Daily FX Market Commentary

Andy Harrison

Andy Harrison

Good Morning,

LMAX Close
USDJPY 108.405 | EURUSD 1.11709 | AUDUSD 0.68562 | NZDUSD 0.63857 | USDCAD 1.31257 | USDCHF 0.98432 | GBPUSD 1.28821 |

LMAX highs and Lows 05.00 GMT
Highs | Lows
EURUSD 1.11634 | 1.11497
USDJPY 108.553 | 108.288
GBPUSD 1.29475 | 1.28748
USDCHF 0.98583 | 0.9847
AUDUSD 0.68654 | 0.68436
USDCAD 1.31389 | 1.31271
NZDUSD 0.64026 | 0.63716
EURCHF 1.10015 | 1.09807
EURGBP 0.86596 | 0.86247
EURJPY 121.141 | 120.782
For Today
• GBP: After the result on Saturday the market opened with a Gap of around 40 pips and traded quickly through to the 1.2920 area and then dipped on a second run to the Tokyo session testing quickly through to the 1.2875 areas before recovering back above the 1.2900 level and ranging just below the level for a short period before pushing towards the 1.2920 area and holding just below the level for the run to the grey hour, downside bids light through to the 1.2850 level with some light congestion into the level, a test through sees very little to hold the market above the 1.2800 level but the sentimental levels are likely to be lightly bids with weak stops through those levels in reality the chances of concentrated bids are not likely until through towards the 1.2500 area, topside offers into the 1.3000 with possible stronger stops above the level and the market opening to congestion around the sentimental figure areas with stops likely behind with very little to deflect a strong move.
• JPY: Opening a little higher and pushing the 108.50 level before being dragged lower as GBPJPY kicked in as the Tokyo traders moved into the market testing through to the 108.30 level before finding a base and holding for a couple of hours and then starting a steady rise through to the highs around 108.50 holding and then pushing higher as the market moved into the grey hour to push through 108.50 lightly, Topside offers 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 a little lower the market tested down to the 0.6840 to make the low for the session before early Tokyo started a steady rise through the session to push just through the 0.6865 levels and holding generally above the 0.6860 area through to the close, 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 faces stronger selling with the market already cleared through to 0.6820 with no real effect to the offers and congestion likely to be strong through the 0.6840-60 levels and increasing on any push through towards the 0.6880 area and the 69 cents level.
• EUR: Opening just above the 1.1160 level the market dipped back to the 1.1150 areas in early trading then ranged quietly just above the 1.1150 area deeper into the session before pushing through to the 1.1150 levels for the move into the grey hour, Topside offers increasing on a push through to the 1.1170 area and into the 1.1200 area with congestion likely through the level to cancel out any weak stops and opening up a further steady climb into the 1.1240 areas, Downside bids light through to the 1.1060 level then minor congestion through to 1.1040 before the market starts to become more supportive on any dips towards the 1.1000 levels.

Overnight News
JPY:
Tokyo looks to turn diplomatic efforts elsewhere despite visit by Moon’s deputy – Nikkei
GBP:
Boris Johnson lost Saturday’s Brexit battle, but he’ll win the general election – The Sun
DUP threaten to unite with Labour to back customs union amendment that would bring down Brexit – TEL
Boris Johnson is bringing his Brexit deal back to Parliament – DJ
UK starts no deal Brexit preparations as EU poised to delay – BBG
Ejected Conservatives hold sway over Brexit outcome – DJ
Risk of No-Deal Brexit rises after Saturday’s vote – BBG
Government losses vote 306-322, Corbyn calls for and extension quoting Benn law
EUR/GBP:
EU will delay Brexit until Feb 2020 if PM Boris Johnson is unable to get his deal past MP’s this week -Sunday Times
Johnson says he won’t negotiate a delay with EU over Brexit – BBG
Johnson asks EU for Brexit delay, but hopes he won’t need it – BBG
EU poised to grant 3-month Brexit extension – Times of London
USD:
Fed leaves October cut on Table, and questions about what’s next – BBG
AUD:
Westpac estimates RBA will see 0.5% as cash rate lower bound – BBG

