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Daily FX Market Commentary

Good Morning,

 

LMAX Close

USDJPY 112.709 | EURUSD 1.13883 | AUDUSD 0.72008 | NZDUSD 68604 | USDCAD 1.33256 | USDCHF 0.99031 | GBPUSD 1.27309 |

LMAX highs and Lows 06.00 GMT

                                Highs | Lows

EURUSD               1.14428 | 1.13914

USDJPY                 112.695 | 112.24

GBPUSD               1.27561 | 1.27056

USDCHF               0.99188 | 0.98709

AUDUSD              0.72231 | 0.71781

USDCAD               1.33378 | 1.32969

NZDUSD               0.68979 | 0.68406

EURCHF                1.12995 | 1.12825

EURGBP               0.89752 | 0.89579

EURJPY                 128.642 | 128.177

For Today

  • GBP: Opening lower after a weekend of Brexit news with the market reacting to the negativity initially and the market slowly pushing through the gap on the charts and pushing through to the 1.2755 areas to range quietly between the 1.2740-50 areas to 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: USDJPY slipped from just below the 112.70 closing areas and testing into the low 112.40’s for the Tokyo opening session, a small bounce into the opening touching to the 112.60 level and holding only for the first hour before dropping sharply again testing through to the 112.25 level before slowly recovering through to the 112.50 levels for the move into the grey hours, downside congestion into the 112.00 areas and likely to continue through into the 111.85 area with weak stops on a move through the level, with some congestion through into the 111.50-40 area before weakness reappears to the 111.00. topside offers light through to the 113.00 level with congestion starting to build a push through the 113.25 areas again sees weakness appearing with some opening to the 113.80 level before stronger offers from there and through the 114.00 level.
  • AUD: Opening a little lower the market tested through to the 0.7180 areas before rising quickly into the Tokyo session push through the opening 0.7195 level and then filling the gap on a move through the 72 cents level and pushing through to the 0.7220 area to range through to the grey hours in the 0.7210-20 level for a quiet run to the grey hours, downside bids into the 0.7150 likely to be particularly strong and likely to be very congested on any dip through the levels to the 71 cents level. topside offers lightly congested through to the 0.7200 cents level with any move to the 0.7250 areas likely to meet little resistance before opening up for a move higher.
  • EUR: A very quiet Euro through to the NFP number with the market ranging through form the opening around the 1.1395 level and slowly moving through the 1.1400 area into the Tokyo session and rising to the 1.1410 level before triggering some minor stops for a test through the 1.1430 level and the rise slowing to peak just through the 1.1440 level, by midsession the markets rise had run its course and the market drifted through the grey hours to hold the 1.1425-30 area, topside offers increasing on a ove through to the 1.1460-1.1500 level with resistance increasing through the 1.1480 areas, congestion through the level with limited stops on a push through the 1.1520 areas opening the market for further limited resistance. Downside bids light through to the 1.1380 level with a mixture of stops and congestion continuing on any dip towards the 1.1320 level and stronger bids starting to appear.

 

Overnight News

NZD:

NZ treasury: Business talks add to signs of steady GDP growth

NZ treasury sees downside risks to consumption forecasts

NZ Economists lower forecast for GDP growth – NZIER

EUR:

Italy Dy PM stages mass rally, promises Italians first policies – RE6

USD/CNY:

Another potential deterioration in US/China relations coming, US readies charges against Chinese hackers

USD:

Top House Democrats raise prospect of impeachment, jail for Trump – AP

Department of Justice calls Donald Trump a felon

CNY:

China Nov. Trade balance $44.74B est. $34.40B

China Nov. Imports rise 3.0% YoY in $ terms est. 14%

China Nov. Exports rise 5.4% in $ terms est. 9.4%

 

Today’s Data

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

NZD       Manufacturing activity SA QoQ Q3 A 2.00% | P 1.80%

JPY         GDP QoQ Q3 (F) A -0.60% | C -0.50% | P -0.30%

JPY         GDP Deflator YoY Q3 (F) A -0.30% | C -0.30% | P -0.30%

JPY         Current account (JPY) Oct A 1.21T | C 1.29T | P 1.33T

AUD       Home loans MoM Oct A 2.20% | C -0.50% | P -1.00%

JPY         Eco watchers survey current Nov A 51.0 | C 49.5 | P 49.5

0645       CHF        Unemployment rate Nov C 2.50% | P 2.50%

0700       EUR        German trade balance Oct C 17.2B | P 17.6B

0930       GBP       Visible trade balance (GBP) Oct C -10.5B | P -9.7B

0930       GBP       Industrial production MoM Oct C 0.10% | P 0.00%

0930      GBP       Industrial production YoY Oct C -0.20% | P 0.00%

0930       GBP       Manufacturing Production MoM Oct C 0.00% | P 0.20%

0930      GBP       Manufacturing Production YoY Oct C 0.00% | P 0.50%

0930      GBP       Construction output MoM Oct C -0.40% | P 1.70%

0930       GBP       GDP MoM Oct C 0.10% | P 0.00%

0930       GBP       Index of services 3m/3m Oct C 0.30% | P 0.40%

0930       EUR        Eurozone Sentix investor confidence Dec C 8.4 | P 8.8

1315       CAD       Housing starts Nov C 198K | P 206K

1330       CAD       Building permits MoM Oct C -0.20% | P 0.40%

 

