Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 116.955 | EURUSD 1.05322 | AUDUSD 0.72980 | NZDUSD 0.69570 | USDCAD 1.32387 | USDCHF 1.01791 | GBPUSD 1.22850 |

 

LMAX Ranges 6am London time

Highs    Lows

EURUSD               1.05444 | 1.05162

USDJPY                 117.536 | 117.056

GBPUSD               1.22716 | 1.21799

AUDUSD              0.73281 | 0.72895

USDCHF               1.01925 | 1.01649

USDCAD               1.32624 | 1.32275

NZDUSD               0.69729 | 0.69488

EURGBP               0.86362 | 0.85841

EURCHF                1.07211 | 1.07112

EURJPY                 123.700 | 123.274

For today

• EUR: With concerns about inflationary pressures building the market struggled through the Asian session early Tokyo buyers took the Euro of its lows around the 1.0525 area to push back through the opening 1.0530 level and test above the 1.0540 in limited trading, eventually though the market settled back to trade around the opening levels into the grey hours. Bids likely to be light into the 1.0500 areas with congestive bids likely to be around the 1.0460-40 areas still with further strong bids on a move towards the 1.0400 areas, possible weak stops on a move through the levels however, 1.0350 likely to remain the key areas to the downside opening. Offers light through to the 1.0600 areas and then likely to see some offers appearing into the 1.0620 areas before some weak stops open to the 1.0640 areas and possibly stronger offers protecting a test of the 1.0700 areas.
• GBP: Cable moved through the early session holding the opening levels but unable to close the gap on the charts moving around the 1.2260 levels before slipping lower through the session with New reports on Brexit/May and costs involved in decommissioning North Sea oil fields in the coming years. And the market pushed into the grey hours testing the 1.2180 areas. Topside offers light through the 1.2300 levels with weak stops on a move through before stronger offers into the 1.2400 areas and thin along the way, Downside bids into the 1.2150 areas the market is likely to see patches of strong liquidity above the 1.2000 levels.
• JPY: A quiet rise through the session with the market opening in line with Fridays close and pushing steadily through to the 117.50 levels into the grey hours topside offers strong through the 118.00 areas and really no stops likely until much higher with the market finding willing sellers through the figure areas each time we’ve tested through the level, Downside bids likely to be weak on a move back through the 117.00 areas with weak stops likely to appear on a move through the 116.80 areas and the market quickly testing back to the 116.00 areas and better bids.
• AUD: Once the market got started it moved steadily higher from the lows around the 0.7290 areas to push through into the upper 0.7320’s before finding light offers and the AUDJPY cross buying running into light offers. Topside offer through the 0.7350 areas are likely to see weak stops on a push through the 0.7360 areas however, further offers through the 0.7440 levels is again likely to slow the movement and a push to the strong 75 cent level is likely to be too much for the day, Downside bids light through to the 0.7250 areas and the market starts to see some supportive bids before moving into the congested 72 cent level and weak stops through that area, further bids are likely to start moving in and are likely to get larger as the market moves through the 71 cent handle.

Overnight News                                                                  

CNY:

China Won’t Likely Impose More Outflow Curbs: PBOC Adviser

China Should Guide Market Towards Prudent, Neutral Policy: News

CNY/KRW:

China Halts Military Cooperation with S.Korea on Thaad: JoongAng

USD:

Fed’s Williams Says Short-Term Fiscal Stimulus Not Needed: FT

JPY:

Japan MOF to Boost Front-Loading Bond Sales in FY2017: Nikkei

GBP:

May Signals U.K. to Leave Single Market to Win Immigration Curbs

AUD:

Australia November Building Approvals Rise 7% M/M; Est. 4.5%

NZD:

Auckland December Average House Price Falls 2% M/M: Barfoot

Today’s data

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

AUD       Building Approvals M/M Nov A 7.00% | C 4.50% | P -12.60% | R -11.80%

7:00        EUR        German Industrial Production M/M Nov C 0.60% | P 0.30%

7:00        EUR        German Trade Balance (EUR) Nov C 20.8B | P 20.5B

8:15        CHF        Retail Sales (Real) Y/Y Nov C 0.40% | P -0.50%

9:30        EUR        Eurozone Sentix Investor Confidence Jan C 12.8 | P 10

10:00     EUR        Eurozone Unemployment Rate Nov C 9.80% | P 9.80%

Weekend News

USD:

Fed’s Powell Urges High Degree of Vigilance Against Excess Risk
Fed’s Powell Says ‘Healthy’ to Change Focus Away From Median Dot
Powell Says Congress Should ‘Take Another Look’ at Volcker Rule
Fed’s Kaplan Says Strong Consumer to Support U.S. Growth in 2017
Fed’s Kaplan Says Must Patiently Assess Policies as They Unfold
Trump May Pick Goldman Banker for Treasury Undersecretary: WSJ
Trump: ‘Absolutely No Evidence’ Hacking Affected Vote Results
Sen. Rand Paul Says Trump Supports Plan to Replace Obamacare
USD/RUB:

Trump Says Only ‘Fools’ See Good Ties With Russia as Bad
USD/GBP:

Trump Plans to Meet U.K.’s Prime Minister May, Reaffirming Ties
USD/CNY:

China Chip Policy Poses Risk to U.S. Firms, White House Says

CNY:

China Reserves Hover Above $3 Trillion on Government Support
China Confident Economy Grew 6.7% Or More in Q4, Minister Says
China 2016 IPOs Highest in 5 Years: Securities Regulator
CNY/XAU:

China Puts Gold Purchases on Hold for Second Month in December
EUR:

Gabriel Takes Aim at Merkel, Targets SPD-Led Government Majority
EUR/GBP:

Portugal, Britain to Maintain Relationship After Brexit: Costa
TRY:

Turkey Fires Over 8,000 Civil Servants for Alleged Terror Links

Harry Hindsight

• EUR: Opening around the 1.0610 levels the market moved through the pre Tokyo session testing through the opening levels however, the move into the Tokyo session saw the market drop back through the 1.0600 levels and then drifted into the midsession holding around the 1.0580 areas through into the London session, the move into the London session with limited reaction to the EU data testing back to the 1.0610 levels, as the market traded towards the NYK session some lightening of positions saw the market pushing back through the lows to test the 1.0570 areas before recovering into the NFP, the release saw the market move quickly higher on a poor number before correcting on the revision from the previous month balancing the number, with the market initially hitting above the 1.0620 levels and then dropping back to push repeatedly through the 1.0540 levels before finding sufficient support to hold through to the close in London, with the market thinner the USD buyers returned and the market slowly drifted to the 1.0530 levels to trade around that level to the close.
• GBP: The previous days recovery was lost on the through the day, with a lack of data but plenty of commentary on Brexit which is more a continual background noise than anything concrete however, the spat with senior civil servants with their own agendas and ministers with theirs could be destabilising if it were allowed to continue, having opening around the 1.2420 levels the market pushed lightly to the 1.2430 areas before the move into the Tokyo session saw the market slowly push lower through to trade around the 1.2380 levels holding through to the London session, as the market moved towards the NYK session Cable started a steady decline, moving in a tight channel even the NFP had little impact with the Cable pushing through to the 1.2260 areas before running out of steam and some light movement higher into the close.
• JPY: The general USD recovery started early in the session with the Sydney market seeing the lows for the day as the market tested towards the 115.00 just before the TKY opening, however, once the new session began the market moved steadily higher in the first couple of hours of Tokyo and touched through the 116.00 areas and then holding just below the level through to the grey hours, the market pushed to the 116.40 levels just before the London opening and then slowly ebbed in the London morning session as the market awaited the NFP numbers, the release of which saw the USDJPY pushing higher again and testing the 116.80 areas for the first time, and pausing again until the end of the London session. The run to the close saw the market slowly pushing higher and through the 117.00 levels to test the 117.20 before finishing the day around the figure.
• AUD: A limited day overall with the market buffeted by outside forces in some cases with Trade balance figures coming in much better than expected and seeing very little reaction to those good numbers and the Oz dominated by a stronger USD through the Asian session, the move through to the London session saw the Oz dropping back from the highs around the 0.7350 areas to the 0.7300 level, London bought the Trade balance number and the market again made its way to above the 0.7350 areas before starting to drift again as the market moved into the NYK session, NFP saw the Oz test above the 0.7350 level again and then drop back towards the 73 cent levels, some recovery into the London close however, the move to the close saw the market testing through the figure areas to the 0.7290 as the USD dominated in light trading.

