Daily FX Market Commentary

Andy Harrison

Andy Harrison

Good Morning,

 

LMAX Close

USDJPY 108.864 | EURUSD 1.10324 | AUDUSD 0.67536 | NZDUSD 0.62852 | USDCAD 1.31983 | USDCHF 0.99879 | GBPUSD 1.27847 |

 

LMAX highs and Lows 05.00 GMT

                                Highs | Lows

EURUSD               1.10369 | 1.10239

USDJPY                108.866 | 108.605

GBPUSD              1.27893 | 1.27391

USDCHF               0.99898 | 0.99744

AUDUSD             0.67550 | 0.67261

USDCAD              1.32112 | 1.31952

NZDUSD              0.63203 | 0.62695

EURCHF               1.10215 | 1.10035

EURGBP              0.86556 | 0.86351

EURJPY                120.120 | 119.760

For Today

  • GBP: A slow drift through the first half of the session from the opening around the 1.2780 areas and testing lightly through the 1.2750 level before holding around the level for a long run to the grey hour, topside historically congested however, its all about the rumour mill with the market likely to find a little bit more resistance to upward movement but nonetheless open to the 1.3000 on a serious push with any likelihood of some form of deal becoming concrete, a push through the 1.2900 level will see weak stops however, the stops are beginning to get smaller for the most part as less sellers are willing to get caught with the quick moves higher, downside bids light through the 1.2700 levels with weak stops just below and opening a move lower again any Brexit new likely to be negative is likely to determine the amount of movement with possibly stronger bids likely only once the market pushes on the 1.25 handle and through to the lower end.
  • JPY: Opening quietly the market moved through into the Tokyo session and saw strong selling moving through the fix and the market testing back from the high openings to push to the 108.60 areas to hold then quietly move through to the grey hour, Topside offers appear through the 108.80 level and likely to increase into the 109.00 level with limited resistance to a slight move through the level with increased offers likely to appear in the 109.20-40 areas before weak stops appear and opens the market to increasing congestion on any push through the 109.50 levels and increasing further on any push to the 110.00 level. Downside bids light back through the 108.00 areas with weak stops likely on a dip through the 107.80 area and congestion likely through the 107.50 level and continuing into growing bids in the 107.00 areas.
  • AUD: Opening around the 0.6750 area the market moved lower with the rise of the JPY testing through to test lightly through the 0.6730 area in a quiet session for the Oz, the market then held through to the grey hour just off the lows, Downside bids through to the 0.6680-0.6700 level with weak stops likely on a dip through the 0.6670 level with congestive bids then likely to be patchy but centred around the sentimental 50/00 areas, topside offers light through to the 68 cents level before stronger selling is likely to appear even a push through the 0.6820 area and weak stops are likely to find sellers willing to move in on the moves.
  • EUR: A very quiet session for the Euro with the market drifting from just above the 1.1030 level and testing lightly through to the mid 1.1020’s before recovering to the 1.1030 area for the move into the grey hour, Topside congestion through the 1.1040-60 area is likely to be rebuilding however, a push through those levels will likely see stronger offers increasing on any run to or through the 1.1080 level and continuing into the 1.1100 and strong stops likely through the 1.1120 areas, Downside bids through the 1.0940-60 area with likely weak stops on any dip possibly sweeping those aside and then increasing as the market moves towards the 1.0900-1.0870 areas, with stops likely on any dip through the 1.0880 areas and opening a longer-term downside move with some congestion around the 1.0860-40 areas and then increasing on any move to the 1.0820-00 areas.

 

Overnight News

EUR/USD:

EU set to impose anti-competitive measure on Broadcom – FT

USD/HKD/CNY:

House approves bill supporting pro-democracy activists in Hong Kong – CNN

CNY/USD:

China threatens retaliation if US Passes Hong Kong bill – BBG

GBP/EUR:

DUP asks for Billions of cash payment to back Brexit – FT

Arlene Foster: Gaps remain to reach Brexit deal – Belfast TEL

DUP Leader says no to mooted Brexit compromise on tariffs – RTRS

Big split opens up among Tory Eurosceptics over whether to back Boris’s Brexit deal – TWT – TN Dunn

Lib Dems to push for vote on second Brexit referendum in House of Commons – NS3

EUR/GBP:

German media downbeat on reaching a Brexit accord by Thursdays EU summit

AUD:

RBA Leaves door open to more cuts, but says House prices are worrying – DJ

NZD:

NZ Still has an entrenched inflation problem – DJ

Bascand: Lower rates may still be needed to achieve objectives – BBG

Bascand: NZ economy is in a good space – BBG

Bascand: Sees low interest rates being here for some time – BBG

NZ Inflation slowed less than expected in Third quarter – BBG

USD:

QE: Fed repo fix will do little to puncture USD dominance – BBG

 

