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Daily FX Market Commentary

Good Morning,

 

LMAX Close

USDJPY 113.337 | EURUSD 1.13558 | AUDUSD 0.71896 | NZDUSD 68738 | USDCAD 1.33991 | USDCHF 0.99048 | GBPUSD 1.25624 |

LMAX highs and Lows 06.00 GMT

                                Highs | Lows

EURUSD               1.13701 | 1.13504

USDJPY                 113.387 | 113.01

GBPUSD               1.25834 | 1.25431

USDCHF               0.99097 | 0.98869

AUDUSD              0.72152 | 0.7181

USDCAD               1.34083 | 1.33911

NZDUSD               0.68870 | 0.68613

EURCHF                1.12486 | 1.12364

EURGBP               0.90450 | 0.90265

EURJPY                 128.710 | 128.424

For Today

  • GBP: A quiet rise through the session with Cable dipping only slightly before pressing the 1.2580 areas, downside bids into the 1.2500 areas with plenty of congestion in the area with a push through the 1.2450 level likely to see further stops entering the market with possibly concentrations only around the sentimental values and the 1.2300 levels vulnerable and the market opening to further deeper movement, topside offers weak through to the 1.2700 level with a slight possibility of a short squeeze on any strong moves higher however, fundamentally that doesn’t seem likely, some light offers from late comers through the 1.2600 areas could slow any move however, as long as the can is kicked down the road weakness is likely to remain and increases the likelihood of a no deal Brexit.
  • JPY: A slow drift from Yesterday’s highs saw the USDJPY drifting to the 113.20 levels for the move into the Tokyo session and very little respite for the USDJPY, light volumes continued to see the USDJPY drifting through to the 113.00 levels and holding through several hours before pushing back through the 113.10 level into the grey hours, topside congestion through to the 113.50 areas with stronger offers likely to move in on any push through to the 114.00 level weak stops likely on a strong push through the 114.20 areas with further congestion likely on any test through the 114.50 and opening up on a push through the 114.60 level with stronger offers limited through the 115.00 areas. Downside bids through into the 113.00 level likely to be light with limited stops on any dip through the 112.80 areas with strength reappearing on any dips through to the 112.20 area.
  • AUD: NAB business numbers a little weaker but balanced by adjustments to the previous numbers, opening around the 0.7190 level the market drifted a little before moving into the Tokyo session and quickly rising through the 72 cent levels to hold just below the 0.7210 area the market drifted again before rising to the 0.7215 areas before again drifting after the minor spike and settling into a quiet range through 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 0.7220 cents level with any move to the 0.7250 areas likely to meet little resistance before opening up for a move higher and stronger offers into the 0.7280-0.7300 levels.
  • EUR: A slow rise through the session moving off the early lows just above the 1.1350 level and pushing quietly on light volume to push to the 1.1370 areas and holding through to the grey hours ranging in the 1.1365-70, topside offers limited through the 1.1400 level with stronger offers likely to appear on any further push at the 1.1440 level with congestion likely to continue through to the 1.1460 level before some weakness appears, a break through the 1.1480 level will likely see a mixture of stops and congestion through to the 1.1500 area with possible strong stops on any move through the level and the market opening to a stronger move higher. Downside bids light through to the 1.1320 areas with the market then seeing congestion likely through to the 1.1280 areas, while limited stops may appear the downside congestion is likely to continue through to the 1.1220 area and stronger bids are likely to reappear through to the 1.1200 level.

 

Overnight News

MXN:

Mexico to invest $30B to boost growth, stem migration – ForMin

JPY:

FinMin Aso: Have agreed with US that FX will be discussed

CNY/USD:

Officials discussed next steps in trade negotiations – MoFCOM

China Vice premier, Mnuchin discuss trade this morning – MoFCOM

GBP:

Another key MP delivers no confidence letter – UK Times

Crossrail delayed indefininetly as bosses warn it could require £1.7B injection, another infrastructure fail – Telegraph

We cannot continue to be led through Brexit by flogging a dead horse – Telegraph

UK Parliament will debate May Brexit vote delay on Tuesday

May: parliament will vote on deal after assurances on backstop

GBP/EUR:

EU’s Tusk says Brexit summit on Thursday

Tusk: EU won’t renegotiate Brexit backstop

Tusk: Ready to discuss how to facilitate UK ratification

Leadsom: Govt will decide when debate restarts on Brexit deal

Leadsom Parliament to return Jan 7 after recess

Labour: to ask speaker on Monday evening for debate Tuesday

Debate in house of commons will not be confidence motion

UK Labour party said to demand emergency Brexit debate

Varadkar: He and Tusk agree withdrawal deal is best option

Varadkar: Withdrawal agreement cannot be renegotiated

Varadkar: No deal Brexit preparations should intensify

NZD:

NZ Non-tradeable inflation may be robust in 4Q – ANZ

NZ retail card spending unexpectedly fell in Nov – BFW

Heavy traffic gauge hints at better GDP growth in 4Q – ANZ

EUR:

EU is closely monitoring France’s new budget measures – Dombrovskis

Italy banks face $273B headache replacing cheap ECB funds

Salvini, Di Maio refuse Italy deficit below 2.2% – Messaggero

Italy PM Conte aims for 2.1% deficit target – Repubblica

EU demands 1.95% Italy deficit target for 2019 – Repubblica

CNY:

China to step up stimulus in 2019 as growth slows – BBG

 

Today’s Data

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

 

JPY         Japan money stock M2+CD YoY Nov A 2.30% | C 2.60% | P 2.70%

JPY         BSI Large Manufacturing QoQ Q4 A 5.5 | P 6.5

AUD       NAB business confidence Nov A 3 | P 4 | R 5

AUD       Nab Business conditions Nov A 11 | P 12 | R 13

AUD       House price index QoQ Q3 A -1.50% | C -1.50% | P -0.70%

AUD       House Price index YoY A -1.90% | P -0.60%

0600       JPY         Machine tool orders YoY Nov (P) P -0.70%

0930       GBP       Jobless claims change Nov C 13.2K | P 20.2K

0930      GBP       Claimant count rate Nov

0930       GBP       Average weekly earnings 3M/Y Oct C 3.00% | P 3.00|%

0930       GBP       Weekly earnings ex-bonus 3M/Y Oct C 3.20% | 3.20%

0930       GBP       ILO unemployment rate 3Mths Oct C 4.10% | P 4.10%

1000       EUR        German ZEW Economic sentiment Dec C -25 | -24.1

1000       EUR        German ZEW Current situation Dec C 55.6 | 58.2

1000       EUR        Eurozone ZEW Economic sentiment Dec C -23.2 | P -22

1330       USD       PPI MoM Nov C 0.10% | P 0.60%

1330       USD       PPI YoY Nov C 2.60% | P 2.90%

1330       USD       PPI Core MoM Nov C 0.20% | P 0.50%

1330       USD       PPI Core YoY Nov C 2.50% | P 2.60%

 

Harry Hindsight

  • GBP: Opening a little lower the market pushed slowly through into the Tokyo session rising through to the 1.2750 areas before stalling and holding through to the grey hours, light selling saw the market moving into the London opening and a spike to set the highs around the 1.2760 level before dipping through to the 1.2710 areas and holding through to mid-morning and rumour of the  cancellation of Tuesdays vote on the Brexit deal, the market dropped quickly through to the 1.2650 areas holding briefly through to the NYK session recovering only minimally before dropping late in the session as the actual cancellation came through and the market dropped quickly as everyone dumped the GBP with the market hitting the 1.2505 areas rather quickly and bouncing weakly moving through to the 1.2580 level over a short period only to settle to hold just above the 1.2750 area through to the close.
  • JPY: Opening unchanged on the day the market dropped back in early trading falling through to the 112.40 level and then holding for a short period into early Tokyo around the 112.50 areas, another run lower after a couple of hours with weaker GDP dropping back steadily to set the lows into the 112.25 area before starting a long steady rise through the day, the move into the grey hours saw the market moving back above the 112.50 level and testing into early London pushing through the opening 112.65 level to hold through to NYK around the level, strong buying into NYK saw the market rising quickly through to the 112.90 level and then grinding the final 113.00 areas and struggling through to the end of London with the level, the break finally came with the market pushing through the 113.20 level and then slowly rising to the close into the 113.35 area.
  • AUD: A low opening saw the Oz dropping back slowly from the 0.7195 areas and the market dropping back through to make the lows just below the 0.7180 areas, Tokyo moved into the market and strong buying saw the market moving quickly through to the 0.7220 level and a limited range from then on with the market testing through the 0.7225 level and holding around the area through to the NYK opening before dipping quietly back to the 0.7200 level for a short period and breaking lower to the original low areas ranging quietly from the 0.7180 base to the close.
  • EUR: Opening around the 1.1395 areas the market moved slowly to push above the 1.1400 area, the move into the Tokyo session saw the market moving fairly smoothly higher testing through to the 1.1440 level before drifting through to the London session before drifting a little through London into the NYK session, and dropping back to the 1.1400 areas until the Cable dropped and dragged on the Euro taking it quickly through to the 1.1350 levels where the market based to the close.

 

Yesterday’s Premiership results

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

CHF        Unemployment rate Nov A 2.40% | C 2.50% | P 2.50%

EUR        German trade balance Oct A 17.3B | C 17.2B | P 17.6B

GBP       Visible trade balance (GBP) Oct A -11.9B | C -10.5B | P -9.7B | -10.7B

GBP       Industrial production MoM Oct A -0.60% | C 0.10% | P 0.00%

GBP       Industrial production YoY Oct A -0.80% | C -0.20% | P 0.00%

GBP       Manufacturing Production MoM Oct A -0.90% | C 0.00% | P 0.20%

GBP       Manufacturing Production YoY Oct A -1.00% | C 0.00% | P 0.50%

GBP       Construction output MoM Oct -0.20% | C -0.40% | P 1.70%

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

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

EUR        Eurozone Sentix investor confidence Dec A -0.3 | C 8.4 | P 8.8

CAD       Housing starts Nov A 216K | C 198K | P 206K

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

 

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