Daily FX Market Commentary

Good morning,

 

LMAX Close

USDJPY 112.212 | EURUSD 1.15581 | AUDUSD 0.71153 | NZDUSD 0.65084 | USDCAD 1.30255 | USDCHF 0.99161 | GBPUSD 1.31542 |

 

LMAX Ranges 5am GMT

Highs    Lows

EURUSD               1.15556 | 1.15432

USDJPY                 112.234 | 111.937

GBPUSD               1.31150 | 1.30954

AUDUSD              0.71128 | 0.70997

USDCHF               0.99209 | 0.9901

USDCAD               1.30326 | 1.30144

NZDUSD               0.65087 | 0.64962

EURGBP               0.88214 | 0.88067

EURCHF                1.14554 | 1.14371

EURJPY                 129.637 | 129.29

 

For today

• GBP: Big gap from Fridays close saw the market opening around the 1.3090 levels and then pushing to the 1.3100 area to hold quietly around the level into Tokyo, with Tory Brexiteers talking of blocking any deal with 60 signatures likely to confound any May declaration and the EU again stating that they and the UK are too far apart the action was probably a little over the top as nothing has really changed, the market rose through the Tokyo session testing to the 1.3115 levels in very quiet trading through to the grey hour. Downside light bids through the 1.3100 areas with stronger congestion through into the 1.3050 level with limited congestion then continuing through to the 1.3000 areas a push through the level is likely to see weak stops and the market opening to a deeper move before stronger bids start to appear into the low 1.29 handle. Topside offers thin through to the 1.3160 level with light congestion then continuing through to the 1.3200 level and stronger offers then reappearing on a move through to the 1.3240 areas.
• JPY: Weak GBP saw GBPJPY under pressure and the USDJPY opening slightly lower from the opening then recovering to fill the gap to above the 112.20 levels before Tokyo fix supply saw the market testing through to the 111.95 areas before bouncing and moving back above the 112.10 areas and holding around the level in a tight range through to the grey hour, Downside bids into the 111.80 areas with weak stops possible on a push through the level however, congestion is fairly consistence through the 111 handle with the downside not really opening until the market pushes through the 110.50 areas and stronger stops a possibility, topside offers light through to the 112.80-113.00 levels weak stops likely on a push through the 113.20 level and the market opening to the 113.60 before stronger offers start to appear in the market.
• AUD: A very quiet Oz with the market drifting from a slightly weaker opening and testing to the 71 cents level before pushing back quickly to the 0.7110 areas, the market drifted around the 0.7105 areas for the balance of the session in quiet trading, downside bids likely to increase the closer the market moves to the 0.7040 areas and the sticking point for the past couple of weeks, a dip through the level is likely to see weak stops appearing and a push through the 70 cents level is likely to see option plays and then stronger stops for a deeper move lower and the sentimental values likely to be stronger point. Topside offers through to the 0.7140-60 areas with the likely offers increasing through to the 72 cents level, weak stops on a push through the 0.7220 areas and weak stops likely to allow the market to push deeper into the handle with increasing offers on a push through to the 73 cents areas.
• EUR: Opening a little lower and trading down to the 1.1540 levels before slowly rising to the 1.1550 area and ranging tightly around those levels to the grey hour. Congestive offers are likely to continue through the 1.1620 area with some weak stops however, the congestion is likely to continue through the 1.1650 areas and increase on any attempt to push towards the 1.1700 areas, downside bids light back through to the 1.1540 area with congestion likely through to the 1.1480 area having seen the market cleared this week to the 1.1440 level stronger bids are likely to be closer to that level and continue into the 1.1400 area with minor stops in between.

 

Overnight News

IMF:

IMF meetings, China’s globalisation agenda left behind in trade debate

GBP/EUR:

Irish border issue holds up Brexit deal EU’s Barnier

Brexit progress made, but unresolved issues on backstop UK Brexit ministry

Brexit talks stall before midweek summit

Stand up to EU bullies Boris Johnson

Agree Brexit security deal, Hunt says to EU

EUR:

Bavaria election humbles Merkel allies, raising tensions in Berlin

CNY:

China central bank mulling over range of risks facing Yuan

AUD:

Australia’s financial index hits near 2yr low as banks continue to face inquiry headwinds

USD:

Trump threatens another round of China tariff’s

 

