Daily FX Market Commentary

Andy Harrison

Good Morning,

LMAX Close

USDJPY 113.376 | EURUSD 1.13051 | AUDUSD 0.71754 | NZDUSD 66948 | USDCAD 1.33885 | USDCHF 0.99815 | GBPUSD 1.25863 |

LMAX highs and Lows 06.00 GMT

                                Highs | Lows

EURUSD               1.13136 | 1.13005

USDJPY                 113.522 | 113.308

GBPUSD               1.26009 | 1.2566

USDCHF               0.99906 | 0.99711

AUDUSD              0.71818 | 0.71692

USDCAD               1.33890 | 1.33745

NZDUSD               0.68018 | 0.67851

EURCHF                1.12941 | 1.12751

EURGBP               0.89951 | 0.89753

EURJPY                 128.395 | 128.08

For Today

• GBP: A very quiet session with limited volume, opening unchanged and pushing lightly to the 1.2590 levels before moving into Tokyo and basing on the 1.2575 level and slowly rising but unable to push back through the 1.2580 in limited trading to the grey hours, downside sentimental bids appear to be stronger than first appeared on a move through to the 2500 level and possible stronger congestion in the area around the 1.2480 area, a break here will open a deeper move through to the 1.2300 levels however, this is all notwithstanding Brexit news, topside offers into the 1.2600-likely to be light with weak stops through the area and congestion through the level and continuing in patches through to the stronger 1.2700 areas and increasing beyond.
• JPY: Opening around the 113.35 levels before dipping to its lows into the 113.32 area, the move into the Tokyo session saw the market lifting slowly through to the 113.50 areas and trading around the level in a tight range to the grey hours, 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: Opening unchanged the market traded sideways through the session with limited reaction to the releases trading through to test the 0.7170 level to test the lows and then rising slowly through to the 0.7180 areas before drifting to the grey hours, downside is likely to see strong congestion into and through the 0.7150 those stronger bids are likely to be in depth and run through to the 71 cents level and while there maybe weak stops on a move through the level the congestion is likely to continue through to the stronger 0.7050 level which was last broke in October and quickly taken back to the 71 cents area, topside offers light through the 72 cent areas with congestion building into the 0.7250 areas and likely to see stronger offers just through the level and into 0.7280-0.7300 with strong stops on a push through.
• EUR: As with the rest of the market very quiet a light volumes moving through the day, rising slightly through the session from the opening just above 1.1300 level the market moved off those early lows to push weakly above the 1.1310 level before drifting back and holding just below for the run to the grey hours, Downside bids light through to the 1.1275 area with some limited congestion through to the 1.2170 area before some weakness appears, a dip into the 1.1260-40 inevitably sees light bids increasing on any move through to the 1.1220 level where stronger bids appear to the 1.1200 areas. Topside offers light through to the 1.1320 level and congestive offers then continue in limited form through to the 1.1400 level where stronger offers start to appear on any moves higher.

 

Overnight News

GBP:

Attorney General Geoffrey Cox “said we’ll remove Theresa May next year Telegraph

Visa data indicates the biggest fall for consumer spending since July

More of PM May allies want MPs to vote on Brexit options Times

Visa data indicates biggest fall for consumer spending since July

AUD:

Australia sees 2.75% GDP growth in 2018-19 vs. 3% seen in May

Australia sees A$4.1B surplus in 2019-2020 vs. A$2.2B seen in May

Australia sees underlying cash deficit of A$5.2B in 2018-19

Treasury in May had predicted A$14.5B deficit for 20189-19

CNY:

China’s next moves will dictate its economic future BBG

USD:

New report on Russian disinformation, prepared for the senate shows operations scale and sweep LA Times

Today’s Data

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

GBP       Rightmove house prices MoM Dec A | P -1.70%

1000       EUR        Eurozone trade balance (EUR) Oct C 14.2B | P 13.4B

1000       EUR        Eurozone CPI MoM Nov C 0.20% | P 0.20%

1000       EUR        Eurozone CPI YoY Nov (F) C 2.00% | P 2.00%

1000       EUR        Eurozone CPI core YoY Nov (F) C 1.00% | P 1.00%

1330       CAD       International securities transactions CAD Oct C 6.20B | P 7.70B

1330       USD       Empire state manufacturing Dec C 20.1 | P 23.3

1500       USD       NAHB housing market index Dec C 61 | P 60

2100       USD       Net long-term TIC flows Oct P 30.8B

Weekend News

CHF/JPY:

ABB, Hitachi said to near $11B deal for Power Grids BBG

NZD:

NZ Services grew at slower pace in Nov BFW

NZ capital demand could lead to major bank asset sales – Macquarie

AUD:

Australia’s 2018/19 deficit seen halved in midyear update – ABC

Morrison Government suffers setback as Ipsos poll points to landslide loss SMH

GBP:

Why there should be no exit from Brexit Spiegel

Investors pull a record £7.8B from UK funds as Brexit fears take hold Telegraph

British Government is not planning for second Brexit vote – TWT

EUR/GBP:

May said to warn Merkel, Macron their Brexit deal is nearly dead – BBG

USD/CNY:

Chinese hackers breach US navy contractors WSJ

EUR:

France exacerbates Euro area slowdown as China weakness mounts BBG

French budget deficit seen at 3.4% of GDP next year TWT

MXN:

Mexican Pres. Promises surplus in 2019 budget proposal BBG

JPY:

Most Japanese support shunning of China tech brands Nikkei

CNY:

China’s home price growth eases amid lacklustre buyer demand BBG

USD:

Judge throws political bomb in Trump’s lag by voiding Obamacare – BBG

Harry Hindsight

• GBP: Cable drifted from the opening testing from the opening highs around the 1.2665 level and dipping only slightly into the 1.2650 areas and into a little stronger selling through to the 1.2630 level before trading in a tight range through to just before the grey hours, some selling through to the 1.2600 level on a spike lower and then bouncing back to move into the London opening before the market dropping quickly from the opening through to the 1.2565 areas, rising a little in early morning trading before renewing the move through to the 1.2550 levels and the NYK opening the market saw a stab lower too the 1.2530 areas snapping back to the 1.2540 level then slowly rising through to the end of the session and the 1.2580 areas.
• JPY: Slow move through into the Tokyo session then some quick selling from the 113.65 areas to test into the low 113.40’s before holding quietly through to the grey hours holding around the 113.50 areas, grey hours buying saw the market pushing the opening levels again and ranging in the 113.50-60 areas into the NYK session before pushing to the his of the day just short of the 113.70 level, dropping back quickly from the highs the market saw weak stops on the move through the 113.50 levels to push through the 113.40 level steadily through to the final hours making the lows into the 113.20’s before rallying back to the 113.40 level in the final hours.
• AUD: Opening around the 0.7225 areas the market held quietly through into the Tokyo session before dropping back from the days highs just short of the 0.7230 area and falling back to the 0.7180 area in the first couple of hours of the Tokyo hours, the market held quietly through to the grey hours lifting just slightly before dropping back steadily through into the London session to trade along the 0.7150 areas for several hours and deep into the NYK session before eventually pushing off the lows and testing through to the 0.7180 and a long tight range for a lengthy run to the close.
• EUR: A very quiet move through the Asian session with the market ranging around the 1.1360 opening levels through to the grey hours, the move into the grey hours saw early selling and a slight bounce into the London session before the EUR numbers were released and a poor set of numbers released sending the market quickly down to the 1.1285 areas holding through to the NYK session and then dipping for the final move lower to test the 1.1270 areas and a steady rise through the balance of the session for the move to the close around the 1.1300 levels.

Yesterday’s Premiership results

NZD       BusinessNZ Manufacturing PMI Nov A 53.5 | P 53.5 | R 53.7

JPY         Tankan large manufacturing index Q4 A 19 | C 17 | P 19

JPY         Tankan large manufactures outlook Q4 A 15 | C 16 | P 19

JPY         Tankan large non-manufacturing index Q4 A 24 | C 21 | P 22

JPY         Tankan large non-manufactures outlook Q4 A 24 | C 20 | P 22

JPY         Tankan small manufacturing index Q4 A 14 | C 13 | P 14

JPY         Tankan small manufactures outlook Q4 A 8 | C 11 | P 11

JPY         Tankan small non-manufacturing index Q4 A 11 | C 9 | P 10

JPY         Tankan small non-manufacturers outlook Q4 A 5 | C 6 | P 5

JPY         Tankan large all industry Capex Q4 A 14.30% | C 12.70% | P 13.40%

JPY         PMI Manufacturing Dec (P) A 52.4 | C 52.3 | P 52.2

CNY        Retail sales YoY Nov A 8.10% | C 8.80% | P 8.60%

CNY        Industrial production YoY A 5.40% | C 5.90% | P 5.90%

CNY        Fixed assets Ex rural YTD YoY Nov A 5.90% | C 5.90% | P 5.70%

JPY         Industrial production YoY Oct (F) A 4.20% | C 5.90% | P 5.90%

EUR        France Manufacturing PMI Dec (P) A 49.7 | C 50.7 | P 50.8

EUR        France Services PMI Dec (P) A 49.6 | C 54.8 | P 55.1

EUR        Germany Manufacturing PMI Dec (P) A 51.5 | C 51.7 | P 51.8

EUR        Germany Services PMI Dec (P) A 52.5 | C 53.5 |P 53.3

EUR        Eurozone Manufacturing PMI Dec (P) A 51.4 | C 51.9 | P 51.8

EUR        Eurozone Services A 51.4 | C 53.4 | P 53.4

USD       Retail sales advance MoM Nov A 0.20% | C 0.40% | P 0.80% | R 1.10%

USD       Retail sales Ex auto MoM Nov A 0.20% | C 0.50% | P 0.70% | R 1.00%

USD       Industrial production MoM Nov A 0.60% | C 0.30% | P 0.10% | R -0.20%

USD       Capacity utilization Nov A 78.50% | C 78.60% | P 78.40% | R 78.10%

USD       Manufacturing PMI Dec A 53.9 | C C 55.1 | P 55.3

USD       Services PMI Dec (P) A 53.4 | C 55 | P 54.7

USD       Business inventories Oct 0.60% | C 0.50% | P 0.30%

Happy New Year and I’ll be back 2nd Jan

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