Daily FX Market Commentary

Andy Harrison

Andy Harrison

Good Morning,

 

LMAX Close

USDJPY 109.284 | EURUSD 1.10502 | AUDUSD 0.68984 | NZDUSD 0.63586 | USDCAD 1.31744 | USDCHF 0.99492 | GBPUSD 1.28146 |

 

LMAX highs and Lows 06.00 GMT

                                Highs | Lows

EURUSD               1.10544 | 1.10458

USDJPY                109.404 | 109.15

GBPUSD              1.28293 | 1.28082

USDCHF               0.99530 | 0.99435

AUDUSD             0.69062 | 0.68756

USDCAD              1.31872 | 1.31712

NZDUSD              0.63819 | 0.63586

EURCHF               1.09941 | 1.09903

EURGBP              0.86267 | 0.86104

EURJPY                120.883 | 120.628

For Today

  • GBP: A very quiet session with the market rising to just above the 1.2820 level in early trading and then slipping back from the Tokyo opening to around the 1.2810 level before narrowing down to range around the 1.2815 areas to the grey hours, Downside bids into the 1.2800 level which was breached yesterday however, bids are likely to be renewed with weak stops likely on a deep push through the figure and opening up a test of the 1.2750 areas with likely stronger bids joining the congestive bids, a push through will see weak bids into the 1.2700 areas with stronger bids likely on any test of the 1.2650 areas with those bids likely to continue through to the 1.2630 areas, Topside offers light through to the 1.2900 some congestion around the level with the congestion light stops on a push through the 1.2920 level then further congestion likely to continue through to the 1.3000 areas and the stronger offers appear.
  • JPY: A little bit more movement than the Cable with the market opening around the 109.30 area and holding a tight range through to the Tokyo session to test through to the 109.40 areas before drifting through the session back to the 109.15 areas and then slowly rising back to the 109.25 area for the move into the grey hours, Topside offers 109.50 levels and increasing further on any push to the 110.00 level likely stronger stops on a push through the 110.20 areas before the market to 110.50 and stronger offers likely to appear in the area. 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 just below the 69 cents level the market drifted a little through to the 0.6890 areas before bouncing through into the Tokyo session setting the high around the 0.6905 areas before dipping sharply on the move through the Tokyo fix testing back to the 0.6880 areas with the RBA dovish comments entering the market however, the market held around the level through to the grey hours, 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: Very quiet trading for the Euro moving quietly around the opening 1.1050 areas and not even breaking out of a 10 pip range before moving into the grey hour, Downside congestion continues in the current area with the congestion likely to extend through to the 1.1000 areas with weak stops mixed with congestive bids on any dip through the 1.0980 area, and congestion then continuing through to the 109.50 area where stronger bids are likely to start appearing for any move through to the 1.0900 areas, Topside offers weak through to the 1.1100 areas with limited stops on a move through the area however, stronger congestion starts to appear on any push through to the 1.1150 areas and continuing through to the 1.1180 level and stronger offers then appearing on any test towards the 1.1200 level however, while there could be option barriers in the area stops above the level could be an attractive target.

 

 

Overnight News

AUD:

RBA seemingly a little more dovish today acknowledging the other options

RBA: Outlook for economy little changed from 3mths ago

RBA: Sees gradual consumption pickup, timing a key uncertainty

RBA: Dwelling investment seen as drag on GDP for several Qtrs

RBA: Outlook based on market pricing chance of 25bps cut by mid 20

RBA: Pushes 2% core inflation forecast out 6 mths to Dec 2021

RBA: Cuts GDP forecast for yr. through Jun 2020 to 2.5% vs. 2.75%

RBA sees some problems to medium term inflation, jobs goals

RBA Says wage growth is no longer expected to pick up

RBA: Prepared to ease monetary policy further if needed

USD:

White House adviser Peter Navarro: There is no agreement at this time to remove any of the existing tariffs

Anonymous official says Trump aides mulled mass resignation – WPT

White house: US is very, very optimistic about reaching a trade deal with China – FOX

CNY:

China claims tariffs will go, but others express doubts – WSJ

China says US agrees to remove some tariffs, Fentanyl case – TikTok as sideshow compared to WeChat –

JPY:

Japanese bought net 668.1b Yen overseas debt last week

USD/KRW/CNY:

US asks S. Korea mobile carriers not to use Huawei gears – BBG

 

