Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 112.232 | EURUSD 118.983 | AUDUSD 0.76116 | NZDUSD 0.68914 | USDCAD 1.26853 | USDCHF 0.97608 | GBPUSD 1.34736 |

 

LMAX Ranges 6am London time

Highs    Lows

EURUSD               1.18790 | 1.18563

USDJPY                 112.895 | 112.634

GBPUSD               1.35142 | 1.3435

AUDUSD              0.76073 | 0.75815

USDCHF               0.98297 | 0.97938

USDCAD               1.27214 | 1.26939

NZDUSD               0.68707 | 0.68482

EURGBP               0.88358 | 0.87844

EURCHF                1.16676 | 1.16283

EURJPY                 134.010 | 1.3366

For today

• EUR: Opening lower as the weekend news impacted the USD, the Euro opened around the 1.1860-80 levels with the market settling down to trade around the 1.1870 levels on a move through into the Tokyo session, Tokyo were sellers and the market tested through to the 1.1855 level again before holding the 1.1870 areas through to the grey hours unable to push beyond the opening and that low. Topside offers likely to be light through the 1.1900 areas with the market possibly increasing in resistance on a move through to the 1.1940-60 areas with possible weak stops on a move through the level and into the stronger 1.1980-1.2000 areas, a push through the 1.2020 areas could possibly see stops appearing and the market likely to see a quick move higher in an attempt to test the years highs with strong offers likely into that area and the 1.2100 level, downside bids light through to the 1.1840 areas with stronger bids appearing on any test to the 1.1800 area, through that level though the market could see stronger stops appearing and the market opening to a test to the 1.1750 areas before finding more substantial bids appearing.
• GBP: As with everything trading against the USD Cable opened lower around the 1.3440 areas before moving back above the 1.3450 level, a European official made comments about the Brexit deal being 90% done and the Cable quickly rose to above the 1.3500 levels, the market then drifted through the session steadily dropping back to the 1.3470 areas and then drifting through to the grey hours holding the 1.3465 level, Downside light congestion building into the 1.3400 areas with possible weak stops on a break down below that level with only limited bids in the sentimental levels with stronger bids likely on the 1.3300 areas below that level the market starts to see some congestion appearing in the market and support increasing. Topside offers into the 1.3550 levels with the market likely to see an increase of offers the close you move to the 1.3600 areas with stops likely on a strong break through the 1.3620 levels.
• JPY: As with the other currencies the market opening a little wide and crazy with the USDJPY testing from the 112.72-82 areas and the move into the Tokyo session pushing towards the 112.90 levels before drifting a little and dipping down to the 112.70 areas and holding around that level deep into the session before rising a little through the 112.80 areas into the grey hours, Topside offers into the 113.00 areas with offers continuing lightly through to the stronger 113.25 areas however a push through that level is likely to see weak stops appearing and the market opening to the 113.80 areas before better offers reappear, with those offers likely to increase into the 114.00 areas with weak stops likely on a push through the level, downside bids light through to the 112.00 areas and while there are bids in that area are likely to continue through to the 111.80 levels before weak stops appear with the market opening to another test of the 111.00 areas.
• AUD: Opening just below the 76 cent levels the market held the 0.7590 areas through into the early hours of Tokyo before rallying through to the 0.7605 areas and drifting around the figure through to the grey hours, Downside bids into the 0.7550-30 areas with possibly weak stops on a move through the downside level and opening a quick test to the 75 cent areas, a push through the level is likely to find congestive bids throughout the 74 cent handle with particular strength into the 0.7440-60 levels and again into the 0.7400 areas, Topside offers light through to the 0.7640 level with some offers likely to continue through to 0.7660 but mostly congestive in nature a push through the level will likely see stronger offers start to appear as the market moves towards the 77 cent level in particular with weak stops through the 0.7710 areas possible.

Overnight News

GBP:

Yesterday’s news superseded: Brexit deal 90% there says senior EU official

Brussels unusually optimistic ahead of May visit – BBC

EUR:

The Dispiriting prospect of a new grand coalition Spiegel

Four Candidates battle to replace Dijssebloem

EUR/GBP:

Brexit deal difficult but doable – diplomats

Today’s data

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

23:50     JPY         Monetary Base Y/Y Nov A 13.20% | C 13.20% | P 14.50%

00:00     AUD       TD Securities Inflation M/M Nov A 0.20% | P 0.30%

05:00     JPY         Consumer Confidence Index Nov A 44.9 | C 44.9 | P 44.5

09:30     GBP       Construction PMI Nov C 51 | P 50.8

09:30     EUR        Eurozone Sentix Investor Confidence Dec C 32.7 | P 34

10:00     EUR        Eurozone PPI M/M Oct C 0.30% | P 0.60%

10:00     EUR        Eurozone PPI Y/Y Oct C 2.60% | P 2.90%

15:00     USD       Factory Orders Oct C -0.40% | P 1.40%

Weekend News

USD;

Taxation laws passed both houses and will likely to become law within 2 weeks

Some minor differences will need to ironed out in the meantime

Trump says he fired Flynn for lying to the Vice Pres. But his actions during the transition were lawful

