LMAX Exchange - unique vision for global FX

Andy Harrison

Good Morning,

For Today
• GBP: Given the circumstances not that much movement over the course of the session drifting in early trading from the 1.3125 level to test towards the 1.3105 area and once the rhetoric from Iran and the attacks finished the Cable started a steady rise through to the 1.3140 levels however, the market waits expectantly on the US response and Cable drifted back to the opening levels for the move into the grey hours, Downside bids into congestion to the 1.3050 level and stronger bids into 1.3000 with the market then opening to a deeper move. Topside offers light through to the 1.3200 level with some limited offers through to the 1.3220 area with possible light stops on a move through, with stronger offers likely to increase on a test through to the 1.3300 level with stops above.
• JPY: Opening around the 108.50 area the first indications of the missile attacks came out of Jerusalem and the market dropped quickly into the Tokyo opening quickly dropping into the 107.65 level before bouncing as the Rhetoric picked up but no further attacks materialised rising again to the opening levels around the 108.45 level and holding quietly for the most part around the 108.30 area, Downside stops likely on a move through the 107.80 area and the market then open to the 107.50 level with some congestion and an old trendline suggesting some support and better bids congested below through to the 107.00 level, Topside offers likely to be weak through to the 109.00 level before stronger offers start to appear with strong offers on any push through the 109.50 level.
• AUD: Opening around the 0.6870 levels the market initially dipped through to the 0.6850 area on the news and once into the Tokyo session slowly pushed through to the 0.6880 areas as the JPY weakened a little from its lows and then finally settled into a tight range around the opening areas, Topside offers from the 0.7000 area through to 0.7020 where strong offers are likely to appear and while that topside should see weak stops the offers are likely to absorb any buying and continue through to the 0.7060 areas, downside bids now cleared through to the stronger 0.6850 areas and congestive bids likely to support the market for the short term through to the 0.6800 level before weakness again starts to appear on a dip through the 0.6780 areas.
• EUR: Flat move through into Tokyo session with some stronger buying taking the market through to the 1.1170 areas as the USDJPY recovered only to drift the balance of the session despite the volumes in the market being above x5 the norm, the Euro ranged around the 1.1160 level through to the grey hours in quiet trading, Topside offers continue through to the 1.1220 area with weak stops likely in the area however, once the stops are out of the way congestion is likely to continue in strength and increase the closer the market moves towards the 1.1300 level, Downside bids light through to the 1.1100 level and bids are still likely to be building with weak stops limited with congestion likely to move through to the 1.1050 level and increasing on a dip to the 1.1020 areas.

Overnight News
AUD:
RBA’s Lowe has an inflation target on his back – AFR
USD/CNY:
US shouldn’t rush phase one deal – Global Times
Trump’s China deal is a gift to Wall street and Beijing – The Hill
GBP:
Carney says Central Banks are nearing policy limits – BBG
Boris Johnson to warn EU new deal must finish on time in No10 Showdown – SKY
USD/IRR:
Multiple rockets hit Taji base in Iraq hosting US troops – Jerusalem post
Iran’s ForMin vows America will pay for death of Gen. Soleimani
Iran says starts attack on Iraq base hosting US troops – IRIB TV
Missiles fired from Iran at multiple US targets in Iraq – FOX
Tehran launches 15 missiles at Iraqi base housing US troops – State TV
US official confirms rocket attacks on multiple locations, including Al Asad airbase in Iraq – LOT
Iran warns US not to retaliate over missile attack in Iraq – APW
Iran confirms firing rockets in revenge over Soleimani killing
Iran’s Guards say they consider Israel as US ally in killing Soleimani – State TV
Guards warn US any aggression against Tehran will get a crashing response – State TV
Guards advise US to withdraw its troops from the region to prevent the killing of more soldiers – State TV
Iran’s missiles have hit American base near Erbil Airport in Iraq’s Kurdistan
Iran’s ForMin: Iran took and concluded proportionate measures in self-defence – TWT
Iran’s ForMin: Do not seek escalation or war, but will defend ourselves against any aggression – TWT
Trump: Assessment of casualties and damages from Iranian missile strikes taking place now – TWT
Trump: Will make a statement on Wednesday morning – TWT
Trump: Missiles launched at two military bases located in Iraq – TWT
Second round of Missiles reported – RTR’s
ILS/IRR:
Hezbollah will attack Israel if US responds to Iran attack – JPT
AED/ILS/IRR:
Iran threatens to hit Israel and even Dubai if US retaliates over airbase attacks – DML

