Daily FX Market Commentary

Andy Harrison

Good Morning,

LMAX Close

USDJPY 113.663 | EURUSD 1.13534 | AUDUSD 0.73581 | NZDUSD 69291 | USDCAD 1.31972 | USDCHF 0.99791 | GBPUSD 1.27243 |

LMAX highs and Lows 06.00 GMT

                                Highs | Lows

EURUSD               1.13819 | 1.13501

USDJPY                 113.662 | 113.054

GBPUSD               1.27501 | 1.2720

USDCHF               0.99850 | 0.99587

AUDUSD              0.73791 | 0.73489

USDCAD               1.32015 | 1.31746

NZDUSD               0.69622 | 0.69247

EURCHF                1.13341 | 1.13275

EURGBP               0.89280 | 0.89202

EURJPY                 129.043 | 128.611

For Today

• GBP: Opening just above the 1.2720 level the market traded quietly through into the Tokyo session holding the level for a short period before starting a slow steady climb through to the 1.2750 level where the market ranged through to the grey hours unable to break through the level. Strong bids into the 1.2700 areas and possibly strong congestion through the level, a push through the level will likely see weak stops and may be some break out trades however, the congestion is likely to continue through to the 1.2650 areas with light sentimental bids and then stronger bids into the 1.2630 level through to the 1.2600 areas, topside offers light through to the 1.2800 level  and limited offers in the area could see minor stops opening up a test to the 1.2850 level and congestion is likely to continue through to the stronger 1.2900 areas.
• JPY: Slow drift from the opening saw the market drop quickly from the Tokyo fix testing the 113.30 levels and holding quietly for several hours, before repeating the move this time pushing through to the 113.05 area before holding quietly again for the move into the grey hours,  light topside offers through to the 114.00 areas with strong offers suspected in the area through to the 114.20 level with weak stops likely through the level however, the topside is limited with stronger offers through the 114.40-60 areas with larger break out stops above the level, downside bids into the 113.00 areas with lighter congestion through the level and limited stops on a push through the 112.80 area with stronger bids not suspected until closer to the 112.40 areas.
• AUD: A choppy start to the day with the market ranging just below the opening 0.7360 levels dipping to the 0.7350 level but unable to push to far through the opening level, the move to the RBA release eventually attracted buyers and the market pushed through to the 0.7380 areas, the release saw a minor selloff however the markets range was limited as was the selling into the grey hours, Topside offers light through the 0.7380-0.7400 area with limited congestion however, a push through the level will likely see stronger congestion on a push through to the level and continuing through to the 0.7450 areas before any weakness starts to appear, downside bids light back through the 73 cents level with some light stops possible and weak congestion until closer to the 0.7250 areas and continuing through to stronger bids into the 72 cents area.
• EUR: Moving through from the opening levels quietly into the Tokyo session saw the market holding around the open with a single attempt to push the 1.1350 area before starting a slow grind higher with the market pushing again through to yesterday’s highs and just through the 1.1380 level before drifting back a little for the move into the grey hours, Topside offers into and through the 1.1400 levels with weak stops likely on a push through the level is likely to see congestion continuing through the level and into the 1.1430 areas weak stops possible through the level however, the congestion is likely to continue through to the 1.1480 level in varying strengths with the 1.1500 level likely to be a very strong point and one has to look back to Oct for the last serious push through. Downside bids light through to limited congestion around the 1.1350 level and although congestion is likely to be light it will possibly get stronger the closer the market moves to the 1.1270 areas with weak stops on a move through and the market opening for a test to the 1.1220-00 level and stronger bids.

 

Overnight News

OIL:

Saudi oil output hit record high in November BBG

USD:

White house corrects Kudlow: 90-day US-China began Dec 1

Trump’s advisers struggle to explain deal he says he cut with Xi

Powell: Fed made great deal of progress toward mission goals

Powell: Productivity picked up but not clear if trend sustained

Powell: Wage gains, consumer confidence supports robust spending

Powell: Remarks in text of speech at Yellen award for excellence

Powell sees long-term challenges in otherwise strong economy

Lighthizer named to lead 90-day negotiation as enforcer of commitments

Trump has won little from China so far, there isn’t an incredible deal yet – WPT

CAD:

Some Canadian producers push back as Alberta orders oil cuts

GBP:

Speaker Bercow backs Brexit contempt debate BBC

Bercow: Arguable case UK Govt. is in contempt of parliament

Bercow: Parliament will debate contempt question Tuesday

Contempt debate will delay UK Govt. Brexit deal debate

Facing Brexit defeat, May turns to damage control NYT

EUR:

ECB will tweak capital key, cutting Italy’s share in Bond buying

Salvini says Italian budget basics won’t change Brussels update

Today’s Data

Actual A | Consensus C | Previous P | Revised R | all timings GMT/UTC

JPY         Monetary Base Y/Y Nov A 6.10% | C 5.70% | P 5.90%

GBP       BRC Retail Sales Monitor Y/Y Nov A -0.50% | P 0.10%

AUD       Current Account Balance (AUD) Q3 A -10.7 | C -10.2B | P -13.5B | R -12.1B

