Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 113.086 | EURUSD 1.17724 | AUDUSD 0.75123 | NZDUSD 0.68454 | USDCAD 1.28544 | USDCHF 0.99432 | GBPUSD 1.34744 |

LMAX Highs and Lows 6am GMT

                                High | Low

EURUSD               1.17766 | 1.17605

USDJPY                 113.393 | 113.081

GBPUSD               1.35184 | 1.3460

USDCHF               0.99592 | 0.99411

AUDUSD              0.75166 | 0.75016

USDCAD               1.28612 | 1.28512

NZDUSD               0.68409 | 0.68225

EURCHF                1.17172 | 1.17042

EURGBP               0.87449 | 0.87004

EURJPY                 133.417 | 133.141

For today

• EUR: The break of the 200DMA in EURGBP has kept the Euro under a little pressure, and the whole day was a little quiet overall with NFP later in the day, opening around the 1.1775 areas the market drifted through the session with very little movement overall testing through to the 1.1760 areas for the move into the grey hours, Downside bids light through bids light through to the 1.1720-00 areas with some limited bids extending through that level but likely weak stops on a push through the 1.1680 areas opening up the 1.1663 key level with a push through here likely to see a quick move through to some congestion into the 1.1600-1.1580 areas with stronger bids appearing on any attempt to push through the lows from November, Topside offers light through the 1.1800 areas with some offers now building around the 1.1850 areas with weak stops on a push through the 1.1880 areas likely, with some offers into the 1.1900 for the moment protecting the stronger 1.1950 key level.
• GBP: Initially struggling with the 1.3480 levels the market slipped down through the level to test to the 1.3460 areas before slowly making steady gains and pushing through to a few pips short of the 1.3500 level pushing through as the market approached the grey hours to the 1.3520 level with news that possible meeting with Juncker and PM May early in Brussels, with negotiations with the DUP N. Ireland party through the night, Topside offers into the 1.3550 areas are likely to be closely followed by stop losses and the market opening for a quick test to the stronger offers into the 1.3600 areas, however, given the possible news the 1.3650 highs from September are possible the target if the early news has anything concrete behind it then 1.3650 will likely see stops above the level and the potential for a sharp move. Downside bids through to the 1.3350 areas are likely to be light however, apart from weak stops on a push back through the 1.3400 level if the market fails to realise the early news will quickly see that level tested again with stronger bids not expected until closer to the 1.3300 areas with congestive bids possibly on a move through the level and into the 1.3250-20 areas.
• JPY: USDJPY held quietly from the close in NYK and pushed to the 113.20 levels into the Tokyo session and after a brief pause continued a slow rise through to the 113.40 areas to range quietly through to the grey hours, Topside congestion through the 113.50 areas and into the 114.00 with stronger offers likely to that topside band, a push through will likely see some weak stops however, until the market pushes beyond the 114.50 level with conviction the congestive offers are likely to remain in place, a break through the 114.60 level could see stronger stops appearing and the market having a chance to test the 115.00 levels with possible option plays around the level, downside bids light through to the 112.00 level with some stronger bids in that area and only light congestion on a move lower to there, a push through will likely see weak stops and the market opening to test the stronger 111.50 areas with limited congestion in front of the 111.00 level with NFP likely to be an important part of any move.
• AUD: A very quiet range for the Oz with the market opening around the 0.7510 level testing towards the 75 cent levels in early Tokyo before rising back to the opening level and struggling to test through the 0.7515 areas with little interest for the moment. Downside bids into the 75 cent level likely to be reasonably strong however, a push through the 0.7480 areas is likely to see stronger stops appearing and the market opening to the 74 cent level with only limited bids through the 0.7460-40 areas, possible strong congestion beyond the 74 cent level. Topside offers light through to the 76 cent areas with some weak offers through to the 0.7630 areas dominating the topside for the moment and then strong congestive offers on any move to test into the 77 cent areas.

 

Overnight News

GBP:                                                                                         

UK Optimistic about Irish Border deal by today

DUP leader Foster negotiated through the early hours with PM May on border issue

DUP leader to make a statement later today,

DUP said to see breakthrough in talks RTE

DUP leader Foster says substantive changes made to Brexit border drat text SKY

Foster says PM May has border text she feels she wants to take to the EU SKY

Foster says no red line down the Irish sea after Brexit

Foster: Clear confirmation that the whole UK is leaving the single market and customs union

Foster: further matters to be clarified over the short term.

