Daily FX Market Commentary

Andy Harrison

Andy Harrison

Good Morning,

 

LMAX Close

USDJPY 108.844 | EURUSD 1.1151 | AUDUSD 0.69038 | NZDUSD 0.63579 | USDCAD 1.31593 | USDCHF 0.9895 | GBPUSD 1.29002 |

 

LMAX highs and Lows 06.00 GMT

                                Highs | Lows

EURUSD               1.11702 | 1.11481

USDJPY                108.901 | 108.589

GBPUSD              1.29335 | 1.28933

USDCHF               0.98951 | 0.9867

AUDUSD             0.69289 | 0.68977

USDCAD              1.31720 | 1.31513

NZDUSD              0.64337 | 0.63932

EURCHF               1.10337 | 1.10203

EURGBP              0.86466 | 0.8636

EURJPY                121.462 | 121.282

For Today

  • GBP: A steady grind higher with good volumes going through pushing off the 1.2900 lows to test to the 1.2935 level before running out of steam and drifting back a little to hold around the 1.2920 level going into the grey hours, Topside offers light through to 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 to with some clusters around the 1.2850 area and stronger into the 1.2800 level 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: USD looked weaker through the session with the USDJPY opening on its highs then slipping through to the 108.80 area before moving into the Tokyo session and dipping quickly through to 108.60 and finding a limited base for the move through to the grey hours. Topside offers remain 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: Oz saw the same pattern through the Tokyo session holding around the 69 cents into the Tokyo session before starting a slow but steady grind through to the 0.6930 areas and then holding in a tight range around the 0.6925 areas through to the grey hours after the RBA commentary on the weaker USD causing the AUD to rise. . 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 stronger offers likely through to the 0.6950 areas with limited resistance behind the 0.6960 level but increasing on any move towards the 70 cents level through to 0.7020 and stronger stops a possibility opening up further gains for the long term.
  • EUR: A slow climb through the early part of the session moving away from the 1.1150 level and once into the Tokyo session pushing steadily through to the 1.1170 area before meeting resistance and drifting a little through into the grey hours holding the bulk of its gains, 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:

After three cuts, Powell sees reason to pause

Bolton asked to testify in impeachment inquiry – DJ

USD/CNY:

China deal time frame unchanged despite APEC cancellation – BBG

GBP:

UK’s Brexit Party mulls pulling out of hundreds of races – FT

ZAR:

Rand slumps as Eskom rescue plan fall short of expectations – BBG

CAD:

BoC stands pat as expected; governing council contemplated an insurance cut

JPY:

BoJ maintains policy balance rate at -0.1%

BoJ Maintains 10yr JGB Yield target at about 0%

BoJ Adjusts forward guidance

BoJ sees FY 19 core CPI incl sales tax at 0.7%, 1.0% previously

BoJ Won’t hesitate to add easing if risks rise

BoJ signals possibility for lower rates

BoJ Sees FY20 core CPI incl sales tax at 1.1%, 1.3% previously

BoJ Risks are on downside for prices and economy

BoJ Price momentum is being maintained

BOJ GDP 19, 0.6% vs. 0.7%, 20, 0.7% Vs. 0.9%, 21, 1.0% Vs. 1.1%

AUD:

RBA Board’s Harper frets at Fed rate cuts reviving AUD – BBG

 

