Daily FX Market Commentary

Andy Harrison

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 113.524 | EURUSD 1.14269 | AUDUSD 0.72759 | NZDUSD 0.67904 | USDCAD 1.3114 | USDCHF 1.00223 | GBPUSD 1.31257 |

 

LMAX Highs and Lows 5.00am GMT

                                High | Low

EURUSD               1.14367 | 1.14226

USDJPY                 113.737 | 113.489

GBPUSD               1.31467 | 1.31208

USDCHF               1.00289 | 1.00181

AUDUSD              0.72875 | 0.72652

USDCAD               1.31260 | 1.3119

NZDUSD               0.67955 | 0.67708

EURCHF                1.14580 | 1.1451

EURGBP               0.87116 | 0.87034

EURJPY                 129.990 | 129.685

 

For today

  • GBP: A return to normality with Gable drifting from the opening through to test towards the 1.3120 areas before recovering late in the session to push to the highs as it headed into the grey hours just above the 1.3135 level, topside offers light through to the 1.3170 level with limited congestion increasing into stronger offers into 1.3200 area, a push through the figure level will likely see some weak stops mixed with congestive offers and only a strong push beyond the 1.3250 level will give some daylight and the market focusing on testing the highs from Sep 1.3300 level. downside bids light through to the 1.3000 with some congestion along the way increasing as the market descends through the 1.3050 areas but very limited after the past few days of rising from the level. a break through that downside will attract stronger buying with the weak stops likely absorbed on any push towards the strong 1.2950 area.
  • JPY: A limited rally for the USDJPY with the market opening on the 113.50 level and steadily rising through the day to the 113.75 areas before running out of steam and drifting into the grey hours falling back to the 113.60 areas on slow trading, topside offers strong through to the 114.00 areas a push through the level will likely see weak stops and early break out traders pushing for a quick test towards the 114.60 levels and the highs from last month and strong offers expected to that level, weak stops possibly appear again on a push through the level and stronger offers likely to contain a move through the 115.00 level, however, a break through the level could see the market moving into the 115.50 area before again facing a long term trend line from early 2017.
  • AUD: Oz started the day drifting from the opening to test through to the 0.7265 levels before starting a stronger push higher with much of the offers cleared yesterday the market moved into the grey hours testing to the 0.7295 level and a stone throw from the 73 cents level that it failed at yesterday, topside offers into the 0.7300-20 areas with weak stops through the level however, congestion into the 0.7350 level will likely slow any rise unless there is sufficient impetus to clear it in one move and beyond that is likely to see only sentimental offers around the 74 cent areas. Downside bids light through to the 72 cents level with possibly strong bids in the area, with weak stops likely to be a little larger on a break through the 0.7180 area and the market quickly testing the stronger congested levels into and through the 0.7150 area.
  • EUR: Very quiet range for the Euro however, it is an ECB bulletin day combined with FOMC late in the NYK session however, the market opened around the 1.1435 levels and returned to the level in late trading into the grey hours having spent much of the day basing on the 1.1425 area. Topside offers through the 1.1480 level again with short term players likely to have done well from the level yesterday, a push through the 1.1500 level will see a mixture of stops and congestion through to the 1.1520 areas before it weakens a little and can push on to the stronger sentimental 1.1540-60 areas with possibly plenty of work to be done before opening the topside for further testing, so more of a USD move one would suspect, downside bids light through the 1.1400 level with stronger congestion waiting below for any run through to the 1.1340-60 areas and the market limited to the stronger bids into the 1.1300 area.

 

Overnight News

CNY:

Beijing woos private sector as trade war hurts economy – Nikkei

Deadly swine virus spreading across China towards neighbours – BBG

Consumers curb their spending even as Beijing denies a consumption downgrade – Nikkei

Chinese exports top estimates amid rush to skirt higher tariffs BBG

NZD:

RBNZ governor Orr: Hoping to push economic growth beyond potential

Orr: I have no view on the NZD’s level – it is being well behaved

EUR:

Italians inquire about moving money abroad – Banca Mediolanum

ECB risks Italian friction in QE review valuing strong economies

GBP:

May’s crunch cabinet meeting over Brexit deal delayed amid row – Guardian

AUD:

Australia’s major banks set to increase loss absorption capital

MOODY’S:

Global economic growth will slow in 2019 and 2020 to a little under 2.9% from estimated 3.3% 2017-18

Slowdown in global trade will hurt not only on growth in US and China, but also in open economies such as Japan, Korea, Germany

Growth advanced economies will slow but remain solid in 2019, while G20 emerging markets growth will remain weak

Expects trade and geopolitical frictions between the US and China will persist for some time

Expects trade and geopolitical frictions will weigh on global trade growth and will reshape trade flows and supply chains

