Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 113.436 | EURUSD 1.1427 | AUDUSD 0.72456 | NZDUSD 0.66676 | USDCAD 1.31229 | USDCHF 1.00254 | GBPUSD 1.3099 |

LMAX Highs and Lows 5.00am GMT

                                High | Low

EURUSD               1.14731 | 1.13944

USDJPY                 113.818 | 112.994

GBPUSD               1.31499 | 1.30794

USDCHF               1.00512 | 0.99885

AUDUSD              0.72729 | 0.72137

USDCAD               1.31580 | 1.31041

NZDUSD               0.67683 | 0.6722

EURCHF                1.14650 | 1.14454

EURGBP               0.87348 | 0.87111

EURJPY                 129.895 | 129.44

For today

• GBP: Choppy session with the market slowly rising to the Tokyo opening pushing the 1.3115 level before quickly rising as early results for the democrats lowered the USD and the market pushed through the 1.3140 level for the first time, a turn of events and the senate votes drifting to the Republicans saw the Cable quickly back through the 1.3100 level triggering weak stops to hold the 1.3075 level and bouncing back to the 1.3100 level ready for the next move, the market continued testing the downside before pushing steadily through to push the 1.3150 as the Republicans finally took the Senate and this left the House of Representatives moving nip and tuck through the balance of the session however, no surprise to see the Republicans starting to build a lead however, projections from exit polls still seem to suggest a Democrat win and the market holds through to the grey hours around the 1.3125 areas. Topside offers into the 1.3200 likely to be fairly strong with weak having limited impact as light congestion appears through the level increasing to stronger offers on an approach to the 1.3250 level and again increasing on any push higher towards the 1.3300 level. downside bids likely to be light through the 1.3100 level and limited interest into 1.3050 possible weak stops involved around each level with stronger congestive bids into the 1.3000 level and continuing through to the 1.2950 areas.
• JPY: The same pattern of movement as you’d expect for the USDJPY with the market opening around the 113.45 areas and dropping a little into the Tokyo opening and then dipping to test the 113.00 level on the opening, bouncing off the level the market regained its opening level and pushed through to the 113.70 level on strong buying, dipping a little the market ran a second time pushing to the 113.80 areas before spending the balance of the session dropping back in a tight channel to hold around the 113.25 areas into the grey hours, downside congestion light through to the 112.60 level with slightly stronger bids appearing and increasing through to the 112.00 area, weak stops likely on a push through the 111.60 areas will likely compete against limited congestion through to the 111.40 level before stronger bids start to appear on any move towards the 111.00 level, topside offers light through the 114.00 areas with stronger offers likely to start appearing on any push through the 114.40-60 level possibly light stops however, the 114.80-115.00 area is stronger and will take time to break.
• AUD: Opening around the 0.7240 level the market tested into the Tokyo session pushing through the 0.7250 level before dropping quickly back to the 0.7215 areas, and basing quietly in the area for a couple of hours, rising through the session more on rumour than anything else the tight channelled rally saw the Oz rally through to the 0.7270 level and the highs for over a month as the market moves into the grey hours slipping lightly from those highs to hold the 0.7260 area. Topside offers congested through to the 0.7280 level through to the 0.7300 where it 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: A better day for movement on the Euro in Asia with the early market slowly rising from the 1.1415 area to push the 1.1440 level into the Tokyo opening, a quick rally through to the 1.1470 on USD movement saw the gains quickly wiped out and the market testing the 1.1400 area bouncing and then returning for a short period to probe through into the high 1.1390’s before climbing steadily back towards the highs to drift to the grey hours holding just below the 1.1460 level. Topside offers into the 1.1480 level likely to be reasonably strong with stops likely on a push through the 1.1520 areas and congestive offers likely to then appear on a move into the 1.1540-60 areas with strong offers likely just above that level, downside bids light through to the 1.1400 areas some stronger bids likely but still remains limited as they continue to build, weak stops very limited and the market remains congestive through to the 1.1340 areas in particular and stronger bids into 1.1300.

Overnight News

USD:

Early results show stronger Republican voters but dwindled towards the close

USD weakens as Democrats begin to pull in front

Democrats will win control of US house NBC, FOX projections

Pete Sessions, GOP chair of house rules committee ousted in Texas

Republicans retain control of US senate

EUR:

Conte says Italian pension reform, Citizens income to start early 2019

OIL:

Oil drops to 7-month low as spectre of worldwide shortage fades

CHF:

SNB’s Zurbruegg says he is convinced bank must continue current monetary policy Schaffhauser Nachrichten

