Daily FX Market Commentary

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               1.10847 | 1.10739

USDJPY                108.680 | 108.487

GBPUSD              1.30030 | 1.29897

USDCHF               0.98752 | 0.98671

AUDUSD             0.68537 | 0.6822

USDCAD              1.32968 | 132846

NZDUSD              0.65294 | 0.65123

EURCHF               1.09404 | 1.09328

EURGBP              0.85284 | 0.8521

EURJPY                120.432 | 120.195

For Today

• GBP: Opening just below the 1.3000 the market struggled with the 1.3000 level throughout the session and eventually started to slip lower late in the session to dip to the 1.2990 levels for the run into the grey hours, Topside offers through the 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: Weak start to the day once the market moved into the Tokyo session dipping from the opening levels around the 108.65 level and dipping to the 108.50 early in the session before holding for the bulk of the session before starting a slow rise through to the 108.60 areas 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 poor GDP reading saw the market dip from the highs just into the Tokyo session around the 0.6854 level to test quickly through to the 0.6830 areas before holding through mid session however, the move through towards the grey hours again saw the market drifting lower and a slow test to the low 0.6820’s, 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: Euro drifted from the opening around the 1.1083 area testing lightly towards the 1.1085 before dipping through to the 1.1077 areas before returning to hold for several hours around the 1.1080 before dipping in the run to the grey hours through to the 1.1075 area in a very limited fashion, 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

CNY/USD:

China opposes US’s Bill on human rights

China urges US to stop wrongdoing re Xinjiang bill MoFA

China warns US not to interfere in China matters

China vows to further respond to US’s human rights bill

USD/CNY:

US House votes to sanction Chinese officials for rights abuses BBG

Ross: Says Hong Kong situation is a variable in China trade deal, but Chinese retaliation on Navy Vessels is not a big deal

Ross: Trump has made clear he is under no time pressure to get China trade deal done CNBC

Ross: Dec 15 tariffs on Chinese imports will be applied unless there is some real reason to postpone them such as substantial progress in talks CNBC

Ross: He is optimistic that US will eventually get something done on trade with China CNBC

Ross: There is always a chance of a breakthrough that could impact Dec 15 Tariffs CNBC

Ross says there will be no breakthrough on US/China trade talks until deal is signed in black and white CNBC

Ross says expects staff level talks with China to continue but no high level meetings scheduled CNBC

Trump: If not getting good deal from China won’t sign it

Trump says China deal can’t be an even deal for US

Trump says of Market drop today over China remarks, that’s okay

Trump says China called us today and yesterday on trade

Trump says China trade talks at critical stage

USD:

API reports US Crude stockpiles fell 3.72m bbl last week BBG

GBP:

Moody’s warns on outlook for UK Banks, citing Brexit concerns BBG

EUR:

German lenders open floodgates to negative rates for all savers BBG

AUD:

Asset managers gear up for Quantitative easing in Australia – BBG

Today’s Data

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

AUD       AiG Performance of Service Index (NOV) A 53.7 | P 54.2

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

AUD       GDP QoQ (3Q) A 0.4% | C 0.5% | P 0.6%

CNY        Caixin China PMI Composite (NOV) A 53.2 | P 52.0

CNY        Caixin China PMI Services (NOV) A 53.5 | C 51.2 | P 51.1

1200       USD       MBA Mortgage Applications (NOV 29) P 1.5%

1315       USD       ADP Employment Change (NOV) C 140k | P 125k

1500       CAD       BoC Rate Decision (DEC 4) C 1.75% | P 1.75%

1500       USD       ISM Non-Manufacturing/Services Composite (NOV) C 54.5 | P 54.7

1530       USD       DOE US Crude Oil Inventories (NOV 29) P 1572k

2300       NZD       RBNZ Announces Bank Capital Review Decisions

Harry Hindsight

 

• GBP: A slow range through the early part of Asia with the market slipping from the early highs around the 1.2945 area and testing through to the 1.2930 area and finding a base slowly started to recover through to the grey hours, Steady buying from the London opening saw the market slowly testing higher and pushing towards the 1.3000 level grinding through the offers and by the time the NYK session opened steady probes through the level saw the market eventually peaking to the 1.3010 level for the end of the London session before drifting back and holding just below the level through into the close.
• JPY: Opening just below the 109.00 level the early market pushed through before holding around the opening levels through to the Tokyo session, steady buying saw the market pushing gradually through to the 109.20 areas before running into offers and holding the level for several hours before drifting off for the move into the grey hours, London saw steady selling taking the market back to the opening levels before triggering some weak stops on a move through to the 108.90 area and then holding just below that level through into the NYK session, steady NYK selling followed that of London and the market drifted through to make the lows into the London close testing the 108.50 level before slowly rising a little for the long drawn out move to the close.
• AUD: Opening around the 0.6820 level the market held around the level through into the Tokyo session initially dipping to test the 0.6815 level before starting a slow rise through to above the 0.6820 level and back to square one again until the rate announcement, no change and the market took that as a signal to buy and the market quickly pushed through to the 0.6840 level before slowing its ascent, the move through the grey hours saw the market continue to slowly rise and after the initial push towards the 0.6850 area the market dipped then quickly snapped back and pushed through to the 0.6860 level to make the highs of the day, the move towards NYK saw the market dropping quickly back from the highs and testing back to the 0.6840 area before holding around the level through the bulk of the rest of the session slowly rising for the move to the close.
• EUR: A limited range through the day with the market drifting off the opening around the 1.1080 area and testing back to the low 1.1070’s and then ranging quietly around the 1.1075 level through to the London session where the market started a slow rise higher through to the 1.1085 area, dropping back from the early highs in London the market stabbed through to the 1.1065 level to make the lows before returning and holding steady around the 1.1075 area again, the move into the NYK session again saw a slightly stronger Euro appearing and the market jumping through to the 1.1085 level then eventually repeating the move through to the 1.1090’s testing just beyond the level but unable to break through the marked again dropped back to hold the 1.1080 level to the close.

 

Yesterday’s Premiership results

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%

CHF        CPI Core YoY (NOV) A 0.4% | C 0.2% | P 0.2%

CHF        CPI EU Harmonized YoY (NOV) A -0.3% | C -0.1% | P -0.3%

CHF        CPI Index YoY (NOV) A -0.1% | C -0.1% | P -0.3%

GBP       Markit/CIPS UK Construction A 45.3 | C 44.5 | P 44.2

GBP       Unit Labour Costs YoY (2Q) A 3.6% | P 2.1% | R 2.3%

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.