USMCA, will be ratified in 2019 with agreement on rules of origin, conflict resolution, agriculture and government procurement

 

Today’s data

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

NZD:      RBNZ Official cash rate A 1.75% | C 1.75% | P 1.75%

JPY:        BoJ Summary of opinions

JPY:        Machine orders MoM Sep A -18.30% | C 8.90% | P 6.80%

JPY:        Current account (JPY) Sep A 1.33T | C 1.36T | P 1.43T

GBP:      Rics House price balance Oct A -10.00% | C 2.00% | R -2.00%

CNY:      Trade balance (USD) Oct A 34.0B | C 36.3B | P 31.7B

CNY:      Trade balance (CNY) Oct A 234B | C 209B | P 213B

JPY:        Eco watchers survey current Oct A 49.5 | C 48.9 | P 48.6

0645       CHF:       Unemployment rate Oct C 2.50% | P 2.50%

0700       EUR:      German trade balance Sep C 21.2B | P 18.3B

0900       EUR:      ECB economic bulletin

1000       EUR:      European commission economic forecasts

1315       CAD:      Housing starts Oct C 195K | P 189K

1330       CAD:      New housing price index MoM Sep C 0.10% | P 0.00%

1330       USD       Initial jobless claims (Nov 3) C 214K | P 214K

1530       USD:      Natural Gas storage P 48B

1900       USD:      FOMC rate decision (lower bound) C 2.00% | P 2.00%

1900       USD:      FOMC rate decision (upper bound) C 2.25% | P 2.25%

 

Harry Hindsight

  • GBP: Opening around the 1.3100 level the market bounced around in a choppy early part to the session dependent on which party was ahead in which ever house however, in the end the pollsters were on target with the Senate control remaining in the Republican hands and the Democrats grabbing the house of representatives, rising quickly through into the Tokyo session to test towards the 1.3150 level the market then dropped back to the 1.3075 areas to make the lows for the day bouncing off the low the market pushed quickly back to the 1.3100 before dipping a second time and starting a steady recovery this time pushing over the next few hours to push to the 1.3150 level before drifting through into the grey hours, holding above the 1.3100 level and the move into the London session saw the market rising steadily from the opening to push the 1.3175 with the markets more or less content with the result in the midterm elections in the US, the move through to the NYK session started to see limited USD buying across the board and the Cable ranging around the 1.3150 levels for much of the session and settling back to just above the 1.3125 into the close.
  • JPY: Highs and lows made early in the Tokyo session with the market dropping off the opening around the 113.40 areas to drift through to the Tokyo session, the market dipped quickly through to test the figure area for the first time before bouncing quickly up to the 113.70 level and running a second time to extend the highs through to the 113.80 area before slowly ebbing through to the grey hours and threatening the lows again, London did very little with the market probing lightly through the figure level and then starting a slow climb away from the 112.95 level into the NYK session, the rest of the session saw the steady rise continuing through to the close pushing above the 113.50 level before drifting back to the level.
  • AUD: A similar pattern in early trading with the market opening around the 0.7225 level and moving into the Tokyo session pushing quickly through to the 0.7255 level before dropping back just as quick to test the 0.7215 area and the lows for the day, the market held the lows for a couple of hours before starting a slow move through to the 0.7270 and drifting from the level on the move into the grey hours, early London were steady buyers through the morning and the market made a push for the 73 cent levels however, offers in the area held and the market moved into the NYK session slowly drifting through the session and running back to the 0.7275 areas in a long drawn out NYK session and dull trading for the pair.
  • EUR: Opening around the 1.1420 areas and the USD whipped around in early Tokyo testing initially through the 1.1465 level and then dipping back to the 1.1400 areas with light penetration through the level a few times before recovering steadily through to the highs again, the move to the grey hours saw the market drifting a little before early Europeans bought strongly through to the London opening and taking the market quickly through to the 1.1500 level only to fail the strong offers and fall steadily through the NYK session with much of the volume done already over with and the market ended the day almost unchanged.

 

Yesterday’s premiership results

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

EUR:      German Industrial Production M/M Sep A 0.20% | C -0.10% | P -0.30% | R 0.10%

CHF;       Foreign Currency Reserves (CHF) Oct A 753B | P 740B

GBP:      Halifax House Prices M/M Oct A 0.70% | C 0.90% | P -1.40% | R -.1.30%

EUR:      Eurozone Retail Sales M/M Sep A 0.00% | C 0.10% | P -0.20% | R 0.30%

CAD:      Ivey PMI Oct A 61.8 | C 50.9 | P 50.4

USD;      Crude Oil Inventories A 5.8M | C 2.0M | P 3.2M

NZD:      RBNZ Official Cash Rate A 1.75% | C 1.75% | P 1.75%

               

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