Daily FX Market Commentary

Andy Harrison

Andy Harrison

Good morning,

LMAX Close

USDJPY 113.807 | EURUSD 1.12887 | AUDUSD 0.72172 | NZDUSD 0.67544 | USDCAD 1.32404 | USDCHF 1.00712 | GBPUSD 1.29731 |

LMAX Highs and Lows 5.00am GMT

                                High | Low

EURUSD 1.13224 | 1.12856

USDJPY 113.988 | 113.755

GBPUSD 1.30393 | 1.29487

USDCHF 1.00844 | 1.0058

AUDUSD 0.72375 | 0.72141

USDCAD 1.32460 | 1.32189

NZDUSD 0.67605 | 0.67833

EURCHF 1.13932 | 1.13663

EURGBP 0.87081 | 0.86663

EURJPY 128.981 | 128.439

For today

  • GBP: A volatile opening with news that several ministers have agreed to back the Brexit plan being put forward to the EU with some media talking about an agreement already proposed by the EU however, as with the similar announcements in the past, the proof is in the pudding as my Gran used to say, confused so was I but end of the day until its signed its not a done deal, with further chatter from the N. Ireland contingent quickly coming out to say it would be unacceptable to them for the EU to set rules pertaining to that part of the UK and the Irish media already saying no chance of a deal this week it would seem there is still a long way to go and we’ve not heard from the Eurosceptics yet that will probably be later today, needless to say the market on the opening quickly shot up to the 1.3040 level from the 1.2960 areas before drifting through the session holding for a long period in the 1.3010-00 areas and dipping a little through the 1.3000 on the move through to the grey hours holding the 1.2990 area. Downside bids light through to the 1.2900 level however, even in this area the market is likely to still be a little thin while the buyers adjust to the new levels, a test through the level will likely see stronger congestion on any dip through the 1.2880 levels and through to the 1.2850 area. Stronger bids are possibly holding for any dips to the 1.2800 level and through. Topside offers into the 1.3050 level and likely to be congested through the level with a little weakness on a push through the 1.3060 level before offers start to appear on any push for the 1.3100 level however, in these ages nothing is guaranteed and it could just as easily push quickly through the level and trigger weak stops on a push through to the 1.3150 level and limited offers again until 1.3200 and possibly stronger offers.
  • JPY: USDJPY initially drifting from the opening with the move into the Tokyo opening seeing some limited GBPJPY buying appear and the market moving off the lows around the 113.75 area to test quickly into the 113.95 area and then ranging through the day in an ever-decreasing range around the 113.90 areas to the grey hours. topside likely to be congested through to the 114.20 level with weak stops on a strong push through the level however, congestion is likely to reappear quickly and the market struggling through the 114.40-60 areas with a break through the 114.60 level likely to see limited stops as the market again tries to push towards the 115.00 area and possibly strong congestion followed by stops through the 115.10-20 areas. Downside bids light through to the 113.20 area with light congestion around the level and then increasing congestion on any push through the 112.80 and its weak stops, the close the market moves towards the 112.00 figure area the stronger the congestion is likely to be.
  • AUD: The Oz opened quietly then played catch up with the GBP pushing through from the 0.7215 area to make the highs just short of the 0.7240 area, the move into the Tokyo session saw what looked like a single seller testing the market a few times before the market dropped back to the 0.7220 areas and range through to the grey hours holding the levels, Topside offers light through to the 0.7240-60 areas with limited congestion through the level building to stronger offers on any attempt through the 73 cents level, a strong push through will likely see some reasonable stops appearing and the market quickly moving to the 0.7340-60 areas and stronger congestion, downside bids light through to the 71 cents level with strong congestion eventually turning into strong support on any test through to the 0.7050 areas.
  • EUR: Rising from the opening just below the 1.1290 level the market didn’t immediately follow the GBP but played catch up with the market testing through to the 1.1320 areas before halting and holding the level through into the Tokyo session, gradual selling saw the market drifting through to the opening levels for the move into the grey hours, downside bids into the 1.1220-00 areas has to look weak however, they held in a limited market Monday, a push through is likely to see weak stops on the move through with limited technical levels and generally sentimental through to the 1.1050 areas where stronger bids are likely to appear, if not around those 50’s and 00 areas. Topside offers light through to the 1.1320 area limited congestion with the possibility of weak stops accumulated just beyond and opening a quick move into the 1.1350 area and the start of stronger congestion through to 1.1400.