Today’s Data
Actual – A | Consensus – C | Previous – P | Revised R | all timings GMT/UTC
GBP Rightmove House Prices YoY (OCT) A -0.2% | P 0.2%
JPY Trade balance Yen (SEP) A -123.0b | C 54.0b | P -143.5b
CNY 1 year Loan Prime rate (OCT) 4.20% | C 4.15% | P 4.2%
CNY 5 year loan Prime Rate (OCT) A 4.85% | C 4.83% | P 4.85%
CNY New Home Prices MoM (SEP) 0.53% | P 0.58%
NZD Credit Card Spending YoY (SEP) A 4.8% | P 6.0%
JPY All Industry Activity Index MoM (AUG) A 0.0% | C 0.1% | P 0.2%
1100 EUR Bundesbank Publishes Monthly Report
USD Monthly Budget Statement (SEP) C 83.0b | P 119.1b

Harry Hindsight

• GBP: Opening just below the 1.2895 level the market was unable to push higher from the opening and slowly drifted to late in the session testing lightly through the 1.2850 area and touching around the 1.2840 level before moving into the grey hour and rising only once the early London traders moved in and by mid-morning the market was testing through the 1.2900 level with initial push through to the 1.2920 before ranging in a 30 pip range from the 1.2900 areas through to the end of London, Once London finished optimism that the UK Government had the numbers to guarantee the Brexit deal appeared in the market and a quick test through to the 1.2965 level before dipping back to the 1.2950 area and then the finish saw quick buying to spike the market through to the 1.2990 area before settling back to the 1.2980 area for the close.
• JPY: A reasonably quiet Asian session for the USDJPY with the market opening just short of the highs around the 108.65 areas and drifting into the Tokyo session testing through to just below the 108.60 areas before recovering on the Tokyo Fix to post the high of the Tokyo session just below 108.70, the market then held quietly through to the London session testing back to make new lows just above the 108.50 level and started a slow rise through the London morning to just above the 108.70 areas for the highs of the day, having made those highs though the market started a slow and steady drift through to the NYK session pushing back to the 108.50 level and the NYK traders pushing through to the 108.40 level eventually and the base for the balance of the session holding in a narrowing range to the close.
• AUD: Oz saw very little interest however, it managed a steady rise through the day opening around the 0.6825 area and making lows just below there before rising through to the 0.6830 areas and ranging in a decreasing range through to the London session before renewing its steady rise to pushing into the NYK session having captured the next 10 pips and continuing through to the 0.6850 for the end of London, a little choppy at times however, after a minor dip back through to the 0.6840 level the market recovered and slowly rose through to the close around the 0.6865 area.
• EUR: A flat Asian session with the Euro unable to push through the 1.1130 area and holding just below the level and slowly drifting through the 1.1120 area on the move into the early London session to make the lows, with the market then fully open the market started a slow rise through to the NYK session pushing the 1.1145 area and although there was a spike through the level it generally held around 1.1140 for several hours before trading quickly through to the 1.1160 area on the close in London, the market saw a small dip before maintaining the high through to the final 30 minutes before running quickly to the 1.1175 area for the close.

Yesterday’s Premiership results
JPY National Consumer Price Index YoY (SEP) A 0.2% | C 0.2% | P 0.3%
JPY National Consumer Price Index Ex-Fresh Food YoY (SEP) A 0.3% | C 0.3% | P 0.5%
JPY National CPI Ex-Fresh Food, Energy YoY (SEP) A 0.5% | C 0.5% | P 0.6%
CNY GDP YoY (3Q) A 6.0% | C 6.1% | P 6.2%
CNY GDP YTD YoY (3Q) A 6.2% | C 6.2% | P 6.3%
CNY GDP s.a. QoQ (3Q) A 1.5% | C 1.5% | P 1.6%
CNY Fixed Assets Ex Rural YTD (YoY) (SEP) A 5.4% | C 5.5% | P 5.5%
CNY IP YoY (SEP) A 5.8% | C 4.9% | P 4.4%
CNY IP YTD YoY (SEP) A 5.6% | C 5.5% | P 5.6%
CNY Property Investment YTD YoY (SEP) A 10.5% | P 10.5%
CNY Retail Sales YoY (SEP) A 7.8% | C 7.8% | P 7.5%
CNY Retail Sales YTD YoY (SEP) A 8.2% | C 8.1% | P 8.2%
CNY Surveyed Jobless Rate (SEP) A 5.2% | P 5.2%
EUR European Summit in Brussels (DAY 2)
GBP UK Sovereign Debt to be rated by Fitch
USD Leading Index (SEP) A -0.1 % | C 0.1% | P 0.0%
USD Baker Hughes US Rig Count (OCT 18) A 851 | P 856
GBP Governor Carney Speaks in Washington

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