Daily FX Market Commentary

Good morning,

LMAX Close

USDJPY 113.096 | EURUSD 1.13452 | AUDUSD 0.71057 | NZDUSD 0.65533 | USDCAD 1.31112 | USDCHF 1.0052 | GBPUSD 1.27063 |

LMAX Highs and Lows 5.00am GMT

                                High | Low

EURUSD               1.13502 | 1.13361

USDJPY                 113.337 | 113.022

GBPUSD               1.27162 | 1.27011

USDCHF               1.00577 | 1.00486

AUDUSD              0.71067 | 0.7072

USDCAD               1.31300 | 1.31077

NZDUSD               0.65704 | 0.65421

EURCHF                1.14071 | 1.13989

EURGBP               0.89322 | 0.89214

EURJPY                 128.542 | 128.235

For today

• GBP: Opening around the 1.2710 level the market moved around the level through to the grey hours in a very quiet session for the Cable with no real attempts at the 1.2700 area and only just touching above the 1.2715 level, August lows within sight with some strong bids into the current levels and possibly weak stops on a dip through the 1.2680 area with possible bids into the 1.2660 area, with stronger stops likely on a dip through the level however stronger congestion then appears on any run towards the 1.2630 level with and into the 1.2600 areas, topside offer light through to the 1.2765 level and the breakdown point likely to have some light offers with the market likely to see weak stops through the level and opening the market to a small short squeeze through to the 1.2800 areas, possible stronger offers however, momentum could see these levels melt away and the market then open to the 1.2850 area and stronger offers likely to appear.
• JPY: Light bidding taking the market from the early lows just below the 113.05 area and pushing through into the Tokyo session testing above the 113.30 areas however, congestion in the area around an old trendline causing some limited resistance and holding the market in place for the move into the grey hours, Topside offers likely to be congested into the 113.40 areas and possibly continuing through to the 113.60 before any weakness appears however, the weakness is likely to be short lived as offers start to increase on any approach to the 114.00 level and although there is potential for a break through the level and weak stops above the 114.20 areas the market is likely to run into plenty of take profit selling into the Months highs above 114.40. downside bids likely weak through the 113.00 level with congestion then through to the 112.00 level likely to be patchy and limited but all the way through, any break through the level is likely to see stronger bids moving into the market and would not be surprised that yield players are still willing too buy into the market on any moves through to the 111.40 area.
• AUD: Opening around the 0.7100 area the market moved into the Tokyo session with a quick dip through to the 0.7070 area before stabilising after the weaker than expected inflation data and slowly recovering through the balance of the session to move into the grey hours holding the 0.7090 area, Topside offers light through to the 0.7120 with congestion beyond the level and likely to continue through to the 0.7160 area before minor weakness appears and the market opens to a push at a stronger 72 cents level however, even at this level the possibility is that this is likely to be limited profit taking and the stronger offers much further away and a slow grind through to the 73 cents area will take time. Downside bids through to the 0.7020 level likely to be weak but any approach will see sentimental bidders and stronger congestive bids to the level any break could see weak stops opening the market for a deeper intraday move through to the 68 cents levels.
• EUR: Very quiet Euro with the market basing along the 1.1340 level for the most part through the session with the high a little scamper to the 1.1350 level but generally probing just through those 1.1340 all the way to the grey hours, downside bids likely to increase on any test through to the 1.1320 level with weak stops likely to be just through the 1.1275 area and opening the market to a stronger intraday move through to the 1.1100 level before stronger bids are suspected. Topside offers through to the 1.1380 area light with the possibility of stronger levels just beyond and through to the 1.1420 area before the market opens to the topside.

Overnight News

EUR:

Italian populists double down on spending plans as growth stalls

ECB heading for Titanic iceberg as Italy crumbles and eurozone slows Telegraph

Italy treasury: EU asked clarifications on debt reduction plans

EU commission tells Rome, Italian debt is worry for whole

Italy treasury: says will respond to EU commission by Nov 13

EU says Italy public debt remains a key vulnerability

EU commission says Italy debt a concern for whole Eurozone

EU: Italy planned fiscal expansion incompatible with debt cut

MXN:

Mexico sovereign debt put on negative outlook by HR Ratings

AUD:

MUFG plans to buy CBA asset management unit (suggested reason for stronger AUD) Nikkei

GBP:

UK Numbers weakens GBP

No deal Brexit risk now UK rating issue S&P says

USD:

Former Fed Chair Yellen speaks at conference in Washington

Yellen: Labour market by any measure is very tight

Yellen: Market volatility reflects uncertainty on trade, rates

Yellen: Worried by build up in nonfinancial corporate debt

Yellen: Fed is trying to take its foot off the accelerator

Yellen: at least a couple more rate hikes necessary

Yellen: Labour market by any measure is very tight

Yellen: Financial conditions still easy despite market correct

OIL:

API is said to report US crude stocks rose 5.69M bbl last week

Today’s data

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

NZD:      Building permits MoM Sep A -1.50% | P 7.80% | R 6.80%

JPY:        Industrial production MoM Sep (P) A -1.10% | C -0.20% | P 0.20%

NZD:      ANZ Business confidence Oct A -37.1 | P -38.3

GBP:      GfK Consumer confidence Oct A -10 | C -10 | P -9

GBP:      BRC shop price index YoY Oct A -0.20% | P 0.20%

AUD:      CPI QoQ Q3 A 0.40% | C 0.50% | P 0.40%

AUD:      CPI YoY Q3 A 1.90% | C 1.90% | P 2.10%

AUD:      CPI RBA Trimmed mean QoQ Q3 A 0.40% | C 0.40% | P 0.50% | R 0.40%

AUD:      CPI RBA Trimmed mean YoY Q3 A 1.80% | C 1.90% | P 1.90% | R 1.80%

AUD:      CPI RBA Weighted Median QoQ Q3 A 0.30% | C 0.40% | P 0.50% | R 0.40%

AUD:     CPI RBA Weighted Median YoY Q3 A 1.70% | C 1.90% | P 1.90% | R 1.70%

CNY:      Manufacturing PMI Oct A 50.2 | C 50.6 | P 50.8

CNY:      Non-manufacturing PMI Oct A 53.9 | C 54.9 | P 54.9

JPY:        BoJ Rate decision A -0.10% | C -0.10% | P -0.10%

JPY:        Consumer confidence index Oct A 43 | C 43.5 | P 43.4

JPY:        Housing Starts YoY Sep A -1.50% | C -0.50% | P 1.60%

1000       EUR: Eurozone unemployment rate Sep C 8.10% | P 8.10%

1000       EUR: Eurozone CPI core YoY Oct (A) C 1.00% | P 0.90%

1000       EUR: Eurozone CPI estimate YoY Oct C 2.20% | P 2.10%

1215       USD: ADP Employment change Oct C 2.20% | P 2.10%

1230      CAD: Industrial product price MoM Sep P -0.50%

1230       CAD: Raw materials price index MoM Sep P -4.60%

1230      CAD: GDP MoM Aug P 0.20%

1230       CAD: GDP YoY Aug P 2.40%

1230       USD: Employment cost index Q3 C 0.80% | P 0.60%

1345       USD: Chicago PMI Oct C 60.5 | P 60.4

1430       USD: Crude oil inventories P 6.3M

Harry Hindsight

• GBP: A quiet Asian session saw the market testing through the 1.2810 areas and the highs for the day before slipping slowly through to the grey hours to the opening levels, early London sold the market strongly and the opening in London saw the 1.2765 areas under pressure testing lightly through to hold into early morning before tipping over again and pushing through to the 1.2730 level helped along by weaker European data and a healthy dose of Brexit, the market saw a limited recovery through into the NYK session pushing back to the 1.2780 areas before the release of a warning by S&P on the possibility of risk involved with no deal Brexit, and this sent the market steadily lower through to the 1.2700 level sneaking through a couple of times buy generally holding around the 1.2705 area to the close.
• JPY: USDJPY saw a steady rise through the day with the market lifting off from the opening in Tokyo from the lows around the 112.35 level and a push through to the 112.50 fairly quickly before slowing its ascent however, rise it did and continued through into the grey hours holding the 112.70 area, early London started to grind it higher pushing above the 112.80 level and the move through early London saw the market struggling with the level for several hours before rising finally towards the 113.00 as NYK started to appear, early NYK saw some light selling moving through the market testing back to the 112.70 levels and holding quietly through to after the London session had finished before again starting a steady rise and testing steadily through to finish on its high just through the 113.10 level and weak stops triggered.
• AUD: Early Tokyo were happy to take the market through the 0.7075 areas in early trading before pushing quickly through to the 0.7090 level and suggested that the MUFG plans could have a baring on the matter, the market then ranged tightly around the level with light testing of the 71 cent level in the grey hours but holding through to the NYK session and strong buyers then seen through the CME buying through to the 0.7120 level before drifting back to the figure level for the run to the close.
• EUR: A slow push higher form the opening around the 1.1370 levels saw the market marking time around the 1.1380 level in limited trading for the pair, the move into the grey hours saw the first of the numbers appearing and initially testing to the highs just short of the 1.1390 level before dropping back to test the 1.1360 level, the market bounced off the level helped by the German numbers but even so the market again started to drop as the balance of numbers appeared in the market and the market tested through to the 1.1345 area and the NYK session moving in to save the day, and initially taking the market back to the 1.1380 level, the move to the close saw the market again under pressure and drifting through to make the lows around the 1.1340 areas as the market took a dim view to the weaker Italian growth.

Yesterday’s premiership results

JPY:        Jobless rate Sep A 2.30% | C 2.40% | P 2.40%

AUD:      Building Approvals MoM Sep A 3.30% | C 3.90% | P -9.40% | R -8.10%

EUR:      French GDP QoQ Q3 (A) A 0.40% | C 0.40% | P 0.20%

CHF:       KOF leading indicator Oct A 100.1 | C 100.8 | P 102.2

EUR:      German unemployment change Oct A -11K | C -12K | P -23K

EUR:      Italian GDP QoQ Q3 (P) A 0.00% | C 0.20% | P 0.20%

EUR:      Eurozone business climate indicator Oct A 1.01 | C 1.15 | P 1.21

EUR:      Eurozone economic confidence A 109.8 | C 110 | 110.9

EUR:      Eurozone services confidence A 13.6 | C 14 | P 14.6

EUR:      Eurozone consumer confidence A -2.7 | C -2.7 | P -2.7

EUR:      Eurozone GDP QoQ Q3 (A) A 0.20% | C 0.40% | P 0.40%

EUR:      Eurozone GDP YoY Q3 (A) A 1.70% | C 1.90% | 2.10% | R 2.20%

EUR:      German CPI MoM Oct (P) A 0.20% | C 0.10% | 0.40%

EUR:      German CPI YoY Oct (P) A 2.50% | C 2.40% | P 2.30%

USD:      S&P/Case-Shiller composite -20 YoY Aug A 5.50% | C 5.80% | P 5.90%

USD:      Consumer confidence index Oct A 137.9 | C 135 | 138.4 | R 135.3

               

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