Daily FX Market Commentary

Andy Harrison

Good Morning,

LMAX Close

USDJPY 112.785 | EURUSD 1.13427 | AUDUSD 0.73392 | NZDUSD 69303 | USDCAD 1.32642 | USDCHF 0.9975 | GBPUSD 1.27195 |

LMAX highs and Lows 06.00 GMT

                                Highs | Lows

EURUSD               1.13462 | 1.13179

USDJPY                 113.097 | 112.651

GBPUSD               1.27247 | 1.26791

USDCHF               1.00020 | 0.99736

AUDUSD              0.73561 | 0.72822

USDCAD               1.32919 | 1.32529

NZDUSD               0.69439 | 0.69097

EURCHF                1.13233 | 1.13065

EURGBP               0.89302 | 0.89139

EURJPY                 128.089 | 1.27794

For Today

• GBP: A steady downturn through the session with news that no one needs to do anything other than revoking the Article 50 sent the market quickly to the 1.2680 areas before bouncing back higher and then sliding more slowly through to the grey hours holding around the level. Downside bids into the 1.2660 level with possibly a stronger level into the 1.2630 areas however, a push through of the downside level is likely to see only limited congestion through the sentimental levels and opening the market to a larger dip through to the 1.2500 areas and congestion possible around that area. Topside offers light through the 1.2700 levels and likely to be limited through to the 1.2800 with possibly stronger offers into that level building and through the level with congestion through to the 1.2850 areas.
• JPY: Light buying from the opening in Tokyo saw the market rising from the 112.65 areas pushing through to the 113.00 area before settling down to a light range around the level for a move into the grey hours, topside offers light through to the 113.60 areas with stronger offers then starting to appear on any approach to the 114.00 levels with limited weak stops above the 114.30 areas and the market then open to a fresh test to the 114.60 areas. Downside bids light through to the 112.40 with strong bids likely into those areas and congestion through to the 111.80 level before weak stops appear to open a deeper move.
• AUD: Rising weakly through to the Tokyo session to test above the 0.7355 level the market fell back quickly once the GDP figures were released, weaker numbers saw the Oz quickly drop to the 73 cents areas on the first dip rising a little from the lows to the 0.7320 area before a more steady flow lower to push through to the 0.7285 areas to hold the level through to 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: Opening around the 1.1345 level and holding to move into the Tokyo session before a slow steady drop through the session to the grey hours holding just above the 1.1320 area, 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

USD:

Fed’s Williams says strong economy warrants further rate hikes

Regional banks ETF takes hit as US housing market cools

IPhone suppliers tumble after Cirrus logic adds to forecast cuts

Tarrif Man Trump says, he may extend truce in China trade war

Trump’s Canberra man vows to watch aggressive China

Navarro: Premature to lose faith in US-China talks FOX

Navarro: Bullish on economy, bullish on this deal FOX

Navarro: US going into China talks clear eyed – FOX

GBP/EUR:

UK could pull article 50 unilaterally, EU court aide suggests

EUR:

Salvini says he’s sure of agreement with EU on budget -Radiocor

GBP:

How PM May plea for unity ended in one of the most bruising in parliament’s history

UK does not need to pass legislation to revoke article 50 Sky

No deal would bring significant future economic benefits – – Suella Braverman ex Brexit minister

NZD:

NZ 3Q construction work rises less than forecast 0.7% est. 2.3%

JPY:

BoJ raises purchases of 10-25-year bonds after cutting frequency

Wakatabe: Regional banks will need to improve efficiency

Wakatabe: Benefit of easing is exceeding its side effects

Wakatabe: Shouldn’t hesitate to add stimulus if needed

Wakatabe: There is room for further stimulus if necessary

Wakatabe: Government spending to raise growth would help CPI

Wakatabe: Inverted yields don’t always bring recession

Wakatabe: Seems downside risks are increasing

Wakatabe: Mull extra easing if can’t hit 2% in mid-long term

Today’s Data

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

AUD       AiG Performance of Service Index Nov A 55.1 | P 51.1

AUD       GDP Q/Q Q3 A 0.30% | C 0.60% | P 0.90%

AUD       GDP Y/Y Q3 A 2.80% | C 2.80% | P 3.40%

CNY        Caixin PMI Services Nov A 53.8 | C 50.8 | P 50.8

08:45     EUR        Italy Services PMI Nov C 49.2 | P 49.2

08:50     EUR        France Services PMI Nov (F) C 55 | P 55

08:55     EUR        Germany Services PMI Nov (F) C 53.3 | P 53.3

09:00     EUR        Eurozone Services PMI Nov (F) C 53.1 | P 53.1

09:30     GBP       Services PMI Nov C 52.5 | P 52.2

10:00     EUR        Eurozone Retail Sales M/M Oct C 0.20% | P 0.00%

13:15     USD       ADP Employment Change Nov C 200K | P 227K

13:30     USD       Non-Farm Productivity C 2.40% | P 2.20%

13:30     USD       Unit Labour Costs C 1.00% | P 1.20%

14:45     USD       Services PMI Nov (F) C 54.4 | P 54.4

15:00     CAD       BoC Rate Decision C 1.75% | P 1.75%

15:00     USD       ISM Non-Manufacturing/Services Composite Nov C 59.5 | P 60.3

15:30     USD       Crude Oil Inventories P 3.6M

19:00     USD       Fed’s Beige Book

Harry Hindsight

• GBP: A quiet move through the Asian session with plenty of two way action pushing from the lows 1.2725 areas to test lightly to the 1.2750 level through to the grey hours, drifting a little into the grey hour the market eventually moved into the London session with strong buying helping the market to push through the 1.2800 level testing through to the 1.2840 with the help of some limited stops holding above the 1.2800 level through into the NYK session before starting a slow but steady decline through to the opening levels and dipping quickly to push through into the congested areas below the 1.2700 level, weak stops saw the market quickly testing into the 1.2660 levels before bouncing quickly back above the 1.2700 level and holding quietly through to the close around the 1.2715 areas.
• JPY: USDJPY dropped back in stages through the session drifting from the opening into the Tokyo saw the market moving into the Tokyo session holding the 113.55 level from the 113.65 areas, the initial dips saw the market moving to the 113.30 level and several hours in a tight range just above the level before dropping for the move into the grey hours, tipping to the 113.05 area and holding through to the London opening, London were quick sellers and the market dropped through the first couple of hours testing through the 112.75 area and held the level in a tight range through into NYK, slow rising to the 113.00 level saw the end of London and the market again dipping and testing through the 112.60 level before recovering only 15 pips or so for the close.
• AUD: Opening around the 0.7355 level and ranging quietly deep into the Asian session in a quiet range testing the 0.7350 level on the downside and pushing through to the 0.7365 areas and eventually pushing through the level and rising through to the 0.7375 area into the grey hours, early London took the market to the highs testing towards the 0.7395 area and then drifting for a couple of hours above 0.7380, the move into NYK the market slowly drifted through the session into the end of London falling back to the 0.7325 areas, once the London session ended the market held quietly around the 0.7335 level.
• EUR: A similar pattern overall with the market moving through the Asian session climbing slowly higher, opening around the 1.1355 and dipping only to the 1.1350 areas and the steady rise from that point saw the market pushing the 1.1380 into the grey hours, the market tested a little higher through the grey hours and then ran quickly through to the 1.1420 level into the Euro numbers ranging lightly just above the figure level before dipping for the move into the NYK session, from there USD buying eventually moved into the market for the run to the London close and the Euro dropped easily back to the 1.1320 area before bouncing to range quietly around the 1.1345 areas.

Yesterday’s Premiership results

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%

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

CHF        CPI Y/Y Nov C 1.10% | P 1.10%

GBP       Construction PMI Nov C 52.5 | P 53.2

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

EUR        Eurozone PPI Y/Y Oct C 4.50% | P 4.50%

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

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