Daily FX Market Commentary

Good morning,

 

LMAX Close

USDJPY 112.254 | EURUSD 1.1575 | AUDUSD 0.71417 | NZDUSD 0.65874 | USDCAD 1.2934 | USDCHF 0.99069 | GBPUSD 1.31818 |

 

LMAX Highs and Lows 5.00am GMT

                                High | Low

EURUSD               1.15806 | 1.15569

USDJPY                 112.419 | 112.214

GBPUSD               1.31919 | 1.31681

USDCHF               0.99175 | 0.99011

AUDUSD              0.71422 | 0.71301

USDCAD               1.29598 | 1.29327

NZDUSD               0.65943 | 0.65814

EURCHF                1.14722 | 1.14611

EURGBP               0.87798 | 0.87729

EURJPY                 130.156 | 1.29729

 

For today

• GBP: A slow rise to just above the 1.3190 levels before slipping slowly lower through the Asian session to test the 1.3170 level and holding just above that level through to the grey hour, Topside offers light through to the 1.3250 areas and then likely to increase in size on any move higher and through to the 1.3300 areas, possibly strong stops on a move through the level with stronger congestion through the sentimental levels. Downside bids light through to the 1.3150 areas with some congestion leaving the market vulnerable to quick return to the 1.3100 levels and possibly some stronger bids into the level, a break through that level does see some stronger bids into the 1.3050 area and congestion thereafter through to the 1.3000 level.
• JPY: A slow rise through to the 112.40 level before dropping quickly off to the opening levels around the 112.20 area in very quiet trading into the grey hour, downside very light through to the 112.00-111.70 areas where some congestion in the area however, if the market breaks through the 111.50 areas the market is likely to open quickly to a test through the 111.00 area and stronger stops on a move through to the congested 110.50 areas. Topside offers congested into the 112.80-113.00 level weak stops likely through the 113.25 areas and some congestion into the 113.50 areas before weakness appears through to the 113.80-114.00 area.
• AUD: opening around the 0.7140 level the market flirted initially to the topside before drifting a little through into the Tokyo session and finally dipping through to test the 0.7130 area and holding around the level into the grey hour, Congestion to the topside with a move through to the 72 cents level looking difficult for the moment with weak stops few and far between strong offers likely from that point through to the 0.7240 area and continuing to the 0.7260 areas before any real weakness appears with the run to 73 cents increasing in resistance. Downside bids light through to the 71 cents area and then bids beginning to appear, any dips through the level is likely to see stronger bids continuing through to the 0.7040 area and the sticking point for the month with likelihood of strong stops on a move through the level.
• EUR: A light attempt to push through the 1.1580 level saw the market quickly drop back through to the 1.1560 areas on what seemed to be cross JPY selling, the Euro found its lows and held quietly then through to the grey hour, downside bids congested on a dip through the 1.1500 level and then increasing on a move through to the 1.1440 level, a push through the 1.1440 level will see some stubborn bids with the 1.1400 level likely to see renewed buyers in the area and weak stops on a drop through the 1.1380 areas, topside offers through the 1.1600 level with weak stops on a push through the 1.1620 limited and congestion through the 1.1640-60 areas before mixed interest on a run to the 1.1680 areas and increasing into the 1.1700 level.

 

Overnight News

CNY:

China local governments hidden debt could total $5.8T S&P

China may hike tariffs on US LNG as spat heats up, group says BBG

AUD:

RBA Deputy Govn. Debelle: RBA paying close attention to falling house prices

Debelle: Drag on economy from lower house prices still unclear

Debelle: Lower OZ probably giving economy bit of boost, not huge

Debelle: Helpful for our economy if FED rate pushes Oz lower

RBA: Signals unemployment may have to fall below 5% to spur wages

Debelle: Unemployment rate may decline faster than we expect

Debelle: Unemployment may have to be lower than before to spur wages

NZD:

ASB Bank cuts Fonterra 2018-19 milk price forecast to NZD 6.25 KG

EUR:

EU’s Barnier open to extending Brexit transition by a year FT

Italian politics push $2.7T debt into danger zone BBG

USD:

Trump says Fed reserve his biggest threat Fox business

GBP:

Hammond says UK to face GBP 36B bill if EU talks fail Telegraph

JPY:

BoJ study hints at exit from easing Nikkei

 