Feinstein: Obstruction of Justice case on Trump developing

Trump slams FBI after Flynn plea, removal of agent WSJ

Trump’s weekend tweets target the FBI under ex-director Comey and raise question about timing of firing

Overseas investors finally join the US stock market party after 4 yrs of outflows

GBP:

Senior Brixit members call for stronger terms for the UK in negotiations

PM May’s Brexit quandary deepens TEL

Brexit timetable in jeopardy as PM May fails to reach deal on Irish border

EUR:

Europe set to award China Holy Grail with Tariff rules revamp

CNY:

China’s curb on irrational overseas investment over CBN

JPY:

Japanese investors shy away from Aussie as yield spread vanishes

Harry Hindsight

• EUR: A steady and quiet rise through the Asian session moving off the lows just after the opening to push though the 1.1900 level again from the 1.1890 areas to trading quietly around the 1.1910 areas through to the grey hours, with early Europeans pushing to the 1.1930 level before dipping back to the 1.1910 into the official opening in London, PMI figures slightly better than expected saw the Euro rallying to the 1.1940 areas the rally didn’t last and the market dropped back from the highs to trade around the 1.1900 levels through to the NYK session, NYK were quick sellers as Brexit again took centre stage and the Euro dipped to the 1.1850 areas before finding support into the NYK Option expiry, and into the London close rallying sharply with slightly weaker ISM numbers impacting the market and quickly regaining the highs before drifting to the close holding around the opening levels.
• GBP: The Asian session saw an immediate dip to the 1.3510 areas before rallying on the Tokyo opening back towards the opening levels, as the market moved into the session the Cable tested to the 1.3555 areas to make the high of the day before drifting off to hold the opening levels through to the grey hours, the move into the London session saw the market again drifting and even the strong PMI manufacturing number did little for the market as the market dropped through to the 1.3480 level before ranging in a choppy market through to the close, concerns with the UK/Dublin situation overshadowing the market saw the market eventually drop through to the 1.3450 levels, the market recovered a little to hold the 1.3470 areas to the close.
• JPY: The USDJPY tested just a little bit higher from the opening testing the 112.70 areas before slipping lower as the Tokyo session opened to drift off to the 112.30 areas before holding around the opening levels through to early morning in London, the market dropped back to extend the lows as the market reached midday in London holding the 112.30 level before moving slowly back to the opening levels and testing through towards the 112.90 areas before dropping back quickly through to the 111.50 levels before finding some bids just below the level to hold the market and rising back to the 112.00 level and a slow climb to the close to test the 112.30 areas.
• AUD: The Oz saw limited action through the Asian session with the lows set early in the session around the 0.7550 level however, the market generally sat in the 0.7560-70 range through to the grey hours and only started to move as the market moved into the London session, pushing from the 0.7560 level to test steadily towards the 76 level, once there though the market was unable to push lower and drifted off through into the NYK session testing back to the opening levels for the move into the NYK session, Oz steadily recovered through to the 76 cent levels before pushing quickly through to the 0.7640 level triggering weak stops along the way as Trump/Flynn situation impacted on the market before the market then drifted back to the 0.7610 for a drawn out close.

Yesterday’s premiership results

NZD       Terms of Trade Index Q/Q Q3 A 0.70% | C 1.30% | P 1.50% | R 1.40%

JPY         Unemployment Rate Oct A 2.80% | C 2.80% | P 2.80%

JPY         Overall Household Spending Y/Y Oct A 0.00% | C -0.30% | P -0.30%

JPY         National CPI Core Y/Y Oct A 0.80% | C 0.80% | P 0.70%

JPY         Tokyo CPI Core Y/Y Nov A 0.60% | C 0.60% | P 0.60%

JPY         Capital Spending Q3 A 4.20% | C 3.20% | P 1.50%

JPY         PMI Manufacturing Nov (F) A 53.6 | C 53.8 | P 53.8

CNY        Caixin PMI Manufacturing Nov A 50.8 | C 51 | P 51

CHF        PMI Manufacturing Nov A 65.1 | C 62.5 | P 62

EUR        Italy Manufacturing PMI Nov A 58.3 | C 58.3 | P 57.8

EUR        France Manufacturing PMI Nov (F) A 57.7 | C 57.5 | P 57.5

EUR        Germany Manufacturing PMI Nov (F) A 62.5 | C 62.5 | P 62.5

EUR        Eurozone Manufacturing PMI Nov (F) A 60.1 | C 60 | P 60

GBP       PMI Manufacturing Nov A 58.2 | C 56.5 | P 56.3 | R 56.6

CAD       GDP M/M Sep A 0.20% | C 0.10% | P -0.10%

CAD       Net Change in Employment Nov A 79.5K | C 10.0K | P 35.3K

CAD       Unemployment Rate Nov A 5.90% | C 6.20% | P 6.30%

CAD       Manufacturing PMI Nov A 54.4 | P 54.3

USD       Manufacturing PMI Nov (F) A 53.9 | C 53.8 | P 53.8

USD       ISM Manufacturing Nov A 58.2 | C 58.3 | P 58.7

USD       ISM Prices Paid Nov A 65.5 | C 67.8 | P 68.5

USD       Construction Spending M/M Oct A 1.40% | C 0.50% | P 0.30%

Stay lucky

Andy

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