Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 113.524 | EURUSD 1.17792 | AUDUSD 0.7816 | NZDUSD 0.69634 | USDCAD 1.26266 | USDCHF 0.98445 | GBPUSD 1.31892 |

 

LMAX Ranges 6am London time

Highs    Lows

EURUSD               1.17743 | 1.17514

USDJPY                 114.098 | 113.67

GBPUSD               1.32045 | 1.31694

AUDUSD              0.78267 | 0.78021

USDCHF               0.98640 | 0.98394

USDCAD               1.26409 | 1.26191

NZDUSD               0.69725 | 0.69318

EURGBP               0.89276 | 0.89102

EURCHF                1.16013 | 1.15821

EURJPY                 134.134 | 133.805

For today

• EUR: Opening slightly weaker from Fridays close with the USD opening higher after the Japanese election, the market dipped into the Tokyo session dropping back from the 1.1770 levels to test into the 1.1750 areas before starting a slow climb back to the opening levels and unable for the moment to fill the small gap on the charts. Topside light congestive offers through the 1.1850 level with stronger offers likely to appear on a move through the 1.1880 areas and into 1.1900 levels with likely limited stops above the level with congestive offers likely to run through to the stronger offering area into 1.2000. Downside bids around the 1.1750 level still remain with a push through the 1.1740 area likely to see some weak stops and the 1.1700 level becoming vulnerable to a test through the level, 1.1660 is likely to hold stronger bids and the market may find sufficient support to hold through the quiet data ahead with stronger stops on a dip through the level leaving 1.1600 areas.
• GBP: A quiet session for the Cable for the most part moving from the opening 1.3190 levels and dipping back to the 1.3170 areas in early Tokyo before quickly recovering and then trading slowly higher to test the 1.3200 areas for the move into the grey hour. Topside light offers in the current areas with weak stops on a push through the 1.3220 areas and congestive offers likely to be stronger on a move towards the 1.3250 level, those congestive offers continue weakly through level and again start to increase as the market approaches the 1.3300 levels with the area likely to find short term sellers moving into the market, and increasing into the next sentimental level. Downside bids light through to the 1.3150 levels with some light bids in the area, and increasing into the 1.3100 areas with reasonable bids likely to appear from that point through to the 1.3050 areas.
• JPY: USDJPY opened around the 113.80 levels with the result of the Japanese election showing the ruling coalition again winning by a similar margin to last time and PM Abe likely to continue through to 2021 and the longest serving PM in Japanese history, the market tested through the 114.00 areas on the opening in Tokyo and although testing through the 114.10 areas was not able to capitalize on the move and dropped back from the level after an hour or so falling back to hold just below the 113.80 areas, Topside offers through the 114.00 areas with weak stops on a push through the 114.20 area likely to see the market quickly rise into the 114.50-60 areas before offers start to increase again, with stronger offers then into the 115.00 areas and the market looking for further gains, Downside bids light through to the 113.25 areas with limited bids on a move back through the level and weak stops likely to appear on a test below the 112.80 areas with limited congestion then over the next 100 pips and the 112.00 area likely to be quickly under pressure, a test through to the 111.80 level will likely see stronger stops and the market opening for a large dip however, as the news has pointed out, Abenomics remain in play for the foreseeable future.
• AUD: Opening in line with Fridays close the market drifted through into the Tokyo testing towards the 0.7800 areas before recovering to push lightly above the 0.7820 areas and ticking a little through 0.7825 into the grey hour. Topside offer into the 0.7880-0.7900 areas likely to be reasonably resistant to a higher move however, with stops above the level and leading into the next big figure with congestive offers throughout the area the market may struggle for more impetus on a day lacking decent data releases, a test above the 0.7950 areas is likely to see stronger offers materialize in the market and again struggling for impetus, Downside bids light through the 78 cent level however, the market is likely to see increasing interest into the 0.7775 areas and congestion through to the 0.7750 before weak stops are likely to appear and the market then opening to the downside for a large push.

