Daily FX Market Commentary

Andy Harrison

Andy Harrison

Good Morning,

 

LMAX Close

USDJPY 109.901 | EURUSD 1.11501 | AUDUSD 0.69052 | NZDUSD 0.66141 | USDCAD 1.30421 | USDCHF 0.96404 | GBPUSD 1.30382 |

 

LMAX highs and Lows 06.00 GMT

                                Highs | Lows

EURUSD               1.11581 | 1.11489

USDJPY                109.991 | 109.858

GBPUSD              1.30600 | 1.30377

USDCHF               0.96466 | 0.96373

AUDUSD            0.69186 | 0.69025

USDCAD              1.30446 | 1.30355

NZDUSD              0.66374 | 0.66142

EURCHF               1.07545 | 1.07475

EURGBP              0.85544 | 0.85434

EURJPY                 122.712 | 122.51

 

For Today

  • GBP: A little bit of strong buying from the reopening and the market testing through towards the 1.3060 on what looked like a single ticket large clip moving through in limited liquidity, the market absorbed the movement and then dipped back to the 1.3040 level for the move into Tokyo and a slow tight range through to midsession before slowly rising through towards the 1.3050 level for the move into the grey hours, Downside bids congested around the 1.2950 level and requires a forceful push to clear only to run into possibly stronger bids into the 1.2900 areas, weak stops likely to appear on any break through the level with plenty of congestion likely at each sentimental level through to the 1.2765 area where any break out if there is to be one awaits. Topside offers still remain through the 1.3090-1.3100 level with weak stops likely on a push through the level and opening a quick return to at least the 1.3150 area before stronger offers start to appear on any attempt to push the 1.3200 area, and break here will likely see stronger stops appearing and the market then likely to increase into the 1.3300 level.
  • JPY: Opening around the 109.90 level there was a little dip towards the 109.85 area before rallying sharply on the Tokyo opening to test towards the 110.00 level but unable to break the level and running back to the 109.90 area and possibly the GBP rally was actually GBPJPY ticket moving through, the market then held around the 109.90-95 level through to the grey hours with the tiny range narrowing again, Topside congestion through the 110.50 level and likely to increase the closer the market moves to the 111.80 area where stronger offers start to appear leading into stronger congestion on any push to the 112.00 level, downside bids light through to the 109.00 areas with congestion likely to appear once through the 108.80 level and weak stops with the congestion likely to increase on any push through the 108.50 areas through to 108.00.
  • AUD: The Oz followed the JPY selling into the Tokyo opening before slowly drifting back from the early highs just short of the 0.6920 level to test back to the opening levels just above the 0.6900 level for the move into the grey hours, Topside offers into the 0.6920 area with possible weak stops through the level before congestion appears around the 0.6940-60 areas and increasing offers once the level is cleared through to the 0.6980-0.7000 areas, downside bids light through to the 0.6850 with some congestion around the level and then continuing through to the 0.6800 level with stronger bids start to appear, weak stops through the 0.6780 areas however, the congestion then increases on any dip through to the 0.6750 levels.
  • EUR: A very quiet session overall but doubly so for the Euro with the market rising from the opening 1.1150 level but unable to push from the 1.1160 area before settling back and holding around the opening levels to the grey hours, 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

USD/CNY:

China’s market condition caveat on US against purchases adds to trade deal doubts – RTR’s

Dispute settlement mechanism in US/China phase 1 trade deal designed to be completed in about 90 days – Senior admin official

If US reimposes tariffs in an enforcement dispute, China cannot retaliate with tariffs of its own but can quiet agreement – SAO

China has not agreed to additional tariff reductions or eliminations as part of deal, but will need to issue waivers or adjustments to meet purchase commitments – SAO

In US-China Phase 1 trade deal, enforcement may end in “We Quit” NPW

US/China signed the trade deal, – DJ

Mnuchin: USMCA and US/China trade deal will add 50 to 70 basis points to US GDP – FOX

Mnuchin: Has data on Chinese subsides will address in phase 2 talks – FOX

Mnuchin: Will roll out progress in US/China talks in phases as work completed

USD:

Garbage points the way to improving US GDP Growth – BBG

FED districts: Economic activity continued to expand modestly – BBG

White House, Hopeful of Republican house majority, plans tax cut – BBG

NZD:

NZ Retail card spending unexpectedly fell in December – BBG

CNY:

Liu He: China 2019 growth projected to be above 6% – Xinhua

China, US trade ties return to normalcy, Yuan’s rise worth watching – Global Times

AUD:

Trump deal causes pain for Australian exporters – AFR

 