Today’s data

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

GBP       Rightmove House Prices M/M Oct A 1.00% | P 0.70%

JPY         Industrial Production M/M Aug (F) A 0.20% | C 0.70% | P 0.70%

07:15     CHF        Producer & Import Prices M/M Sep C 0.10% | P 0.00%

07:15     CHF        Producer & Import Prices Y/Y Sep C 3.00% | P 3.40%

12:30     USD       Empire Manufacturing Oct C 20.4 | P 19

12:30     USD       Retail Sales Sep C 0.70% | P 0.10%

12:30     USD       Retail Sales Ex Auto M/M Sep C 0.50% | P 0.30%

14:00     USD       Business Inventories Aug C 0.50% | P 0.60%

14:30     CAD       BoC Business Outlook Survey                                     

 

Weekend News

EUR:

Italy’s Di Maio rules out Euro exit, denounces scaremongering

Italy must calm down and stop questioning the Euro Draghi

Italian cabinet to approve 2019 budget Monday D Maio

Italy’s FinMin shoots down idea of tax breaks for debt investors

GBP/EUR:

UK must take realistic approach to Brexit talks Slovenian PM

Juncker: A Brexit deal must be found

UK Brexit minister to hold talks with EU Source

GBP:

Labour will not vote for blind Brexit

May’s team must force change in Brexit policy, says former minister

Britain will not stay indefinitely in customs union with EU Cleverly

DUP leader sees no deal Brexit as likeliest outcome The observer

CNY:

China says US arms sales to Taiwan interfere in its affairs

USD:

Fed’s Evans says questioning of rate hikes is fair CNBC

Mnuchin Trump respects Fed but likes low interest rates CNBC

 

Harry Hindsight

• GBP: Cable moved through the Asian session quietly holding around the 1.3235 areas with brief attempts to the 1.3245 areas before dipping through to the grey hour testing through to the 1.3230 level, early London took the market above the 1.3255 areas before dropping quickly back as Brexit rumours drifted through the market, the move through to the NYK session saw the market holding the 1.3200 level but dipping on the move into NYK and testing down in steps to hold the 1.3150 level through to the close.
• JPY: A limited day for the USDJPY pushing off the early lows just below the 112.00 areas to test through to the grey hour pushing to the 112.50 level in a steady climb through the Asian session, London were limited sellers and the market dipped to the 112.30 areas and held quietly through to the NYK session, NYK were steady sellers through to the end of London with the market drifting through to make new daily lows around the 111.90 area before meandering around the 112.00 level until the last couple of hours and making some light recovery to finish the day just above the opening levels.
• AUD: Very limited for the Oz opening around the 0.7120 areas and moving through the Asian session testing to the 0.7130 level and generally moving from that high to 15 pips lower and repeat, the move into the London session saw the market extend the lows a little testing towards the 0.7110 level, the move into the NYK session saw weak day shorts turned out and testing through to the 0.7140 areas before dropping quickly back from the area and pushing through to make the lows in the run to the close around the 0.7100 areas for the largest move of the day, the market recovered into the close to finish just below the opening levels in quiet trading.
• EUR: Opening around the 1.1590 level the Asian market slowly took the market through to test into the grey hour and the 1.1610 area, London moved in and quickly put it back to the opening level and the first couple of hours saw the market again attempt the topside however, the Brexit negotiations still throw up negative rumours and the market started to drop in stages through the day with the first dip to the 1.1580 level and holding through to the NYK session before selling reappeared and pushed the market quickly through to the 1.1530 areas to make the lows, the end of the London session saw some recovery to the 1.1560 levels and a quiet long run to the close.

 

Yesterday’s premiership results

NZD       BusinessNZ Manufacturing PMI Sep A 51.7 | P 52

JPY         Japan Money Stock M2+CD Y/Y Sep A 2.80% | C 2.90% | P 2.90%

AUD       Home Loans M/M Aug A -2.10% | C -0.90% | P 0.40% | R 0.00%

CNY        Trade Balance (USD) Sep A 31.7B | C 19.4B | P 27.9B

CNY        Trade Balance (CNY) Sep A 213B | C 192.3B | P 179.8B

JPY         Tertiary Industry Index M/M Aug A 0.50% | C 0.30% | P 0.10% | R -0.10%

EUR        German CPI M/M Sep (F) A 0.40% | C 0.40% | P 0.40%

EUR        German CPI Y/Y Sep (F) A 2.30% | C 2.30% | P 2.30%

EUR        Eurozone Industrial Production M/M Aug A 1.00% | C 0.40% | P -0.80% | P -0.70%

USD       Import Price Index M/M Sep A 0.50% | C 0.30% | P -0.60% | R -0.40%

USD       U. of Mich. Sentiment Oct (P) A 99 | C 100.9 | P 100.1

 

Stay lucky

Andy

 

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