Overnight News

GBP:

Key Ministers to grudgingly back May’s Brexit draft – The Sun Raab, Hunt, Javid, Gove and Cox to back May’s Brexit draft – The Sun DUP’s Foster: Unacceptable for N. Ireland rules to be set by EU Foster: Desire for deal won’t be superseded by any deal

EUR:

More pain for German savers as real yields fall to record lows German officials concerned about China involvement in 5G – Rtrs Di Maio: Italy 2019 deficit and growth targets unchanged Di Maio: letter to EU includes mention of more real estate sales Di Maio: all key points of Italy 2019 budget unchanged Italy’s populists defy Europe on budget deficit, growth targets EU sees little chance of Brexit deal this week – RTE Italy sent revised budget to EU after Midnight Tuesday – official

USD:

Kudlow says US is again talking to China about trade – CNBC Kudlow says US, China talking on all levels of government Kudlow says Peter Navarro’s comments were way off base US said to hold off on Trump’s car tariffs after trade meeting – BBG

OIL:

Oil drops most in 3 years as investors flee darkening outlook

Today’s data

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

23:30 AUD Westpac Consumer Confidence Nov A 2.80% | P 1.00%

23:50 JPY GDP Q/Q Q3 (P) A -0.30% | C -0.30% | P 0.70%

JPY GDP Deflator Y/Y Q3 (P) A -0.30% | C -0.20% | P 0.10% | R 0.00%

AUD Wage Price Index Q/Q Q3 A 0.60% | C 0.60% | P 0.60% | R 0.50%

CNY Retail Sales Y/Y Oct A 8.60% | C 9.20% | P 9.20%

CNY Industrial Production Y/Y Oct A 5.90% | C 5.80% | P 5.80%

CNY Fixed Assets Ex Rural YTD Y/Y Oct A 5.70% | C 5.50% | P 5.40%

JPY Tertiary Industry Index M/M Sep A -1.10% | C -0.40% | P 0.50% | R 0.40%

JPY Industrial Production M/M Sep (F) A -0.40% | C -1.10% | P -1.10%

JPY Industrial Production Y/Y Sep (F) A -2.50% | P -2.90%

07:00 EUR German GDP Q/Q Q3 (P) C -0.30% | P 0.50%

09:30 GBP CPI M/M Oct C 0.20% | P 0.10%

09:30 GBP CPI Y/Y Oct C 2.50% | P 2.40%

09:30 GBP Core CPI Y/Y Oct C 2.00% | P 1.90%

09:30 GBP RPI M/M Oct C 0.20% | P 0.00%

09:30 GBP RPI Y/Y Oct C 3.40% | P 3.30%

09:30 GBP PPI Input M/M Oct C 0.60% | P 1.30%

09:30 GBP PPI Input Y/Y Oct C 9.60% | P 10.30%

09:30 GBP PPI Output M/M Oct C 0.20% | P 0.40%

09:30 GBP PPI Output Y/Y Oct C 3.10% | P 3.10%

09:30 GBP PPI Output Core M/M Oct C 0.20% | P 0.10%

09:30 GBP PPI Output Core Y/Y Oct C 2.40% | P 2.40%

09:30 GBP House Price Index Y/Y Sep C 3.30% | P 3.20%

10:00 EUR Eurozone Industrial Production M/M Sep C -0.40% | P 1.00%

10:00 EUR Eurozone GDP Q/Q Q3 (P) C 0.20% | P 0.20%

13:30 USD CPI M/M Oct C 0.20% | P 0.10%

13:30 USD CPI Y/Y Oct C 2.50% | P 2.30%

13:30 USD CPI Core M/M Oct C 0.20% | P 0.10%

13:30 USD CPI Core Y/Y Oct C 2.20% | P 2.20%

Harry Hindsight

  • GBP: Asia saw a slow steady rise through the session with the Cable recovering barely, moving off a whippy start to the day the market set the 1.2840 area for the low before pushing through the 1.2850 level into the Tokyo session, the push through the 1.2870 level saw some limited stops triggered and the market testing to the 1.2890 before holding quietly through into the grey hours, early London chased the market a little lower before moving into the official opening and a push through the 1.2900 areas failing at the 1.2920 level and dropping back a little to trigger the weak buyers out again, weaker employment numbers helped the market to drop back however, with Average weekly earnings up 0.3% from the last number the market started to see stronger buying moving in and a steady rise through the 1.2900 levels and not stopping at the 1.2920 level this time and continuing into the NYK session pushing through 1.2950, a little bit of choppy movement saw the market contained in the 1.2950-80 areas holding deep in the session, late into the session just before the London close saw speculation about the Brexit deal resurfacing and the market heading quickly through to test towards the 1.3050 level from the 1.2950 in a quick move before speculation disappeared and the market dropped back almost as quickly with London out of the way, the run to the close saw the market basing along the 1.2950 level to finish slightly above the 1.2970.
