Daily FX Market Commentary

Good morning,

 

LMAX Close

USDJPY 112.426 | EURUSD 1.13746 | AUDUSD 0.70827 | NZDUSD 0.6514 | USDCAD 1.30718 | USDCHF 0.99966 | GBPUSD 1.28174 |

 

LMAX Highs and Lows 5.00am GMT

                                High | Low

EURUSD               1.13768 | 1.1361

USDJPY                 112.443 | 112.12

GBPUSD               1.28256 | 1.28112

USDCHF               1.00077 | 0.99921

AUDUSD              0.70821 | 0.70232

USDCAD               1.31172 | 1.30707

NZDUSD               0.65320 | 0.64756

EURCHF                1.13751 | 1.13641

EURGBP               0.88731 | 0.8864

EURJPY                 127.868 | 127.428

 

For today

• GBP: Asia no change for the week of no particular interest in getting involved with Cable and a quiet range through the session holding around the 1.2820 levels to the grey hour, bids into the 1.2800 level with weak stops light through the area and stronger bids possibly on any dip through to the 1.2760 area with limited congestion and any push through would likely see that congestion cleared to the 1.2700 areas and stronger bids possible there and slightly through before stops appear and a test to the lows from Aug with possible bids into the sentimental 1.2650. Topside offers light through to the 1.2900 areas with weak stops likely to be behind the area and opening the market to a short squeeze if very limited, congestion through the 1.2950 area could slow the rise through that level and stronger offers into the 1.3000 area.
• JPY: Opening around the 112.45 area the market slowly drifting through to the Tokyo session limited action around the fix saw a rise to the opening area before starting a drift lower through to late in the session holding the 112.10 level.  downside bids into the 111.80 level and light congestion limiting the suspected weak stops and stronger bids likely to reappear on a dip to the 111.60-40 areas and strong congestion likely to appear on any move through to the 111.00 with increasing bids on the move lower, even through the level the possibility of congestion continuing through to the 111.50 areas before strong stops are likely to appear and possibly a limited chance of a test to the 110.00 areas, topside offers congested around the 112.50 level with stronger offers then moving in on any push towards the 113.00 level, a push through the 113.25-30 area could see weak stops heling the market make some swift gains through to the 113.70 level however, from there the offers are likely to be particularly strong through to the 114.00 areas, from there the market is likely to be a little mixed however, one would suspect that any further move higher is dependent on yield buyers appearing in a knee jerk reaction to the break to those willing to take profit in the area.
• AUD: Opening quietly around the 0.7080 level the market held into the Tokyo session the market to drift from this point and the break through the 0.7060 level saw the market quickly push through to the 0.7040 area and then slowly continued through into the 0.7020 areas and into the grey hours, bids into the 70 cents level and likely to be well supported for the moment and any push lower will likely find local buyers willing to buy into the dip, a push through to the 0.6950 areas will see stops triggered and some two way action as the market grinds to the next sentimental level and limited bids into the 69 cents opens the market to another dip through to the early lows of 2016. Topside offers light through to the 0.7100 area with some light offers protecting the area, possible chance of a short squeeze however, equity movements are possibly limiting the topside movement as AUDJPY remains under pressure. Any push through to the 0.7150 level is likely to see increasing offers through to the 72 cents.
• EUR: A slow drift around the 1.1370 level with opening levels the high for the session, the move into the Tokyo session saw the market dipping through to the low 1.1360 areas and then recovering however, the pressure slowly continued through cross EURJPY and the market saw the lows testing through to the 1.1362 area for the move into the grey hour, congestion to the downside with the market likely to see stronger bids into the 1.1300 level with weak stops and breakout stops likely through the Aug lows however, the congestion is likely to continue and any dips are likely to be strongly contested but open to a intra day move through to the 1.1100 areas. Topside offers light through to the 1.1400 level and weak stops on a push through the 1.1420 areas and the market then opening to a small squeeze higher with some limited congestion through the 1.1450-60 area but nothing too firm until the 1.1500 areas.