Overnight News

GBP:

Sajid Javid, suggests borrowing could see some increase to pay for housing projects

Phillip Hammond faces Tory rebellion over budget

JPY:

PM Abe’s to reappoint all Japan’s cabinet members after poll Yomiuri

Most business economists see US growth above 2% – poll

USDJPY rises to 3mth high, Abe victory removes threat to BoJ’s easing policy

EUR:

Italian regions vote in favour of autonomy in shadow of Catalonia crises

CNY:

China’s home prices rise in fewest cities since Jan 2016a

Today’s data

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

10:00     EUR        Bundesbank Releases Monthly Report

10:00     GBP       CBI Trends Total Orders Oct C 9 | P 7

12:30     CAD       Wholesale Sales M/M Aug P 1.50%

14:00     EUR        Eurozone Consumer Confidence Oct (A) C -1.1 | P -1.2

Weekend News

JPY:

Japan ruling coalition retains 2/3^rd majority

Japan LDP set to maintain majority

Abe to lead through to 2021 making him longest running PM in Japanese history

Abe: Important to grow economy to restore fiscal health

Abe: too early to decide on cabinet positions vote count ongoing – bbg

EUR:

Spain moves to seize control of Catalan government WSJ

Poll shows Catalan secessionist bloc support stable Periodico

Leaders of Italy’s two richest regions claim victory in autonomy votes that seek to take power from Rome

USD/CNY:

US disappointed by slow China reform Trump official

TRY:

Turkish raids kill five PKK gunmen in SE Turkey

CZK:

Populist billionaire’s party wins big in Czech Republic

Harry Hindsight

• EUR: A quiet drift into the Tokyo session before dropping quickly back as David Davis UK’s Brexit minister told the world to prepare for no deal, overall a limited reaction as the market took the comment more as a negotiation ploy, however, the Euro held around the 1.1810 areas through to the grey hour before lifting a little and early London sold gently through the 1.1800 levels and basing through to the NYK session holding around the figure, a brief push towards the 1.1820 level however, limited data and the USD rallying strongly against the CAD saw Euro’s slowly dripping through to the 1.1760 areas before quietly trading through to the close around the 1.1780 areas.
• GBP: Cable traded quietly into the early part of Tokyo before dropping back on a report that David Davis had informed the government to prepare for no deal Brexit, the Cable dropped from the 1.3160 levels through to the 1.3100 areas with a last move as the market moved towards the 1.3090 areas before finding support as Donald Tusk allegedly spoke of Trade negotiations to be started and the market rising back through the 1.3150 areas to test into the NYK session around the 1.3190 levels the run to the London close saw the market testing the 1.3200 areas and ranging around that level through to the close.
• JPY: USDJPY saw a steady rise through to the close with the market moving off the 112.40 area lows to move into the Tokyo session rising only a small amount before rising quickly through to the 113.25 areas and some limited trading through into the London session, the market tested through to the 113.40 areas however, while the market did dip back a little it remained in touch with the 113.00 areas before rising slowly through towards the 113.60 once London and holding through to the close around the 113.50 level, and voting in Japan.
• AUD: As USD strengthened through the day the Oz struggled with the market drifting from the opening 0.7880 areas to test the 0.7870 before the market dropped with the help of EURAUD and GBPAUD crosses, Oz tested back through to the 0.7830 areas before finding a base there and holding around the 0.7840-50 for the most part through the day and into the NYK session before renewing the move to the 0.7810 levels and with London out of the way the market held in the area.

Yesterday’s premiership results

EUR        German PPI M/M Sep A 0.30% | C 0.10% | P 0.20%

EUR        German PPI Y/Y Sep A 3.10% | C 2.90% | P 2.60%

EUR        Eurozone Current Account (EUR) Aug A 33.3B | C 26.2B | P 25.1B | R 31.5B

GBP       Public Sector Net Borrowing (GBP) Sep A 5.3B | C 5.7B | P 5.1B

CAD       CPI M/M Sep A 0.20% | C 0.40% | P 0.10%

CAD       CPI Y/Y Sep A 1.60% | C 1.70% | P 1.40%

CAD       CPI Core – Common Y/Y Sep A 1.50% | P 1.50%

CAD       CPI Core – Trim Y/Y Sep A 1.50% | P 1.40%

CAD       CPI Core – Median Y/Y Sep A 1.80% | P 1.70%

CAD       Retail Sales M/M Aug A -0.30% | C 0.40% | P 0.40%

CAD       Retail Sales Less Autos M/M Aug A -0.70% | C 0.30% | P 0.20%

USD       Existing Home Sales Sep A 5.39M | C 5.32M | P 5.35M

Stay lucky

Andy

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