Today’s Data

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

JPY         Machine Orders YoY (NOV) A18% | C -5.4% | P -6.1%

GBP        RICS House Price Balance (DEC) A -2.0% | C -8.0% | P -11.0%

AUD       Home Loans Value MoM (NOV) A 1.8% | C 1.4% | P 2.1%

AUD       Investor Loan Value MoM (NOV) A 2.2% | C 1.0% | P 1.5%

CNY        New Home Prices MoM (DEC) A 0.35% | P 0.30%

0700       EUR        German CPI YoY (DEC F) C 1.5% | P 1.5%

0700       EUR        German CPI EU Harmonized YoY (DEC F) C 1.5% | P 1.5%

0930       GBP       BoE Bank Liabilities/Credit Conditions Survey

1130       EUR        Accounts of ECB’s Dec Meeting

1330       USD       Retail Sales Advance MoM (DEC) C 0.3% | P 0.2%

1330       USD       Continuing Claims (JAN4) P 1803k

1330       USD       Export Price Index YoY (DEC) P -1.3%

1330       USD       Import Price Index ex Petroleum MoM (DEC) C 0.1% | P 0.2%

1330       USD       Initial Jobless Claims (JAN 11) C 220k | P 214k

1330       USD       Philadelphia Fed Business Outlook (JAN) C 3.6 | P 0.3

1330       USD       Retail Sales Control Group (DEC) C 0.3% | P 0.1%

1330       USD       Retail Sales ex-Auto and Gas (DEC) C 0.4% | P 0.0%

1500       USD       Business Inventories (NOV) C -0.1% | P 0.2%

1500       USD       NAHB Housing Market Index (JAN) C 74 | P 76

]2100     NZD       Government 5-month Financial Statements

2100       USD       Net Long-term TIC Flows (NOV) P 32.5b

2130      NZD       BusinessNZ Manufacturing PMI (DEC) P 51.4

 

Harry Hindsight

 

  • GBP: Mixed day for the Cable with Asia starting a steady climb from the opening level and the minor dip in Tokyo to the 1.3015 level to test into the grey hours pushing lightly above the 1.3040 level London opened and a quick dip back to the 1.3000 level a bounce and then running again on the better inflationary news from the CPI release, initially sending the market down to the 1.2985 level before the market released a rate cut is a little irrelevant to the current GBP Levels, bouncing to the 1.3035 level and choppy as retail trend follows matched off against institutional buyers and the market moved off the 1.3000 level and slowly but steadily headed back to the 1.3035 level to finish the day just short of that level.
  • JPY: A quiet session for the USDJPY overall with the market initially dipping on the realization that there will not be any reduction in tariffs until the second phase, dropping from the opening levels just above the 110.00 high levels and dropping quickly through to the Tokyo opening to test into the 109.80’s before bouncing as the penny dropped that the Chinese wouldn’t have signed if there was a significant issue at the present time, the market then held in a quiet range roughly basing around the 109.90 level before slipping through in early London to test the 109.80 levels again, the move into the NYK session saw some light buying of the USD and the market moving through to test the 110.00 level again however, it struggled with the level and dipped back to range around the 109.90 to the close.
  • AUD: Oz saw a small dip through towards the 0.6890 area before ranging quietly through to London just managing to keep in touch with the 0.69 cents level for the London opening, London sold the market through to just above the 0.6880 level in a short move before slowly pushing through to the NYK session regaining the upper 0.6880’s and again on the opening in NYK the market sold to just below the 0.6880 level repeating the London opening as the market regained some composure, the move to the end of London saw the market run quickly through to the 0.6910 level before testing through to the 0.6915 areas and a slow drift holding onto the figure level for the close.
  • EUR: A slow rise through the Asian session opening around the 1.1125 level and pushing gradually higher into the grey hours to test just above the 1.1135 level, London opening saw the markets dip a little before moving back to the 1.1130 level after the release of German numbers with generally a weaker number, midmorning saw the Euro rallying and pushing steadily through to the 1.1150 level and then raining around the level through to the close with a minor run to just above the 1.1160 area before holding the 1.1150 to the close.

 

Yesterday’s Premiership results

JPY         Kuroda Speech at Branch Manager’s Meeting

JPY         Machine Tool Orders YoY (DEC P) A -33.6% | P -37.9%

EUR        German GDP n.s.a. YoY (2019) A 0.6% | C 0.6% | P 1.5%

EUR        German Public Finances Balance-GDP ratio A 1.5% | C 1.2% | P 1.7%

GBP       CPI YoY (DEC) A 1.3% | C 1.5% | P 1.5%

GBP       Core CPI YoY (DEC) A 1.4% | C 1.7% | P 1.7%

GBP       CPIH YoY (DEC) A 1.4% | C 1.6% | P 1.6% | R 1.5%

GBP       CPI MoM (DEC) A 0.00% | C 0.2% | P 0.2%

GBP       House Price Index (YoY) (NOV) A 2.2% | C 1.0% | P 0.7%

EUR        Eurozone Industrial Production w.d.a. YoY (NOV) A -1.5% | C -1.0% | P 2.2% | R 2.6%

USD       MBA Mortgage Applications (JAN 10) A 30.2% | P 13.5%

CAD       Existing Home Sales MoM (DEC) A -0.9% | P 0.6%

USD       DOE US Crude Oil Inventories (JAN10) A -2549k | P 1164k

USD       Fed Beige Book

 

 

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