Daily FX Market Commentary

Andy Harrison

Andy Harrison

Good morning,

LMAX Close

USDJPY 113.61 | EURUSD 1.1312 | AUDUSD 0.72318 | NZDUSD 0.67946 | USDCAD 1.32422 | USDCHF 1.00582 | GBPUSD 1.29886 |

LMAX Highs and Lows 5.00am GMT

                                High | Low

EURUSD 1.13420 | 1.13088

USDJPY 113.675 | 113.43

GBPUSD 1.30135 | 1.29793

USDCHF 1.00751 | 1.00515

AUDUSD 0.72816 | 0.72299

USDCAD 1.32491 | 132259

NZDUSD 0.68062 | 0.67874

EURCHF 1.14030 | 1.13769

EURGBP 0.87181 | 0.86977

EURJPY 128.679 | 128.43

For today

  • GBP:  A very quiet session as the market thinks about Brexit, opening around the 1.3000 level the market drifted into early Tokyo probing just below the level before rising from the Tokyo fix to push through above the 1.3010 level in limited trading. Topside offers cleared through to the 1.3060 area with some light congestion continuing from that level and stronger offers into the 1.3100 level however, with Brexit back as the lead story for UK and EU the market could end up anywhere however, any push through the 1.3100 level is likely to see some congestion on its move to the stronger 1.3200 levels and possibly profit taking and fresh shorts, downside bids light back through to the 1.2900 level and possible weak stops on any strong push below the level with strong congestion into the 1.2840 areas with strong stops likely on a push through and the momentum suggesting a deeper move into the 1.27 handle.
  • JPY: A little drift into the opening in Tokyo with early highs around the 113.68 areas and dropping back to the 113.50 level on the opening, early Tokyo saw limited action around the 113.60 level before drifting through the session to hold the 113.45 level through 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: opening around the 0.7235 level the market remained close to that level through to the employment data and a quick surge through to the 0.7270 levels on good showing in participation and underlying numbers, the market remained tight around that level through to the grey hours with highs just probing above the 0.7280 level but with little conviction. Topside offers through to the 73 cents level is likely to be very strong with weak stops quickly following on a move through the level and opening up a quick move to the 0.7350 level with stronger congestion likely to appear and continue through to 0.7380-0.7400 levels. Downside bids light back through to the 0..7170 area with possibly some light stops reappearing on a dip through the level and into the more congested and supportive 0.7150 areas downwards.
  • EUR: The Euro’s moved slowly higher from the opening around 1.1315 level to test into the late session pressing above the 1.1340 levels and holding close to the level in quiet trading to the grey hours. Topside offers into the 1.1380-1.1400 level likely to be limited with weak stops on a move through will see very little resistance to a strong move with better offerings around the 1.1450 area and likely to increase the closer the market moves to the 1.1500 areas, strong stops on a push through the 1.1520 areas will likely limit any further push however, this is dependent on Brexit news. Downside bids light through to the 1.1260 level with some limited congestion and likely to increase on any dips towards the 1.1220-00 level with strong stops through the level opening up limited downside potential for the moment.

Overnight News

CNY:

China’s growth engines lose $32M a minute as markets sink – BBG

China said to outline concessions to US ahead of G20 talks

USD/CNY/HKD:

US concerned about fundamental freedoms in Hong Kong

GBP:

Brexit cabinet erupted with a massive bust up between Esther McVey and PM May

Varadkar: can’t predict how vote in UK parliament will go

Varadkar: Hard to see where we go if this is defeated

Varadkar: Expect to speak to DUP’s Foster in next couple of days

Banks continue to plan for no deal Brexit, UK Finance says

UK Finance says terms of Brexit finance deal must be solidified

Steve Baker MP predicts this deal will be in bits in a couple of days

Brexit deal means UK finance will lose easy access to the EU

Brexit draft agreement: Westminster mood much much worse than after chequers

USD/MXN:

Mexican Peso whipsawed as democrat raises concern on trade deal

USD:

Powell doesn’t sound like he’s changed his mind

Powell: very happy about state of economy

Powell: Trying to avoid hiking too slowly or too fast

Powell: Take both risks seriously so gradually raising rates

JPY:

Japanese bought net 1.6T Yen of overseas debt last week

AUD:

Australian participation rate was 65.6% in Oct Est 65.5%

Today’s data

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

AUD Consumer Inflation Expectation Nov A 3.60% | P 4.00%

AUD Employment Change Oct A 32.8K | C 20.3K | P 5.6K | R 7.8K

AUD Unemployment Rate Oct A 5.00% | C 5.10% | P 5.00%

09:30 GBP Retail Sales Inc Auto Fuel M/M Oct C 0.20% | P -0.80%

09:30 GBP Retail Sales Inc Auto Fuel Y/Y Oct C 2.80% | P 3.00%

09:30 GBP Retail Sales Ex Auto Fuel M/M Oct C 0.20% | P -0.80%

09:30 GBP Retail Sales Ex Auto Fuel Y/Y Oct C 3.30% | P 3.20%

10:00 EUR Eurozone Trade Balance (EUR) Sep C 16.7B | P 16.6B

13:30 CAD ADP Non-Farm Employment Change Oct P 28.8K

13:30 USD Empire State Manufacturing Nov C 19.3 | P 21.1

13:30 USD Retail Sales Advance M/M Oct C 0.50% | P 0.10%

13:30 USD Retail Sales Ex Auto M/M Oct C 0.50% | P -0.10%

13:30 USD Philadelphia Fed Business Outlook Nov C 20.7 | P 22.2

13:30 USD Import Price Index M/M Oct C 0.10% | P 0.50%

13:30 USD Initial Jobless Claims (NOV 13) P 5.8M

15:00 USD Business Inventories Sep C 0.30% | P 0.50%

15:30 USD Natural Gas Storage P 65B

16:00 USD Crude Oil Inventories P 5.8M

 