Today’s Data

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

NZD       Consumer Price Index YoY (3Q) A 1.5% | C 1.4% | P 1.7%

NZD       Consumer Price Index QoQ (3Q) A 0.7% | C 0.6% | P 0.6%

AUD       Westpac Leading Index MoM (SEP) A -0.08% | P -0.19%

0930       GBP       Consumer Price Index YoY (SEP) C 1.8% | P 1.7%

0930       GBP       Core Consumer Price Index YoY (SEP) C 1.7% | P 1.5%

0930       GBP       CPIH YoY (SEP) C 1.8% | P 1.7%

0930       GBP       Consumer Price Index MoM (SEP) C 0.2% | P 0.4%

0930       GBP       House Price Index YoY (AUG) C 0.6% | P 0.7%

1000       EUR        Eurozone Consumer Price Index MoM (SEP) C 0.2% | P 0.1%

1000       EUR        Eurozone CPI YoY (SEP) C 0.9% | P 1.0%

1000       EUR        Eurozone CPI Core YoY (SEP F) C 1.0% | P 1.0%

1200       USD       MBA Mortgage Applications (OCT11) P 5.2%

1330       CAD       CPI YoY (SEP) C 2.1% | P 1.9%

1330       CAD       CPI nsa MoM (SEP) C -0.3% | P -0.1%

1330       USD       Retail Sales Advance MoM (SEP) C 0.3% | P 0.4%

1330       USD       Retail Sales Control Group (SEP) C 0.3% | P 0.3%

1330       USD       Retail Sales Ex-Auto and gas (SEP) C 0.3% | P 0.1%

1400       GBP       BoE’s Carney takes part in panel discussion at IMF event

1500       USD       Business Inventories (AUG) C 0.2% | P 0.4%

1500       USD       NAHB Housing Market Index (OCT) C 68 | P 68

1900       USD       Federal Reserve Beige book

2100       USD       Net Long-Term TIC flows (AUG) P $84.3b

2300       GBP       BoE’s Carney speaks at event at Harvard Kennedy School

 

Harry Hindsight

 

  • GBP: Opening around the 1.2620 areas saw the market rise quickly to the 1.2630 level before drifting off from the opening in Tokyo testing back to close to the figure level and basing there throughout Asia, the move into the grey hour saw the market quickly rise to test towards the 1.2700 level before dropping back again and holding around the 1.2650 areas through to the employment numbers which were weaker than expected and sent the Cable back to the opening level s for a short period however, to be honest did anyone expect employment to continue to increase? The markets move towards the NYK session saw the market rising steadily from the 1.2610 level through the 1.2650 area again and hold deep into the NYK session before rallying again on the back of ERG’s comments that a deal was achievable before the OCT 31 and the market quickly pushed to the 1.2800 level to post the high of the day, then followed several titbit’s from doomsayers and Remoaners with the expected dip before steadily pushing back above the 1.2770 level and holding through to the close of the day with the mix of comments continuing.
  • JPY: A quiet range through the first half of the day with the market initially ranging around the opening 108.40 level before slowly dipping back to the 108.30 areas and basing there deep into London before a round of selling appeared and the market squeezed through to the 108.15 area before starting a slow recovery into the NYK session to hold the opening levels, a mixture of Brexit news triggered strong GBPJPY buying as Cable moved higher slowly pushing to the 108.50 levels before breaking through and running quickly to the 108.80 area and the awaiting offers, holding around the level before eventually settling into a slow run to the close with the pressure being maintained on the offers but unable to break through the 108.90 highs through to the close.
  • AUD: Initially slowly pushing from the opening around the 0.6775 area to lightly test the 0.6780 areas before dropping back on as the Tokyo session moved in and taking the market through to the 0.6765 areas, once the rate meeting minutes were released the market pushed towards the 0.6790 level for a brief flirtation with the level before dropping off and holding the opening levels through into the London session, steady selling through the session saw the market drifting through the NYK session holding just above the 0.6750 level, NYK tested through to mid-0.6740’s before testing steadily through to the 0.6770 area before returning back to the 0.6750 areas and holding tightly to the close.
  • EUR: Opening around the 1.1025 areas, the Euro struggled through the Asian session looking for direction, pushing through the 1.1030 area and testing only towards the 1.1035 before generally holding around the 1.1030 area through to the London session, early buyers saw a move through to the mid 1.1040’s before dropping quickly back to the 1.1015 level on the London opening however, the market continued to remain in its previous mire before slipping back steadily through the session into NYK to post the lows around the 1.0990 area, the move in Cable dragged the Euro higher testing through towards the previous highs before sagging and mirroring the GBP moves to finish around the opening levels.

 

Yesterday’s Premiership results

AUD       RBA Oct. rate meeting minutes (OCT)

CNY        Consumer Price Index YoY (SEP) A 3.0% | C 2.9% | P 2.8%

CNY        Producer Price Index YoY (SEP) A -1.2% | C -1.2% | P -0.8%

JPY         Industrial Production YoY YoY (AUG F) A -4.7% | P -4.7%

JPY         Tertiary Industry Index MoM (AUG) A 0.4% | C 0.6% | P 0.1%

CNY        New Yuan Loans CNY (SEP) A 1690.0b | C 1360.0b | P 1210.0b

GBP       BoE Governor Carney speaks in Parliamentary Testimony

GBP       Average weekly Earnings (3M/YoY) (AUG) A 3.8% | C 4.0% | P 4.0%

GBP       Claimant Count Rate (SEP) A 3.3% | P 3.3%

GBP       Employment Change 3m/3m (AUG) A -56k | C 26k | P 31k

GBP       ILO Unemployment Rrate 3mths (AUG) A 3.9% | C 3.8% | P 3.8%

GBP       Jobless Claims Change (SEP) A 21.1k | C 26.5k | P 28.2k

GBP       Weekly Earnings ex-bonus (3M/YoY) (AUG) A 3.8% | C 3.7% | P 3.8%

EUR        Eurozone ZEW Survey (Economic Sentiment) (OCT) A -23.5 | C -33.0 | P -22.4

EUR        German ZEW Survey Expectations (OCT) A -22.8 | C -26.8 | P -22.5

EUR        German ZEW Survey Current Situation (OCT) A -25.3 | C -23.0 | P -19.9

CAD       Existing Home Sales MoM (SEP) A 0.6% | C 2.0% | P 1.4%

 

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