Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 114.061 | EURUSD 1.16085 | AUDUSD 0.76496 | NZDUSD 0.69069 | USDCAD 1.27633 | USDCHF 1.00055 | GBPUSD 1.30758 |

 

LMAX Ranges 6am London time

Highs    Lows

EURUSD               1.16244 | 1.15966

USDJPY                 114.738 | 114.041

GBPUSD               1.30804 | 1.30583

AUDUSD              0.76598 | 0.77636

USDCHF               1.00244 | 0.99955

USDCAD               1.27785 | 1.27603

NZDUSD               0.69128 | 0.68874

EURGBP               0.88889 | 0.88768

EURCHF                1.16308 | 1.16624

EURJPY                 133.122 | 1.3244

For today

• EUR: A reasonable quiet session with some volume seen on the push through the 1.1600 in early Tokyo before recovering the opening and pushing a little above the 1.1620 level with the market holding around the opening areas into the grey hour, downside bids into 1.1580 areas with possible bids extending to the 1.1570 areas before weak stops appear in the market and key levels cleared for a deeper move with sentimental areas the better bid however, the downside opens to the 1.1500-1.1480 areas where stronger bids appear. Topside offers light through the 1.1650 areas and increasing into the 1.1660 level with limited stops through the area and the 1.1700 level then vulnerable through that area to the 1.1740-60 areas where stronger offers are likely. PMI numbers to watch.
• GBP: Opening around the 1.3070 levels the market pushed to the 1.3080 level in early trading before slipping back to make lows around the 1.3060 areas into early Tokyo session, the market struggled on the lows for a couple of hours before starting a steady move through towards the 1.3080 level and holding into the grey hour around the opening level. Downside bids into the current areas with the bids possibly going a little deeper with congestion into the 1.3000 areas limited at best and the downside vulnerable to stops appearing and opening to the 1.2900 areas. Topside offers light through the 1.3100 level with slightly stronger offers likely into the 1.3150 areas, possibly stronger offers into the 1.3180-1.3200 levels with those offers likely to increase on a move to the 1.3220 areas with weak stops likely through the level.
• JPY: USDJPY like the others opened in line with Fridays close and started a slow climb higher into the Tokyo session, the release of the BoJ minutes saw the market quickly push higher and the market testing above the 114.70 levels before seeing sufficient interest to turn it slowly back again and once through the 114.50 level trigger some weak stops before trading quietly around the 114.30 areas. Downside bids light through the 114.00 areas with weak stops likely through the 113.80 areas with stronger bids into the 113.20 areas and continuing through to the 113.00-112.80 areas, strong stops are likely through the level and the market vulnerable to a larger move, Topside offers through the 114.60 areas with stronger offers likely beyond the 114.80 level with weak stops on a move through the 115.00 areas and possible stronger offers continuing into the 115.50 level.
• AUD: A quiet opening saw the Oz trading around the 0.7650 levels through the session testing down to the 0.7640 areas in the USDJPY buying before rising through to test the 0.7660 level before trading back to the opening level. Downside bids into the 0.7640 area with the likelihood of a mixture of stops and bids through to the 0.7620 areas and the bids possibly increasing from there, a push through the 0.7600 areas could see stops appearing and the market congested through the 75 cent handle. Topside offers light into the 77 cent levels and while those offers thin out as the market moves through the 0.7710 level with increasing offers then into the 0.7730-40 areas.

Overnight News

USD/JPY:

Tump: Right now our trade with Japan is not free or reciprocal

JPY:

Kuroda: BoJ will persistently continue powerful easing

Kuroda: There is still a long way to achieve 2% price target

PM Abe: Supports President Trumps stance on N. Korea that all options are on the table

PM Abe: agreed with US Pres. Trump, China needs to play larger role to have N. Korea abandon its weapons programmes

GBP

May: We won’t shield UK economy from market forces BBC

Carney’s own Phillips curve calls for rate caution BBG

Today’s data

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

JPY         BOJ Minutes Sep Meeting

AUD       TD Securities Inflation M/M Oct A 0.30% | P 0.30%

NZD       RBNZ 2-Year Inflation Expectation Q4 A 2.00% | P 2.10%

07:00     EUR        German Factory Orders M/M Sep C -1.10% | P 3.60%

08:15     CHF        CPI M/M Oct C 0.10% | P 0.20%

08:15     CHF        CPI Y/Y Oct C 0.70% | P 0.70%

08:45     EUR        Italy Services PMI Oct C 53 | P 53.2

08:50     EUR        France Services PMI Oct (F) C 57.4 | P 57.4

08:55     EUR        Germany Services PMI Oct (F) C 55.2 | P 55.2

09:00     EUR        Eurozone Services PMI Oct (F) C 54.9 | P 54.9

09:30     EUR        Eurozone Sentix Investor Confidence Nov C 31 | P 29.7

10:00     EUR        Eurozone PPI M/M Sep C 0.40% | P 0.30%

15:00     CAD       Ivey PMI Oct P 59.6

Weekend News

USD:

