Daily FX Market Commentary

Andy Harrison

Andy Harrison

Good Morning,

LMAX Close
USDJPY 108.693 | EURUSD 1.11306 | AUDUSD 0.68542 | NZDUSD 0.64175 | USDCAD 1.30708 | USDCHF 0.99078 | GBPUSD 1.29136 |

LMAX highs and Lows 05.00 GMT
Highs | Lows
EURUSD 1.11419 | 1.11292
USDJPY 108.694 | 108.578
GBPUSD 1.29261 | 1.29051
USDCHF 0.99096 | 0.98988
AUDUSD 0.68574 | 0.6844
USDCAD 1.30789 | 1.30711
NZDUSD 0.64235 | 0.64058
EURCHF 1.10316 | 1.10244
EURGBP 0.86238 | 0.86158
EURJPY 121.024 | 120.885
For Today
• GBP: Barely a heart beat today with the market ranging around the 1.2915 level through the session with the high just short of the 1.2930 level and the low sneaking through the 1.2910, Topside offers light through the 1.2950 area however the closer you get to the 1.3000 area the stronger the offers begin to get, with stop losses likely on a push through the 1.3020 levels could see option related stops and the market quickly moving through to challenge the 1.3050 sentimental level and very little to slow a push higher especially on the back of any hopeful news, downside bids likely to be limited through the 1.2800 levels and with maybe weak stops on a dip through the 1.2750 areas the market could possibly see quick dips through to the light congestion around the sentimental levels to 1.2600 where possibly stiffer bids start to appear.
• JPY: A slow drift from the opening which was slightly lower than the close, moving off the 108.70 area and slipping late in the session through the 108.60 level in quiet trading, 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: Light selling from the opening but contained in a tight range in early trading and slipping a little lower around the Tokyo Fix to test lightly through the 0.6845 area before making a steady push through to the 0.6855 area before dropping back again for the move into the grey hour, Downside bids light through the 68 cents level with weak stops likely on a dip through the 0.6780 level and opening the market to a limited move initially but renewing the downside potential 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 again above the 0.6880 level and a bit away from the current levels if ranges have anything to say on the matter, a push through the 69 cents level doesn’t really do much until pushing past the 0.6920 area and congestion quickly following in to limit any gains.
• EUR: A slow start really didn’t improve that much with the market opening just above the 1.1130 area and dipping lightly through the level before starting a slow climb through to move just above the 1.1140 level and hold for a short period before dipping back to 1.1135 level 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 1.1080 level where weak stops are likely to appear however, once cleared 1.1060 level sees minor congestion through to 1.1040 before the market starts to become more supportive on any dips towards the 1.1000 levels.

Overnight News
GBP:
UK’s Johnson poised for election call – The Times
Johnson faces growing Tory revolt over threat to hold General election before Brexit – The Sun
Johnson faces losing two key votes for his Brexit deal within a week in yet another setback The Sun
Sajid Javid delivers blunt Brexit vow on ITV’s Preston in a heated outburst “no delay” – Express
Boris Johnson’s plan for pre-Christmas election in doubt after EU leaders fall out over length of Brexit delay – The Sun
USD:
US fears mass boycott as Chinese turn to homegrown brands – BBG
US Currency manipulation threat puts Asian nations on guard – BBG
How a weaponized USD could backfire – PS
CNY:
China’s bond market reckoning is one default away – BBG
AUD:
Treasury Chief pushes back on calls for Fiscal stimulus – DJ

