Daily FX Market Commentary

Good morning,

 

LMAX Close

USDJPY 112.444 | EURUSD 1.14706 | AUDUSD 0.70856 | NZDUSD 0.65569 | USDCAD 1.30845 | USDCHF 0.9949 | GBPUSD 1.29832 |

 

LMAX Highs and Lows 5.00am GMT

                                High | Low

EURUSD               1.14754 | 1.14612

USDJPY                 112.615 | 112.327

GBPUSD               1.29905 | 1.29734

USDCHF               0.99570 | 0.99441

AUDUSD              0.71062 | 0.70806

USDCAD               1.30878 | 1.30698

NZDUSD               0.65652 | 0.65466

EURCHF                1.14174 | 1.14055

EURGBP               0.88367 | 0.8832

EURJPY                 129.215 | 128.777

 

For today

• GBP: Another quiet session for Asia with the Cable ranging around the closing levels testing lightly through to the 1.2975 level before pushing through to the 1.2990 area deep into the session and again drifting through to the grey hour just holding the 1.2980 area. downside congestion through to the 1.2900 areas with stronger bids into the level, weak stops are likely to appear through the level however, the congestion then runs to the 1.2860 levels and likely to be absorbed, and then the market opening to a move through to the 1.2750 areas, topside offers weak through to the 1.3100 level with possibly stronger offers appearing around that level and then increasing on any push through to the 1.3160 areas and the 1.3200.
• JPY: Opening quietly around the 112.40 level the move through to mid-session saw the USDJPY dipping a little through the 112.35 areas before rallying and pushing quickly to above the 112.50 areas, a brief pause before rising a little further to test the 112.60 level on quiet trading then saw the market drifting a little through to the grey hour holding the bulk of its gains. topside offers through the 113.00 level and a little congestion through to the 113.25 areas and then weak stops appear and the market able to move through to the 113.60 areas before hitting any meaningful offers and stronger offers on any push for the 114.00 level, downside bids lightly congested through to the 112.00 areas with stronger bids likely through to the 111.80-60 areas, with possible stronger stops on a move through the area but running quickly into congestive levels from the summer, a move to the 111.00 level will possibly see yield buyers reappearing and the market possibly strongly bid from there to the 110.50 area.
• AUD: A very quiet session for the Oz with the early market slipping a little into the Tokyo session testing towards the 0.7080 level before slowly rising back to the opening levels and ranging around the 0.7090 level through deep into the session before rising through the 71 cents level to test just above and hold from there to the grey hour, downside bids into the 0.7050 level with the weak stops through the level and the market supported by sentimental levels through overall with 70 cents likely to be a strong point, with stops likely through the level and the 68 cent level becoming exposed. Topside offers through the 71 cents level and likely congested through to the stronger 0.7140 area where the past few weeks the market has stalled, poor news for the current coalition still undercutting the Oz with economics ticking along nicely as a side issue makes a dull market, a push through the 0.7150 areas will likely see weak stops taking the market towards the 72 cents levels before stronger offers reappear.
• EUR: A quiet run into the Tokyo session saw the market limited to the 1.1475 level and drifting lower through to the 1.1460 area before recovering and holding the opening levels through to the grey hour, downside bids into the 1.1440 level and likely weak stops through the level for a run at the 1.1400 level and further strong bids, a push through the 1.1380 could see weak stops opening up a deeper move however, congestion on any move towards that 1.1300 level is likely to be strong with the market likely to remain that way until the 112.75 level is breached and this then opens up the potential for a larger fall over time.

 

Overnight News

USD:

Trump steps up attack on Fed chairman Jerome Powell WSJ

Fed’s Bostic: Economy strong, doesn’t need support from FED policy

Bostic: Must balance risk of hiking too fast vs. going too slow

Bostic: Headwinds include trade policy, market volatility

Bostic: Little reason to keep Fed’s foot on the gas peddle

Bostic: Risks tilted to upside, lifts 2018-19 GDP forecasts

Bostic: Backs gradually raising rates to neutral level

Bostic: Inflation remains stable around the FED’s 2% target

Bostic: Tailwinds include tax reform, fiscal stimulus

Bostic: Remarks in text of speech in Baton Rouge

Bostic: Fed is still a few rate hikes away from neutral

Bostic: Not seeing signs that tax cuts boosting productivity

Bostic: No threshold number for market change and his outlook

Bostic: favours raising rates four times in total this year

Bostic: Watching market signals while focused on real economy

Senate slipping away as Democrats fight to preserve blue wave

Companies say they’re ready to move supply chains from China

Pompeo says Trump won’t stand for caravan coming to US

Pompeo: Caravan is a security risk to the US

Pompeo: Makes remarks from state department

Pompeo: Caravan won’t be allowed to enter the US

Pompeo: US has identified some respo0nsible for Khashoggi, reviewing Magnitsky sanctions

