Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 113.206 | EURUSD 1.13896 | AUDUSD 0.71984 | NZDUSD 0.6648.3 | USDCAD 1.31057 | USDCHF 1.00352 | GBPUSD 1.29654 |

 

LMAX Ranges 6am GMT

Highs    Lows

EURUSD               1.13996 | 1.13827

USDJPY                 113.301 | 113.113

GBPUSD               1.30194 | 1.29828

AUDUSD              0.72041 | 0.71824

USDCHF               1.00460 | 1.0020

USDCAD               1.31121 | 1.30846

NZDUSD               0.66618 | 0.66321

EURGBP               0.87696 | 0.87464

EURCHF                1.14404 | 1.14215

EURJPY                 129.100 | 128.791

 

For today

  • GBP: More rumours and comments in national media of Brexit deal complete however, if it is there are several prevision’s wanted by Raab that could still undermine the situation, the market opened higher around the 1.3010 levels dipping initially to the figure level and bouncing back to the 1.3015 level before moving through into the Tokyo session slowly drifting lower through the session to find a base along the 1.2985 areas and holding quietly through to the grey hour, topside congestion through to the 1.3050 level remains however, through the level should see a little bit of a two way battle with weak stops contending with congestion pushing through to the 1.3100 level and possibly stronger offers around the area and continuing through, downside bids light through to the 1.2900 areas with possible late comer bids into the area however, weak stops likely through the 1.2880 level and the market quickly testing back to the 1.2800 areas and stronger bids appearing.
  • JPY: Light trading through the early part of the session trading around the 113.20 areas with early dips to the 113.10 repeated into the Tokyo session before returning to the opening levels, late in the session the market put in a small rally towards the 113.30 areas and into the grey hours holding that level, downside congestion through to the 112.00 areas with possible strong bids into the figure level and through to the 111.80 area before weak stops appear however, as with earlier in the week any fall below the level is likely to find bids into the 111.40-60 areas slowing any further dips with strong congestion likely to continue through that level and into the 111.00 area with strong bids from there through to the 110.50 areas. Topside offers into the 113.30 areas and congestion likely to continue through to the 113.40-60 level before weak stops appear and the market then opening to test to the 114.00 level and stronger offers and the target the high of the month into the 114.40-60 levels.
  • AUD: Opening a touch lower the market moved from the 0.7190 level and filled the small gap to test above the 72 cents level and held through into the Tokyo session, before starting a slow drift with comments from Xi sounding very optimistic for a resolution between China and the US, the market settled back a touch to the 0.7190 and ranged quietly through the balance of the session into the grey hour. Topside offers congested through to the 0.7260 level before opening a little however, 0.7300 is likely to see some stronger profit taking from medium term traders with weak stops possible on a push through the 0.7320 areas meeting congestive offer through to the 0.7350 areas, downside bids light through to the 0.7150 levels with congestion appearing on any dip into the area and increasing through the 71 cent level with stronger bids likely on any dips into the 70 cent handle again.
  • EUR: The same pattern with USD dominating the market, opening unchanged the market pushed towards the 1.1400 level and then drifted from the opening in Tokyo testing slowly through to the 1.1385 areas holding quietly through to the grey hours in a tight range, topside offers likely to be reasonably weak through to the 1.1460 areas however, a push towards the 1.1480 level is likely to see stronger offers appearing and continuing to the 1.1500 level and congestion increasing through to the 1.1520 level and repeated into 1.1540-60, any push through the level is likely to see similar offers continuing. Downside bids lightly congested through to the 1.1320-00 area where stronger bids are likely to appear and with nonfarm payrolls the only threat to the lows of the year, a break through the 1.1300 will likely see some limited congestion into the 1.1275 level before a larger intraday movement lower appears to be possible through to the 1.1150 area.