 

Overnight News

CNY:

PBoC allows push to 6.9704 on USDCNH

USD:

FED’s Mester says the US economy is doing very well

Mester: Inflation staying near 2% with appropriate policy

Mester: GDP growth topping 3% this year 2.75%-3% next year

Mester: We are far from a market rout that hurts risk taking

Mester: Recent stock moves don’t mean investors too pessimistic

Mester: Stock market woes far from denting outlook

GBP:

Dominic Raab warns that Britain will leave the EU without a deal if Brussels take a deliberately intransigent approach to talks

OIL:

OPEC Lurches from pump all you can to mulling cuts in just days

Brexit talks said to be on hold as May’s team can’t agree

 

Today’s data

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

JPY    Tokyo CPI Core YoY Oct A 1.00% | C 1.00% | P 1.00%

1230    USD    GDP Annualized Q3 (A) C 3.20% | P 4.20%

1230    USD    GDP Price index Q3 (A) P 3.00%

1400    USD    U. of Mich. Sentiment OCT (F) C 99.2 | P 99.0

 

Harry Hindsight

• GBP: A quiet move through the Asian session with the market trading from the opening 1.2885 level to the 1.2895 area into early Tokyo and then a slow drift back to test into the grey hour touching the opening levels again, early London were quick buyers and the market moved up through the 1.2900 levels testing to the 1.2920 to make the high of the day, the market drifted through the London session trading around the figure level but generally stick to the figure level, NYK sold the Cable heavily with Brexit uncertainties dominating and the Cable dipped to the 1.2850 with a minor pause before running again to the low 1.2815 with a brief spike through the 1.2800 level but returning to the 1.2815 level through to the close.
• JPY: Early selling saw the USDJPY dipping into the Tokyo fix to test through the 112.00 areas to the 111.80 area before recovering slowly through to the 112.10 areas for the move into the grey hour, limited selling in the grey hour saw the London session buying and the market moving in the first hour through to the 112.35 levels before holding quietly through into the NYK session, limited buying around good numbers saw the USDJPY test quickly through to the 112.60 level and then slowly pushing through to the 112.65 areas to make the high of the day late in the session, the run to the close saw the market drifting a little and settling back to below the 112.50 level.
• AUD: A quiet 0.7060-80 range for the most part opening around the lows the market slowly pushed through to the 0.7080 level into mid-Tokyo session before drifting a little into the grey hour, the London session saw the market testing the opening levels again and the low around the 0.7058 area, after a short period the market started a slow rise to make the highs for the day just below the 71 cents area and then drop back immediately from the level having failed to push through to again return to familiar territory for the day around the 0.7080 areas for a long run to the close.
• EUR: Opening around the 1.1395 areas and the low for the Asian session, the move into the Tokyo session saw the market rising slowly through to the 1.1410 level and marking time in the area for a long run through to the London session and early eastern Europe buying taking the market to the 1.1420 level and the release of unimpressive IFO numbers and a test back through to the figure areas and ranging around the 1.1410 level until the NYK session, Early buying as the ECB press conference was on however, there was nothing new with usual talk of a move to normality that has been talked about every month for the past 18 months, US numbers released and the market dropped back quickly through to the 1.1380 areas, eventually the market pushed through the limited bids and drifts to late in the session to the 1.1355 areas and slowly rising back to above 1.1370 for the close.

 

Yesterday’s premiership results

NZD       Trade Balance Sep A -1560M | C -1365M | P -1484M | R -1470M

JPY         Corporate Service Price Y/Y Sep A 1.20% | C 1.20% | P 1.30%

EUR        German IFO Business Climate Oct A 102.8 | C 103.2 | P 103.7

EUR        German IFO Current Assessment Oct A 105.9 | C 106 | P 106.4 | R 106.6

EUR        German IFO Expectations Oct A 99.8 | C 100.3 | P 101 | R 100.9

EUR        ECB Rate Decision A 0.00% | C 0.00% | P 0.00%

EUR        ECB Press Conference

USD       Advance Goods Trade Balance Sep A -76.0B | C -74.9B | P -75.5B

USD       Durable Goods Orders Sep (P) A 0.80% | C -1.10% | P 4.40%

USD       Durables Ex Transportation Sep (P) A 0.10% | C 0.30% | P 0.00%

USD       Wholesale Inventories M/M Sep (P) A 0.30% | 0.50% P 1.00%

USD       Initial Jobless Claims (OCT 20) A 215K | C 208K | P 210K

USD       Pending Home Sales M/M Sep A 0.50% | C -0.20% | P -1.80% | R -1.90%

USD       Natural Gas Storage A 58B | C 47B | P 81B

               

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