Daily FX Market Commentary

Andy Harrison

Andy Harrison

Good Morning,

LMAX Close
USDJPY 108.976 | EURUSD 1.1079 | AUDUSD 0.68187 | NZDUSD 0.64985 | USDCAD 1.33087 | USDCHF 0.99129 | GBPUSD 1.29402 |

LMAX highs and Lows 06.00 GMT
Highs | Lows
EURUSD 1.10829 | 1.10714
USDJPY 109.205 | 108.953
GBPUSD 1.29463 | 1.29308
USDCHF 0.99261 | 0.9913
AUDUSD 0.68479 | 0.68159
USDCAD 1.33095 | 1.33004
NZDUSD 0.65126 | 0.64942
EURCHF 1.09928 | 1.09799
EURGBP 0.85639 | 0.85565
EURJPY 120.950 | 120.697
For Today
• GBP: A slow drift lower from the opening highs around the 1.2945 level and dipping to the 1.2930 on the opening in Tokyo before holding quietly through to midsession, from midsession onwards the market slowly rose back to hold just above the 1.2940 level for the move into the grey hours, Topside offers congested from the 1.2950 level and increasing on any push through to the 1.2980-1.3000 level with likely weak stops on a push through the 1.3020 area and likely to squeeze through to the 1.3050 area before further congestion and a long term trend line moves into play to slow the ascent through to the stronger 1.3100 levels, downside bids light through to the 1.2900 area again, with a little stronger congestion on a dip through to the 1.2880 areas and likely to be patches of support through to the slightly stronger 1.2850 and ultimately the 1.2820-00 level providing the strongest point.
• JPY: A slow rise from the early lows just through the 109.00 level and testing quietly through to the 109.20 level through the Tokyo session for the move into the grey hours, Topside offers strong through the 109.80-110.00 areas with strong stops likely on a push through the 110.20-30 areas and opening up only too the 110.50 areas with likely congestion then kicking in to slow the ascent any further or at least limit it in all likelihood, downside bids light through to the 108.50 level with some congestion around the level and likely to continue through to the stronger 108.00 area limited stops through the level and then further congestion likely to reappear through to the 107.50 areas and stronger bids thereafter.
• AUD: A quiet session through the first half of the session with the market trading around the 0.6820 opening levels to move into the RBA announcement, another hold and wait saw the market quickly rise through to the 0.6840 level and slowly push a little higher on the move through to the grey hours slowly testing towards the 0.6850 areas, Topside congestion limited around the 0.6850 area then increasing on any test through to the 0.6880-0.6900 areas with strong offers likely to be mixed with light stops and only once the market pushes through the 0.6830 area will the stops count and force the market into the usually congested areas around the 0.6850 and stronger offers thereafter. Downside bids light through to the 0.6750 area with some strong congestion through the area and increasing as the market pushes for the 0.6720-0.6700 levels with any weak stops likely to be buried below the 0.6680 level however, a push through to the 0.6670-60 area is likely to see strong stops appearing from the break out crowd and the market vulnerable to a deeper move.
• EUR: AS very quiet session for the Euro, a slow drift from the early highs just above the 1.1080 area and slowly slipping through to hold quietly just above the 1.1070 levels and trading generally around the 1.1075 area to the grey hours, Downside weak stops mixed with congestive bids on any dip through the 1.0980 area, and congestion then continuing through to the 1.0950 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:
Oz Govt. bonds see biggest foreign buying since 2017 in 3Q – BBG
RBA leaves cash rate target unchanged at 0.75%
RBA: Prepared to ease monetary policy further if needed
RBA: Rate cuts supporting employment, income growth
RBA Sees only gradual pickup in inflation
RBA: Rate cuts have put downward pressure on exchange rates
RBA: Uncertainties include drought, housing construction cycle
RBA: Given long lags in monetary policy, decided to hold steady
CNY:
Two Chinese firms miss $526m bond payments as woes mount – BBG
Yi Gang dampens hopes for stimulus
USD/EUR:
Trump admin proposes tariffs against $2.4b of French goods
US trade representatives’ offices says Frances digital services tax discriminates again US companies
USTR: US will take action against digital tax regimes that discriminate against US companies
USTR: Exploring whether to open section 301 investigations in digital services taxes in Austria, Italy and Turkey
USTR: Soliciting comment on proposed duties of up to 100% of certain French products over digital services taxes
USTR: List of French products subject to potential duties are valued at $2.4b
USD:
Trump: FED should lower rates (there is almost no inflation) and loosen, making us competitive with other nations
JPY:
Japan Govt to decide on stimulus package worth 25T Yen – NHK
Stimulus package would include about 13T Yen fresh fiscal spending – NHK

