Daily FX Market Commentary

Good morning,

 

LMAX Close

USDJPY 112.65 | EURUSD 1.15005 | AUDUSD 0.71085 | NZDUSD 0.65657 | USDCAD 1.30239 | USDCHF 0.9953 | GBPUSD 1.31163 |

 

LMAX Highs and Lows 5.00am GMT

                                High | Low

EURUSD               1.15053 | 1.14943

USDJPY                 112.729 | 112.473

GBPUSD               1.31079 | 1.30872

USDCHF               0.99567 | 0.99448

AUDUSD              0.71372 | 0.71029

USDCAD               1.30462 | 1.30218

NZDUSD               0.65558 | 0.65351

EURCHF                1.14518 | 1.14383

EURGBP               0.87839 | 0.87742

EURJPY                 129.627 | 1.29324

 

For today

• GBP: Opening a touch lower the market held around the 1.3100 trading in a narrow band around the level dipping only to the 1.30090 areas and unable to move much above the 1.3100 area into the grey hour, downside bids sees light congestion increasing on a move through to the 1.3050 areas with the congestion likely to continue into the 1.3000 area and stronger bids, weak stops on a move through the level will likely see stronger bids reappearing around the 1.2950 areas and then increasing into 1.2900 notwithstanding a strong Brexit comment from the UK, topside offer slight through to the 1.3200 areas with congestion likely to be strong through the level and into the 1.3240 areas withy possible weak stops on a test through that level and opening a test through to the 1.3280-1.3300 where stronger offers will likely appear.
• JPY: Opening just below the highs the market made a couple of attempts to push beyond the 112.70 areas but struggled each time and taking several hours to decide to move lower instead, dropping back through the 112.60 level and then drifting through to the grey hours pressing lightly through the 112.50 area and holding in to the grey hour in that area, 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: Oz moved off the lows opening around the 0.7110 level and then pushing through to the 0.7130 level on RBA comments and unemployment numbers, the first attempt to push higher failed and the market eventually took a second run at the level and pushed through marginally to hold around the 0.7135 areas 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 through to the 0.7080 area 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 very quiet day for the Euro with the market holding around the opening level with barely a 10 pip range through out the session, downside bids likely to be reasonably strong through to the 1.1460 level minor congestion likely from there until the 1.1440 area and the lows of the month likely to attract some weak stops on a move through the 1.1430 level however, fresh stronger bids into the 1.1400 area is likely to be the limit for the downs side and only a break below the 1.1380 level will open the downside to the 1.1300 before finding stronger bids. Topside offer light through to the 1.1580-1.1600 level with the market needing to push beyond the 1.1620 to trigger likely stops and opening the market to a move through to the congestive 1.1640-60 areas and stronger offers.

 

Overnight News

AUD:

Expats could face large capital gains tax bills under proposed laws

Unemployment drops to 5% as fewer people seek work

Big four banks get shameful report AFR

RBA: No strong case for near term adjustment in policy

JPY:

Japanese bought net 1T JPY overseas debt last week

OIL:

Saudi’s and Russia step up oil pumping to fill voids elsewhere

CNY:

China shouldn’t wait out US trade feud BBG

China stock rout puts $613B of share pledges at risk BBG

USD:

US Treasury refrains from naming China a currency manipulator

Ross: US section 232 report on cars will be ready when needed

Ross: Says Trump wants good faith, quick trade talks with EU

Ross: US still won’t impose auto tariffs on EU during talks

Trump says China not ready for trade talks Fox Business

Pompeo: Some pastor related Turkey sanctions could be lifted

Ross: Wouldn’t say we’re at China impasse, there are ups, downs

Kudlow: China hasn’t responded yet to US requests over trade

US planning to withdraw from international postal, treaty NYT

Fed officials debated hiking rates into restrictive territory

US treasury concerned about, will monitor Yuan depreciation

US treasury says direct PBoC intervention has been limited

US treasury says recent depreciation of Chinese currency will likely exacerbate China’s trade surplus with US

EUR:

Merkel says Germany has also begun preparing for no deal Brexit

EU official: EU may publish no deal plan Jan-Feb if needed

Austria’s Kurz says Govt is prepared for hard Brexit APA

BMW preparing for sorst case Brexit, hopes for deal Freismuth

BMW no plans to shift car production from UK

European commission rejects Italian draft budget

Tony Connelly: Senior EU source says unlikely a date will be set for November Brexit summit

Bundesbank’s Weidmann joins EU in criticizing Italy budget draft

 