Today’s Data

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

NZD       Building Permits MoM (SEP) A 7.2% | P 0.8% | R 0.9%

JPY         Industrial Production YoY (SEP P) A 1.1% | C -0.1% | P -4.7%

NZD       ANZ Activity outlook (OCT) A 3.5 | P -1.8

GBP       GfK Consumer Confidence (OCT) A -14 | C -13 | P -12

AUD       Building Approvals YoY (SEP) A -19.0% | C -25.7% | P -21.5%

AUD       Private Sector Credit YoY (SEP) A 2.7% | C 2.7% | P 2.9%

CNY        Manufacturing PMI (OCT) A 49.3 | C 49.8 | P 49.8

CNY        Composite PMI (OCT) A 52 | P 53.1

CNY        Non-manufacturing PMI (OCT) A 52.8 | C 53.7 | P 53.7

JPY         BoJ 10yr Yield Target (OCT 31) A 0.00% | C 0.00% | P 0.00%

JPY         BoJ Rate Decision (OCT 31) A -0.10% | C -0.10% | P -0.10%

JPY         BoJ CPI Current Forecast +1 (4Q) A 1.1% | P 1.3%

JPY         BoJ CPI Current Forecast +2 (4Q) A 1.5% | P 1.6%

JPY         Construction Orders YoY (SEP) A -6.8% | P -25.9%

JPY         Consumer Confidence Index (OCT) A 36.2 | C 35.2 | P 35.6

JPY         Housing Starts YoY (SEP) A -4.9% | C -6.7% | P -7.1%

0700       EUR        German Retail Sales YoY (SEP) C 3.4% | P 3.2%

1000       EUR        Eurozone Consumer price Index Core YoY (OCT P) C 1.0% | P 1.0%

1000       EUR        Eurozone Consumer Price Index Estimate YoY (OCT) C 0.7% | 0.9%

1000       EUR        Eurozone GDP s.a. QoQ (3Q A) C 0.1% | P 0.2%

1000       EUR        Eurozone Unemployment Rate (SEP) C 7.4% | P 7.4%

1100       EUR        Italian GDP Product w.d.a. YoY (3Q P) C 0.2% | P -0.1%

1230       CAD       GDP YoY (AUG) C 1.4% | P 1.3%

1230       CAD       GDP MoM YoY C 0.2% | P 0.00%

1230       USD       PCE Core YoY (SEP) C 1.7% | P 1.8%

1230       USD       Continuing Claims (OCT 19) C 1679k | P 1682k

1230       USD       Employment Cost Index (3Q) C 0.7% | P 0.6%

1230       USD       Initial Jobless claims (OCT 26) C 215k | P 212k

1230       USD       PCE Core MoM (SEP) C 0.1% | P 0.1%

1230       USD       Personal Income (SEP) C 0.3% | P 0.4%

1230       USD       Personal Spending (SEP) C 0.2% | P 0.1%

1230       USD       Real Personal Spending (SEP) C 0.2% | P 0.1%

1345       USD       Chicago Purchasing Manager (OCT 25) P 87

1530       CHF        SNB’s Jordan speaks about challenges for pension funds in Bern

2130       AUD       AiG Performance of Manufacturing Index (OCT) P 54.7

2330       JPY         Jobless Rate (SEP) C 2.2% | P 2.2%

 

Harry Hindsight

 

  • GBP: A tight range through the Asian session with the market testing the 1.2860 level lightly and forming a base through the session but unable to break through the 1.2870 level with any conviction until into the grey hours, with early London producing a steady rise through to the 1.2885 level then popping through the 1.2900 level on the opening in London but unable to push beyond the 1.2905 areas, once it hit those highs the market dipped back to the 1.2875 level in a similar fashion to the rise then held deep into the session before slowly rising again through to the 1.2900 level before slowly drifting in early NYK to push through to the opening levels , the move to the FOMC started to chop around a little dipping to the lows of the day just through the 1.2850 level before rallying on the Powell comments to test quickly through the 1.2900 area and failing the 1.2910 level repeatedly before settling in to a short run to the close holding just above the 1.2900 levels.
  • JPY: USDJPY held through to the FOMC in a very tight range with the market trading quietly around the 108.85 levels and unable to break in either direction until the move into the early part of NYK and then only a minor push through to the 108.95 area before slowly slipping through back into the previous range again, FOMC saw a quick rise higher with the unchanged release however, the dovish comments post release by Powell triggered USD selling and the market quickly dropped from the high just short of the 109.30 area to test quickly through the 108.80 areas before holding and then struggling through to the end of the session almost unchanged on the day.
  • AUD: A little wider in range than say the USDJPY through to the FOMC however, it was limited with the opening around the 0.6865 area and slipping through into the Tokyo session testing lightly through the 0.6850 area before quickly recovering and pushing above the 0.6870 level to make the highs through Asia, the move through to London saw the 0.6870 level pushed through and the market holding around the 0.6875 areas and that more or less completed the range until the FOMC with similar results initial USD buying on the no cut and testing the 0.6850 level again before quickly rallying on the commentary from Powell and testing through to the 0.6900 areas through to the close.
  • EUR: Similar trading to the rest of the Majors and Minors with the Asian session very quiet and aa tight range around the 1.1110 areas before slowly rising through the grey hour to test lightly above the 1.1120 level and then holding through to the 1.1115 level into NYK the range increased a little dipping through to the 1.1100 level bur recovered for the move into the FOMC dipping as USD buyers took the no change as a signal to buy USD’s and the Euro dipped through to the 1.1080 area before quickly bouncing and pushing through to the 1.1150 areas and a slow rise through to the close.