 

Weekend News

AUD:

Prepare contingency plans, OECD warns coalition government

RBA’s Kent sees borrowing costs rising as Fed moves to neutral – BBG

CNY:

China ramps up pressure ahead of Huawei bail verdict – MEA

China’s Copper, Iron ore import slum as economic growth slows

NZD:

NZ manufacturing volumes fall for second quarter

Manufacturing volumes fall 1.6% after revised 1.7% in 2Q

CAD/USD/CNY:

Canadian prosecutor lays out US allegation against Huawei CFO – DJ

China summons US envoy over CFO Meng Wauzhou – BBG

Huawei’s unofficial Skycom allegedly helped defy sanctions – BBG

China says US should withdraw arrest warrant for Huawei executive – RTRS

USD/CNY:

US says 1st March hard deadline for trade deal with China – RTRS

EUR:

Frances Month of protest seen smacking economic activity – BBG

Macron to address after latest violent yellow vest protests in Paris

Brussels police arrest hundreds in yellow vest riot – RTRS

Macron to blame for French protests, Italy’s Salvini says – RTRS

Merkel ally Annegret Kramp-Karrenbauer elected head of Germany’s CDU

GBP:

May sticks with Brexit vote as demands to renegotiate mount – BBG

MXN:

Lopez Obrador says Mexico to build an $8B refinery

 

Harry Hindsight

  • GBP: Drifting from the opening highs through the Asian session dropping back from the 1.2795 levels and moving in a tight channel through to the grey hours testing the 1.2765 level, ranging through the grey hours moving around that level the market dipped further on the opening in London dropping initially through to the 1.2750 level before moving a second time to test to the 1.2735 area, a slow rise through to the NYK session saw the market moving towards the 1.2780 areas and an hour in saw the market testing to the opening highs before slowly slipping lower with USD moving higher on the weaker hourly earnings numbers and Cable weakening under Brexit concerns, the end of London saw the market dipping through to test towards the 1.2710 level before recovering a little for the move to the close.
  • JPY: Opening around the 112.70 level the market moved quietly in a tight range around the level through into early Tokyo before starting a slow rise through to the 112.90 levels before slipping slowly back to run into the grey hours holding the 112.80 level, the market remained fairly static through the session holding into the NYK session before dropping back on the early numbers ignoring the average hourly earnings and concentrating on the weaker employment numbers, the market drifted through to the close with minor pushes through the 112.60 level and finishing the day almost unchanged.
  • AUD: Fairly quiet day for the Oz with the market drifting from the opening in Tokyo testing through to the 0.7220 levels from the 0.7230 areas, late in the session the Oz recovered pushing through to the 0.7240 level to make the highs before slipping slowly through to the London opening pushing to the 0.7210 level, London were quick buyers and the market pushed back towards the 0.7230 level and dipping back into the NYK session pushing to the 0.7205 level and quickly rising back to he opening levels on the opening, holding and testing lightly to the highs for the second time the market dropped from the highs quickly to set the lows just through the 72 cents area returning to the level again into the close having recovered a little.
  • EUR: A slow steady rise through the day, with Asia being the quiet bit in comparison to the rest, opening around the 1.1375 level the Euro continued to hold in a very tight range through into mid Tokyo before testing to its early high however that was just a slight nudge through the 1.1380 level before drifting back to move towards the grey hours trying the downside, to push the 1.1360 level however, although the range widened it wasn’t until the NYK opening that the market moved testing quickly through to the 1.1415 level in a quick move dipping quickly back to the 1.1375 level to range between the low and the 1.1400 areas ranging through to the end of the London session before again pushing higher to the 1.1425 areas before slipping back for the close.

 

Yesterday’s Premiership results

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

EUR       German Industrial production MoM Oct A -0.50% | C 0.30% | P 0.20% | R 0.10%

CHF        Foreign currency reserves Nov A 749B | P 753B

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

CAD       Net change in employment Nov A 94.1K | C 10.0K | P 11.2K

CAD       Unemployment rate Nov A 5.60% | C 5.80% | P 5.80%

USD       Change in Non-Farm payrolls Nov A 155K | C 200K | P 250K | R 237K

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

USD       Average hourly earnings MoM Nov A 0.20% | C 0.30% | P 0.20% | R 0.10%

USD       Wholesale inventories MoM Oct (F) A 0.80% | C 0.70% | P 0.70%

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

 

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