CNY:

Chinese banks face potential shortfall IMF

EUR:

Juncker aide Selmayr tweets picture of white smoke

NZD:

Manufacturing volumes increase at a slower pace

Today’s data

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

NZD       Manufacturing Activity Q3 A 0.50% | P 3.90% | R 3.40%

JPY         Current Account (JPY) Oct A 2.44T | C 1.93T | P 1.84T

JPY         GDP Q/Q Q3 (F) A 0.60% | C 0.40% | P 0.30%

JPY         GDP Deflator Y/Y Q3 (F) A 0.10% | C 0.10% | P 0.10%

JPY         Labor Cash Earnings Y/Y Oct A 0.60% | C 0.80% | P 0.90%

AUD       Home Loans M/M Oct A -0.60% | C -2.00% | P -2.30% | R -2.50%

CNY        Trade Balance (CNY) Nov A 264B | C 238B | P 254B

CNY        Trade Balance (USD) Nov A 40.2B | C 34.9B | P 38.2B

07:00     EUR        German Trade Balance (EUR) Oct C 22.3B | P 21.8B

09:30     GBP       Industrial Production M/M Oct C 0.00% | P 0.70%

09:30     GBP       Industrial Production Y/Y Oct C 3.50% | P 2.50%

09:30     GBP       Manufacturing Production M/M Oct C 0.00% | P 0.70%

09:30     GBP       Manufacturing Production Y/Y Oct C 3.80% | P 2.70%

09:30     GBP       Construction Output M/M Oct C 0.10% | P -1.60%

09:30     GBP       Visible Trade Balance (GBP) Oct C -11.5B | P -11.3B

13:00     GBP       NIESR GDP Estimate Nov C 0.40% | P 0.50%

13:15     CAD       Housing Starts Nov C 221K | P 223K

13:30     CAD       Capacity Utilization Rate Q3 C 85.20% | P 85.00%

13:30     USD       Change in Non-farm Payrolls Nov C 200K | P 261K

13:30     USD       Unemployment Rate Nov C 4.10% | P 4.10%

13:30     USD       Average Hourly Earnings M/M Nov C 0.30% | P 0.00%

15:00     USD       U. of Mich. Sentiment (Dec P) C 99 | P 98.5

 

Harry Hindsight

• EUR: A very quiet day for the Euro with the market opening around the 1.1800 levels with the market trading around that level throughout the day before dropping off late into the NYK session, a weaker industrial production number from Germany was largely ignored, unable to push much beyond the 1.1800 areas testing late in the session to the 1.1815 area before drifting off for the close holding just below the 1.1780 areas.
• GBP: A quiet range through the Asian session with the market dipping a little from the opening 1.3390 areas to test through the 1.3380 level and base along there through to the grey hours with the market slipping a little lower and holding the 1.3370 levels into the London session unchanged Eurozone GDP saw the market pop higher testing through the 1.3420 level before trading lower again to trigger weak stops on a move through the 1.3370 level touching 1.3320, with more squabbles within the Government, the market bounced off the lows and pushed steadily back to the 1.3350 level before again triggering weak stops to quickly push into the NYK session to just short of the opening levels, deeper into the NYK session the market pushed back through the 1.3400 levels struggling from the 1.3430-40 areas through to the close of London with the market eventually popping through that 40 level and weak stops pushing the market to the 1.3480 areas to hold through to the close in the area.
• JPY: USDJPY saw a steady climb higher as USD took on a bid tone through the market with Asia taking the market off the low 112.20’s to push up against the 112.50 areas and holding the 112.40 level through to the grey hours, early Europeans continued the move with support in the crosses heling the market to move through to the NYK session pushing the 112.80 level before drifting a little, drifting a little from the opening in NYK the market based along the 112.60 level until the close of London and then renewing the push higher through to the 113.00 areas with limited stops along the way and holding around the 113.10 level through to the close.
• AUD: Opening around the 0.7565 levels and as with the previous day the numbers set the tone for the market as the market held its level into a weaker trade balance and a drop through to the 0.7545 level before holding quietly through to the grey hours, early Europeans sold the market steadily and the London session saw the market balanced on the 0.7530 level slowly tripping a little to test slowly to the 0.7515 areas and basing along the level deep into the session before attempting a push a little lower and making the low around the 0.7505 areas and finishing just above the 0.7510 level.

Yesterday’s premiership results

AUD       Trade Balance Oct A 0.11B | C 1.41B | P 1.75B | R 1.60B

JPY         Leading Index CI Oct (P) A 106.10 | C 106.1 | P 106.4

CHF        Unemployment Rate Nov A 3.00% | C 3.10% | P 3.00%

EUR        German Industrial Production M/M Oct A -1.40% | C 1.00% | P -1.60%

CHF        Foreign Currency Reserves (CHF) Nov A 735B | C 745B | P 742B

EUR        Eurozone GDP Q/Q Q3 (F) A 0.60% | C 0.60% | P 0.60%

USD       Challenger Job Cuts Y/Y Nov A 30.10% | P -3.00%

CAD       Building Permits M/M Oct 3.50% | C 1.70% | P 3.80% | R 4.90%

USD       Initial Jobless Claims (DEC 02) A 236K | C 241K | P 238K

CAD       Ivey PMI Nov A 63 | C 62.7 | P 63.8

USD       Natural Gas Storage A 2B | C -5B | P -33B

Good Luck,

Andy

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