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

8:15        CHF        CPI M/M Nov C -0.10% | P 0.20%

8:15        CHF        CPI Y/Y Nov C 1.10% | P 1.10%

9:30        GBP       Construction PMI Nov C 52.5 | P 53.2

10:00     EUR        Eurozone PPI M/M Oct C 0.40% | P 0.50%

10:00     EUR        Eurozone PPI Y/Y Oct C 4.50% | P 4.50%

13:30     CAD       Labour Productivity Q/Q Q3 C 0.40% | P 0.70%

Harry Hindsight

• GBP: Weekend G20 news drove the early market with Cable opening in line with Friday’s close and drifting a little through to early Tokyo before some light buying saw the market rising to the 1.2750 levels and holding quietly into the Tokyo opening, Tokyo continued buying pushing through the 1.2765 levels eventually to test to the 1.2775 area and a quiet range through to the grey hours, strong buying from early London saw the market make the highs into the official opening to test the 1.2825 level with a few weak stops before slowly drifting back triggering some weak stops on the move back through the 1.2800 to test to the 1.2775 area, the limited pause saw stronger selling moving in and the market quickly fell back even after the strong manufacturing number testing through to the 1.2710 levels and although the market did attempt to push the 1.2700 level into the NYK session the market held and steadily pushed off the level to the opening levels and the end of the London session before drifting through to the 1.2725 and the close.
• JPY: Gapping higher from the opening the market pushed off the 113.60 level and ran to the highs of the day touching just through the 113.80 areas before moving into the Tokyo session and dropping back to fill the gap on the charts quickly, the market drifted lightly testing into the mid 113.40’s before holding quietly through to the grey hours around the 113.50 level, early London saw the market test through the 113.40 levels to make the lows on the day and quietly rose through the day to range around the 113.60 level to the close.
• AUD: A strong opening for the Oz with the market drifting from the 0.7380 area through to the 0.7355 level into the Tokyo session, the balance of the Asian session saw the market quietly range through to the grey hours testing down to the 0.7350 areas holding on the couple of attempts and once in the grey hours the market pushed slowly through to the opening in London holding around the 0.7390 level. London were slow sellers and the market drifted back to the opening levels and ranged quietly deep into the NYK session before slowly drifting back to the 0.7350 level and the close.
• EUR: A boost from the weekend news saw the Euro opening around the 1.1340 level, initially attempting to close the gap on the charts the market tested back to the 1.1330 area before moving into the Tokyo session and running steadily higher to range around the 1.1350 level through to the grey hour, early European buying saw the market quickly push to the 1.1370 area and then after the release of the data a quick stab towards the 1.1380 level and while the market pushed the level for a year the market struggled and eventually gave back 20 pips to range around the 1.1360 level for a couple of hours, slow selling eventually tipped the market lower and the move through to midmorning in London quickly saw the Euro filling the gap on the charts and bouncing off the 1.1320 level to range through into early NYK around the 1.1330 levels, eventually pushing slowly through to the end of London pushing the 1.1360 levels before drifting to the close.

Yesterday’s Premiership results

AUD       AiG Performance of Manufacturing Index Nov A 51.3 | P 58.3

NZD       Terms of Trade Index Q/Q Q3 A -0.30% | C 0.10% | P 0.60% | R 0.40%

JPY         Capital Spending Q3 A 4.50% | C 8.60% | P 12.80%

AUD       TD Securities Inflation M/M Nov A 0.00% | P 0.10%

AUD       Company Operating Profit Q/Q Q3 A 1.90% | C 2.90% | P 2.00% | R 2.40%

AUD       Building Approvals M/M Oct A -1.50% | C -1.40% | P 3.30% | R 5.50%

JPY         PMI Manufacturing Nov (F) A 52.2 | C 51.8 | P 51.8

CNY        Caixin PMI Manufacturing Nov A 50.2 | C 50.1 | P 50.1

CHF        Retail Sales Real Y/Y Oct A 0.80% | C -0.70% | P -2.70%

CHF        PMI Manufacturing Nov A 57.7 | C 56.3 | P 57.4

EUR        Italy Manufacturing PMI Nov A 48.6 | C 48.9 | P 49.2

EUR        France Manufacturing PMI Nov (F) A 50.8 | C 50.7 | P 50.7

EUR        Germany Manufacturing PMI Nov (F) A 51.8 | C 51.6 | P 51.6

EUR        Eurozone Manufacturing PMI Nov (F) A 51.8 | C 51.5 | P 51.5

GBP       PMI Manufacturing Nov A 53.1 | C 52 | P 51.1

CAD       Manufacturing PMI Nov A 54.9 | P 53.9

USD       Construction Spending M/M Oct A -0.10% | C 0.40% | P 0.00%

USD       Manufacturing PMI Nov (F) A 55.3 | C 55.4 | P 55.4

USD       ISM Manufacturing Nov A 59.3 | C 57.5 | P 57.7

USD       ISM Prices Paid Nov A 60.7 | C 70.5 | P 71.6

USD       ISM Employment Nov A 58.4 | P 56.8

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