Pompeo: Looking at revoking some visas, US intends to hold people accountable

Pompeo: Says Turkey has been very cooperative

AUD:

Australia’s interest only mortgage time bomb set to blow

OIL:

Oil tumbles 4% as Saudis pledge to produce as much as they can

API is said to report US Crude stocks rose 9.88M bbl last week

GBP:

Theresa May reportedly considering chartering ships for supplies if there is a no deal Brexit Business insider (rumour mill)

Asia:

Trade war drives Asian manufacturing out of China Nikkei

EUR:

Italy says no plan B as EU demands first ever budget changes

 

Today’s data

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

JPY         PMI Manufacturing Oct (P) A 53.1 | C 52.6 | P 52.5

07:15     EUR        France Manufacturing PMI Oct (P) C 52.4 | P 52.5

07:15     EUR        France Services PMI Oct (P) C 54.7 | P 54.8

07:30     EUR        Germany Manufacturing PMI Oct (P) C 53.5 | P 53.7

07:30     EUR        Germany Services PMI Oct (P) C 55.5 | P 55.9

08:00     EUR        Eurozone Manufacturing PMI Oct (P) C 53.1 | P 53.2

08:00     EUR        Eurozone Services PMI Oct (P) C 54.5 | P 54.7

08:00     EUR        Eurozone M3 Money Supply Y/Y Sep C 3.50% | P 3.50%

08:30     GBP       BBA Mortgage Approvals Sep C 39.0K | P 39.4K

13:00     USD       House Price Index M/M Aug C 0.30% | P 0.20%

13:45     USD       US Manufacturing PMI Oct (P) C 55.5 | P 55.6

13:45     USD       US Services PMI Oct (P) C 54.1 | P 53.5

14:00     CAD       BoC Rate Decision C 1.75% | P 1.50%

14:00     USD       New Home Sales Sep C 630K | P 629K

14:30     USD       Crude Oil Inventories P 6.5M

15:15     CAD       BoC Press Conference

18:00     USD       Federal Reserve Beige Book                       

                               

Harry Hindsight

• GBP: A quiet move through the Asian session ranging between the 1.2960-70 levels for much of the session before moving into the grey hour and dipping lower a little and testing through to the 1.2940 areas before bouncing and pushing through to the London opening testing the 1.3000 level, London then slowly drifted until a news item released on RTE Irelands news channel, which I was unable to find so likely deleted saw the market quickly rising into the NYK session to test to the 1.3045 level before drifting off through to the close in London only just holding the 1.2975 areas and ranging through to the close testing lightly back through the 1.3000 level and then finishing short of the figure area.
• JPY: A steady decline through to the NYK session with the market drifting from the opening around the 112.80 levels and pushing through to the 112.50 level for the movie into the London session and the drift then continuing to the 112.15 level before finding some minor support, the market did manage to make it back to the 112.35 area before starting another drift into the NYK session and briefly tested to the 111.95 area before slowly rising higher through to the 112.30 level and weak buying late in the session to recover to just below the 112.50 area to the close.
• AUD: Opening around the 0.7080 areas the market drifted through to the London session with falling equity markets triggering some minor margin selling in the AUDJPY and the market testing initially through to the 0.7060 levels and later extending just below the lows before moving into the grey hour and some strong early buying to push the market back to the 0.7090 level, London was unable to push the 71 cents level and drifted a little before dropping back to test the lows for a second time into the NYK opening and basing for several hours around that area, rising from the NYK option cut saw the market slowly rising to test the highs again and running to a quiet close just above the opening levels.
• EUR: A slow slide lower through the Asian session saw the market drifting from the 1.1465 level and testing through into the grey hour testing the 1.1450 level, early selling saw the days lows with a test to the 1.1440 level and bouncing off the strong bids pushing back to the 1.1460 level eventually ranging widely through to the NYK session between the 1.1450-85 level with a brief spike through into the 1.1490 level and then eventually drifting back to the 1.1470 areas for the close.

 

Yesterday’s premiership results

EUR        German PPI M/M Sep A 0.50% | C 0.20% | P 0.30%

EUR        German PPI Y/Y Sep A 3.20% | C 2.90% | P 3.10%

GBP       CBI Trends Total Orders Oct A -6 | C -1 | P -1

EUR        Eurozone Consumer Confidence Oct (A) A -3 | C -3 | P -3

               

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