Today’s data

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

JPY         Trade Balance (JPY) Sep A -0.24T | C -0.34T | P -0.19T

AUD       Employment Change Sep A 5.6K | C 15.2K | P 44.0K | R 44.6K

AUD       Unemployment Rate Sep A 5.00% | C 5.30% | P 5.30%

AUD       NAB Business Confidence Q3 A 3 | P 7

06:00     CHF        Trade Balance (CHF) M/M Sep C 2.45B | P 2.13B

08:30     GBP       Retail Sales M/M Sep C -0.30% | P 0.30%

12:30     CAD       ADP Payrolls Report P 13.6K

12:30     USD       Philly Fed Manufacturing Index Oct C 21 | P 22.9

12:30     USD       Initial Jobless Claims (OCT 13) C 210K | P 214K

14:00     USD       Leading Index Sep P 0.40%

14:30     USD       Natural Gas Storage P 90B

               

                                               

Harry Hindsight

• GBP: A slow slide through the Asian session saw the market drifting from early highs around the 1.3190 level through to the grey hours and testing too the 1.3160 level, early London saw some limited buying into the opening and the highs revisited before dropping off quickly with inflationary data slightly better than expected for the Sep numbers and the market falling through to the 1.3125 level before pausing however, the pause was short and the market again pushed through to test the 1.3100 areas and the los for the day, Brexit at the forefront again for the day with the no deal being openly discussed in the EU area.
• JPY: A slow rise through to the 112.40 areas into the Tokyo session saw those gains wiped out late in the session to test back through the opening around 112.30 and test through the 112.20 only to range deep into the London session before breaking out to the downside into the NYK session to test to the 112.00 areas, the lows made and the plenty of speakers in the US the USD started to rise pushing in a tight channel through to the 112.60’s into the close.
• AUD: Opening around the 0.7140 areas the market moved through into the Tokyo morning holding around the level in quiet trading, some light selling took the Asian lows to the 0.7130 area before rising slowly through to the London session pushing back to the opening levels, morning buyers in London saw the market quickly push through towards the 0.7160 level and then back again on a run through to the NYK opening testing through to the 0.7120 areas, the market held around the level until late in the session and the Sydney opening saw the money dipping back to the 0.7110 level for the close.
• EUR: Opening around the 1.1575 level with a light test to the 1.1580 area in early Tokyo before sliding through the session to the grey hours testing to the 1.1550 area, London were light buyers and pushed back towards the opening levels but movement through the morning was limited before dropping off as the market moved towards the NYK session holding the 1.1530 levels into the open, the market ranged around the 1.1530-40 levels late into the session dipping away as the USD started to rally on the back of several comments late in the session sliding through to the 1.1500 for the close.

 

Yesterday’s premiership results

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

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

GBP       CPI M/M Sep A 0.10% | C 0.50% | P 0.70%

GBP       CPI Y/Y Sep A 2.40% | C 2.80% | P 2.70%

GBP       Core CPI Y/Y Sep A 1.90% | C 1.80% | P 2.10%

GBP       RPI M/M Sep A 0.00% | C 0.20% | P 0.90%

GBP       RPI Y/Y Sep A 3.30% | C 3.20% | P 3.50%

GBP       PPI Input M/M Sep A 1.30% | C 0.20% | P 0.50% | R 1.20%

GBP       PPI Input Y/Y Sep A 10.30% | C 5.70% | P 8.70% | R 9.40%

GBP       PPI Output M/M Sep A 0.40% | C 0.20% | P 0.20%

GBP       PPI Output Y/Y Sep A 3.10% | C 2.90% | P 2.90%

GBP       PPI Output Core M/M Sep A 0.10% | C 0.10% | P 0.10% | P 0.20%

GBP       PPI Output Core Y/Y Sep A 2.40% | C 2.10% | P 2.10% | R 2.20%

GBP       House Price Index Y/Y Aug A 3.20% | C 3.50% | P 3.10% | R 3.40%

EUR        Eurozone CPI M/M Sep A 0.50% | C 0.20% | P 0.20%

EUR        Eurozone CPI Y/Y Sep (F) A 2.10% | C 2.10% | P 2.10%

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

CAD       Manufacturing Sales M/M Aug A -0.40% | C -0.10% | P 0.90% | R 1.20%

USD       Housing Starts Sep A 1.20M | C 1.21M | P 1.28M | R 1.27M

USD       Building Permits Sep A 1.24M | C 1.28M | P 1.25M | R 1.25M

USD       Crude Oil Inventories A 6.5M | C 1.6M | P 6.0M

USD       FOMC Minutes

 

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