Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 111.152 | EURUSD 1.06273 | AUDUSD 0.74021 | NZDUSD 0.7051 | USDCAD 1.3441 | USDCHF 1.0113 | GBPUSD 1.24218 |

LMAX Highs and Lows 6am GMT

                                High | Low

EURUSD               1.06349 | 1.06197

USDJPY                 111.175 | 110.949

GBPUSD               1.24270 | 1.24042

USDCHF               1.01180 | 1.01084

AUDUSD              0.74348 | 0.74030

USDCAD               1.34496 | 1.34295

NZDUSD               0.70743 | 0.7059

EURCHF                1.07508 | 1.07401

EURGBP               0.85694 | 0.85513

EURJPY                 118.161 | 117.935

For Today

• EUR: FOMC meeting minutes for the end of the day and several PMI numbers into the London session saw the market quiet for the session opening around the 1.0625 levels and trading to the 1.0635 levels into the Tokyo opening and then slipping a little back to trade the back end of the session around the 1.0620-25, Topside offers through the 1.0650 levels are likely to be a little sticky and the market has struggled into that level for the past couple of days however, a push through will likely see the 1.0700 levels quickly tested with weak stops opening that test, a push to the 1.0700 levels is likely to see very little apart from sentimental offers and the market open to light stops and a run to the 1.0740-60 better offered areas, Downside bids light through the 1.0600 levels with the 1.0580 level likely to be stronger with those bids defining the downside level of the current range, with weak stops likely on a move through the 1.0540 areas and likely stronger stops appearing on a test through the 1.0490 level.
• GBP: Very quiet market for the Cable with the market ranging between the opening 1.2420 level and drifting down through the 1.2410 as the market pushed to the grey hours, Topside offers through the 1.2500 levels now beginning to prove to be a little tough with very little impetus to push it through, a break through to the 1.2550 levels is likely to see weak stops on the move through and the 1.2600 level quickly tested, beyond that level though the market is likely to meet some stronger offers appearing in the market, downside bids into the 1.2400-1.2380 areas with weak stops possibly absorbed by congestion bids on a move to a stronger 1.2350 areas with the bids likely to be in depth through that level through to the 1.2300 better bids.
• JPY: Quiet session for the USDJPY with the market opening around the 111.10 levels and trading down through the 111.00 a little before ranging through the session pushing briefly to the 111.15 areas and that was the day in Asia, Topside offers likely to be weaker through the 111.30 areas however, on each test the market has seen model selling and this could lead to day trader selling on further tests, a push through the 111.50 levels could see weak stops appearing and the market opening to stronger offers into the 111.80 areas through to the slightly congested 112.00 level. Downside bids light through to the 110.00 levels with some light bids into the area likely to be sentimental more than anything else with a break below the 109.80 areas triggering weak stops and the market running to the stronger 109.00 levels.
• AUD: Moving into the new day above the 74 cent level the market triggered some weak stops and AUDJPY buying on a move through to the 0.7430 levels before running quietly through to the grey hours holding above the 0.7420 levels for the most part, with very little movement the Topside offers into the 0.7440-60 areas likely to be limited with a push through the level still likely to see congestive offers on any move towards the 75 cent levels with weak stops through the level then better 0.7550 areas. Downside bids through into the 0.7350-00 areas with strong stops a possibility on a move through those levels before bids appear.

Overnight News

CNY/USD:

Vice Premier Wang Calls for Continuing China-U.S. Economic Ties

USD/CNY:

Fed Rate Hike May Fuel Global Outflows: China’s Eco. Info. Daily

CNY:

PBOC to Prevent Abnormal Capital Flows in Shanghai FTZ

PBOC to Allow Cross-Border Private Equity Investment in FTZ

KRW:

1. Korea’s Justice Minister Offers to Resign over Scandal Probe

JPY/KRW:

Japan, South Korea to Sign Military Intelligence Pact: Nikkei

USD:

U.S. ‘Negatively Affected’ If No TPP Ratification: White House

SGD:

Singapore October Consumer Prices -0.1% Y/y; Est. No Change

AUD:

Australian Construction Falls Most Since 2000 in Third Quarter

RBA Names Luci Ellis Assistant Governor for Economics Division

SEK:

Floden Says Riksbank Currently Needs to Have Expansionary Policy

Today’s data

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

08:00     EUR        France Manufacturing PMI Nov (P) C 51.5 | P 51.8

08:00     EUR        France Services PMI Nov (P) C 52.1 | P 51.4

08:30     EUR        Germany Manufacturing PMI Nov (P) C 54.8 | P 55

08:30     EUR        Germany Services PMI Nov (P) C 54.1 | P 54.2

09:00     EUR        Eurozone Manufacturing PMI Nov (P) C 53.2 | P 53.5

09:00     EUR        Eurozone Services PMI Nov (P) C 53.1 | P 52.8

13:30     USD       Durable Goods Orders Oct (P) C 0.80% | P -0.30%

13:30     USD       Durables Ex Transportation Oct (P) C 0.10% | P 0.10%

13:30     USD       Initial Jobless Claims (NOV 19) C 241K | P 235K

14:00     USD       House Price Index M/M Sep C 0.50% | P 0.70%

15:00     USD       New Home Sales Oct C 590K | P 593K

15:00     USD       U. of Michigan Confidence Nov (F) C 91.6 | P 91.6

15:30     USD       Crude Oil Inventories P 5.3M

15:30     USD       Natural Gas Storage P 30B

19:00     USD       FOMC Meeting Minutes

Harry Hindsight              

• EUR: Limited range again with some minor choppiness through the day, Euro’s pushed from the opening around the 1.0630 levels and tested to the 1.0650 into the Tokyo session before slipping back to the opening levels through into the London session, early grey hours selling saw the market testing towards the 1.0600 before bouncing into the official London to take the market to the highs of the day with early London good buyers however, the failure of on the push through the 1.0650 level saw the market trigger weak stops and the market moving back to the opening levels into the NYK session, NYK continued the selling with Yellen again on the wires talking up the rate rise and the Euro dipped back to the 1.0585 areas and the low for the day before returning to the opening levels and the day ending very little changed.
• GBP: Opening around the 1.2490 levels the Tokyo session saw some limited buying through into the first couple of hours and the market tested through the 1.2510 levels before running into trouble with limited movement on the Earthquake news in Japan, as the risk receded the market returned to the opening levels for the move into the grey hours, and once into the London session the selling increased with UK numbers on the face of it not so bad with decent Tax receipts offsetting a large borrowing requirement and reducing the actual number to a respectable area, the market dipped back from the 1.2500 levels in the run to the CBI trends and although the number was better than expected it was still a negative number and the recovery was limited before moving into the NYK session slipping slowly back to test the 1.2400 levels before finishing the day just above the figure.
• JPY: Late selling into the NYK session saw the market in USDJPY dipping from the highs above the 111.30 levels as model sellers moved in, the move into the Asian session saw the market moving around the opening 110.80 levels and dipping through into the Tokyo session to quickly test the 110.30 levels before holding and finding some support as the risk aversion waned and lifted through the mid-session period to the 110.80 levels and holding around that level through into the London session, grey hour buying saw the market moving back above the 111.00 levels testing close to the 111.20 areas before the London session started proper, London sold the market back through to the 110.60 areas however, while volumes were reasonable the market was a steady riser from that point through into the NYK session testing the 111.30 areas again and while the same result appeared the markets dip lower was limited this time and the market for the most part remained above the 111.00 areas to the close.
• AUD: A limited day for the Oz with no data and only limited interest in the pair. Moving off the opening 0.7370 areas the market moved quietly through to the 74 cent levels into the grey hours and early Europe were quick sellers from the level and forced the market back to the opening levels with London quickly buying it back and pushing the market from those opening levels through the 0.7410 levels and defining the range for the day, the move through the rest of the day was slow with the market ranging in the 0.7380-0.7400 areas to the close.

Yesterday’s premiership results

CHF        Trade Balance (CHF) Oct A 2.68B | C 3.89B | P 4.37B | R 4.33B

GBP       Public Sector Net Borrowing (GBP) Oct A 4.3B | C 5.9B | P 10.1B

GBP       CBI Trends Total Orders Nov A -3 | C -8 | P -17

CAD       Retail Sales M/M Sep A 0.60% | C 0.70% | P -0.10% | R 0.10%

CAD       Retail Sales Less Autos M/M Sep A 0.00% | C 0.60% | P 0.00% | R 0.20%

EUR        Eurozone Consumer Confidence Nov (A) A -6 | C -8 | P -8

USD       Existing Home Sales Oct A 5.60M | C 5.43M | P 5.47M | R 5.49M

Good Luck,

Andy

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