Daily FX Market Commentary

Andy Harrison

Good Morning,

 

LMAX Close

USDJPY 109.307 | EURUSD 1.11314 | AUDUSD 0.69107 | NZDUSD 0.65824 | USDCAD 1.31813 | USDCHF 0.9847 | GBPUSD 1.31694 |

 

LMAX highs and Lows 06.00 GMT

                                Highs | Lows

EURUSD               1.11996 | 1.11005

USDJPY                109.627 | 109.182

GBPUSD              1.35143 | 1.34162

USDCHF               0.98600 | 0.98212

AUDUSD            0.69387 | 0.69118

USDCAD              1.31750 | 1.31509

NZDUSD              0.66336 | 0.66047

EURCHF               1.10319 | 1.09625

EURGBP              0.83248 | 0.82774

EURJPY                 122.575 | 122.069

 

For Today

  • GBP: The close missed the release of the exit polls with predictions between 50-86 seat win for the Conservatives, the opening was the market opening some 3 big figures higher around 1.3430-70 level and then climbing through to test above the 1.3500 level before early NYK moved in and the market dipped back to hold around the 1.3450 area, another run through the 1.3500 level before slipping back a little and holding through to the grey hours around the 1.3460 area. As of writing the Conservatives have managed to clear the majority number gaining 47 seats from the Labour party with 10 seats remaining to be announced. As the Conservatives stretched their lead the opposition leader Jeremy Corbyn resigned as leader.
  • JPY: A strong GBP saw GBPJPY cross bought and the market opening around the 109.40 level up from the close to test quickly to the 109.55 levels before holding through into the Tokyo session, early sellers saw the market back to the 109.35 levels and a steady rise through to the 109.60 levels for the market to hold and running through to the grey hours, Topside strong offers around 109.80-110.00 areas with strong stops likely on a push through the 110.20-30 areas and opening up only to 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: Opening around the 0.6930 level helped by the combination of a stronger GBP and the lessening of trade tensions between the US and China saw the market test to the 0.6940 area before running into congestion and running away to drift through to the 0.6910 area and fill the gap in early Tokyo, a slight recovery saw the market eventually edge through to the 0.6930 area to hold through to the grey hours, Topside offers likely to be around the 0.6950 area with limited weakness through 0.6960 before stronger offers start to appear on any move through to the 0.6980-0.7020 levels, possible stops through the level and the market then limited to the 0.7050 area and congestion then increasing on any attempt to push to the 0.7080-0.7100 levels, downside bids limited through to the 69 cents level with weak stops likely to be increasing on any dip through the 0.6880 area and the downside then opening up again through to the 0.6750 levels.
  • EUR: Gapping from the close on the back of the GBP move the Euro tested through to the 1.1200 level before running into some strong offers and dipping back to the Tokyo session to test the 1.1170 levels and forming a light base through the session and then unable to move out of the 1.1170-80 level through to the grey hours, Topside offers through the 1.1200 with option plays likely through to the 1.1220 area and possible weak stops through level and opening up further gains however, congestion is likely to increase into the 1.1250 areas but finally testing into the stronger congestion from earlier in the year with offers likely to increase into the 1.1275-1.1300 levels. Downside bids light through to the 1.1100 level with bids likely on any dips too the 1.1080 before stronger stops appear and the market again opening to weaker congestion on a test through to the 1.1000 level where stronger bids are likely to appear.

 

Overnight News

USD/CNY:

US reaches deal in principle with China, awaits Trump signoff BBG

China-US have agreed to some tariff reductions and a delay on set to go into effect on Dec 15 – RTRs

China has agreed to make $50b in agricultural purchases in 2020 US sources – RTRs

GBP:

Exit poll suggests Tory party landslide with 86+ seats majority GBP leaps higher BBC

PM Johnson: We have a powerful mandate for Brexit

MXN/USD:

Mexico ratifies modified N. American trade deal

CNY:

Beijing’s legal influence triggers disquiet in Hong Kong financial sector

JPY:

Japan manufacturers business mood gloomiest in nearly 7yrs

 

 