Today’s Data
Actual – A | Consensus – C | Previous – P | Revised R | all timings GMT/UTC
AUD CBA PMI Composite A 50.7 | P 52.0
AUD CBA PMI Manufacturing (OCT P) A 50.1 | P 50.3
AUD CBA PMI Services A 50.8 | P 52.4
JPY Nikkei PMI Manufacturing (OCT P) A 48.5 | P 48.9
0830 EUR Markit German Services PMI (OCT P) C 52 | P 51.4
0830 EUR Markit/BME Germany Composite PMI (OCT P) C 48.9 | P 43.5
0830 EUR Markit/BME Germany Manufacturing PMI (OCT P) C 42 | P 41.7
0900 EUR Markit Eurozone Composite PMI (OCT P) C 50.4 | P 50.1
0900 EUR Markit Eurozone Manufacturing PMI (OCT P) C 46 | P 45.7
0900 EUR Markit Eurozone Services PMI (OCT P) C 51.9 | P 51.6
0930 GBP BBA Loans for House Purchase (SEP) C 42200 | P 42576
1200 MXN Bi-Weekly CPI (OCT 15) C 0.46% | P 0.13%
1200 MXN Bi-Weekly CPI YoY (OCT 15) C 3.06% | P 3.01%
1200 MXN Bi-Weekly Core CPI (OCT 15) C 0.16% | P 0.12%
1200 MXN Economic Activity IGAE YoY (AUG) C 0.5% | P 0.33%
1245 EUR ECB Deposit Facility Rate (OCT 24) C -0.50% | P -0.50%
1245 EUR ECB Marginal Lending facility C 0.25% | P 0.25%
1245 EUR ECB European Central Bank Rate Decision C 0.00% | P 0.00%
1330 EUR ECB’s Draghi speaks in Frankfurt after Policy Decision
1330 USD Durable goods orders (SEP P) C -0.7% | P 0.2%
1330 USD Continuing Claims (OCT 12) C 1675k | P 1679k
1330 USD Durables Ex Transportation (SEP P) C -0.2% | P 0.5%
1330 USD Initial Jobless Claims (OCT 19) C 215k | P 214k
1445 USD Markit US Composite PMI (OCT P) P 51
1445 USD Markit US Manufacturing PMI (OCT P) C 50.7 | P 51.1
1445 USD Markit US Services PMI (OCT P) C 51 | P 50.9
1500 USD New Homes Sales MoM (SEP) C -1.4% | P 7.1%

Harry Hindsight

• GBP: Dipping a little from the opening the market managed through towards the 1.2900 levels before moving deeper into the Tokyo session before dipping away steadily again through to the 1.2845 area to make the lows, rising a little through from the lows into the London session testing towards the 1.2890 level and then ranging through into the NYK session holding around the 1.2875 areas, a slow rise through NYK to push the 1.2895 area in slow trading saw the market unable to break higher until late into the session before pushing steadily through the 1.2900 level and holding quietly around the 1.2910-20 level through to the close.
• JPY: Opening quietly and lightly testing through the 108.50 areas before dropping off quickly into the Tokyo fix to push into the 108.25 level before ranging through to deep into London broadly holding the 108.30-40 areas, London eventually woke up and took the USDJPY back to the opening level before NYK moved in and started a steady session of buying through to the 108.70 level and although there was a dip away from the high it was short lived with the market pushing back to the level for the close.
• AUD: IMF chatter dominated some of the Asian market and that impacted the Oz to some extent with the market initially pushing off the lows just below the opening level around the 0.6850 and tested to above the 0.6860 areas to make the highs for the day before dipping on the Tokyo fix rallying a little afterwards then impacting the IMF lowering of growth for Asia pushing down to push towards the 0.6830 for the lows of the day and a slow rally to above the 0.6845 level on the move into the London session, London did very little with the market holding around the 0.6840 areas and with the opening in NYK the levels improved only slightly with the range holding around the 0.6845 area too late into the session and the Sydney market taking it through to the opening levels again for a quiet close almost unchanged on the day.
• EUR: A very quiet day for the Euro and less Brexit chatter saw the Euro becalmed with the market holding around the 1.1125 area and then ranging through to the London session unable to breach either the 1.1130 level or 1.1120 with any conviction, the move into London was similarly quiet through to mid-morning before dipping steadily away through to the 1.1105 levels before early NYK pushed in and took the market back to range around the 1.1120 level before London left then rallied through late in the session to the 1.1140 areas before holding quietly to the close only slightly higher than the market opening.

Yesterday’s Premiership results
NZD Trade Balance (SEP) A -1242m | C -1375m | P -1565m
NZD Trade Balance 12mth YTD (SEP) A -5.21b | C -5254m | P -5484m
1200 USD MBA Mortgage Applications A -11.9% | P 0.5%
1400 USD House Price Index MoM (AUG) A 0.2% | C 0.4% | P 0.4%
1500 EUR Eurozone Consumer Confidence A -7.6% | C -6.7% | P -6.5
1530 USD DOE US Crude Oil Inventories (OCT 18) A -1699k | C 2751k | P 9281k

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