Daily FX Market Commentary

Andy Harrison

Andy Harrison

Good Morning,

LMAX Close
USDJPY 108.676 | EURUSD 1.10721 | AUDUSD 0.68088 | NZDUSD 0.64082 | USDCAD 1.32044 | USDCHF 0.98962 | GBPUSD 1.29528 |

LMAX highs and Lows 06.00 GMT
Highs | Lows
EURUSD 1.10755 | 1.10625
USDJPY 108.700 | 108.464
GBPUSD 1.29664 | 1.29416
USDCHF 0.99034 | 0.9881
AUDUSD 0.68097 | 0.67853
USDCAD 1.32160 | 1.31973
NZDUSD 0.64099 | 0.63822
EURCHF 1.09661 | 1.09501
EURGBP 0.85503 | 0.85449
EURJPY 120.352 | 120.012
For Today
• GBP: A very quiet session with the market holding around the 1.2950 level and dipping lightly through to the low and holding 1.2945 before returning back to the opening levels around the 1.2955 area through to the close, Topside offers through the 1.2950 level cleared sees reasonably strong and increasing congestion on any attempt to the 1.3000 level however, a break through the 1.3020 area will see stops appearing and the market pushing higher with some congestion through to the 1.3100 level the market could struggle without strong impetus and reasoning, downside bids light through to the 1.2900 level with only slightly stronger bids in the area with weak stops on a move back through the level however, congestion then starts to appear on any push through to the 1.2850 area with strong bids likely to hanging around the 1.2800 areas and congestion below.
• JPY: Limited movement overall but in the great scheme of things better than most with the opening just below the 108.70 level and dipping from the Tokyo opening testing lightly through the 108.50 area before bouncing and recovering in the same manner as the decline to again test the 108.70 areas before drifting through to the grey hours around the 108.60, Downside bids into the 108.20 area before stronger bids are likely to appear on any push at the 108.00 area, some weak stops through the 107.80 level and a likely test through to the 107.50 areas with stronger bids along a trend line likely to slow the descent with stronger congestion through into the 107.00 level. Topside offers again around the 109.00 level are likely to be weak however, a push through is likely to see stronger offers reappearing and continuing through to the 109.50 level with stronger offers into this month’s highs.
• AUD: Weak start saw the market dipping away from the 0.6810 opening highs to test back to 0.6805 and the RBA minutes coming in dovish and dropping back quickly through to the 0.6785 area before a limited bounce and the market eventually recovering to just below the 0.6800 area for the move into the grey hours, Downside bids light through the 0.6770 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: Quiet session for the Euro effected more by the Oz than anything else with the market holding through to the Tokyo session around the opening 1.1070 area and then dipping on the RBA chatter to test through to the low 1.1060 areas before bouncing and starting a slow steady rise to push above the 1.1075 areas and through to the grey hours, 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
USD:
FED secretly bailing out a major bank – Zero Hedge
Trump’s Health under scrutiny again after unplanned visit to Walter Reed – WPT
Trump: At my meeting with Jay Powell this morning, I protested fact that out Fed rate is too high – TWT
NZD:
RBNZ finds weaknesses in BNZ’s Capital calculation process – BBG
RBNZ: BNZ has not breached minimum Capital requirements – BBG
AUD:
Oz bonds shiver as Green Riksbank highlights vulnerability – BBG
RBA minutes dovish
RBA: Board prepared to ease policy further if needed
RBA: Board agreed case could be made for a rate cut at the NOV meeting
RBA: Rate cuts could have different impact on confidence than in the past
RBA: Saw case to wait and asses impact of substantial stimulus already delivered
RBA: Considerable uncertainty over the outlook for household consumption
RBA: Risks from home building sector tilted to downside could delay recovery
RBA: Risk extended period of low wage growth could lower wage expectations, norms
RBA: Board agreed a lift in wages growth would be a welcome development
HKD:
PLA committed to protecting Hong Kong as standoff intensifies – SMP
CNY/HKD:
Chinese troops that cleaned up Hong Kong were from top counter terrorism – SMP
China says ruling on HK mask ban challenges authority – Xinhua

Today’s Data
Actual – A | Consensus – C | Previous – P | Revised R | all timings GMT/UTC
AUD RBA Minutes of Nov. Policy Meeting (NOV)
1330 USD Building Permits MoM (OCT) C -0.8% | P -2.7%
1330 USD Housing Starts MoM (OCT) C 4.9% | P -9.4%
2330 AUD Westpac Leading Index MoM (OCT) P -0.08%
2350 JPY Trade Balance Yen (OCT) C 301.0b | P -123.0b

Harry Hindsight

• GBP: Opening a touch higher from Friday’s close the market made steady headway from the 1.2915 areas through to the 1.2930 level before holding steadily around the level through to the grey hours where early London moved in to push through to the 1.2950 area and the market holding for a short period before edging through and pushing quickly on weak stops from the 1.2960 area to test quickly to the 1.2985 area to make the high of the day before dropping back to the 1.29654 areas and ranging from there through to the 1.2950 area for the bulk of the day and slipped back to the 1.2950 area for the close.
• JPY: USDJPY dipped slowly through the pre-Tokyo period testing to the 108.70 area before recovering to the opening levels around the 108.80 area and then held in a very tight range through to the grey hours, early London took the market through the 108.90 level and once through the market continued rising at a slower pace to test through the 109.08 area unable to break through the 109.10 level, the move into the NYK session saw strong selling moving in and the market dropping quickly back to the opening levels then drifting through to the London close to make the lows just above the 108.50 area with the market making limited gains towards the opening level.
• AUD: Opening around the 0.6815 area the close from Friday the market held around the level to deep into the session, the last couple of days saw the market drifting back to the 0.6810 level before moving into the London session regaining and holding in a tight range through to the NYK session before making the lows around the 0.6800 area in a quick move then slowly recovering and triggering weak stops on the move through the opening levels and taking the market through to the 0.6820 level to make the highs, from there a long quiet drift back to the opening area for the close.
• EUR: Opening unchanged early movement saw the markets low for the day on the 1.1050 level and then a steady rise through to the 1.1060 area and a quiet range around that level deep into the NYK session, rising steadily through the session testing to the 1.1090 areas before drifting back to hold the 1.1080 for a short period then slipping through to finish the day just above the 1.1070 level.

Yesterday’s Premiership results
NZD: Performance Services Index (OCT) A 55.4 | P 54.5
JPY Housing Loans YoY (3Q) A 2.9% | P 2.2%
GBP Rightmove House Prices A 0.3% | P -0.2%
CNY Foreign Direct Investment A 7.4% | P 3.8%
EUR Bundesbank Publishes Monthly Report
USD NAHB Housing Market Index A 70 | C 71 | P 71
USD Net Long-Term TIC flows (SEP) A $49.5b | P -$41.1b

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