Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 115.775 | EURUSD 1.05548 | AUDUSD 0.73698 | NZDUSD 0.69882 | USDCAD 1.32314 | USDCHF 1.01678 | GBPUSD 1.21751 |

LMAX Highs and Lows 6am GMT

                                High | Low

EURUSD               1.05663 | 1.05347

USDJPY                 116.247 | 115.671

GBPUSD               1.21990 | 1.2154

USDCHF               1.01819 | 1.01601

AUDUSD              0.73830 | 0.73539

USDCAD               1.32550 | 1.32356

NZDUSD               0.70009 | 0.69716

EURCHF                1.07352 | 1.07268

EURGBP               0.86784 | 0.86584

EURJPY                 122.599 | 122.142

For Today

• EUR: A reasonably quiet opening with the market holding in a tight range around the 1.0555 level and eventually testing above the 1.0560 level once it moved into Tokyo but as the session moved on drifting back to test through the 1.0540 levels to make the low, and a quiet move back to the opening areas into the grey hours, Topside offers through the 1.0640 levels and likely to continue with weak stops likely through the level, limited offers around the 1.0700 areas however, those limited offers are likely to continue through the handle with stronger offers into the 1.0800 level, downside bids limited through to the current lows with weakness likely just behind and increasing as the market moves towards the 1.0500 levels, a move through will likely see congestive bids with some light stops appearing and stronger bids around the 1.0440-60 area with lighter bids from there on.
• GBP: Opening quietly the market moved through to the Tokyo opening holding the 1.2175 areas before spiking quickly higher in a limited attack on the 1.2200 levels before failing the level and drifting through the session to push into the 1.2150 areas, Topside bids into the 1.2120 areas remain and likely to be reasonably strong through to the 1.2090 areas before stops are likely to appear and possibly in numbers, a move through the level does open the market with possibly sentimental levels dominating through any deep moves and mid 1980’s lows in view. Topside offers light through the 1.2200 areas with those light offers continuing through the handle with stronger offers likely into the 1.2300 areas and stops light on a break.
• JPY: A quiet but steady move back above the 116.00 levels, early opening selling set the lows around the 115.70 areas before a steady recovery through the Tokyo saw the market pushing back through the opening to test to the 116.10 areas, the market continued to have a bid tone and the highs were eventually extended to above the 116.20 areas before remaining in the 116.00-10 areas through to the grey hours, Topside offers light through the current levels with weak stops possibly through the 116.40 areas opening a test to the 117.00 areas and stronger offers through the levels, downside bids into the 115.20-00 areas probably followed quickly by stops and the market pretty much open to the congested 114.60-40 areas.
• AUD: A steady rise through the session but limited, opening around the 0.7370 levels the market drifted into Tokyo but once the market opened there it was quickly back to the opening levels, the market saw limited AUDJPY buying moving in as the USDJPY pushed back through the 116.00 level and the Oz rose steadily through to the 0.7380 areas to hold into the grey hours just off those lows. Topside offers through the current highs and into the 74 cent level, weak stops likely on a push through with congestive offers likely to appear around the 0.7450 areas and continuing through to 75 cents with stronger offers likely, Downside bids light through to the 73 cent areas with bids likely to begin around the level with limited bids into the 0.7250 areas, from there though the market is likely to see stronger bids moving into the market and possibly in depth.

Overnight News

JPY:

Japanese See Ties with U.S. Worsening Under Trump Presidency

JPY: Japan Govt. Pension Fund Seen Posting Oct.-Dec. Gain: Nikkei

JPY: GPIF Says Stock Holdings May Rise to Allowable Limits

JPY: Japan’s PM Abe Didn’t Make Any Specific Requests, Kuroda Says

USD/RUB:

Trump Briefed on Claims Russia Has Compromising Info on Him: CNN

USD:

Obama Decries ‘Autocrats in Foreign Capitals’ as Threat to Order

CNY:

China Banks Told to Keep Quiet on Capital Outflow Curbs: Reuters

TWD/CNY:

Taiwan Looking for New Model on China Relations, Minister Says

CNY/TWD:

