Daily FX Market Commentary

Andy Harrison

Good Morning,

LMAX Close

USDJPY 108.669 | EURUSD 1.10803 | AUDUSD 0.68214 | NZDUSD 0.63498 | USDCAD 1.30581 | USDCHF 0.9945 | GBPUSD 1.2830 |

LMAX highs and Lows 05.00 GMT

                                Highs | Lows

EURUSD               1.10848 | 1.10764

USDJPY                108.786 | 108674

GBPUSD              1.28366 | 1.28087

USDCHF               0.99596 | 0.99439

AUDUSD             0.68249 | 0.68108

USDCAD              1.30777 | 1.30558

NZDUSD              0.63624 | 0.63432

EURCHF               1.10362 | 1.10197

EURGBP              0.86464 | 0.86349

EURJPY                120.568 | 120.43

For Today

• GBP: Wide opening after a dull weekend and less commentary around the market more or less set the range between 1.2835-10 area and settled eventually to trade around the mdi area and made its way steadily to test to the highs once more before holding into the Tokyo session to slip back and push to the lows around the 1.2812 area and a slow range just below the 1.2820 level for the move into the grey hour, 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: USDJPY opened higher around the 108.75 level and then drifted on the long move through to the Tokyo session testing through the 108.70 level before rising slowly through the Tokyo session to just short of the 108.80 area in very quiet session for USDJPY, 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 almost unchanged from Friday the move through into the Tokyo session saw the market eventually start a steady drift from the highs around the 0.6825 area through towards the 0.6810 level before holding quietly 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 very quiet range with the market opening unchanged and then ranging between the 1.1075-85 level to 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

USD/CNY:

Trump administration considers blacklisting Chinese companies that repeatedly steal US intellectual property NPW

EUR/GBP:

EU27 to debate Brexit extension until Jan 31 BBG

EU draft proposal allows UK to leave EU before Jan 31 BBG#

EU draft proposal still needs sign off by bloc’s envoys – BBG

European council declaration seen by BBG

EUR:

Germany to double annual EU budget payment by 2027 FT

Rising deflation risk in the Eurozone IIF

Merkel’s coalition loses big in Thuringia vote, exit poll shows – BBG

CNY:

60% of Chinese household debt tied up in home loans, Existing homeowners dominate lending China news

Industrial enterprises see biggest profit fall in 4 years SMP

China’s industrial profit widens drop on economy, deflation – BBG

AUD:

QE Down under would pack some punch DJ

Australia urges big banks to lend more BBG

Australia QE would mean buying mortgage backed bonds, paper says BBG

RBA Could give banks cheap loans – AFR

GBP:

Lib Dems, SNP will back election if EU grants 3-month extension Politico EU

Latest polls show UK cons ahead with each poll showing +10

USD/THB:

Trump to suspend Thailand’s $1.3b trade preferences BBG

Today’s Data

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

1230       USD       Advance goods Trade Balance (SEP) C -$73.5b | P -$72.8b

1230       USD       Wholesale Inventories MoM (SEP P) C 0.3% | P 0.2%

1500       EUR        ECB President Draghi Speaks in Frankfurt

Harry Hindsight

 

• GBP: A limited range through into the grey hour with the Asian session opening around the 1.2855 level and then drifting through to the Tokyo session testing the 1.2840 level and holding around the level through to the grey hour before pushing through to the highs of the day just above the 1.2860 level, early London sold the market back through the 1.2830 levels recovering and pushing back towards the highs again before again settling into a few hours holding around the 1.2830 area again, before dipping again through to the 1.2820 level pausing and pushing into the NYK session testing to the lows on a weak attempt to test the 1.2800 area and then recovering into the London close on a push back to the 1.2840 areas, the run to the close saw the market test back to the 1.2820 level then run in a tight spread to the close.
• JPY: USDJPY saw limited movement through the day opening around the 108.60 levels before rising in early Tokyo pushing through to the 108.70 level and then narrowed down for the move into the London session in a tight range around the 108.65 areas, the move into early London saw the market drop back from that holding area steadily to test towards the 108.55 levels and the move into the NYK session testing through to the lows just above the 108.50 areas and then starting a strong steady rally through the session pushing through to just above the 108.75 level before dipping away for the move into the close.
• AUD: Opening just below the 0.6820 areas and testing through towards the eventual lows around the 0.6810 area before ranging through to the grey hour making the low just below the 0.6810 areas and unable to break higher with any conviction until the grey hour saw a quick push through to the 0.6830 level and ranging through around the level before dipping and holding deep into the NYK session before struggling through to the 0.6835 area to make the highs but dropping off quickly to hold the 0.6820 area through to the close.
• EUR: A very quiet session through the Asian session with the market holding around the 1.1105 areas for the most part and just short of the opening level into the grey hour before starting a slow rise through to the 1.1120 area in early morning trading, once the market had hit the highs on limited data the sellers appeared and there was a slow but steady drifting through to the end of London making the lows just through the 1.1075 area before holding a tight range around the 1.1080 level to the close.

 

Yesterday’s Premiership results

EUR        France Sovereign debt to be rated by Moody’s

EUR        Italy Sovereign debt to be rated by S&P

GBP       UK Sovereign debt to be rated by S&P

EUR        German GfK Consumer Confidence (NOV) A 9.6 | C 9.8 | P 9.9

EUR        ECB Survey of Professional Forecasters

EUR        German IFO Business Climate (OCT) A 94.6 | C 94.5 | P 94.6

EUR        German IFO Current Assessment (OCT) A 97.8 | C 98.0 | P 98.5

EUR        German IFO Expectations (OCT) A 91.5 | C 91 | P 90.8

USD       U. of Mich Sentiment (OCT F) A 95.5 | C 96.0 | P 96.0

USD       Baker Hughes US Rig Count (OCT25) A 830 | P 851

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