Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 113.558 | EURUSD 1.1769 | AUDUSD 0.75261 | NZDUSD 0.69157 | USDCAD 1.28561 | USDCHF 0.99196 | GBPUSD 1.33383 |

LMAX Highs and Lows 6am GMT

                                High | Low

EURUSD               1.17800 | 1.17644

USDJPY                 113.578 | 113.437

GBPUSD               1.33504 | 1.33332

USDCHF               0.99238 | 0.99133

AUDUSD              0.75369 | 0.75193

USDCAD               1.28610 | 1.28437

NZDUSD               0.69372 | 0.69016

EURCHF                1.16795 | 1.16671

EURGBP               0.88276 | 0.88193

EURJPY                 133.747 | 133.478

For today

• EUR: A very quiet session with the market drifting from the highs around the 1.1780 levels early in Tokyo to test through to the lows of the day around 1.1765 with very little going through and pushing into the grey hours almost unchanged on the day, Topside offers into the 1.1780 levels with those offers likely to continue through to the 1.1800 areas with light congestion through to the stronger 1.1850 levels with those offers likely to extend to the 1.1880 level before any weakness appears in the market, Downside bids through the 1.1750 level and extending down towards the 1.1730 level weak stops likely on a push through the 1.1700 areas opening a test of the stronger 1.1660 level with congestion likely to push into the 1.1640 with a mix through the level and stronger bids again into the 1.1600 level.
• GBP: A very flat day with the Cable meandering around the 1.3340 levels with barely a blip to be seen, a couple of attempts to the 1.3350 levels in early trading and the downside was less exciting with the market barely breaking through the 1.3335 level before heading into the grey hours holding just above that 1.3340 level. Downside congestion through to the 1.3300 areas with a break through that level possibly opening a quick move to the stronger 1.3250 areas and congestion continuing to the 1.3220, a break here will possibly see further congestion on a move through to the 1.3150 level. Topside offers light through to the 1.3440 levels with weak stops on a move through the level and congestive offers then continuing through to the 1.3500 areas increasing in size on a move through to the 1.3550 level.
• JPY: Early trading to above the 113.55 levels saw the market drop back and test to the 113.45 areas and then trade in a narrow range through to the grey hours holding just off those lows. Topside offers through the 113.80-114.00 areas likely to be congested through to the 114.50 areas with a push through the 114.60 level likely to see some strong stops appearing above the level and the market likely to test towards the 115.00 level, gotobi rules apply with this level in particular with possibly strong offers into the level with possible option barriers before opening up to higher levels. Downside bids light through the 113.00 level and likely to continue through to the 112.50 areas with weak congestive bids appearing before stronger bids into the 112.00 level.
• AUD: Trading to its lows into the Tokyo session testing the 0.7520 before rising back slowly through to the 0.7535 level and the highs to move into the grey hours with very little interest in the Oz. Downside bids into the 75 cent level with likely weak stops on a push through the level opening the market to light congestive bids through to the 74 cent areas were bids start to increase with further stops awaiting through the level and the market opening to a deeper move over the medium term, Topside offers light through to the 0.7550 areas with some light congestion then creeping in to a move through to the 76 cent areas where offers are likely to be a little stronger with congestive offers continuing through to the 0.7650 levels with some light stops in the mix above 76 cent.

 

Overnight News

NZD:

NZ ministry lowers forecast of 2017-18 primary exports growth to 8.5% from previous 9.2%

MXN:

Peso leads losses among emerging market peers on NAFTA

AUD:

Australia Nov. Business confidence and conditions dip

CNY:

Fearing the worst, China plans refugee camps on N. Korean border

USD/KRW:

US officials fear N. Korea are building biological weapons amid signs of microbe production

GBP:

Brent soars as suspected break in the Forties pipeline causes stoppage

Today’s data

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

JPY         Domestic CGPI M/M Nov A 0.40% | C 0.20% | P 0.30%

JPY         Domestic CGPI Y/Y Nov A 3.50% | C 3.30% | P 3.40%

AUD       NAB Business Conditions Nov A 12 | P 21

AUD       NAB Business Confidence Nov A 6 | P 8

AUD       House Price Index Q/Q Q3 A -0.20% | C 0.50% | P 1.90%

JPY         Tertiary Industry Index M/M Oct A 0.30% | C 0.20% | P -0.20%

09:30     GBP       CPI M/M Nov C 0.20% | P 0.10%

09:30     GBP       CPI Y/Y Nov C 3.00% | P 3.00%

09:30     GBP       Core CPI Y/Y Nov C 2.70% | P 2.70%

09:30     GBP       RPI M/M Nov C 0.30% | P 0.10%

09:30     GBP       RPI Y/Y Nov C 4.00% | P 4.00%

09:30     GBP       PPI Input M/M Nov C 1.50% | P 1.00%

09:30     GBP       PPI Input Y/Y Nov C 6.70% | P 4.60%

09:30     GBP       PPI Output M/M Nov C 0.30% | P 0.20%

09:30     GBP       PPI Output Y/Y Nov C 3.00% | P 2.80%

09:30     GBP       PPI Output Core M/M Nov C 0.20% | P 0.10%

09:30     GBP       PPI Output Core Y/Y Nov C 2.20% | P 2.10%

09:30     GBP       House Price Index Y/Y Oct C 5.20% | P 5.40%

10:00     EUR        German ZEW Economic Sentiment Dec C 17.9 | P 18.7

10:00     EUR        German ZEW Current Situation Dec C 88.7 | P 88.8

10:00     EUR        German ZEW Expectations Dec C 18 | P 18.7

10:00     EUR        Eurozone ZEW Economic Sentiment Dec C 30.2 | P 30.9

11:00     USD       NFIB Small Business Optimism Nov C 104 | P 103.8

13:30     USD       PPI M/M Nov C 0.40% | P 0.40%

13:30     USD       PPI Y/Y Nov C 3.00% | P 2.80%

13:30     USD       PPI Core M/M Nov C 0.20% | P 0.40%

13:30     USD       PPI Core Y/Y Nov C 2.40% | P 2.40%

19:00     USD       Monthly Budget Statement Nov C -135.2B | P -63.2B

 

Harry Hindsight

• EUR: Moving quietly from the opening in a tight channel through the first half of the day, opening around the 1.1770 levels the market dipped on the opening to push into the Tokyo session unchanged from Fridays close and moving into the first half of the Asian session testing to the 1.1785 areas before holding through to the grey hours, London were initially sellers on the opening testing back to the 1.1775 areas before rallying back and continuing its steady move through to the 1.1800 level and holding the area into the NYK session, early sellers as with London before the market moved off that 1.1775 level again and this time catching some weak stops and pushing this time through to the 1.1810 areas before drifting off and reversing all the gains to test back to the lows with a slight bounce into the close.
• GBP: Quiet buyers through the Asian session saw the market pushing up against the 1.3400 levels through the Tokyo session, the move into the grey hours saw the market quickly test through the 1.3430 and dropping back quickly as Brexit arguments dominate the UK media and the government, the move into the London session saw the market back below the 1.3400 level and testing through to the 1.3360 before finding a limited base, the market dipped a second time catching some weak stops on a move through the 1.3350 level but bounced smartly back before drifting through the NYK session trading through towards the 1.3330 level and holding around the 1.3340 areas in a long drawn out move to the close.
• JPY: Opening around the 113.50 level the market made a move to just above the 113.60 level before dropping back into the early part of the Tokyo session to the opening levels, fixing demand helped the USDJPY to the highs of the day with the market pushing the 113.70 before starting a long steady decline through to the NYK session, moving through into the grey hours dropping back through the opening levels to the 113.40 level and trading around the level to the NYK opening tipping into the opening to trade the lows just below the 113.25 level before recovering back to the 113.40 and through to the end of London pushing steadily higher from that point with no sudden moments and a steady rally through to above the opening levels and closing just in the positive side.
• AUD: Oz rallied through the Asian session moving off the lows around the 0.7505 level pushing into the Tokyo session trading in a tight channel through to the London session pushing above the 0.7535 levels before holding for a long period around the 0.7530 areas and continuing into the NYK session before again pushing higher testing through to the 0.7545 level before drifting the balance of the session back to the 0.7530 holding areas.

Yesterday’s premiership results

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%

Good Luck,

Andy

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