cent areas and then drifting in the area through to the grey hours. Downside bids light through to the 0.7310-00 areas with likely better bids appearing and weak stops likely on a push through the 0.7280 areas with congestion then running continually through the 72 cent handle and likely very strong bids appearing on a move through that level into the 0.7150 areas. Topside offers into the current highs with a push through the level likely to see little resistance for a move through the 74 cent handle and the 0.7480 holding only limited offers before opening the 75 cent level and stronger offers appear above the level and around the 0.7550 areas.

Overnight News

JPY:

Magnitude 7.3 Quake Hits Fukushima Japan; Tsunami Warning Issued

Japan Lifts All Tsunami Alerts From Quake at 12:50pm JST: JMA

Japan Probes Nuclear Cooling System Shutdown after Earthquake

Japan’s Stance to Build Momentum for TPP Won’t Change: Ishihara

Suga: Japan Has the World’s Strictest Nuclear Safety Rules

Kuroda: New Interest Rate Policy More Sustainable, Flexible

JPY/USD:

Japan’s Abe Says TPP Is Meaningless Without U.S.

USD:

Fischer Says Fed Will Take Steps Required to Meet Dual Mandate

CNY:

China Affirmed at ‘A+’ by Fitch; Outlook Stable

IMF Recommended China Move Toward More Flexible Exchange Rate

PBOC, CSRC Publish Fund Flow Rules on China-H.K. Stock Connect

China Should Pay More Attention to Risks, Govt. Researcher Says

PBOC Should Weaken Yuan More, Researchers Say: Sec. News

EUR:

Portugal Sees Need to Start Discussion on Greek Debt Cut: Bild

AUD:

Australia ANZ Weekly Consumer Confidence Falls 2.3% to 115.5

NZD:

N.Z. Annual Net Immigration Rises to Record in October

New Zealand East Coast Earthquake Measured 5.4 by GeoNet

Today’s data

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

07:00     CHF        Trade Balance (CHF) Oct C 3.89B | P 4.37B

09:30     GBP       Public Sector Net Borrowing (GBP) Oct C 5.9B | P 10.1B

11:00     GBP       CBI Trends Total Orders Nov C -8 | P -17

13:30     CAD       Retail Sales M/M Sep C 0.70% | P -0.10%

13:30     CAD       Retail Sales Less Autos M/M Sep C 0.60% | P 0.00%

15:00     EUR        Eurozone Consumer Confidence Nov (A) C -8 | P -8

15:00     USD       Existing Home Sales Oct C 5.43M | P 5.47M

Harry Hindsight              

• EUR: Opening around the 1.0590 levels slipping back to the 1.0580 areas before lifting off the lows in a move through to the Tokyo session and pushing quickly above the 1.0610 areas, the market then traded around the 1.0600 levels for the move into the London session with the market unable to push through the 1.0610 levels and having tested early on the 1.0580 area. London were steady buyers with French primary results with Fillon showing clear lead into the next round. Limited reaction into the London session with the market moving back firmly above the 1.0600 levels and pushed towards the 1.0650 level and held through to NYK around the 1.0630 with a 1.0620-45 range, very little news for the most part the end of TPP being called for by Trump and this saw weakness in the Euro and USD overall with the market dipping back to the 1.0590 levels into the London close and the market eventually pushing back to the 1.0630 areas for the close.
• GBP: The market move through the Asian session reasonably quietly with the market dipping to the 1.2320 levels in early trading before rising into the Tokyo session to push the 1.2360 and defining the range through Asia, the move into the grey hours saw the highs tested again however, the market held and slowly slipped lower through the early London session before picking up on hints from PM May of a deal to stave off the worst of a hard Brexit and Cable caught a bid and pushed quickly to the 1.2400 levels into the NYK session, the break through the level when it came saw the market drive quickly to the 1.2500 and ranged through to the close between the 1.2460-1.2500 levels to the close finishing close to the highs.
• JPY: A range bound day again with the market pushing weakly through the 111.00 level and drifting off from the opening in Tokyo, mid-session saw the market again pushing at the 111.00 level but unable to push the 111.20 before slipping slowly back as the market moved into the London session with very little data to mention through the day the movement in Cable saw the USDJPY push higher with 139.00 levels in GBPJPY being a trend line and old high however, it remained intact for the day and the USDJPY managed to push into the 111.35 areas after the London close before the market saw model and tech trading enter the market towards the end of the session and risk aversion moving in as the Earthquake saw a reverse effect kick in, with little damage with a tsunami warning given for some areas.
• AUD: The early sellers saw the market move off the opening 0.7330 areas and dipping into the opening in Tokyo around the 0.7315 area, the market moved off the lows into the opening in Tokyo and the high for Asia was a little later as the market tested to the 0.7345 areas, before slipping back towards the lows and slowly moving into the London session little changed on the day, the move through London saw the market in Oz starting to slowly rise through to the NYK period and topped around the 0.7380 and was more a consequence of cross trading through the day more than anything, the market eventually slipped back to hold the 0.7350 levels returning slightly higher too the close.

Yesterday’s premiership results

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

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

CAD       Wholesale Sales M/M Sep A -1.2% | C 0.30% | P 0.80%

Good Luck,

Andy

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