NYK Fed’s Dudley may soon announce retirement CNBC

Mueller reportedly has enough evidence to charge Michael Flynn

Commerce head has stake in firm tied to Putin orbit AP

Booming Labour market, Fed/Powell, retailers struggling to find staff WSJ

Trump warns against challenging the US during first stop in Asia BBG

Trump plans to see Putin in Asia amid scrutiny of campaign ties BBG

Trump prepares to maximise pressure on N. Korea

AUD:

RBA’s Lowe may have to ignore weak inflation but not just yet

CNY:

China’s financial system weakening amid latent risks Zhou

EUR:

Sacked Catalonia leader turns himself in, polls how independence strength RTRS

KRW:

1. Korea call for halt to brutal sanctions

Harry Hindsight

• EUR: Opening around the 1.1655 levels the market moved quietly through Asian session with the market pushing up into the 1.1665 areas but unable to challenge the 1.1670 areas and it wasn’t until the grey hour that the market truly tested the downside having based along the opening levels, early sellers took the market down to the 1.1640 area and held through to the NYK session in a similar tight range before lifting on the NYK opening with a revision on the Trade balance and NFP coming in lower, the market spiked through the highs and touched the 1.1690 areas before dropping back as the drop in unemployment and the better than expected hourly earnings number, the market reversed and the fall through the 1.1640 areas saw weak stops and a move through towards the 1.1600 areas and ranged in a tight 1.1600-20 areas to the close.
• GBP: A quiet Asian session for the Cable with the market quietly rising from the opening levels and the lows around 1.3050 to push above the 1.3070 and holding to the London opening, the market dropped back to test the 1.3050 areas the early sellers encouraged by the nearness of the level and pushed through to the 1.3040 levels before starting a recovery, a stronger Services number helped the market and a small gap higher through the 1.3060 levels and then rising steadily through to the 1.3090 levels as the market moved into the NYK session, US numbers as with the Euro saw the Cable push through to the 1.3130 levels before dropping quickly back to the 1.3100 level and holding for a short period before slowly dropping back to the 1.3070 areas again and a 1.3060-80 range through to the close.
• JPY: USDJPY traded quietly for most of the day with the market opening around the 114.10 level and drifting through into Tokyo to test the 113.90 level and recovered the move through to the NYK session saw the market holding around the opening levels with very little movement, the US numbers saw the market drop through to the 113.65 areas before snapping back again to the 114.00 levels and eventually pushing through the highs to test to the 114.40 area, holding around the 114.30 deep into the session saw the market eventually give ground and tip back to the opening levels for the close.
• AUD: The Oz dropped from the opening levels initially just a few pips however the move into the Tokyo session and the release of the poor retail sales numbers saw the market drop quickly through to the 0.7685 area and a slow drift through to the NYK session dropping to the 0.7665 levels in dull trading, the move into the NYK session saw the market stab higher back towards the 0.7690 level before dropping back and triggering stops on the move through the lows and a test to the 0.7640 areas and basing through to the close just off those lows.

Yesterday’s premiership results

AUD       Retail Sales M/M Sep A 0.00% | C 0.40% | P -0.60%

CNY        Caixin PMI Services Oct A 51.2 | C 50.8 | P 50.6

GBP       Services PMI Oct A 55.6 | C 53.3 | P 53.6

CAD       International Merchandise Trade (CAD) Sep A -3.18B | C -2.95B | P -3.41B | R -3.18B

CAD       Net Change in Employment Oct A 35.3K | C 15.5K | P 10.0K

CAD       Unemployment Rate Oct A 6.30% | C 6.20% | P 6.20%

USD       Trade Balance Sep A -43.5B | C -43.5B | P -42.4B | R -42.8B

USD       Change in Non-farm Payrolls Oct A 261K | C 310K | P -33K | R 18K

USD       Unemployment Rate Oct A 4.10% | C 4.20% | P 4.20%

USD       Average Hourly Earnings M/M Oct A 0.00% | C 0.20% | P 0.50%

USD       ISM Non-Manufacturing/Services Composite Oct A 60.1 | C 58.5 | P 59.8

USD       Factory Orders Sep A 1.40% | C 1.20% | P 1.20%

Stay lucky

Andy

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