Harry Hindsight

  • GBP: A choppy day with Brexit draft completed and Cabinet backing however, descension from all sides will likely see some of those Cabinet members resigning, and remoaners and Brexiteers alike joined as one in condemnation, Opening on a quick move from the 1.2960 area the market quickly pushed towards the 1.3050 level before struggling and knee jerk reaction over to the announcement of agreement by some of the senior members of Parliament the market dropped back though into the Tokyo session holding the 1.3010 areas for several hours, late in the session the market again dipped lower through the 1.3000 level for the grey hours and the move into the period saw mixed reactions trading between the 1.2985-1.3015 level before settling down for a slow but steady decline as the market digested and analysed the announcement, with better than expected inflationary data the market dipped through to the 1.2900 level with minor dip through before bouncing with Cabinet meeting in full flow pushing back to the 1.2970 areas as NYK bought the news and the market rose through to test the highs again before dropping back quickly as the Cabinet meeting came to an end again testing through the 1.2900 level, the agreement by the Cabinet to go forward with the draft saw a big bounce and the market testing through to the 1.3070 levels this time however, the fact remains that the Government will never be able to get this draft through the House of Commons with all the different factions likely to vote against it and leaving a no Brexit deal the only option. The market fell back from the highs and held just below the 1.3000 level for the close on a hectic day for the pair.
  • JPY: Quiet drift through to the Tokyo session with the market testing just below the opening 113.80 level and then trading quickly higher with GBPJPY buying on the Brexit news, from thee the market held in a tight range through the day trading around the 113.90 level and never quiet getting to the 114.00 level through until the NYK session and then only just, the downside was also limited and only into the NYK session did the market attempt the opening levels and only briefly before moving into the NYK session to push the highs, the move through to the end of London saw the market dropping back to the 113.70 level and running a second time as strong Cable buying met limited GBPJPY selling and USDJPY making the lows around the 113.30 rea before slowly regaining the 113.65 areas for the close.
  • AUD: Reasonably quiet for much of the day with Asia rising through to the 0.7235 levels on the Westpac confidence number before dropping back and drifting through to the London session and the early sellers pushing the Oz through to the 0.7190 areas before holding and making a steady recovery through into the NYK session, quiet trading until the opening in Sydney with the market ranging around the 0.7220 areas for much of the afternoon and then Sydney buying through to the 0.7250 areas in a quick move and then drifting to a close around 0.7230.
  • EUR: As with the Cable but with less movement overall, opening around the 112.85 area the market pushed higher in pursuit of the GBP topping about the 1.1315 levels and holding that level through to the Tokyo session, from the opening the Asian sellers sold steadily through into the grey hours taking the market back to the opening levels and then London following through to push the lows to the 1.1265 area to make the lows for the day, the move into the NYK session saw buying move through the market as GBP again moved higher and as with GBP the choppy market continued through the session with the initial push through the highs testing towards the 1.1350 areas and repeating the move late in the session before finishing the day around the 1.1315 areas.

Yesterday’s premiership results

AUD Westpac Consumer Confidence Nov A 2.80% | P 1.00%

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%

EUR German GDP Q/Q Q3 (P) A -0.20% | C -0.30% | P 0.50%

GBP CPI M/M Oct A 0.10% | C 0.20% | P 0.10%

GBP CPI Y/Y Oct A 2.40% | C 2.50% | P 2.40%

GBP Core CPI Y/Y Oct A 1.90% | C 2.00% | P 1.90%

GBP RPI M/M Oct A 0.10% | C 0.20% | P 0.00%

GBP RPI Y/Y Oct A 3.30% | C 3.40% | P 3.30%

GBP PPI Input M/M Oct A 0.60% | C 0.60% | P 1.30% | R 1.40%

GBP PPI Input Y/Y Oct A 10.00% | C 9.60% | P 10.30% | R 10.50%

GBP PPI Output M/M Oct A 0.30% | C 0.20% | P 0.40%

GBP PPI Output Y/Y Oct A 3.30% | C 3.10% | P 3.10%

GBP PPI Output Core M/M Oct A 0.30% | C 0.20% | P 0.10%

GBP PPI Output Core Y/Y Oct A 2.40% | C 2.40% | P 2.40%

GBP House Price Index Y/Y Sep A 3.50% | C 3.30% | P 3.20% | P 3.10%

EUR Eurozone Industrial Production M/M Sep A -0.30% | C -0.40% | P 1.00% | R 1.10%

EUR Eurozone GDP Q/Q Q3 (P) A 0.20% | C 0.20% | P 0.20%

USD CPI M/M Oct A 0.30% | C 0.20% | P 0.10%

USD CPI Y/Y Oct A 2.50% | C 2.50% | P 2.30%

USD CPI Core M/M Oct A 0.20% | C 0.20% | P 0.10%

USD CPI Core Y/Y Oct A 2.10% | C 2.20% | P 2.20%

          

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