Today’s Data

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

2330       JPY         Labour Cash Earnings YoY (SEP) A 0.8% | C 0.1% | P -0.2%

2330       JPY         Overall Household spending YoY (SEP) A 9.5% | C 7.1% | P 1.0%

2330       JPY         Real Cash Earnings YoY (SEP) A 0.6% | C -0.3 | P -0.6%

AUD       Home Loans MoM (SEP) A 3.6% | C 1.0% | P 2.0%

AUD       RBA Statement on Monetary Policy

CNY        Trade Balance A $42.81b | C $40.10b | P $39.65b

JPY         Coincident Index (SEP P) A 101.1 | C 101.0 | P 99.00

JPY         Leading Index CI (SEP P) A 92.2 | C 92.2 | P 91.9

GBP       UK Sovereign debt to be rated by Moody’s

0645       CHF        Unemployment rate (OCT) C 2.2% | P 2.1%

0645       CHF        Unemployment Rate s.a. (OCT) C 2.3% | P 2.3%

0700       EUR        German Trade Balance (SEP) C 18.8b | P 16.2b

1315       CAD       Housing Starts (OCT) C 222.5k | P 221.2k

1330       CAD       Net Change in Employment (OCT) C 10.0k | P 53.7k

1330       CAD       Unemployment Rate (OCT) C 5.5% | P 5.5%

1330       CAD       Building Permits MoM (SEP) C -1.8% | P 6.1%

1330       CAD       Full Time Employment Change (OCT) C 2.5k | P 70k

1330       CAD       Hourly Wage Rate Permanent Employees YoY (OCT) C 4.2% | P 4.3%

1500       USD       U. of Mich Sentiment (NOV P) C 95.5 | P 95.5

1800       USD       Baker Hughes US Rig Count (NOV8) P 822

 

Harry Hindsight

 

  • GBP: Drifting from the opening around the 1.2860 areas and tested through to the 1.2840 areas and based around that level through to the early pre-London period before rising steadily through to make the highs just above the 1.2875 areas before the BoE rate decision and while it went unchanged the dovish commentary and the voting 7-2 saw a quick move through to test through the 1.2800 level before rallying a little into the NYK session and then ranging in an ever decreasing move through to the close.
  • JPY: A slow drift through the early part of the session dropping back from the opening just short of the 109.00 level testing through to the 108.65 and holding the level with a minor gain to the 108.75 area for the move into the pre-London market testing quickly through to the 109.10 area before running into light offers and drifting back to the opening levels for a short period, the market eventually rose through to the 109.20 areas in early London morning but held around the level through to the NYK session before pushing steadily higher again, the end of the London session saw the USDJPY reaching higher again to test to the 109.50 level before holding deep through the evening session before dipping back and holding through to the close around the 109.30 levels.
  • AUD: As with the other currencies the market drifted lower from the opening in Tokyo testing through to the 0.6860 area before finding a base and a slow climb through the 0.6870 area before pre-London quickly saw the market move above the 0.6890 areas slowing and then steadily rising through to the 0.6910 areas before drifting from the highs to test through to slip lightly through the 69 cents levels and meander through to the end of London before again testing through to the highs and extend them to the 0.6913 area holding quietly before slipping a little through the figure area for the close.
  • EUR: Opening just below the 1.1070 areas the market struggled with the level through into the Tokyo session before starting a slow drift through to hold around the 1.1060 areas through to the London session with a quick rise through to the 1.1080 areas before slowly rising through to the 1.1090 area to make the highs before moving into the NYK session and a slow drift as the drag of the GBP tugged it lower the break through the 1.1070 area saw some weak stops before increasing its descent testing through to the 1.1035 area before finding a base with London now closed the market saw some recover to trade through to the close holding around the 1.1050 level.

 

Yesterday’s Premiership results

AUD       AiG Performance of Construction Index (OCT) A 43.9 | P 42.6

AUD       Trade Balance (SEP) A A$7180m | C A$5050m | P A$6617m

EUR        German IP n.s.a. and w.d.a. YoY (SEP) A -4.3% | C -4.3% | P 4.0%

EUR        Markit Germany Construction PMI (OCT) A 51.5 | P 50.1

EUR        ECB Publishes Economic Bulletin

GBP       Office for Budget Responsibility publishes updated forecasts

EUR        EU Commission Economic Forecasts

GBP       BoE Asset Purchase Target (NOV) A 435b | C 435b | P 435b

GBP       BoE Bank rate (NOV 7) A 0.75% | C 0.75% | P 0.75%

GBP        Inflation Report

MXN      CPI YoY (OCT) A 3.02% | C 3.0% | P 3.0%

GBP        BoE’s Carney speaks at press conference in London

USD       Continuing Claims (OCT 26) A 1689k | C 1660k | P 1690k

USD       Initial Jobless Claims (NOV 2) A 211k | C 215k | P 218k

USD       Consumer Credit (SEP) A 9.513b | C 15.000b | P 17.901b

 

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