Today’s Data

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

NZD       BusinessNZ Manufacturing PMI (NOV) A 51.4 | P 52.6

GBP       UK General Election Polls Close

JPY         Tankan Large All Industry Capex (4Q) A 6.8% | C 6.0% | P 6.6%

JPY         Tankan Large Manufacturers Outlook (4Q) A 0 | C 4 | P 2

JPY         Tankan Large Manufacturing Index (4Q) A 0 | C 3 | P 5

JPY         Tankan Large Non-Manufacturing Index (4Q) A 20 | C 16 | P 21

JPY         Tankan Small Non-Manufacturing Outlook (4Q) A 1 | C 3 | P 1

JPY         Industrial Production YoY (OCT F) A -7.7% | P -7.4%

EUR        France Sovereign Debt to be rated by Fitch

0930       GBP       BoE/TNS Inflation next 12mths (NOV) P 3.3%

1330       USD       Retail Sales Advance MoM (NOV) C 0.4% | P 0.3%

1330       USD       Export Price Index YoY (NOV) P -2.2%

1330       USD       Import Price Index ex Petroleum MoM (NOV) C 0.0% | P -0.1%

1330       USD       Retail Sales Control Group (NOV) C 0.3% | P 0.3%

1330       USD       Retail Sales Ex Auto and Gas (NOV) C 0.4% | P 0.1%

1500       USD       Business Inventories C 0.2% | P 0.0%

1800       USD       Baker Hughes US Rig Count (DEC 13) P 799

 

Harry Hindsight

 

  • GBP: Opening around the 1.3200 level the market struggled through to the 1.3230 level in early Tokyo before holding quietly through into the London session around the 1.3220, a slow drift through the rest of the day with the market slowly dipping through the 1.3100 level and testing to the 1.3060 area bouncing off the lows and then slowly pushing to the 1.3100 level, late NYK and rumours and so on saw limited offers saw the market run quickly back to the 1.3180 level for the close holding quietly in the final hours,
  • JPY: USDJPY opened around the 10855 area dipping on the Tokyo opening to test towards the 108.45 level and holding through the first few hours, a move through into midsession saw the market rising slowly through to the 108.60 level for the move into the grey hours, early London continued the slow rise through to the 108.70 areas and then drifted through into the NYK session slipping from the highs to test back to the opening levels, the news that on paper the China/US negotiations had seen both sides giving ground and the possibility of a deal to come if Trump signs off saw the USD rallying sharply and the USDJPY quickly pushing through to the 109.30 area and holding deep into the session with the market edging to the highs around the 109.50 level before sliding a little through to finish the day around the 109.30 areas.
  • AUD: A slow slide from the opening saw the market testing to the lows for the day just through the 0.6870 level, early Tokyo took back the losses and then after a short period pushed through steadily to the 0.6890 level before drifting through to the London session, London did very little with the market holding around the 0.6880 areas through to early NYK before rising a little and pushing again to the 0.6890 level, a softening of tensions between China/US saw the Oz benefitting and the market pushing lightly through the 69 cents level but unable to move to far on the first or second run on the move through to the close just off its highs.
  • EUR: Euro’s opening around the 1.1130 level the market struggled for a period and although it pushed through to the 1.1145 level the topside remained elusive, the move into the London session saw the market drifting a little and by midmorning the market was testing back to the 1.1125 areas. The move into the NYK session saw the market quickly push through to the 1.1150 areas however, the China/US news saw the USD in ascendance and the Euro pushed gradually lower through to the 1.1115 level and eventually testing towards the 1.1100 area for a limited period, the move to the close saw the Euro rallying towards the opening levels and holding steadily into the close.

 

Yesterday’s Premiership results

JPY         Machine Orders YoY (OCT) A 0-6.1% | C -1.7% | P 5.1%

AUD       Consumer Inflation Expectation (DEC) A 4.0% | P 4.0%

GBP       RICS House Price Balance (NOV) A -12.0% | C -5.0% | P -6.0%

EUR        German Consumer Price Index YoY (NOV F) A 1.1% | C 1.1% | 1.1%

EUR        German Consumer Price Index EU Harmonized YoY (NOV F) A 1.2% | C 1.2% | P 1.2%

GBP       UK General Election Polls open

CHF        SNB Sight Deposit Interest Rate (DEC 12) A -0.75% | C -0.75% | P -0.75%

EUR        Eurozone Industrial Production w.d.a. YoY (OCT) A -2.2% | C -2.4% | P -1.7% | R -1.8%

MXN      Industrial Production n.s.a. YoY (OCT) A -3.0% | C -1.6% | P -1.8%

EUR        ECB Deposit Facility Rate (DEC 12) A -0.50% | C -0.50% | P -0.50%

EUR        ECB Marginal Lending Facility (DEC 12) A 0.25% | C 0.25% | P 0.25%

EUR        ECB Rate Decision (DEC 12) A 0.00% | C 0.00% | P 0.00%

EUR        ECB’s Lagarde Speaks in Frankfurt after Policy Decision

USD       Continuing Claims (NOV 30) A 1667k | C 1678k | P 1693k | R 1698k

USD       Initial Jobless Claims (DEC 7) A 252k | C 212k | P 203k

CAD       BoC Poloz gives speech in Toronto

 

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.

LMAX Exchange Market Commentary   Andy Harrison  

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 Group 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 Group 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 Group 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 Group or any other FX 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.