Daily FX Market Commentary

Good Morning,

 

LMAX Close

USDJPY 112.674 | EURUSD 1.13744 | AUDUSD 0.72348 | NZDUSD 68721 | USDCAD 1.33815 | USDCHF 0.99269 | GBPUSD 1.27823 |

LMAX highs and Lows 06.00 GMT

                                Highs | Lows

EURUSD               1.13836 | 1.13658

USDJPY                 112.929 | 112.608

GBPUSD               1.28055 | 1.27638

USDCHF               0.99401 | 0.99171

AUDUSD              0.72427 | 0.72197

USDCAD               1.33973 | 1.33756

NZDUSD               0.68907 | 0.68755

EURCHF                1.13024 | 1.12847

EURGBP               0.89121 | 0.88908

EURJPY                 128.421 | 128.081

For Today

  • GBP: Choppy opening saw the market slowly drifting from the early attempt at the 1.2800 level with a tight channelled drift through to the 1.2765 level and the move into the grey hours, 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: A slow sideways drift into the Tokyo session eventually start a slow rise through the session to push towards the 112.95 areas for the move into the grey hours, topside offers light through to the 113.60 areas, very little likely to around the 113.00 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: A quiet range but still a bit wider than some of the other pairs, drifting from the opening 0.7235 level with the market then drifting through the Tokyo morning to the 0.7220 levels to hold and slowly move off those lows to push quickly through to 0.7240 area and the range set for the session and slowly drifting towards the lows again. 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 very quiet session with the Euro slipping slowly late in the session, initially moving sideways through the morning in Tokyo trading around the 1.1375 areas with meagre attempts through the 1.1380 before starting a slow and steady drive through to the 1.1365 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 1.1300 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

CNY:

Watch out for China junk bonds with keep well pacts – Moody’s

Huawei arrest a despicable rogue action – Chinese Media

USD/CNY:

US takes aim at Huawei – DJ

USD:

Feds Williams: Direct impact of tariffs so far is relatively small

Williams: Need to be nimble about responding to unexpected economic circumstances

Williams: can be lots of ambiguity in economic data

Williams: Asked about trade war effects, says so far US tariffs do not have big effect on overall growth inflation

Williams: Bigger effect of higher US tariffs is uncertainty for businesses

Williams: Hearing some businesses stepping back from investments, likely slows economy a bit

Powell: US labour market very strong by many measures

Powell: Economy currently performing very well overall

Powell: Job creation strong, wages gradually rising

Powell: Remarks in text of speech at housing conference

Powell: Expansion benefits still not reaching some communities

Embraer-Boeing aviation deal blocked by Brazilian court – RTRS

US Becomes a net oil exporter for first time in 75 years

US wage gains likely to hold firm at almost decade high

FED officials may signal a wait and see approach following rate increase this month – WSJ

Trump did not know about the Huawei extradition request before his dinner in Argentina – White house

EUR:

Bank of Spain to have powers to rein in mortgage risk – El Mundo

France fears more riots; Museums, Eiffel tower to close – APW

Italy PM Conte, 5star favour FinMin Tria resignation – Stampa

Italy’s Salvini opposes possible Tria resignation – Stampa

CAD:

Poloz: We’ll have more information ahead of next rate decision

Poloz: Trade data were a positive surprise

Poloz: Pace of pace hikes will be data dependent

Poloz: Economy has been operating at capacity for past year

Poloz: The oil sector problems are material

Poloz: Surprised by recent decline in long-term yields

OIL:

Crude fades amid signals of lacklustre OPEC deal to cut output

NZD:

NZ Farmers more pessimistic on rural economy – Rabobank

 

 

 

 

 

 

Today’s Data

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

JPY         Overall household spending YoY Oct A -0.30% | C 1.20% | P -1.60%

JPY         Labour cash earnings A 1.50% | C 1.00% | P 1.10% | R 0.80%

JPY         Leading index CI Oct (P) A | C 104.8 | P 104.3

0700       EUR       German Industrial production MoM Oct C 0.30% | P 0.20%

0800       CHF        Foreign currency reserves Nov P 753B

1000       EUR        Eurozone GDP QoQ C 0.20% | P 0.20%

1330       CAD       Net change in employment Nov C 10.0K | P 11.2K

1330       CAD       Unemployment rate Nov P 5.80%

1330       USD       Change in Non-Farm payrolls Nov C 200K | P 250K

1330       USD       Unemployment rate Nov C 3.70% | P 3.70%

1330       USD       Average hourly earnings MoM Nov C 0.30% | P 0.20%

1500       USD       Wholesale inventories MoM Oct (F) C 0.70% | P 0.70%

1500       USD       U. of Mich. Sentiment Dec (P) C 97 | P 97.5

 