Today’s Data
Actual – A | Consensus – C | Previous – P | Revised R | all timings GMT/UTC
JPY Monetary Base YoY (NOV) A 3.3% | P 3.1%
JPY Monetary Base End of Period (NOV) A 517.3t | P 523.0t
AUD Current Account Balance (3Q) A 7.9b | C 6.1b | P 4.7b
AUD RBA Cash Rate Target (DEC 3) A 0.75% | C 0.75% | P 0.75%
0730 CHF CPI Core YoY (NOV) C 0.2% | P 0.2%
0730 CHF CPI EU Harmonized YoY (NOV) C -0.1% | P -0.3%
0730 CHF CPI Index YoY (NOV) C -0.1% | P -0.3%
0930 GBP Markit/CIPS UK Construction C 44.5 | P 44.2
0930 GBP Unit Labour Costs YoY (2Q) P 2.1%
2130 AUD AiG Performance of Service Index (NOV) P 54.2

Harry Hindsight

• GBP: Opening lower on the back of a weekend poll suggesting Labour are beginning to close the gap on the Conservatives, opening around the 1.2915 levels and held the 1.2910 level through to the grey hours eventually starting a slow rise from the lows to test the 1.2920 area before ranging through to the opening in London, testing lightly through to the mid 1.2920;s for the opening the market held for a short period around the area before slipping back slowly to penetrate the 1.2900 level before pushing off the lows in a steady rise through to the NYK session with less effect on the GBP than the other pairs from the poor numbers released in the US, moving through into the NYK session holding around the 1.2930 areas lightly testing into the low 1.2940 areas and gradually once London had left pushing lightly to test the 1.2950 area before holding through to the close around the 1.2940 area.
• JPY: The move through the Asian session with the USDJPY rising from the opening pushing steadily up through to the 109.70 areas to make the highs just beyond the level and holding then through to the London with a slight drift through to the 109.60 level and continuing into the London session staying around the same levels before eventually losing its will to test the 110.00 level, the move into the NYK session saw a light fall back to the opening levels however, ISM numbers came in surprisingly lower and the rest is history as they say with the USD being sold off across the board, USDJPY gapped lower to the 109.40 areas and continued to drop steadily through to the 109.00 level before meeting some support, the market then ranged around the figure level through to the close holding just below through to the close.
• AUD: A very slow rise once the market moved into the Tokyo session testing through to the 0.6775 areas from the opening around the 0.6770 level and holding quietly through to the London session before continuing its slow rise pushing through to the 0.6790 level, the move through to NYK saw the bulk of the movement and even so was slow in developing and more a reaction to the stronger Yen with the Oz pushing through to the 0.6820 levels with little problem and then holding just below the 0.6825 areas to the close.
• EUR: A quiet range through to deep into the London session with the market opening just below the 1.1020 level and then drifting through to the Tokyo session dipping back to the 1.1015 level and ranging in that area for Asian session early London had a little impact with the market eventually dipping through to the 1.1005 area to make the lows just before the NYK opening and then running steadily higher on weaker numbers and US/CNY phase 1 moving further from reality the move to the US numbers then sealed the move and the market gapped from the 1.1045 level to push steadily through to the London close testing the 1.1090 level before drifting around the 1.1080 area to the close.

