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Daily FX Market Commentary

Good Morning,

 

LMAX Close

USDJPY 113.194 | EURUSD 1.13446 | AUDUSD 0.72694 | NZDUSD 69025 | USDCAD 1.33548 | USDCHF 0.99769| GBPUSD 1.27336 |

LMAX highs and Lows 06.00 GMT

                                Highs | Lows

EURUSD               1.13529 | 1.1339

USDJPY                 113.244 | 112.581

GBPUSD               1.27477 | 1.27104

USDCHF               0.99843 | 0.99576

AUDUSD              0.72738 | 0.72186

USDCAD               1.34050 | 1.33509

NZDUSD               0.69007 | 0.68588

EURCHF                1.13197 | 1.12995

EURGBP               0.89280 | 0.89056

EURJPY                 128.445 | 127.704

For Today

  • GBP: Opening around the 1.2735 levels a little bit of thin trading around the start saw the market start to drift into the Tokyo area and held the 1.2720 area through to the grey hours with the market unable to break above the 1.2730 level with any conviction, 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 1.2800 levels and likely to be limited through to the 1.2850 with possibly stronger offers into that level building and through the level with congestion through to the 1.2900 areas.
  • JPY: Opening on its highs the USDJPY saw solid selling through into the NYK session testing initially to the 113.00 and while the market was being squeezed lower came the AUD trade numbers adding AUDJPY selling to the movement and margin issues appearing in the market, with cross JPY selling sending the market to the 112.80 before pausing, however, the market continued a final run before running into the Tokyo lunch period and pushed through to the 112.60 level before bouncing a little and holding through to the great hours holding above the 112.70 area. 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: AUDJPY selling started after the opening with limited impact initially but enough to push through the 0.7250 levels into the trade balance number and the market accelerating to the 0.7230 level before slowing and drifting on a dip through to the 0.7220 level before holding the level for the move to the grey hours just off those lows. Downside bids into the 72 cents level likely to be reasonably strong however, a push through the level is likely to see weak stops appearing with congestion likely into the 0.7160 level and continuing to the stronger 0.7150 area, a dip there will likely meet stronger congestion on any attempt to move to the 71 cents level, topside offers likely to be light with limited congestion on a move to the 0.7300 before stronger congestion appears with weak stops and congestion through the level competing but limited through to the stronger 0.7350 area.
  • EUR: A quiet session for the Euro with the market ranging in the 1.1340-50 areas for the most part with very limited moves above and below those levels. 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 1.1300 level and although congestion is likely to be light it will possibly get stronger on any test through to the 1.1270 area 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

GBP:

PM May should go back to Brussels to renegotiate or be replaced – Tory MP – Telegraph

What PM May’s secret Brexit legal advice says and how it differs from what she told us before – Telegraph

May urged to call off Brexit vote in Parliament next week – Times

EUR:

Eurozone growth set to remain weak as Italy recession looms

Fitch no longer forecasting ECB raising rates in 2019 – RTRS

JPY:

Kuroda: Economic risks from abroad could be severe

Kuroda: BoJ watching impacts of trade war, Brexit on economy

Kuroda: BoJ will take appropriate policy as needed

Kuroda: Closely monitoring protectionist policies

Kuroda: Uncertainties are increasing in economies abroad

Kuroda: Still uncertainties remain for impact of tax hike

Kuroda: Important to maintain market trust in fiscal policy

Kuroda: Don’t think there are limits on current policy

Kuroda: Momentum to 2% inflation is firmly maintained

Kuroda: Will decide on appropriate policy, keeping eye on risks

Kuroda: More downside risks centred on overseas economy

Kuroda: Japan’s economy expanding moderately

Japanese bought net 1.1T Yen overseas debt last week

CAD:

Canada has arrested Huawei CFO Wanzhou Meng and facing extradition to the US – Globe and Mail

Metals:

Palladium surges above gold as buyers scramble for supply

 