 

Overnight News

CNY:

Xi says China to cut import taxes further, import $30T BBG

XI: China pledges to open market to world

XI: Calls for building open global economy

Xi: Protectionism posing challenges to globalization

Xi: Calls for countries to lower barriers, open markets

Xi: Calls for countries to defend against protectionism

Xi: calls for countries to enhance macro policy cooperation

Xi: Global recovery has not stabilised yet

Xi: Winner takes all, is dead end

Xi: Nations should implement 2030 sustainable development agenda

Xi: China sticks to opening policy, will go even further

Xi: To be stable engine for global economic growth

Xi: China to boost households income, nurture consumption

Xi: China to consistently relax control of market access

XI: China Widening access to financial markets, service sector

Xi: China to protect legitimate right of foreign enterprises

Xi: China to enhance IP rights protection

Xi: China to do more trials on free trade zone

Xi: China to keep promoting belt and road initiative

Xi: China’s GDP growth so far in line with full year target

Xi: Many indicators show China economy is in reasonable range

Xi: China’s economy is facing problems too

AUD:

Australia’s property slump casts doubt on household spending BBG

EUR:

The Rhine, a lifeline of Germany is crippled by drought – NYT

NZD:

NZ Treasury says weak confidence a risk to 2018-19 GDP forecast

NZ Export commodity prices fall for fifth month – ANZ

 

Today’s data

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

JPY:        BoJ Minutes of policy meeting

AUD:     TD Securities inflation MoM Oct A 0.10% | 0.30%

CNY:      Caixin PMI Services Oct A 50.8 | C 52.9 | P 53.1

0930       GBP:      Services PMI Oct C 53.4 | P 53.9

0930       EUR:      Eurozone Sentix investor confidence Nov C 9.9 | P 11.4

1445       USD:      Services PMI Oct (F) C 54.7 | P 54.7

1500       USD:      ISM Non-Manufacturing services composite Oct C 59.5 | P 61.6

 

Weekend News

GBP:

Raab Brexit Secretary, has privately demanded the right to pull Britain out of EU backstop after 3 months Tel

May secures key EU Brexit concessions on customs – Times

AUD:

Australian Oct, Services index falls 1.4pts MoM to 51.1

EUR:

Italy’s Di Maio says budget plans won’t change despite EU FT

Italy doubles down on threat to Euro stability, Weaponized debt Der Spiegal

Salvini’s surge renews turmoil in Italy populist Governement BBG

CNY:

China to tighten rules on five financial giants

USD:

Fed likelier to raise rates in Dec WSJ

Trump risks backlash in zeal for deal to end China trade war

Job cuts at big US companies may be picking up data shows BBG

EUR/GBP:

A mess Irish border issue continues to hamper Brexit progress Guardian

USD/CNY:

Trump Xi trade deal likely to begin rather than end at G-20

 