Chinese Tourists’ Trips to Taiwan Fall 14.4% in 2016: Xinhua

Today’s data

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

JPY         Leading Index Nov (P) A 102.7 | C 102.6 | P 100.8

09:30     GBP       Visible Trade Balance (GBP) Nov C -11.2B | P -9.7B

09:30     GBP       Industrial Production M/M Nov C 0.90% | P -1.30%

09:30     GBP       Industrial Production Y/Y Nov C 0.60% | P -1.10%

09:30     GBP       Manufacturing Production M/M Nov C 0.50% | P -0.90%

09:30     GBP       Manufacturing Production Y/Y Nov C 0.40% | P -0.40%

09:30     GBP       Construction Output M/M Nov C 0.30% | P -0.60%

15:00     GBP       NIESR GDP Estimate Dec C 0.50% | P 0.40%

15:30     USD       Crude Oil Inventories P -7.1M

Harry Hindsight              

• EUR: Opening around the 1.0580 areas early trading saw the market moving steadily to the 1.0600 levels into the Tokyo session, with a weaker USDJPY finding light buyers in EURJPY enter the market, USD weakness continued once the Tokyo fix was over with and the Euro was able to again push off the opening levels where it had slipped too pushing quickly through the 1.0600 levels and trading through the 1.0625 areas before running out of steam and drifting through the balance of the session into the grey hours, early European selling was limited and the market pushed to the 1.0590 and model buying on the opening in London saw the market quickly back to the 1.0620 level, from that point though the market drifted ever lower through to the NYK session testing through to the 1.0560 levels and the opening of the new session, no real news through the session and the market lifted off the lows in the first hour before the sellers again reappeared and the market dipped back to test the 1.0550 and a long drawn out run around the 1.0560 areas to the close.
• GBP: Choppy day overall for the Cable with the market making limited gains from the opening to push to the 1.2175 areas before dropping back quickly with GBPJPY selling into the Tokyo session putting pressure on the GBP from the start however, the lows were only around the 1.2140 levels in a limited market and as fast as it dipped it rose to the 1.2180 areas after the fix in Tokyo, the market found itself around the 1.2150 levels into the grey hours and held the areas until the London opening with quick sellers chasing the market lower to test the support from 1.2120 the market held the level making lows just through the 1.2110 areas before bouncing back to the 1.2150 levels, as with a slow news day the market continued to hear commentary on PM May’s hard Brexit chatter from the weekend before moving into a less believing NYK session and the market again moving higher to test the 1.2190 levels and finishing the day just off those highs.
• JPY: Opening lower around the 115.90 levels the market pushed off the 115.70 areas in the first hour and pushed back through the 116.00 areas to fill the gap on the charts and then range through the early part of the session testing to the 116.20 areas before dropping quickly lower triggering some weak stops on the move to the 115.60 levels and a brief hold, as the market moved the Lunch the market again dipped and the low was made around the 115.20 areas and the start of a steady tight channelled rise through into the London session pushing to the 116.00 areas and then holding in a tight range into NYK, the Highs were quickly made from the opening testing to the 116.30 areas, the highs were short lived with the move further into NYK saw the sellers reappear and the lows again threatened on a move reminiscent of the Asian session before settling into the 115.70-80 areas for the close.
• AUD: Similar choppy session for the Oz with the market trading off the USDJPY movement for the most part however, early sellers moved in on the release of weaker retail sales numbers to set the Asian low around the 0.7340 levels, with a weaker USDJPY the Oz was quickly higher and pushing through to the 0.7380 areas with weak stops triggered the move through to the grey hours was quiet with a light drift to the 0.7370 areas and the London opening selling to the 0.7350 areas and choppy through to the NYK open making the lows close to 0.7330, NYK were buyers or the Oz rose as the USDJPY hit its lows and the again testing the highs before finishing just short of the level.

Yesterday’s premiership results

GBP       BRC Retail Sales Monitor Y/Y Dec A 1.00% | P 0.60%

AUD       Retail Sales M/M Nov A 0.20% | C 0.40% | P 0.50%

CNY        CPI Y/Y Dec A 2.10% | C 2.20% | P 2.30%

CNY        PPI Y/Y Dec A 5.50% | C 4.60% | P 3.30%

JPY         Consumer Confidence Dec A 41.3 | C 41.3 | P 40.9

CHF        Unemployment Rate Dec A 3.30% | C 3.30% | P 3.30%

CAD       Housing Starts Dec A 207K | C 191.3K | P 184.0K | R 187K

CAD       Building Permits M/M Nov A -0.10% | C -5.00% | P 8.70% | R 10.50%

Good Luck,

Andy

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