Daily FX Market Commentary

Good morning,

 

LMAX Close

USDJPY 111.888 | EURUSD 1.14032 | AUDUSD 0.70885 | NZDUSD 0.65249 | USDCAD 1.31047 | USDCHF 0.99728 | GBPUSD 1.28297 |

 

LMAX Ranges 6am GMT

Highs    Lows

EURUSD               1.14040 | 1.13864

USDJPY                 112.044 | 111.779

GBPUSD               1.28384 | 1.2824

AUDUSD              0.71073 | 0.70843

USDCHF               0.99870 | 0.99724

USDCAD               1.31092 | 1.30908

NZDUSD               0.65483 | 0.6515

EURGBP               1.13761 | 1.13692

EURCHF                0.88863 | 0.88743

EURJPY                 127.655 | 127.327

 

For today

• GBP: Opening almost unchanged the market saw limited liquidity due to the change of trading hours in London but eventually moved off the 1.2825 areas and testing through to the 1.2835 level, the move into the Tokyo session again saw the market on the lows and slowly recovering for a push through to the high 1.2830’s for the move into the London session, congestion through the downside into the 1.2765 areas with possible weak stops then appearing with some light stops possibly in the mix below the area however, while there is some congestion its possibly light and the market is open to the 1.2630 areas with congestion concentrated around the sentimental 50’s and figure areas, Topside offers light through to the 1.2900 level with some minor congestion in the area and possible weak stops on a move through, stronger offers into the 1.2950 areas and congestion thereafter to stronger offers likely into the 1.3000 level and through to the 1.3050 area.
• JPY: A quiet range through the session with the market moving off the 111.90 areas and generally ranging around that level with the market briefly pushing above the 112.00 areas before dipping to its lows and spending a short period on the lows around 111.80 level and slowly rising back to close of the 112.00 area for the move into the London session. 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 that 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: Quiet session for the Oz with the market opening around the 0.7090 level and trading quietly through to the Tokyo session testing the 71 cents level before dipping through into the Tokyo open and basing along the 0.7085 areas for a short period before making its way back through to the 71 cents level and a stab towards the 0.7110 area before dropping back and holding through to the London session around the figure area. 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 congestion possibly pushing through  to the 0.7150 areas and possibly stronger offers in the area, a push through could see a little run however the offers are likely to be fairly strong for a move through the 0.7180 areas and into the 72 cents level with stronger congestion through the level.
• EUR: A very quiet Euro with the market opening a little lower and slowly filling the gap through into the Tokyo session before dipping away to the 1.1385 areas in light trading and then ranging around the 1.1390 level for a long run to the London session, 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 an intraday move through to the 1.1100 areas. Topside offers light through to the 1.1420 level and weak stops on a push through that area 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

EUR:

S&P projects 2.7% debt to GDP for Italy in 2019, governments growth forecasts overly optimistic

Merkel’s CDU makes huge losses in Hesse election

CNY:

China Inc’s $287B perpetual pileup flashes warning signs BBG

Early Indicators show China’s slowdown worsened again in October BBG

 

Today’s data

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

JPY:        Retail Trade YoY Sep A 2.10% | C 2.10% | P 2.70%

0930       GBP: Mortgage approvals Sep C 65K | P 66K

0930       GBP: Money supply M4 MoM Sep C 0.30% | P 0.20%

1100      GBP: CBI reported sales Oct C 27 | P 23

1230      USD: Personal Income Sep C 0.30% | P 0.30%

1230       USD: Personal spending Sep C 0.40% | P 0.30%

1230       USD: PCE Deflator MoM Sep C 0.10% | P 0.10%

1230      USD: PCE Deflator YoY Sep C 2.20% | P 2.20%

1230       USD: PCE Core MoM Sep C 0.10% | P 0.00%

1230       USD: PCE Core YoY Sep C 2.00% | P 2.00%

 

Weekend News

USD:

Mike Pompeo promises US will meet China’s strategies with strong and vigorous response

USD/CNY:

Trade deficit with China shows America’s strength BBG

CNY:

Prepare for war: China’s President Xi tells advisors of South China seas NZ Herald

EUR:

Coeure: Significant monetary policy stimulus is still needed

Coeure: Central banks must follow domestic mandate in policies

Coeure: Capital flows rather unreactive to nearing QE end (again)

Draghi: Central Bank credibility hinges on independence

Italy escapes a second rating downgrade a week after Moody’s

S&P confirms rating outlook to negative

Tria says Italian govt. would intervene in Bank crisis BBG

Merkel’s government braces for high stakes state election RTRS

CAD:

RBC CEO sees mini crisis in Canadian oil as prices plunge

GBP:

S&P affirms UK sovereign debt at AA outlook remains negative

 

Harry Hindsight

• GBP: Overall a quiet session for the Cable with the market through the Asian session holding around the opening 1.2820 level dipping slightly through to the grey hour testing into the 1.2810 areas and opening London testing through the low, moving further into the session the market eventually broke through the lows and tested steadily through to the 1.2780 areas and into the NYK session, mixed numbers in the US saw the USD dipping a little and Cable slowly pushed through to the end of London testing the 1.2840 areas before trading in a narrow range through to the close.
• JPY: A slow drift through the first half of the day with the Asian session drifting from the opening 112.50 levels through into the Tokyo session to hold around the 112.35 areas for several hours before again starting a slow drift through to the 112.15 areas, the move through into the London session saw the steady decline again tipping through to the 111.85 levels before finding a base and slowly pushing through the morning session into the NYK opening testing to the 112.20 areas before dropping back quickly once the US numbers were analysed and the USDJPY moved quicker through to the 111.60 level pausing then dipping to the lows for the day holding around the 111.40 areas and then moving just as quickly back through to the 112.10 level and slowly drifting for the balance of the day to finish the day just below the 112.00 areas.
• AUD: Opening around the 0.7080 areas a quiet move through into the Tokyo session before starting a steady dip through to the 0.7065 level on slow trading, the market dipped quickly through to the 0.7035 level and then struggled through to the 0.7025 levels and a quiet range through to the NYK session ranging from the 0.7020 low to the 0.7040 area, NYK saw USD slipping after the US number and slowly pushed through to the close in London testing through to the 71 cents level with a light spike just above the level and holding quietly through to the close around the 0.7095 areas.
• EUR: A slow drift through to the London session opening around the 1.1375 areas moving into the Tokyo and then starting a slow drift through to the 1.1360 level, London saw a slow rise through to the 1.1380 areas holding in early London before resuming the move lower through to the 1.1335 area before being saved by the opening in the US and the Euro rallying steadily through to the 1.1380 area before pausing and running a second time into the London close and pushing through to the 1.1410 level, the market dipped back away from the offers before trying in a final long move to push through and settling just above the 1.1400 areas.

 

Yesterday’s premiership results

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

USD:      GDP Annualized Q3 (A) A 3.50% | C 3.20% | P 4.20%

USD:      GDP Price index Q3 (A) A 1.70% | C 2.10% | P 3.00%

USD:      U. of Mich. Sentiment OCT (F) A 98.6 | C 99.2 | P 99.0

 

Stay lucky

Andy

 

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