Daily FX Market Commentary

Andy Harrison

Good Morning,

LMAX Close

USDJPY 113.384 | EURUSD 1.13171 | AUDUSD 0.72048 | NZDUSD 68764 | USDCAD 1.33902 | USDCHF 0.99323 | GBPUSD 1.2488 |

LMAX highs and Lows 06.00 GMT

                                Highs | Lows

EURUSD               1.13341 | 1.13155

USDJPY                 113.518 | 113.333

GBPUSD               1.25165 | 1.2482

USDCHF               0.99344 | 0.99208

AUDUSD              0.72305 | 0.71962

USDCAD               1.34056 | 1.33714

NZDUSD               0.69002 | 0.68718

EURCHF                1.12502 | 1.12409

EURGBP               0.90686 | 0.9053

EURJPY                 128.627 | 128.294

For Today

• GBP: As with yesterday the Asian market came in to move the Cable slowly higher and pushing from the early 1.2485 area through into the Tokyo session testing through the 1.2500 level and creeping to a high just short of the 1.2515 level before ranging quietly around the 1.2510 level for the move into the grey hours, 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 building through the 1.2630 levels and the highs for yesterday however, weak stops could be close behind that level that could push any sentimental offers into the 1.2650 level and open the way to a return to above the 1.2700 levels however, for the moment the market seems to feel flat overall and possibly nervous of the risk of sharp moves in either direction.
• JPY: USDJPY moved sideways into the Tokyo session with quick sellers on the opening taking the market into the low 113.30’s before recovering and turning the market over on a move to the 113.50 level to set the range for the day in the first hour in Tokyo, the market then ranged around the 113.45 level through to the grey hours in quiet trading and little to indicate a direction. Topside offers into the 1.1380-114.00 areas with congestion above the level and weak stops hanging just above the area and opening the market to the stronger 114.40-60 areas, a push through the level will likely see weak offers through to the 115.00 area with limited congestion through the level and into the 115.50 area with a break here opening a stronger move through to the 117.00 level intraday. Downside bids light through to the 113.20 level with strong congestion likely to continue through the figure area and into the 112.50 levels however, even through this level the opportunity for yield buyers to continue buying opens and the any move to the 112.00 is likely to be a struggle.
• AUD: The Oz opened strongly pushing from the opening area just above the 72 cents level and pushing into the Tokyo session forcing its way through the 0.7220 level to rally to the 0.7230 areas before finally finding offers holding the market for several hours, the failure to push through saw the early buyers cutting positions and the market dropping back to just above the 0.7210 areas over the rest of the session to move into the grey hours holding meagre gains. No meaningful change with 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 from the opening 1.1315 area testing through to the 1.1335 level and holding for several hours before drifting back a little to the low 1.1320 level and running to the grey hours again to recapture those early highs, Downside bids strong through the 113.00 level and likely to see weak stop appearing on any strong selling through the 112.80 areas with minor congestion through the level and the market reopening the downside 1.1220-00 support areas for testing. Topside offers light through to the 1.1400 levels some congestion then running through the level with limited stops and stronger congestion through the 1.1440-60 levels with increasing offers then appearing on any test into the 1.1480-1.1500 level.

 

Overnight News

CNY:

Analysts warn China financial situation remains weak despite rise in bank lending SCMP

USD/CNY:

Marriot breach traced to China as US prepare crackdown NYT

China is said to move on US car tariff cut Trump tweeted

More trade meetings likely – Trump

USD:

Trump says Fed shouldn’t hike rates, but calls Powell a good man

Powell Fed Chief has added a new rule to central banking, ignore all the yelling from the White House -WSJ

NZD:

An under resourced RBNZ a pretty significant concern National Finance spokeswoman

EUR:

EU drafts no deal Brexit plan to avert swap market rupture BBG

Macron’s credibility shattered as France joins Italy in budget disgrace Telegraph

French giveaways to appease protesters are music to Rome’s ears

The sputtering German-French Motor – Spiegel

Today’s Data

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

AUD       Westpac consumer confidence Dec A 0.10% | P 2.80%

JPY         Domestic CGPI YoY Nov A 2.30% | C 2.40% | P 2.90% | R 3.00%

JPY         Machine orders MoM Oct A 7.60% | C 10.20% | P -18.30%

JPY         Tertiary industry index MoM Oct A 1.90% | C 0.90% | P -1.10% | R -1.20%

