Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 112.519 | EURUSD 1.05518 | AUDUSD 0.73865 | NZDUSD 0.70095 | USDCAD 1.34873 | USDCHF 1.01684 | GBPUSD 1.24419 |

LMAX Highs and Lows 6am GMT

                                High | Low

EURUSD               1.05612 | 1.05248

USDJPY                 112.890 | 112.375

GBPUSD               1.24480 | 1.23950

USDCHF               1.01903 | 1.01709

AUDUSD              0.73890 | 0.73644

USDCAD               1.35225 | 1.34862

NZDUSD               0.70134 | 0.69719

EURCHF                1.07401 | 1.07247

EURGBP               0.84984 | 0.84688

EURJPY                 118.895 | 118.515

For Today

• EUR: With Thanksgiving upon the US, the market saw reasonable volumes however, the day is likely to be quiet for the most part without the US, moving from the opening around the 1.0550 level the market slowly drifted through the session testing quietly below the 1.0530 area into the mid-session before recovering to the opening levels as the market moved towards the grey hours. Topside offers light through the 1.0600 areas with the market likely to see stronger offers likely through the 1.0640 level and into the 1.0660 areas, weak stops on a move through the level will see further congestion on a move through to the 1.0700 areas and the ranges from last week. Downside bids into the 1.0500 areas are likely to be strong through the level with the market likely seeing strong stops appearing on a move through the 1.0480 with the market likely to open up for a possible deeper move towards the 1.0200 areas.
• GBP: Cable was very quiet with the market trading around the 1.2430 levels having initially tested towards the 1.2420 levels, through the move into the Tokyo session the market recovered and then ranged between 1.2430-40 to the grey hours. Topside offers through the 1.2500 levels are beginning to prove to be more troublesome than you’d expect and on a US bank holiday news would need to be strong to push through the level, Downside bids through the 1.2400 levels are weak with the better bids likely into the 1.2350 areas with the bids likely to be in depth through to the 1.2300 areas and stops possibly below that level.
• JPY: USDJPY did attempt to push a little higher through the session opening around the 112.40 areas the market test above the 112.80 through to the mid-session of the Tokyo period however, it was a weak move and the market drifted having penetrated the area and slipped back to hold the 112.60 levels through into the grey hours. Topside offers into the 113.00 levels opens the market to limited potential on a Thanksgiving with congestion from the beginning of the year and likely to slow the market through to the 114.00 where better offers are likely, Downside bids are likely to be weak for a good way having moved so quickly over the past week or so that the bids are still building, with weakness on any move through the 112.50 areas with stops likely to appear through the 111.80 levels and a return to the more supportive 111.00 levels.
• AUD: As with the rest of the market the Oz was range bound with the market moving off the 0.7365 levels to test above the 0.7380-85 area and repeating several times before moving into the grey hours holding the 0.7380. Weak offers into the 74 cent levels with reasonable movement available to the 0.7440 levels where offers are likely to increase on any attempt to the 0.7460 levels, downside bids through the 0.7350 levels and the bids likely to increase on any further move to the 73 cent and limited for the day.

Overnight News

CNY:

China wants quick close on regional trade pact after TPP dashed

USD:

Trump picks wealthy activist for educations secretary

KRW:

South Korea official says will monitor exports to Japan, China on FX volatility

JPY:

BoJ has sufficient means to exit easy policy says Deputy Governor

Today’s data

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

JPY         PMI Manufacturing Nov (P) A 51.1| C 51.7 | P 51.4

07:00     EUR        German GDP Q/Q Q3 (F) C 0.20% | P 0.20%

09:00     EUR        German IFO – Business Climate Nov C 110.6 | P 110.5

09:00     EUR        German IFO – Current Assessment Nov C 115 | P 115

09:00     EUR        German IFO – Expectations Nov C 106.3 | P 106.1

09:30     GBP       BBA Mortgage Approvals Oct C 38.8K | P 38.3K

12:00     EUR        German GfK Consumer Confidence Dec C 9.8 | P 9.7

Harry Hindsight              

• EUR: A quiet Asian session for the Euro range wise anyway with the market moving from the opening 1.0625 areas and unable to break cleanly through the 1.0630 levels until the grey hours and spending much of the day around the 1.0620 levels. Early buyers in the grey hours took the market slightly through the 1.0640 levels and posted the highs before trading back as the European numbers began to hit, with mixed results with services across the board showing better PMI numbers but offset by the Manufacturing numbers, and the market dipped to the 1.0600 levels before slowly recovering to the opening levels into the NYK session, a massive durable good number released in the US saw the market dropping quickly through to the 1.0530 levels before finding sufficient support and lifting back to trade the 1.0550-60 into the close.
• GBP: Cable saw a decent range through the day with the market opening around the 1.2420 levels and slowly drifting off to the 1.2400 areas into the grey hours, decent Euro numbers saw the EURGBP cross trading higher and the Cable was eventually forced lower to the 1.2370 areas in the morning session before recovering through into the NYK session and pushing to the 1.2430 levels, NYK saw the same initial selling as the Euro on the release of the Durable goods order number however having extended the low slightly to the 1.2360 levels the market steadily pushed higher over the course of the London session and at the close in London was quickly pushing higher with weak stops and shorts quickly closing positions as the London session ended, the Cable held the 1.2470 areas for a short period before the volumes started to drop off and the Cable drifted lower into the close around the 1.2440.
• JPY: The USDJPY opened around the 111.10 areas the market drifted through the Asian session holding around the 111.00 level deep into the London session with a brief attempt lower on the opening in London however the low was only around the 110.90 areas and the opening in NYK saw the market moving quickly higher as the USD rallied sharply from the Durable goods numbers to push quickly through the resistance around the 112.00 levels with weak stops triggered and the market pushing too the 112.40 levels before finding some limited resistance and eventually breaking through the 112.60 levels to test towards 113.00 into the FOMC minutes and a quiet drift to the close in the 112.40-60 level. FOMC minutes see rate hike relatively soon but nothing concrete and mostly little changed.
• AUD: Early buying into the Tokyo session saw the market moving quickly higher having opened around the 74 cent levels and touching through to the 0.7430 areas before finding light resistance to the move, the move into the grey hours saw the market testing the topside again and this time with more impetus however, even with the London session the market was unable to push too far through the 0.7445 areas and then drifted back for the opening in NYK and the Durable goods number, the market as you’d expect dropped quickly lower triggering some weak stops on the move through the 74 cent levels and quickly dipped to 0.7375 levels before ranging to the close between the 0.7380-0.7400 areas.

Yesterday’s premiership results

EUR        France Manufacturing PMI Nov (P) A 51.5 | C 51.5 | P 51.8

EUR        France Services PMI Nov (P) A 52.6 | C 52.1 | P 51.4

EUR        Germany Manufacturing PMI Nov (P) A 54.4 | C 54.8 | P 55

EUR        Germany Services PMI Nov (P) A 55 | C 54.1 | P 54.2

EUR        Eurozone Manufacturing PMI Nov (P) A 53.7 | C 53.2 | P 53.5

EUR        Eurozone Services PMI Nov (P) A 54.1 | C 53.1 | P 52.8

USD       Durable Goods Orders Oct (P) A 4.80% | C 0.80% | P -0.30% | R 0.40%

USD       Durables Ex Transportation Oct (P) A 1.00% | C 0.10% | P 0.10% | R 0.20%

USD       Initial Jobless Claims (NOV 19) A 251K | C 241K | P 235K | R 233K

USD       House Price Index M/M Sep A 0.60% | C 0.50% | P 0.70%

USD       New Home Sales Oct A 563K | C 590K | P 593K

USD       U. of Michigan Confidence Nov (F) A 93.8 | C 91.6 | P 91.6

USD       Crude Oil Inventories A -1.3M | C 0.3M | P 5.3M

USD       Natural Gas Storage A -2B | C 7B | P 30B

USD       FOMC Meeting Minutes

Good Luck,

Andy

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