Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 113.466 | EURUSD 1.17738 | AUDUSD 0.75095 | NZDUSD 0.68368 | USDCAD 1.28499 | USDCHF 0.99254 | GBPUSD 1.33823 |

 

LMAX Ranges 6am London time

Highs    Lows

EURUSD               1.17845 | 1.17631

USDJPY                 113.689 | 113.455

GBPUSD               1.34039 | 1.33716

AUDUSD              0.75298 | 0.75029

USDCHF               0.98425 | 0.99163

USDCAD               1.28644 | 1.28387

NZDUSD               0.69118 | 0.68356

EURGBP               0.87976 | 0.87837

EURCHF                1.16905 | 1.16767

EURJPY                 133.884 | 133.538

For today

• EUR: A quiet session with some volume with the market opening unchanged and testing through to the 1.1785 areas before quietly holding in the 1.1780 areas, holding that level through to the grey hours, light offers through the 1.1800 areas with limited potential for stops with congestion likely through to the 1.1850 areas with the offers likely to increase into the 1.1880 areas with possible weak stops and light offers into the 1.1900 areas, with stronger offers then continuing through to the 1.1960 areas, downside bids light through to the 1.1750 level with weak stops likely on a break below the 1.730 areas and the market then opening to a test through the 1.1700 level with limited bids into the area and stronger bids likely into the 1.1660 levels continuing through to the 1.1640 before weakness appears.
• GBP: A very quiet session for the Cable with the market pushing from the opening 1.3380 areas to hold around the 1.3400 areas through to the grey hours, Congestion to the downside through to the 1.3350 levels with some light stops through the level with bids likely to continue through to the 1.3300 level with stops likely on a move through the level and stronger congestion into the 1.3250 areas, Topside offers light back through the 1.3450 areas and then increasing on a move through the 1.3500 level with congestion likely to continue through to the 1.3550 areas and possibly strong stops on a move through the level to quickly test to the 1.3600 level and possibly beyond.
  JPY: USDJPY opened around the 113.50 levels, early trading saw the market pushing through the 113.60 areas with the move into the Tokyo session testing the 113.70 area before drifting through towards the grey hours testing back to the 113.50 level, Topside congestive offers into the 114.00 level likely to continue through to the 114.30 areas before stronger offers appear into the 114.50-60 areas and possible strong stops on an attempt at the 115.00 level with possible option plays in the area, a push through the area could see the market spike higher with stops likely to join the defending option players, for a push through to the 115.40 levels before some offers reappear. Downside bids light through the 113.00 level with weak stops on a move back through the 112.80 area and the market quickly testing through towards the 112.00 where bids start to increase however, the 111.50 level is the stronger point however, with very little data for the day its likely to be quiet.
• AUD: Testing from the lows from the opening the market moved off the lows to push slowly through to the 0.7528 area before moving into the grey hours with volumes disguising the fact that volumes didn’t match any of the ranges. Downside bids into the 75 cent level still remain and for the moment look strong, a push through the level though is likely to see stronger stops appearing and the market opening to a quick test to the 0.7460-40 levels where congestive bids Topside offers light through the 76 cent areas however, above the figure level the market starts to see some congestive offers running through to the 0.7650 areas and possibly stronger beyond.

Overnight News

NZD:

NZ economists lower forecast for GDP growth NZIER

NZ Retail card spending rises more than forecast

DJ Adrian Orr appointed new RBNZ Gov. from March 2018

EUR/GBP:

Ireland warns May over Brexit deal

GBP:

UK consumers cut spending in run up to Christmas Visa

May’s fragile truce tested as Brexit pledges start to unravel

CNY:

China’s top paper says Australian media reports are racist

Today’s data

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

JPY         BSI Large All Industry Q/Q Q4 A 6.2 | C 5.8 | P 5.1

JPY         BSI Large Manufacturing Q/Q Q4 A 9.7 | C 10 | P 9.4

JPY         Japan Money Stock M2+CD Y/Y Nov A 4.00% | C 4.10% | P 4.10%

JPY         Machine Tool Orders Y/Y Nov (P) A 46.90% | P 49.80%

23:50     JPY         Domestic CGPI Y/Y Nov C 3.30% | P 3.40%

23:50     JPY         Domestic CGPI M/M Nov C 0.20% | P 0.30%

Weekend News

NZD:

New Zealand will shortly move to extend bright line test FinMin

FinMin: Will widen RBNZ objectives to give due consideration to maximising employment in monetary policy

CNY:

Chinese capital controls send tremor through Australian city of Brisbane BTM

EUR:

US economy Trump tax plan worries Europe Spiegel

Harry Hindsight

• EUR: Another limited day with the market drifting from the opening in a quiet range opening around the 1.1770 levels and pushing through the highs around 1.1775 to test into the grey hours along the 1.1760 level, early European sellers saw the London market opening around the 1.1750 areas and the market slipping a little lower from London open with slightly weaker German trade balance, the market tested eventually to the 1.1730 areas and held through to the NFP number with a slightly stronger number seeing the Euro bounce back higher to the opening areas for a quiet run to finish the day virtually unchanged.
• GBP: A deal done or not as the case may be as until the whole of the Brexit negotiation is over with the deal is not complete, Cable edged up as the deal was set moving off the early lows around the 1.3460 level to push through to the 1.3520 level and holding that level into the grey hours, early Europeans sold the Cable on the knowledge that Barnier is still not finished with Davis, May only for early London to push it back to the highs, the run through London saw an unchanged monthly IP number and a blip higher in Manufacturing with a slightly lower visible trade balance all unhelpful and the Cable falling back to the 1.3450 levels and weak stops appearing on the move through to test the 1.3400 levels, the move into the NYK session saw the market holding the level and as the London session came to a close the market again dropped with discontent starting to bubble in the media and comments from Europe about a soft Brexit being an understatement or something along those lines the run to the close saw some recovery from the lows just above the 1.3350 level and returning to trade around the 1.3400 areas.
  JPY: A steady rise through the Asian session testing through the 113.30 levels into early Tokyo, after a brief pause the market again started to rise again pushing through to the London session moved off the 113.40 levels testing towards the 113.50 areas holding close to the area through to the NYK session, a quick selloff into the early numbers saw the USD dip with no movement in average hourly earnings testing quickly towards the 113.10 level before bouncing back to hold the 113.50 levels through to the close.
• AUD: Opening around the 0.7510 levels the market dipped towards the 75 cent level in early trading before returning to the opening levels and ranging quietly through to the grey hours holding the 0.7506-16 areas with very little going through the market, the move into the NYK session saw the Oz spike through the 0.7530 levels before again dropping back and holding quietly below the 0.7510 areas to the close.

Yesterday’s premiership results

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         Labour 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

EUR        German Trade Balance (EUR) Oct A 19.9B | C 22.3B | P 21.8B | R 21.9B

GBP       Industrial Production M/M Oct A 0.00% | C 0.00% | P 0.70%

GBP       Industrial Production Y/Y Oct A 3.60% | C 3.50% | P 2.50%

GBP       Manufacturing Production M/M Oct A 0.10% | C 0.00% | P 0.70%

GBP       Manufacturing Production Y/Y Oct A 3.90% | C 3.80% | P 2.70%

GBP       Construction Output M/M Oct A -1.70% | C 0.10% | P -1.60%

GBP       Visible Trade Balance (GBP) Oct A -10.8B | C -11.5B | P -11.3B

GBP       NIESR GDP Estimate Nov A 0.50% | C 0.40% | P 0.50%

CAD       Housing Starts Nov A 252.2K | C 221K | P 223K | R 222.7K

CAD       Capacity Utilization Rate Q3 A 85.00% | C 85.20% | P 85.00%

USD       Change in Non-farm Payrolls Nov A 228K | C 200K | P 261K | R 244K

USD       Unemployment Rate Nov A 4.10% | C 4.10% | P 4.10%

USD       Average Hourly Earnings M/M Nov A 0.20% | C 0.30% | P 0.00%

USD       U. of Mich. Sentiment (Dec P) A 96.8 | C 99 | P 98.5

Stay lucky

Andy

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