Zurbruegg: Balance sheet size does not bar further interventions if necessary

Zurbruegg: No talk at present about reducing size of balance sheet

Zurbruegg: Bank still has leeway on interest rate policy

Zurbruegg: Currency market situation still fragile

Zurbruegg: Still ready to intervene in currency markets if needed

Today’s data

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

NZD       Unemployment Rate Q3 A 3.90% | C 4.40% | P 4.50% | R 4.40%

NZD       Employment Change Q/Q Q3 A 1.10% | C 0.50% | P 0.50% | R 0.60%

NZD       Labour Cost Private Sector Q/Q Q3 A 0.50% | C 0.50% | P 0.60%

JPY         Labour Cash Earnings Y/Y Sep A 1.10% | C 1.20% | P 0.90% | R 0.80%

NZD       RBNZ 2-Year Inflation Expectation Q4 A 2.00% | P 2.00%

JPY         Leading Index CI Sep (P) A 103.9 | P 103.9 | R 104.5

07:00     EUR        German Industrial Production M/M Sep C -0.10% | P -0.30%

08:00     CHF        Foreign Currency Reserves (CHF) Oct P 740B

08:30     GBP       Halifax House Prices M/M Oct C 0.90% | P -1.40%

10:00     EUR        Eurozone Retail Sales M/M Sep C 0.10% | P -0.20%

15:00     CAD       Ivey PMI Oct C 50.9 | P 50.4

15:30     USD       Crude Oil Inventories P 3.2M

20:00     NZD       RBNZ Official Cash Rate C 1.75% | P 1.75%

Harry Hindsight

• GBP: Shortly after the open the market quickly moved through to the 1.3065 areas from the early low just through the 1.3040 area with rumours that Ireland had agreed to some proposals between the UK, whether that is true or not remains to be seen however, the early gains were wasted through the session with the market slipping back down to the opening levels in quiet trading into the grey hours, grey hours buying saw the market testing the highs again and the opening in London saw the market rally through the 1.3080 level before holding for a short period and dipping back to make the lows just above the 1.3020 level, the move through the rest of the morning was quiet and only as the elections in the US got going did the Cable rally with USD coming under pressure with exit polls suggesting a strong showing for the democrats, the opening in NYK saw the Cable pushing towards the 1.3100 levels, not quiet getting there and then drifting sideways through the balance of the session holding for the most part around the 1.3080 level and rising into the close to the figure level.
• JPY: Another limited day for the USDJPY with the hype over midterm elections in the US denting the volumes a little in USDJPY, opening around the 113.20 level the market traded quietly higher through the Asian session saw the market pushing into the Tokyo session testing above the 113.30 level and holding quietly deep into the session, the move towards the grey hours saw the market pushing against the 113.35 level and breaking a little higher too the 113.45 levels before early London quickly pushed it back to the 113.20 areas before the official opening and a steady drift over the next couple of hours to make the lows around the 113.10 level and basing there into the NYK session, with voting and exit polls continued to limit movement and the USDJPY slowly rose through to the 113.50 level and ranged around the 113.40 to the close.
• AUD: Oz remained quiet through the day rising quietly through till late in the session, opening around the 0.7210 levels the market through the Asian session was focused around the opening area for the most part with Tokyo taking the market to the 0.7220 level from the opening before slipping slowly through to the 0.7205 areas to set the low for the day. The move towards the grey hour saw the highs being pushed and the move into the London session saw the market moving through the 0.7220 level and pushing slowly through to 0.7240 with the move into NYK seeing the market test a little higher, the market having made the highs slowly drifted back towards the opening levels before quickly moving back to the highs and triggering some panic buying through the 0.7240 areas before holding the 0.7245 level into the close.
• EUR: A narrow range overall with barely a net result on the day, opening around the 1.1410 level the market struggled around the level through to late in the Asian session eventually slipping through the 1.1400 slightly before moving into the grey hours and slowly rising, German factory orders expected to be weak came in on the positive side even though a big difference from last month, Euro tested to the 1.1425 level to create early highs and London attempted a couple of pushes at the level before dropping quickly back with any number other than Germany underperforming for the most part, Euro’s tested back through to the 1.1390’s driven particularly by PMI Italy and France basing on the level until early NYK and starting a steady rise through into the official opening to push to the highs just above the 1.1435 level and the back and forth tussle of the exit polls, the market eventually slowed slipping to the opening levels and only lifted slightly into the closing hour to finish a little above the open.

Yesterday’s premiership results

JPY:        Overall Household Spending Y/Y Sep A -1.60% | C 1.60% | P 2.80%

GBP:      BRC Retail Sales Monitor Y/Y Oct A 0.10% | C 0.60% | P -0.20%

AUD:     RBA Rate Decision A 1.50% | C 1.50% | P 1.50%

EUR:      German Factory Orders M/M Sep A 0.30% | C -0.40% | P 2.00% | R 2.50%

EUR:      Italy Services PMI Oct A 49.2 | C 52.1 | P 53.3

EUR:      France Services PMI Oct (F) A 55.3 | C 55.6 | P 55.6

EUR:      Germany Services PMI Oct (F) A 54.7 | C 53.6 | P 53.6

EUR:      Eurozone Services PMI Oct (F) A 53.7 | C 53.3 | P 53.3

EUR:      Eurozone PPI M/M Sep A 0.50% | C 0.30% | P 0.30% | R 0.40%

EUR:      Eurozone PPI Y/Y Sep A 4.50% | C 4.20% | P 4.20% | R 4.30%

CAD:      Building Permits M/M Sep A 0.40% | C 0.30% | P 0.40% | R -1.10%

               

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