Daily FX Market Commentary

Andy Harrison

Good Morning,

LMAX Close

USDJPY 108.578 | EURUSD 1.11278 | AUDUSD 0.68839 | NZDUSD 0.64168 | USDCAD 1.31512 | USDCHF 0.98785 | GBPUSD 1.28842 |

LMAX highs and Lows 06.00 GMT

                                Highs | Lows

EURUSD               1.11310 | 1.11125

USDJPY                108.839 | 108.539

GBPUSD              1.28907 | 1.28786

USDCHF               0.98953 | 0.98782

AUDUSD             0.69068 | 0.68768

USDCAD              1.31604 | 1.31501

NZDUSD              0.64123 | 0.63915

EURCHF               1.10044 | 1.09899

EURGBP              0.86380 | 0.86286

EURJPY                121.074 | 120.781

For Today

• GBP: A tight steady range again through the Asian session with the market opening around the 1.2885 areas and then pushing through into the Tokyo session testing the 1.2890 levels before drifting through deep into the session to lightly test through the 1.2880 levels and then holding around the level through to the grey hours, Light congestion on a move through the 1.2880 level with possibly better congestion around the 1.2850 levels before the bids start to thicken on any dip towards the 1.2800 areas, with strong stops not suspected until deep into the 1.27 handle possible around the 1.2770-60 area and then limited support on any further push lower, Topside offer light through to the 1.2900 level with light congestion through the level and likely to increase only on a push towards the 1.3000 level with stops likely on a strong move through the level.
• JPY: Opening around the 108.60 level the market held quietly until early Tokyo appeared and a quick rise to the108.75 area into the Tokyo opening, the market slowly pushed towards the 108.80 areas before dipping back on the Tokyo fix however, it was limited and the push higher continued slowly through to test above the 108.80 areas before holding into 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: Limited range through the session and that is with the RBA announcement, a little choppy at times the market drifted from the opening to test lightly through the 0.6880 level before jumping to the 0.6895 level on the early Japanese buyers before dipping back and basing around the 0.6880 until the release, a quick move through this time testing to the 0.6905 area before trading around the 69 cents level through to 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 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: Maintaining a 10 pip range deep into the Tokyo session rising in a limited move to the 1.1130 level before drifting through to the 1.1120 level and quickly dipping towards the 1.1110 area before bouncing and holding around the 1.1125 areas through to the grey hours, 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:

US mulls removing some tariffs on $112b of China imports FT

CNY:

Gauges flash red as economy’s weakness persists BBG

USD:

Fed says Loan standards for less credit-worthy borrowers tighter BBG

US needs allies in fight against China – HAA

NZD:

Orr: Insurance sector must evolve

Orr: Insurance sector must review and improve culture, conduct

Orr: RBNZ to prioritize insurance policy, supervision in 2020

RBNZ will review insurer solvency levels

RBNZ expects a graduated series of solvency thresholds

RBNZ to intensify show don’t tell engagement with insurers

GBP:

GBP slips broadly amid possible election squeeze – BBG

AUD:

CBA Australia Oct. Composite PMI 50 vs. 52 in Sep – BBG

Today’s Data

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

AUD       AiG Performance of Service Index (OCT) A 54.2 | P 51.5

CNY        Caixin China PMI Composite (OCT) A 52 | P 51.9

CNY        Caixin China PMI Services (OCT) A 51.1 | C 51.1 | P 51.3

AUD       RBA Cash Rate Target (NOV 5) A 0.75% | C 0.75% | P 0.75%

0930       GBP       Markit/CIPS Composite PMI (OCT) C 49.4 | P 49.3

0930       GBP       Markit/CIPS Services PMI (OCT) C 49.7 | P 49.5

1330       USD       Trade Balance (SEP) C -52.5b | P -54.9b

1500       USD       ISM Non-Manufacturing/Services Composite C 53.4 | P 52.6

2145       NZD       Employment Change YoY (3Q) C 0.9% | P 1.7%

2145       NZD       Unemployment Rate (3Q) C 4.1% | P 3.9%

2145       NZD       Employment Change QoQ (3Q) C 0.2% | P 0.8%

2350       JPY         BoJ Minutes from September Policy Meeting

Harry Hindsight

 

• GBP: A slightly lower opening from Fridays close saw the early part of the session closing the gap then the market holding in a 1.2930-40 area range with minor pushes above the level but unable to break the low opening levels through into the London session, running commentary through the day on the subject of a possible split vote with the Brexit Party and Johnsons Conservatives wanting more or less the same thing as Johnson is adamant of no agreement between the two parties, this saw the Cable drifting through the day slipping to 1.2910 areas just after the Construction number and then again drifting through deep into the NYK session testing the 1.2900 level, the end of London saw very little support remaining in the area and the market sagged quickly through to the 1.2880 areas and then held around the level through to the close.
• JPY: Japanese bank holiday meant the market was stalled at the opening levels through to the London session before managing to break out of a very tight 5 pip range to push through to the 108.30 level and the official opening saw the market quickly test to the 108.40 level then meander around the level through to the NYK session and as with Cable only once the London session ended did the market start a limited push through to the 108.65 areas to make the highs before drifting a little too the close.
• AUD: Dipping from the opening testing slightly lower before moving into the Tokyo session pushing towards the 0.6920 area before dropping back quickly to make the Asian lows however, having tested towards the 69 cents level it was a steady stream of buying to take the market above the 0.6920 levels and holding deep into early morning in London before dropping back to the opening, the move through the rest of the day saw the market drifting lower and once London had left the market dropped off a little faster through to the 0.6880 level before finding stronger support through to the close.
• EUR: Ranging quietly through to late into the Asian session before breaking out of the 1.1160-70 range lightly testing towards the 1.1175 level and the high for the day, the move into the London session initially testing the highs again before dropping quickly back to the 1.1150 level then holding quietly through to NYK around the 1.1160 area, NYK saw steady selling as USD buyers returned to the market and the Euro tested through to just below the 1.1130 levels before running to the close.

 

Yesterday’s Premiership results

AUD       TD Securities Inflation YoY (OCT) A 1.5% | P 1.5%

AUD       Retail Sales Ex Inflation QoQ (3Q) A -0.1% | C 0.3% | P 0.2%

NZD       Treasury Publishes Monthly Economic Indicators

CHF        SECO Consumer Confidence (4Q) A -10.4 | C -8 | P -8

GBP       Markit/CIPS UK Construction PMI (OCT) A 44.2 | C 44.1 | P 43.3

USD       Durable Goods Orders (SEP F) A -1.2% | C -1.1% | P -1.1%

USD       Factory Orders (SEP) A -0.6% | C -0.5% | P -0.1%

EUR        ECB President Lagarde speaks in Berlin

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