Harry Hindsight

  • GBP: A slow drift through the Asian session opening around the 1.2735 area and holding for the bulk of the session holding around the 1.2720-30 area for the bulk of the session and dipping into the grey hours to test the 1.2700 level before London stepped in and the market turned into a slow rising push through to the 1.2800 level moving in a tight channel through into the NYK session, a short period of choppy movement saw the market testing to the 1.2750 level before breaking on a spike to make the highs above the 1.2810 level before settling into a tight range for the run to the close.
  • JPY: USDJPY slipped lower through the early part of the Asian session openin at its highs around the 113.15 level and slowly dipping into the Tokyo session testing the figure level, a short battle saw the market pushing through and testing the 112.65 level and holding for a couple of hours before renewing the selling to the 112.60 level low, the move into the grey hours saw the market rising to push through to the opening level however, the move into the London opening saw the strong selling being renewed with the market testing back to the lows and again holding, this time though there was no noticeable recovery and the move into the NYK session saw the market dropping off quickly through the 112.50 level and testing to the 112.25 areas holding through to the London close before starting a slow recovery  to hold the 112.80 areas into the NYK session, early numbers did little to keep the market happy surprisingly and the market dipped away again more the dip in Labour costs and the market dipped through the 112.50 levels slowly testing the 112.25 holding for a couple hours before rising slowly back to the 112.50 area and eventually pushing through to the closing areas.
  • AUD: Opening towards its highs above the 0.7270 level and moving slowly lower into the Tokyo session slowly moving through opening to test the 0.7250 area before quickly dropping through to the 0.7225 level pausing and finally settling down to the 0.7220 level and basing on that level through into the London session, London steadily settled the market through to the 0.7190 levels on a push through the figure but running into the strong congestion the market slowly but surely moving through to the 0.7250 area again, NYK attempted the same move however, as with the first try the market was eventually forced through to close around the 0.7235 level.
  • EUR: Quiet through the Asian session with the range holding in the 1.1340-50 levels with limited push through the 1.1350 levels, the move into the grey hours saw the market drifting off to set the lows of the day with several weak attempts to push through the 1.1320 levels but holding the level deep into the London session before early NYK players moved in and the market rose through to the NYK numbers, with mixed numbers the market pushed steadily through to the 1.1365 areas triggering weak stops on a push through the level to quickly head to the 1.1390 areas and the market slowing in its ascent but pushing through the 1.1410 level to make the highs, the second tranche of US numbers saw the market dropping quickly back to the 1.1360 level and then after a weak bounce the market settled in an ever declining range to the close.

 

Yesterday’s Premiership results

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%

EUR:      German factory orders MoM Oct A 0.30% | C -0.40% | P 0.30% | R 0.10%

USD:      Challenger job cuts YoY Nov A 51.50% | P 153.60%

USD:      ADP employment change Nov A 179K | C 200K | P 227K | R 225K

CAD:      International merchandise trade (CAD) A -1.2B | C -0.7B | P -0.4B | R -0.9B

USD:      Trade balance Oct A -55.5B | C -55.2B | P -54.0B | R -54.6B

USD:      Initial jobless claims (Dec 1) A 231K | C 226K | P 234K | R 235K

USD:      Non-farm productivity A 2.30% | C 2.40% | P 2.20%

USD:      Unit Labour costs A 0.90% | C 1.00% | P 1.20%

USD:      Services PMI Nov (F) A 54.7 | C 54.4 | P 54.4

CAD:      Ivey PMI Nov A 57.2 | C 60.3 | P 61.8

USD:      ISM Non-manufacturing services composite Nov A 60.7 | C 59.5 | P 60.3

USD:      Factory orders Oct A -2.10% | C -2.00% | P 0.70% | R 0.70%

USD:      Crude oil inventories A -7.3M | C -1.3M | P 3.6M

 

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