  • JPY: A contained day for the USDJPY with the market drifting quickly off from the opening around the 113.85 levels and dropping quickly into the Tokyo opening to make the lows around the 113.60 areas, a slow move through to midsession before quickly pushing through the opening levels to test through the 114.00 level and stalling for the move into the grey hours, early London saw the market rising through to the 114.10 areas and holding in that area for several hours before drifting off through into the early morning in NYK to push through the 114.00 level, the run to the close was limited with the market ranging in the 113.80-114.00 levels for the most part before finishing the day holding the low end of the range.
  • AUD: Dropping from the opening 0.7175 areas to make early lows around the 0.7165 area before recovering into the Tokyo session to run to the 0.7180 level and hold quietly for a couple hours before rising quickly through to the 0.7210 level and some AUDJPY carry trade buying moving in the market, the market held through into the London session trading around the 0.7210 level and unable to extend the highs beyond the 0.7220 level, early London saw a limited dip through to the 0.7190 level and again starting a slow march back through the 72 cents levels and ranged around the 72 cents again deep into NYK and eventually breaching the 0.7220 in limited trading before again rejecting the highs, 0.7200-20 remained the range through to the close with the market just off those highs.
  • EUR: A slow raise through the Asian session moving off the opening lows around the 1.1220 areas and pushing through to the Tokyo lunch testing 1.1250 area and then drifting into the London session pressing weakly through the highs before drifting back towards the lows before the drag of the GBP triggered a slow move through to deep in NYK taking the market through to the 1.1290 level before dropping back quickly to the 1.1250 area once the London session left for the day, with Brexit optimism in mind the market started a slow climb through to the end in NYK pushing the highs again.

Yesterday’s premiership results

AUD NAB Business Confidence Oct A 4 | P 6

AUD NAB Business Conditions Oct A 12 | P 15

EUR German CPI M/M Oct (F) A | C 0.20% | P 0.20%

EUR German CPI Y/Y Oct (F) A | C 2.50% | P 2.50%

CHF Producer & Import Prices M/M Oct A 0.20% | C 0.10% | P -0.20%

CHF Producer & Import Prices Y/Y Oct A 2.30% | P 2.60%

GBP Jobless Claims Change Oct A 20.2K | C 4.3K | P 18.5K | 23.2K

GBP Claimant Count Rate Oct A 2.70% | P 2.60%

GBP Average Weekly Earnings 3M/Y Sep A 3.00% | C 3.00% | P 2.70%

GBP Weekly Earnings ex Bonus 3M/Y Sep A 3.20% | C 3.10% | P 3.10%

GBP ILO Unemployment Rate 3Mths Sep A 4.10% | C 4.00% | P 4.00%

EUR German ZEW Economic Sentiment Nov A -24.2 | C -24.2 | P -24.7

EUR German ZEW Current Situation Nov A 58.2 | C 65 | P 70.1

EUR Eurozone ZEW Economic Sentiment Nov A -22 | C -17.3 | P -19.4

USD Monthly Budget Statement (USD) Oct A -100.5B | C -116.6B | P 119.1B

          

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