Daily FX Market Commentary

Good morning,

 

LMAX Close

USDJPY 112.518 | EURUSD 1.15146 | AUDUSD 0.71202 | NZDUSD 0.65915 | USDCAD 1.30853 | USDCHF 0.99638 | GBPUSD 1.3676 |

 

LMAX Ranges 5am GMT

Highs    Lows

EURUSD               1.15188 | 1.14981

USDJPY                 112.655 | 112.352

GBPUSD               1.30754 | 1.30527

AUDUSD              0.71225 | 0.70874

USDCHF               0.99714 | 0.99601

USDCAD               1.31170 | 1.30894

NZDUSD               0.66035 | 0.65821

EURGBP               0.88138 | 0.88067

EURCHF                1.14749 | 1.1465

EURJPY                 129.740 | 129.211

 

For today

• GBP: Opening in line with the Friday close holding the 1.3070 level through into the Tokyo session, the market dipped through to the 1.3055 level before starting a slow rise through to the grey hour pushing to the 1.3075 high, topside offers through to the 1.3100 levels with weak stops limited through the level and congestion likely through to the 1.3180 areas with stronger offers likely to be around that level, downside bids light through to the 1.3000 area with weak stops on a push through the 1.2980 areas and the downside likely to be weak on a move through to the 1.2900 levels and stronger bids.
• JPY: Opening around the 112.60 level the market slipped into the early part of the Tokyo session drifting through to the 112.45 level, Tokyo opened officially, and the market pushed through into the mid 112.30’s before finding some buyers and trading in a tight range through to the 112.60’s for the move into the grey hour, downside bids to the 112.00 areas likely to be light with congestion likely to be building on a move through the level with weak stops likely to be mixed with bids on a move through the level and that congestion is likely to be continuous through to the 111.00 areas and possibly continuing through to the 110.80 area before opening a little.
• AUD: Weekend Oz poll showed the government under pressure and although the market opened in line with Friday the market slipped once the Tokyo session opened and a quick dip to the 0.7090 level before finding support, the market rose slowly through the session testing back to the opening levels before holding quietly just off the opening into the grey hour, topside offers through the 0.7160 level and likely to be mildly congested through to the 72 cents level with stronger offers in the area before opening up only once the 0.7240-60 area is cleared with weak stops on a push through the 73 cents level, downside bids through to the 0.7040 level increasing in size the closer the market moves towards the level, with weak stops on a push through and into stronger bids into the 0.7000 level,  some limited bids into the sentimental levels however, a deeper move is possible through on the 68 cents area if the market can find the momentum.
• EUR: A slow steady drift through into the Tokyo session from the opening 1.1515 level and then dipping through the figure before returning through to the opening levels in a long drawn out move, downside bids light through to the 1.1460 level where congestive bids are likely to be holding, a push through to the 1.1400 areas will likely see weak stops quickly appearing on a dip through the figure and the downside congestive then through to the 1.1380 level to absorb that selling, topside offers light through to the 1.1600 area and stronger offers in the area followed by congestive offers continuing into the 1.1640-60 areas before any weak stops appear on a push through to stronger offers into the 1.1700 areas.

 

Overnight News

USD:

Trump has no intention of easing tariffs on China Axios

EUR:

With EU deadline looming, Italy’s League warns of risks to Banks BBG

Italy’s league surges in regional voting as five star stumbles BBG

Italy will send budget response to EU at 1155 am Repubblica

Italy to add monitoring to stay within 2.4% deficit Repubblica

Italy to confirm 2.4% deficit target in EU response Messaggero

Italy plans counter measure if spread hits 400 BPS Messaggero

CNY:

PBoC adviser Ma Jun expects policy measures to support market

Ma Jun expects policies to ease private companies, financing difficulty

Ma Jun sees China tax, fee cuts next year to be 1% of GDP or more

Rising possibility China, US trade spat to ease Ma Jun

 

Today’s data

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

JPY         All Industry Activity Index M/M Aug A 0.50% | C 0.40% | P 0.00%

12:30     CAD       Wholesale Trade Sales M/M Aug C 0.10% | P 1.50%                                         

 

Weekend News

USD:

Mnuchin open to change currency test as US spars with China BBG

Trump plans to pull out of Nuclear weapons pact with Russia BBG

Trump claims Russia breached the accord on intermediate range weapons

EUR:

Moody’s downgrades Italy’s ratings to Baa3, stable outlook

Italy expects EU budget rejection on Tuesday Source RTRS

Italy is only one side of Euro’s woes, with Germany sitting on outlook is hardly rosy for Germans Telegraph

GBP/EUR:

Brexit deadlock may make ECB reticence on risks hard to sustain

Draghi, Euro may take lower path into ECB to maintain rhetoric

Brexit negotiations watching a country make a fool of itself Der Spiegel

AUD:

Australia’s government vows to see out term after poll backlash

 

Harry Hindsight

• GBP: The move through the Asian session was quiet with the market holding around the 1.3020 levels to the grey hour and an increasing range, push into the London session saw the market dripping back from the 1.3040 areas and slipping back to make the lows of the day just above the 1.3010 level and testing higher after the better than expected PBSR number to push through to the 1.3045 levels, testing the level several times before running into the NYK session holding the opening level, NYK took the market through the 1.3050 level for the first time and the end of London saw the market quickly testing through to the 1.3100 level on a spike before holding around the 1.3065 area through to the close.
• JPY: A slow and steady climb for the USDJPY through the Asian session to push into early morning in Tokyo holding around the 112.40 levels from the opening around the 112.20 area. The run through to the London session saw the market ranging around the 112.50 levels and then drifting a little on the move through to the NYK session, NYK eventually pushed through the 112.60 level to make the highs then range through to the close in the 112.40-60 level.
• AUD: Opening a little lower the market moved off the 0.7095 areas to fill the gap and move into the Tokyo session and dipping to the lows of the day just below the 0.7090 level and then recovering steadily through to the grey hour pushing the 0.7120 level, London saw early sellers however, the market was unable to push down below the 0.7100 areas before again starting a slow steady rise this time pushing to the 0.7125 level and triggering some weak stops on a run to the 0.7140 areas, the move through to the NYK session saw the market still rising slowly and the market halted once it hit the 0.7150 areas, the market slipped slowly lower from the high slowly slipping through to the 0.7120 areas to hold quietly to the close.
• EUR: As with the Cable the move through the Asian session was very quiet and the market held in a very tight range rising from the 1.1450 level and testing and holding quietly around the 1.1460 level, London saw some movement with the early sellers pushing the market through to the 1.1435 area before starting a slow rise through to the NYK session pushing to the 1.1475 level and holding quietly into the early morning period testing through to the 1.1480 level quickly and pushing through the 1.1500 levels quietly and testing through to the 1.1535 on weak stops before settling back a little and holding around the 1.1515 areas to the close.

 

Yesterday’s premiership results

JPY         National CPI Core Y/Y Sep A 1.00% | C 1.00% | P 0.90%

CNY        GDP Y/Y Q3 A 6.50% | C 6.60% | P 6.70%

CNY        Retail Sales Y/Y Sep A 9.20% | C 9.00% | P 9.00%

CNY        Industrial Production Y/Y Sep A 5.80% | C 6.00% | P 6.10%

CNY        Fixed Assets Ex Rural YTD Y/Y Sep A 5.40% | C 5.30% | P 5.30%

EUR        Eurozone Current Account (EUR) Aug A 23.9B | C 21.4B | P 21.3B | R 19.5B

GBP       Public Sector Net Borrowing Sep A 3.3B | C 4.6B | P 5.9B | R 4.8B

CAD       Retail Sales M/M Aug A -0.10% | C 0.40% | P 0.30% | R 0.20%

CAD       Retail Sales Ex Auto M/M Aug A -0.40% | C -0.20% | P 0.90% | R 0.80%

CAD       CPI M/M Sep A -0.40% | C -0.10% | P -0.10%

CAD       CPI Y/Y Sep A 2.20% | C 2.90% | P 2.80%

CAD       CPI Core Common Y/Y Sep A 1.90% | P 2.00%

CAD       CPI Core Median Y/Y Sep A 2.00% | P 2.10%

CAD       CPI Core Trim Y/Y Sep A 2.10% | P 2.20%

USD       Existing Home Sales Sep A 5.15M | C 5.31M | P 5.34M

 

Stay lucky

Andy

 

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