Yesterday’s premiership results

JPY         Labour Cash Earnings Y/Y Nov A 0.20% | C 0.20% | P 0.10%

AUD       Trade Balance (AUD) Nov A 1.24B | C -0.55B | P -1.54B | R -1.12B

EUR        German Factory Orders M/M Nov A -2.50% | C -2.50% | P 4.90% | R 5.00%

EUR        German Retail Sales M/M Nov A -1.80% | C -0.90% | P 2.40%

CHF        Foreign Currency Reserves Dec A 645B | C 649B | P 648B

EUR        Eurozone Business Climate Indicator Dec A 0.79 | C 0.47 | P 0.42 | R 0.41

EUR        Eurozone Economic Confidence Dec A 107.8 | C 106.8 | P 106.5 | R 106.6

EUR        Eurozone Industrial Confidence Dec A 0.1 | C -0.4 | P -1.1

EUR        Eurozone Services Confidence Dec A 12.9 | C 12 | P 12.1 | R 12.2

EUR        Eurozone Consumer Confidence Dec (F) A -5.1 | C -5.3 | P -5.1 | R -6.2

EUR        Eurozone Retail Sales M/M Nov A -0.40% | C -0.40% | P 1.10% | R 1.40%

CAD       Trade Balance (CAD) Nov A 0.5B | C -1.6B | P -1.1B | R -1.0B

CAD       Net Change in Employment Dec A 53.7K | C -5.0K | P 10.7K

CAD       Unemployment Rate Dec A 6.90% | C 6.90% | P 6.80%

USD       Trade Balance Nov A -45.2B | C -42.2B | P -42.6B | R -42.4B

USD       Change in Non-farm Payrolls Dec A 156K | C 178K | P 178K | R 204K

USD       Unemployment Rate Dec A 4.70% | C 4.70% | P 4.60%

USD       Average Hourly Earnings M/M Dec A 0.40% | C 0.30% | P -0.10%

USD       Factory Orders Nov A -2.40% | C -2.30% | P 2.70% | R 2.80%

Stay lucky

Andy

Any opinions, news, research, analyses, prices or other information contained on this Blog, whether by LMAX, its employees, partners or contributors, does not constitute investment advice nor has it been prepared in accordance with legal requirements designed to promote the independence of investment research. Further, the material contained within this Blog does not contain (and should not be construed as containing) investment advice or an investment recommendation, or an offer of, or solicitation for, a transaction in any financial instrument. Whilst information provided on this Blog may help with your investment research you must consider carefully whether you should make (or refrain from making) investment or other decisions based on what you see without doing further research on the investments you are interested in. Participating in this Blog cannot be a substitute for obtaining advice from an appropriate expert independent adviser who takes into account your circumstances and specific investment needs in selected investments that are appropriate for you. LMAX has not verified the accuracy or basis-in-fact of any claim or statement made by any third parties as comments for every Blog entry.

LMAX will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. No representation or warranty is given as to the accuracy or completeness of the above information. While the material produced in this Blog was obtained from sources deemed to be reliable, LMAX does not provide any guarantees about the reliability of such sources.

Consequently any person acting on it does so entirely at his or her own risk.

If you currently hold an account with LMAX for the purposes of trading FX and CFD’s, you are encouraged to use a different Username and Password to access the Blog or any other online systems. The Blog is a place to learn, discuss and share information and ideas with Blog followers. It is not a place to slander, use unacceptable language or to promote LMAX or any other FX, Spread Betting and CFD provider and any such postings, excessive or unjust comments and attacks will not be allowed and will be removed from the site immediately.