1000       EUR        Eurozone industrial production MoM Oct C 0.20% | P -0.30%

1330       USD       CPI MoM Nov C 0.10% | P 0.30%

1330       USD       CPI YoY Nov C 2.20% | P 2.50%

1330       USD       CPI Core MoM Nov C 0.20% | P 0.20%

1330       USD       CPI Core YoY Nov C 2.20% | P 2.10%

1530       USD       Crude Oil Inventories P -7.3M

1900       USD       Monthly Budget statement Nov P -100.5B

Harry Hindsight

• GBP: A quiet move through the Asian session moving from the early Tokyo low around the 1.2555 level to steadily move higher through to the 1.2580 areas, the move into the grey hours saw a slight drift before heading into the London session and a strong rise into the employment numbers with average weekly earnings showing gains over inflation for the first time for the first time in 2 years and the Cable pushed through to the 1.2635 level before hitting some waiting offers, the market moved slowly through to the NYK session holding above the 1.2600 areas before USD started a strong move with inflation seemingly in check and the return to normality back in the Fed’s hands, Cable started a strong move lower and the tumble through to the 1.2550 levels triggering weak stops through the level and the market quickly dipping to the 1.2500 areas holding for the most part and moving through to late in the session with some minor choppiness and finally dipping again to push through the figure level with conviction to test the 1.2480 level before limping to the close.
• JPY: USDJPY dropped back from the opening highs falling steadily through into the first couple of hours in Tokyo to test the 113.00 areas and basing along the level through to just before the grey hours where the market saw a limited recovery through to the 113.20 areas and drifting a little from the opening in London, a slow rise as the day developed in London pushing slowly through the 113.20 level and into the NYK session continuing through to the 113.45 level before ranging to the close.
• AUD: Opening on its lows the market struggled through the day higher with a limited range, opening around the 0.7190 level the market initially held above the level through to the Tokyo opening and a limited dip testing into the 0.7185 area before rising quickly through to the 0.7205 level and then ranging in a tight range around the level through deep into the London morning before starting another steady climb higher through to make the highs close to the 0.7225 level into the NYK session, as USD’s started to recapture its losses the Oz drifted through to the London close testing back through to the 72 cents level and finishing the day around the level.
  EUR: Rising slowly through the first half of the day with the Asian session taking it from the low 1.1350 level to push to the 1.1370 into the grey hours, early Europeans extended the highs slightly and the move into the London opening saw the market pushing through to the 1.1385 level and ranging in that area for a few hours, early NYK tested the 1.1400 however, the opening was the opposite with stronger selling entering the market, possibly to do with the laughter in Italy over the turn of fortunes for the French situation with there debt climbing beyond the EU permissible levels, needless to say the sell off was fairly strong and with the general USD buying moving in towards the end of the drop the extension took the Euro through to just above the 1.1305 before support was strong enough to hold the selling, and a slow range through to the close holding around the 1.1320 areas.

Yesterday’s Premiership results

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%

JPY         Machine tool orders YoY Nov (P) A -16.80% | P -0.70%

GBP       Jobless claims change Nov A 21.9K | C 13.2K | P 20.2K

GBP       Claimant count rate Nov A 2.80% | 2.70%

GBP       Average weekly earnings 3M/Y Oct A 3.30% | C 3.00% | P 3.00%

GBP       Weekly earnings ex-bonus 3M/Y Oct A 3.30% | C 3.00% | 3.00% | 3.10%

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

EUR        German ZEW Economic sentiment Dec A -17.5 | C -25 | -24.1

EUR        German ZEW Current situation Dec A 45.3 | C 55.6 | 58.2

EUR        Eurozone ZEW Economic sentiment Dec A -21 | C -23.2 | P -22

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

USD       PPI YoY Nov A 2.50% | C 2.60% | P 2.90%

USD       PPI Core MoM Nov A 0.30% | C 0.20% | P 0.50%

USD       PPI Core YoY Nov A 2.70% | C 2.50% | P 2.60%

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