Yesterday’s Premiership results
CNY Manufacturing PMI (NOV) A 50.2 | C 49.5 | P 49.3
CNY Composite PMI (NOV) A 53.7 | P 52.0
CNY Non-Manufacturing PMI (NOV) A 54.4 | C 53.1 | P 52.8
AUD AiG Performance of Manufacturing Index (NOV) A 48.1 | P 51.6
NZD Terms of Trade Index QoQ (3Q) A -4.6% | C 1.0% | P 1.6%
AUD TD Securities Inflation YoY (NOV) A 1.5% | P 1.5%
AUD Building Approvals YoY (OCT) A -23.6% | C -18.0% | P -17.0%
NZD Treasury Publishes Monthly Economic Indicators
CNY Caixin China PMI Manufacturing (NOV) A 51.8 | C 51.3 | P 51.7
CHF Retail Sales Real YoY (OCT) A 0 .7% | P 0.9%
CHF PMI Manufacturing (NOV) A 48.8 | P 49.4
EUR President Lagarde Testifies at European Parliament
CAD RBC Canadian Manufacturing PMI (NOV) A 51.4 | P 51.2
USD ISM Employment (NOV) A 46.6 | P 47.7
USD ISM Manufacturing (NOV) A 48.1 | C 49.5 | P 48.3
USD ISM Prices Paid (NOV) A 46.7 | C 47 | P 45.5
MXN Markit Mexico PMI Manufacturing (NOV)) A 48 | P 50.4

Any opinions, news, research, analyses, prices or other information contained on this Blog, whether by LMAX, its employees, partners or contributors, does not constitute investment advice nor has it been prepared in accordance with legal requirements designed to promote the independence of investment research. Further, the material contained within this Blog does not contain (and should not be construed as containing) investment advice or an investment recommendation, or an offer of, or solicitation for, a transaction in any financial instrument. Whilst information provided on this Blog may help with your investment research you must consider carefully whether you should make (or refrain from making) investment or other decisions based on what you see without doing further research on the investments you are interested in. Participating in this Blog cannot be a substitute for obtaining advice from an appropriate expert independent adviser who takes into account your circumstances and specific investment needs in selected investments that are appropriate for you. LMAX has not verified the accuracy or basis-in-fact of any claim or statement made by any third parties as comments for every Blog entry.

LMAX will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. No representation or warranty is given as to the accuracy or completeness of the above information. While the material produced in this Blog was obtained from sources deemed to be reliable, LMAX does not provide any guarantees about the reliability of such sources.
Consequently, any person acting on it does so entirely at his or her own risk.

If you currently hold an account with LMAX for the purposes of trading FX and CFD’s, you are encouraged to use a different Username and Password to access the Blog or any other online systems. The Blog is a place to learn, discuss and share information and ideas with Blog followers. It is not a place to slander, use unacceptable language or to promote LMAX or any other FX, Spread Betting and CFD provider and any such postings, excessive or unjust comments and attacks will not be allowed and will be removed from the site immediately.

Any opinions, news, research, analyses, prices or other information ("information") contained on this Blog, constitutes marketing communication and it has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Further, the information contained within this Blog does not contain (and should not be construed as containing) investment advice or an investment recommendation, or an offer of, or solicitation for, a transaction in any financial instrument. LMAX Exchange has not verified the accuracy or basis-in-fact of any claim or statement made by any third parties as comments for every Blog entry.

LMAX Exchange will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. No representation or warranty is given as to the accuracy or completeness of the above information. While the produced information was obtained from sources deemed to be reliable, LMAX Exchange does not provide any guarantees about the reliability of such sources. Consequently any person acting on it does so entirely at his or her own risk. It is not a place to slander, use unacceptable language or to promote LMAX Exchange or any other FX, Spread Betting and CFD provider and any such postings, excessive or unjust comments and attacks will not be allowed and will be removed from the site immediately.

LMAX Exchange will clearly identify and mark any content it publishes or that is approved by LMAX Exchange.

FX and CFDs are leveraged products that can result in losses exceeding your deposit. They are not suitable for everyone so please ensure you fully understand the risks involved. The information on this website is not directed at residents of the United States of America, Australia (we will only deal with Australian clients who are "wholesale clients" as defined under the Corporations Act 2001), Canada (although we may deal with Canadian residents who meet the "Permitted Client" criteria), Singapore or any other jurisdiction where FX trading and/or CFD trading is restricted or prohibited by local laws or regulations.