Daily FX Market Commentary

Good morning,

 

LMAX Close

USDJPY 113.704 | EURUSD 1.15202 | AUDUSD 0.70499 | NZDUSD 0.64374 | USDCAD 1.29412 | USDCHF 0.99204 | GBPUSD 1.31158 |

 

LMAX Ranges 5am GMT

Highs    Lows

EURUSD               1.15296 | 1.15106

USDJPY                 113.944 | 113.658

GBPUSD               1.31327 | 1.31088

AUDUSD              0.70614 | 0.70459

USDCHF               0.99223 | 0.99135

USDCAD               1.29748 | 1.29441

NZDUSD               0.64444 | 0.64247

EURGBP               0.87824 | 0.87775

EURCHF                1.14330 | 1.14135

EURJPY                 131.250 | 130.962

 

For today

• GBP: Slowly rising from the opening through into the Tokyo session to make highs just above the 1.3130 level the market into midsession saw the market slip lower through to the 1.3110 areas in a slow move to the grey hour, Topside offer increase through  the 1.3150 level with congestion likely to continue through to the 1.3190-1.3200 and slightly stronger offers then into the 1.3220 level with weak stops limited through the level with congestion continuing from there. Downside bids light back through the 1.3100 levels with some congestion then starting to appear on a dip in and through the 1.3050 levels and increasing into the 1.3000 areas with stronger stops below the level.
• JPY: USDJPY opened a little higher and dipped from the opening around the 113.80 levels to test to the 113.65 area and hold into the Tokyo fix, demand helped the market back through the opening and once through the area pushed through on a second move to test above the 113.90 areas before holding quietly through to the grey hour around the 113.85 level. Downside bids light through to the 113.60 level with some stronger bids then showing through to the 113.40 levels, with weak stops on a move through the 113.20 area and limited bids into the 113.00 areas, light congestion then continues through to the 112.00-111.80 areas with some stronger bids in the areas.
• AUD: Very narrow range for the Oz with the market opening around the 0.7060 areas and setting the high for the day and unable to push through the level, dipping into the Tokyo session the market dipped a few times to the 0.7046 level but held through to the grey hours with a final push to the highs, and very little in the way of news for the day, downside bids through to the 70 cents levels with some limited congestion through the level however a push through will likely see sentimental levels slowing a descending market through to the 69 cents level and stronger bids reappearing on any push towards the level. topside offers is likely to see light congestion back through the 71 cents level and then increasing into the 0.7150 area with congestion continuing through the 72 cents levels and a two battle likely through the level.
• EUR: Euro opened slightly stronger and moved quietly into the Tokyo session holding the 1.1525 area, Tokyo initially sold it slightly before rising through the Tokyo fix to the high for the session around the 1.1530 area before slowly drifting for the balance of the session to hold the 1.1510 areas into the grey hour, downside bids through the 1.1480 area could see weak stops contending with sentimental bids into the 1.1460 areas and a break through the 1.1440 level the market contending with stronger bids into the 1.1420-00 areas, weak stops a possibility through the level and then stronger bids reappearing on any push for the August lows.

 

Overnight News

CNY:

China state media says Hong Kong’s one country, two systems policy remains

Interpol Chief Meng Hongwei under investigation, China says

China slashes banks reserve requirements as trade war imperils growth

GBP:

Brexit uncertainty is starting to bite UK company surveys

PM May seeks support as others draw Brexit battle lines

UK services firms doing the least recruiting in 25 years poll

AUD:

Australia job ads dip 0.8% in Sep ANZ

ANZ takes profit hit as inquiry fallout sweeps banking sector

EUR:

Italy threatens to shut airports over migrant charter flights

 

Today’s data

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

CNY        Caixin China PMI Services Sep A 53.1 | C 51.5 | P 51.5

05:45     CHF        Unemployment Rate Sep C 2.50% | P 2.60%

06:00     EUR        German Industrial Production M/M Aug C 0.40% | P -1.10%

08:30     EUR        Eurozone Sentix Investor Confidence Oct C 11.4 | P 12.0

 

Weekend News

CNY:

China PBoC cuts RRR by 100BPS to 14.50%, Cuts Reserve Ratio for fourth time in 2018 as growth slows BBG

USD:

China spy chips report adds pressure on Pentagon cloud security BBG

After fight that split US, Kavanaugh wins place on Supreme court RTRS

Increased USD dependence sets world up for liquidity crunch BBG

GBP:

First Minister of Scotland Sturgeon: Will set out the next steps on Scottish neverendum

TRY:

Erdogan says Turkey is not facing any worrying economic problems RTRS

USD/KRW:

Pompeo says good meeting with N. Korea’s Kim but more needs to be done RTRS

 

Harry Hindsight

• GBP: A slow drift through to the Grey hour with the Cable opening around the 1.3020 level and holding deep into the session before heading towards the grey hour dipping back to test the 1.3005 level for the low of the day, the move into the London session saw the Cable make a quick test higher and through the 1.3050 level with talk of Brexit negotiations looking a bit more brighter, running through the London session slipping back to the 1.3025 areas the market ranged through to the NYK session and the release of NFP with a less than expected number undercutting the USD and Cable rising quickly through to the 1.3100 level before running into some weak offers, and although the unemployment number dipped to 3.70% with no notable rise in hourly earnings the USD remained under pressure and once the London session ended the market pushed through the 1.3100 firmly to rise to the 1.3120 level holding through to just off those highs for the close.
• JPY: Overall a quiet session for the USDJPY with the market moving from the 113.90 opening areas to test into the Tokyo session pushing to the 114.10 level before dipping back and running through to the London session holding the opening level, London did very little drifting off a little in early trading before holding the opening levels again into the NYK session and the release of the NFP, a quick push through towards the highs before dropping quickly back and pushing through to the 113.50 areas before holding the level through to the London close and struggling to recover the losses making it back to the 113.80 level before drifting to close around the 113.70 level.
• AUD: The Oz pushed a little higher into the Tokyo session pushing to the 0.7085 area before slipping slowly back and trading around the 0.7065 area for the long run to the London session, London were quick sellers sending the market through to the 0.7055 area and a long run to the NFP with the market recovering to the opening level before the release, a quick dip lower through to the lows again and then quickly through to the highs holding for a short period before AUDJPY selling moved into the market and the Oz dropped back to the 0.7045 areas holding just below the level and recovering to the 0.7055 level for the close.
• EUR: As with the some of the other pairs the Euro struggled through to the NFP with the market unable to push beyond the 1.1520 level in early trading and drifting from midsession in Tokyo to move into the London session testing the figure level, London eventually extended the low a little through the 1.1490 area before returning to above the 1.11500 level for the release of the NFP, a blip lower saw the low extended to the 1.1485 area before snapping back and pushing through to test the 1.1550 level on a spike and then drifting to the close in London testing back to the figure level, a steady rise through the balance of the session saw the market make its way to the 1.1530 level before finishing the day just off those levels.

 

Yesterday’s premiership results

JPY         Overall Household Spending Y/Y Aug A 2.80% | C 0.20% | P 0.10%

JPY         Labour Cash Earnings Y/Y Aug A 0.90% | C 1.30% | P 1.50% | R 1.60%

AUD       Retail Sales M/M Aug A 0.30% | C 0.30% | P 0.00%

JPY         Leading Index CI Aug (P) A 104.40% | C 104.30% | P 103.90%

EUR        German Factory Orders M/M Aug A 2.00% | C 0.70% | P -0.90%

EUR        German PPI M/M Aug A 0.30% | C 0.20% | P 0.20%

EUR        German PPI Y/Y Aug A 3.10% | C 2.90% | P 3.00%

CHF        Foreign Currency Reserves Sep A 740B | P 731B

CHF        CPI M/M Sep A 0.10% | C 0.00% | P 0.00%

CHF        CPI Y/Y Sep A 1.00% | C 1.20% | P 1.20%

CAD       Net Change in Employment Sep A 63.3K | C 32.5K | P -51.6k

CAD       Unemployment Rate Sep A 5.90% | C 5.90% | P 6.00%

CAD       International Merchandise Trade (CAD) Aug A 0.5B | C -1.4B | P -0.1B | R -0.2B

USD       Trade Balance Aug A -53.2B | C -52.3B | P -50.1B | R -50.0B

USD       Change in Non-farm Payrolls Sep A 134K | C 188K | P 201K | R 270K

USD       Unemployment Rate Sep A 3.70% | C 3.80% | P 3.90%

USD       Average Hourly Earnings M/M Sep A 0.30% | C 0.30% | P 0.40% | R 0.30%

 

Stay lucky

Andy

 

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