Harry Hindsight

  • GBP: A slow drift through the Asian session moving from below the 1.3000 level to test only to the 1.3005 area before drifting from the Tokyo session onwards to base along the 1.2885 level through to late in the session before rising through the 1.3000 level again and pushing into the grey hour testing the 1.3010 area, a small dip before starting a strong rally through to the London opening to test the 1.3040 area and holding close to the area through to just before the NYK session and EU again playing down any agreement and Ireland the crux of the problem, the market dipped quickly through to the 1.2985 level and held deeper into the session, a stronger factory orders number in the US saw the USD rising across the board and the market dropped back steadily through to the 1.2950 areas before finding a base and light recovery through to finish the day just 15 pips off those lows.
  • JPY: Early selling before Tokyo saw the lows around the 112.55 area before moving into the Tokyo session pushing quickly through to the 112.80 level and then slowly drifting through the session back to the 112.70 levels, news that Trump had asked for a draft trade deal with China to before formulated saw the USD rallying quickly through to the 113.10 level and range through the grey hours around the 113.00 level, early London saw the market drop back to the 112.70 levels again and the move to the NYK session saw the market slowly rising back towards the figure levels, ranging around the 112.90-113.00, better factory orders into the US session saw the market rally through to the 113.30 level to post the highs for the day and ranging around the level through to the close.
  • AUD: With a quiet first half to the Asian session the market struggled around the 0.7200 level with a minor dip to the 0.7190 level before news of the Trump actions sent the Oz quickly to test the 0.7250 level and range tightly through to early morning in London holding the 0.7240 areas and eventually pushing through to the 0.7260 level, dropping back on the move into the NYK session the market tested back to the opening levels as the USD started a slow but steady rise and the Factory order numbers came in stronger and the Oz dipped slowly to the lows holding the 0.7180 through to the close just off the figure level.
  • EUR: A similar pattern to the Cable with early trading seeing the market slip slowly below the 1.1400 level to test towards the 1.1390 level before rallying on the back of so-called agreement on parts of the Brexit deal, and the Trump comments, the Euro rallied through to deep into the London session pushing above the 1.1450 level before dropping back on the opening in NYK and falling further as US numbers should strongly and weak stops triggered on breaking through the 1.1400 areas testing through to the 1.1375 level before slowly recovering to move towards those opening levels for the close.

 

Yesterday’s premiership results

JPY:        Monetary base YoY Oct A 5.90% | C 6.20% | 5.90%

AUD:     PPI QoQ Q3 A 0.80% | C 0.20% | P 0.30%

AUD:     PPI YoY Q3 A 2.10% | P 1.50%

AUD:     Retail sales MoM Sep A 0.20% | C 0.30% | P 0.30%

CHF:       Retail sales real YoY Sep A -2.70% | C -0.30% | P 0.40%

EUR:      Italy Manufacturing PMI A 49.2 | C 49.7 | P 50

EUR:      France Manufacturing PMI Oct (F) A 51.2 | C 51.2 | P 51.2

EUR:      Germany Manufacturing PMI Oct (F) A 52.2 | C 52.3 | P 52.3

EUR:      Eurozone Manufacturing PMI Oct (F) A 52 | C 52.1 | P 52.1

GBP:      UK Construction PMI Oct A 53.2 | C 52 | P 52.1

CAD:      Net change in employment Oct A 11.2K | C 25K | P 63.3K

CAD:      Unemployment change Oct A 5.80% | C 5.90% | P 5.90%

CAD:      International Merchandise trade Sep A -0.4B | C 0.2B | P 0.5B | R -0.6B

USD:      Change in Non-farm payrolls Oct A 250K | C 200K | P 134K | R 118K

USD:      Unemployment rate Oct A 3.70% | C 3.70% | P 3.70%

USD:      Average hourly earnings MoM Oct A 0.20% | C 0.20% | P 0.30%

USD        Trade balance Sep A -54.0B | C -53.4B | P -53.2B | R -53.3B

USD:      Factory orders Sep A 0.70% | C 0.30% | P 2.30% | R 2.60%

 

Stay lucky

Andy

 

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LMAX Exchange Market Commentary   Andy Harrison  

Any opinions, news, research, analyses, prices or other information ("information") contained on this Blog, constitutes marketing communication and it has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Further, the information contained within this Blog does not contain (and should not be construed as containing) investment advice or an investment recommendation, or an offer of, or solicitation for, a transaction in any financial instrument. LMAX Group has not verified the accuracy or basis-in-fact of any claim or statement made by any third parties as comments for every Blog entry.

LMAX Group will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. No representation or warranty is given as to the accuracy or completeness of the above information. While the produced information was obtained from sources deemed to be reliable, LMAX Group does not provide any guarantees about the reliability of such sources. Consequently any person acting on it does so entirely at his or her own risk. It is not a place to slander, use unacceptable language or to promote LMAX Group or any other FX and CFD provider and any such postings, excessive or unjust comments and attacks will not be allowed and will be removed from the site immediately.