Today’s Data

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

AUD:     Trade balance (AUD) Oct A 2.32B | C 3.00B | P 3.02B | R 2.94b

AUD:     Retail sales MoM Oct A 0.30% | C 0.30% | P 0.20% | R 0.10%

0700       EUR: German factory orders MoM Oct C -0.40% | P 0.30%

1230       USD: Challenger job cuts YoY Nov P 153.60%

1315       USD: ADP employment change Nov C 200K | P 227K

1330       CAD: International merchandise trade (CAD) P -0.4B

1330       USD: Trade balance Oct C -55.2B | P -54.0B

1330       USD: Initial jobless claims (Dec 1) C 226K | P 234K

1330       USD: Unit Labour costs C 1.00% | P 1.20%

1445       USD: Services PMI Nov (F) C 54.4 | P 54.4

1500       CAD: Ivey PMI Nov C 60.3 | P 61.8

1500       USD: Durable goods orders Oct (F) C -2.4% | P -4.4%

1500       USD: ISM Non-manufacturing services composite Nov C 59.5 | P 60.3

1500       USD: Factory orders Oct C -2.00% | P 0.70%

1530       USD: Natural gas storage P -59B

1530       USD: Crude oil inventories P 3.6M

 

Harry Hindsight

  • GBP: Drifting through the Asian session the market moved from the opening around the 1.2710 areas to test through to the 1.2675 level for the move into the grey hours, London buyers moved into the market with a quick move through to the 1.2750 areas in the first hour and into a poor services PMI number limiting the early gains however, with the Government releasing said documents the market found some focus even though the vote on Brexit is likely to continue to be unlikely testing quickly towards the 1.2800 area before dipping back to the 1.2780 areas and holding into the NYK session, a strong USD saw the Cable dropping back through to the opening levels and although the market slowly pushed above the 1.2750 areas the end of the London session saw the market again drifting through to the close just above the opening levels.
  • JPY: A dip from the opening saw the market setting an early low for the day with the USDJPY dipping to the 112.65 area before rallying quickly through to the 112.90 level on the Tokyo opening, while the market slowed a little it did continue rising through the sessio0n holding around the 113.00 level for the move into the grey hours, Grey hour range was limited and saw the 113.10 level on the topside and drifting into the London session testing back through the 113.00 level and holding quietly until early NYK started a steady period of buying and the USDJPY rose through to the 113.20 level and ranged quietly through to the close just off those highs.
  • AUD: Opening around the 0.7335 areas the market ran a little higher to push through to the 0.7350 areas before the release of the weak GDP numbers, the market dropped quickly down to the 0.7300areas and holding in a tight range for a couple of hours before renewing the move lower and into the grey hours holding the 0.7280 area, the move through into London session saw very little movement ranging in the 0.7285-0.7300 level through to the NYK session before the USD buying moved in and the market again drifted back to the 0.7250 area and based in the area through to the close.
  • EUR: Asian selling through to the grey hours with the market opening quietly around the 1.1340 areas and slowly falling back to the 1.1320 level and congestive bids, the market moved into the grey hours recovering and slowly pushing back to the opening level and lifting higher just before the NYK opening to test to the 1.1355 areas, with mixed PMI results, the move into the NYK session saw strong buying in USD and the market dropping back quickly to test through the lows towards the 1.1310 area bouncing back to the 1.1330 level and a rise back to the 1.1350 area for a slow range to the close almost unchanged.

 

Yesterday’s Premiership results

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

EUR        Italy Services PMI Nov A 50.3 | C 49.2 | P 49.2

EUR        France Services PMI Nov (F) A 55.1 | C 55 | P 55

EUR        Germany Services PMI Nov (F) A 53.3 | C 53.3 | P 53.3

EUR        Eurozone Services PMI Nov (F) A 53.4 | C 53.1 | P 53.1

GBP       Services PMI Nov A 50.4 | C 52.5 | P 52.2

EUR        Eurozone Retail Sales M/M Oct A 0.30% | C 0.20% | P 0.00% | R -0.50%

CAD       BoC Rate Decision A 1.75% | C 1.75% | P 1.75%

USD       Fed’s Beige Book

 

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