 

Yesterday’s Premiership results

JPY         Large Retailers Sales (SEP) A 10% | C 8.8% | P 0.4% | R 0.3%

JPY         Retail Trade YoY (SEP) A 9.1% | C 6.1% | P 2.0% | R 1.8%

AUD       CPI YoY (3Q) A 1.7% | C 1.7% | P 1.6%

AUD       CPI QoQ (3Q) A 0.5% | C 0.5% | P 0.6%

AUD       CPI RBA Trimmed Mean QoQ (3Q) A 0.4% | C 0.4% | P 0.4%

AUD       CPI RBA Trimmed Mean YoY (3Q) A 1.6% | C 1.6% | P 1.6%

AUD       CPI RBA Weighted Median QoQ (3Q) A 0.3% | C 0.4% | P 0.4%

AUD       CPI RBA Weighted Median YoY (3Q) A 1.2% | C 1.3% | P 1.3%

EUR        French GDP YoY (3Q P)  A 1.3% | C 1.3% | P 1.4% | R 1.4%

CHF        KOF Leading Indicator (OCT) A 94.7 | C 93.5 | P 93.2

EUR        German Unemployment Change (000s) (OCT) A 6.0k | C 2.0k | P -10.0k

EUR        German Unemployment Claims rate s.a. (OCT) A 5.0% | C 5.0% | P 5.0%

USD       MBA Mortgage Applications (OCT 25) A 0.6% | P -11.9%

USD       ADP Employment Change (OCT) A 125k | C 115k | P 135k | R 93k

USD       GDP Annualized (QoQ) (3Q A) A 1.9% | C 1.6% | P 2.0%

USD       Core PCE (QoQ) (3Q A) A 2.2% | C 2.2% | P 1.9%

USD       GDP Product Price Index (3Q A) A 1.6% | C 1.9% | P 2.4%

USD       Personal Consumption (3Q A) A 2.9% | C 2.6% | P 4.6%

EUR        German CPI YoY (OCT P) A 1.1% | C 1.1% | P 1.2%

EUR        German CPI MoM (OCT P) A 0.1% | C 0.0% | P 0.0%

EUR        German CPI EU Harmonized YoY (OCT P) A 0.9% | C 0.8% | P 0.9%

CAD       BoC Rate Decision (OCT 30) A 1.75% | C 1.75% | P 1.75%

USD       DOE US Crude Oil Inventories (OCT 25) A 5702k | C -104k | P -1699K

USD       FOMC Rate Decision (Lower Bound) (OCT 30) A 1.50% | C 1.50% | P 1.75%

USD       FOMC Rate Decision (Upper Bound) (OCT 30) A 1.75% | C 1.75% | P 2.00%

USD       Interest rate on Excess Reserves (OCT 31) A 1.55% | C 1.55% | P 1.80%

 

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