Harry Hindsight

• GBP: A reasonable quiet move through the Asian session with the market rising a little from the opening to test the 1.3180 level before ranging through to the grey hours lightly testing the 1.3170 area, the move into the grey hour saw some selling flowing through and testing through to the 1.3150 level before slipping through on the opening in London, the market recovered quickly from the London opening to rise through to the 1.3200 level as PM Johnson started the new session for the Government more or less telling the EU to get into motion to finalise the Brexit agreement, having peaked just above the 1.3210 levels and a steady drift through to the NYK session saw the market breaking through the 1.3150 level triggering a few weak stops on the way and testing through to the 1.3100 level in NYK before holding steadily around the 1.3125 level through to the close.
• JPY: A quiet range for the USDJPY for the most part, rising slowly from the opening around the 108.40 level and pushing through late into the Asian session to the 108.50 area, grey hour selling saw the market drifting into the London session and testing weekly through the 108.30 area before London buyers took the market towards the highs again only to hold quietly through to deep into the NYK session before pushing through to the 108.60 levels before moving to the close dipping back through to 108.40.
• AUD: A light range through half of the Asian session with the market rejoicing in the fact that it had rained for the most part and hundreds of firemen could take a break from the bushfires to some extent, the move into the grey hours saw the first solid round of selling and the market dropped from the 0.6940-30 range it held to quickly test towards the 0.6900 areas holding through to midmorning in London before slowly drifting again through to the 0.6870 level and expected stops not present, the move through to the NYK session saw the drift slow but continue through to the 0.6860 level to form a base and holding to the close.
• EUR: A quiet Asian session with the Euro holding the 1.1190 level for the run to the grey hours and then tipping lightly through into the 1.1180’s through to the London opening, any chance of testing back towards the highs quickly disappeared with London testing through to the 1.1170 lightly and ranging through to the bland CPI numbers which seemed to be less impressive for the market and a quick stab below the lows before regaining a little on the better retail sales number, the move into the NYK session saw strong sellers appear and the market testing through into the 1.1130’s steadily before recovering only slightly for the long run to the close.

Yesterday’s Premiership results
JPY Loans and Discounts Corp YoY (NOV) A 2.02% | P 2.24%
JPY Monetary Base YoY (DEC) A 3.2% | P 3.3%
JPY Monetary Base End of period (DEC) A 518.2t | P 517.3t
GBP Parliament returns from recess
CHF CPI EU Harmonized YoY (DEC) A -0.1% | C -0.2% | P -0.3%
CHF CPI YoY (DEC) A 0.2% | C 0.0% | P -0.1%
CHF CPI Core YoY (DEC) A 0.4% | C 0.4% | P 0.4%
EUR Markit Germany Construction PMI (DEC) A 53.8 | P 52.5
EUR Eurozone CPI Core YoY (DEC P) A 1.3% | C 1.3% | P 1.3%
EUR Eurozone CPI Index Estimate YoY (DEC) A 1.3% | C 1.3% | P 1.3%
EUR Eurozone CPI MoM (DEC P) A 0.3% | C 0.3% | P -0.3%
EUR Eurozone Retail Sales YoY (NOV) A 2.2% | C 1.5% | P 1.4%
USD Trade Balance (NOV) A -43.1b | C -43.9b | P 47.2b
USD ISM Non-Manufacturing/Services Composite (DEC) A 55.0 | C 54.5 | P 53.9
USD Durable Goods Orders (NOV 7) A -2.1% | C -2.0% | P -2.0%
USD Factory Orders (NOV) A -0.7% | C -0.7% | P 0.3%

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.

LMAX Group blog - FX industry thought leadership

Daily FX Market Commentary

LMAX Group blog - FX industry thought leadership

Sign up for Global FX Insights, the daily market commentary from LMAX Group