Today’s data

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

AUD       Westpac Leading Index M/M Sep A -0.10% | P 0.10% | R 0.00%

08:30     GBP       CPI M/M Sep C 0.50% | P 0.70%

08:30     GBP       CPI Y/Y Sep C 2.80% | P 2.70%

08:30     GBP       Core CPI Y/Y Sep C 1.80% | P 2.10%

08:30     GBP       RPI M/M Sep C 0.20% | P 0.90%

08:30     GBP       RPI Y/Y Sep C 3.20% | P 3.50%

08:30     GBP       PPI Input M/M Sep C 0.20% | P 0.50%

08:30     GBP       PPI Input Y/Y Sep C 5.70% | P 8.70%

08:30     GBP       PPI Output M/M Sep C 0.20% | P 0.20%

08:30     GBP       PPI Output Y/Y Sep C 2.90% | P 2.90%

08:30     GBP       PPI Output Core M/M Sep C 0.10% | P 0.10%

08:30     GBP       PPI Output Core Y/Y Sep C 2.10% | P 2.10%

08:30     GBP       House Price Index Y/Y Aug C 3.50% | P 3.10%

09:00     EUR        Eurozone CPI M/M Sep C 0.20% | P 0.20%

09:00     EUR        Eurozone CPI Y/Y Sep (F) C 2.10% | P 2.10%

09:00     EUR        Eurozone CPI Core Y/Y Sep (F) C 1.00% | P 0.90%

12:30     CAD       Manufacturing Sales M/M Aug P 0.90%

12:30     USD       Housing Starts Sep C 1.21M | P 1.28M

12:30     USD       Building Permits Sep C 1.28M | P 1.25M

14:30     USD       Crude Oil Inventories P 6.0M

18:00     USD       FOMC Minutes

23:50     JPY         Trade Balance (JPY) Sep C -0.34T | P -0.19T

                                               

Harry Hindsight

• GBP: A slow drift through the Asian session falling back from the highs to test through to the 1.3140 areas from the highs above 1.3160 in limited trading, the move into the grey hour saw the market start to move higher and the move into London saw the Cable jump up to the 1.3170 areas before hitting minor resistance and slipping a bit lower before renewing the rally once the employment numbers were released and holding flat, weekly earnings showed a surprise strong number and the market reacted on that sending the rally through to the 1.3200 areas, holding the area into stronger offers the market eventually pushed through to the 1.3220 level and ranged deep into the NYK session trading around the level testing through to the 1.3235 level before giving ground into the London session and dipping back to range quietly around the 1.3185 area to the close.
• JPY: A quiet move into the Tokyo session eventually saw the USDJPY on a steady rise throughout the day, moving from the opening 111.75 levels a slight dip to set the lows saw the Tokyo session buying steadily through to the 112.00 the market then moved through slowly into the London session before testing a little further and ranged around the 112.10 areas through into the NYK session before pushing through to the 112.30 levels and a long run to the close holding those levels.
• AUD: Opening around the 0.7130 level the market moved through to the 0.7145 areas in early trading before settling into a range around the 0.7135 level deep into the Tokyo session before dropping back and moving into the grey hours pushing back through the opening level on light selling through to London, London were quick buyers from the 0.7110 area lows to push back towards the opening levels before starting a slow but steady climb through to the NYK session with USDJPY helping the market higher and cross buying moving the Oz quickly through to test the resistance around the 0.7150 level before drifting back a little and holding in a tight range through to the close around the 0.7140 levels.
• EUR: Limited range for the Euro with early gains meagre through the Asian session moving from the opening 1.1580 level to test lightly through the 1.1590 area before drifting off and through to test the lows into the grey hour, early London took the market off its lows around the 1.1565 areas to push steadily through to 1.1580 again before jumping on a strong weekly earnings number to test too the first time towards the 1.1600 level before dropping back on weaker German Zew numbers again testing the lows and holding for a couple of hours just off that level. The move into the NYK session saw the market pushing higher against the flow of data spiking through the 1.1600 level to test just above the 1.1620 level before collapsing back again and holding around the opening levels in a long run to the close finishing the day just off the opening level.

 

Yesterday’s premiership results

NZD       CPI Q/Q Q3 A 0.90% | C 0.70% | P 0.40%

NZD       CPI Y/Y Q3 A 1.90% | 1.70% | P 1.50%

AUD       RBA Minutes

CNY        CPI Y/Y Sep A 2.50% | C 2.50% | P 2.30%

CNY        PPI Y/Y Sep A 3.60% | C 3.60% | P 4.10%

GBP       Jobless Claims Change Sep A 18.5K | C 4.5K | P 8.7K

GBP       Claimant Count Rate Sep A 2.60% | P 2.60%

GBP       ILO Unemployment Rate 3Mths Aug A 4.00% | C 4.00% | P 4.00%

GBP       Average Weekly Earnings 3M/Y Aug A 2.70% | C 2.40% | P 2.60%

GBP       Weekly Earnings ex Bonus 3M/Y Aug A 3.10% | C 2.80% | P 2.90%

EUR        Eurozone Trade Balance (EUR) Aug A 16.6B | C 15.0B | P 12.8B

EUR        German ZEW Economic Sentiment Oct A -24.7 | C -12.3 | P -10.6

EUR        German ZEW Current Situation Oct A 70.1 | C 72 | P 76

EUR        Eurozone ZEW Economic Sentiment Oct A -19.4 | C -9.2 | P -7.2

CAD       International Securities Transactions (CAD) Aug A 2.82B | C 10.05B | P 12.65B | R 15.29B

USD       Industrial Production M/M Sep A 0.30% | C -0.10% | P 0.40%

USD       Capacity Utilization Sep A 78.10% | C 78.00% | P 78.10%

USD       NAHB Housing Market Index Oct A 68 | C 68 | P 67

USD       Net Long-term TIC Flows (USD) Aug A 131.8B | C 50.3B | P 74.8B | R 66.7B

 

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