Daily FX Market Commentary

Good morning,

LMAX Close

USDJPY 111.469 | EURUSD 1.15822 | AUDUSD 0.71769 | NZDUSD 0.65549 | USDCAD 1.31885 | USDCHF 0.97435 | GBPUSD 1.28542 |

LMAX Highs and Lows 5.15am GMT

                                High | Low

EURUSD               1.16083 | 1.15805

USDJPY                 111.714 | 111.423

GBPUSD               1.28708 | 1.28507

USDCHF               0.97431 | 0.79299

AUDUSD              0.72183 | 0.71721

USDCAD               1.31814 | 1.31639

NZDUSD               0.65630 | 0.65302

EURCHF                1.12935 | 1.12786

EURGBP               0.90203 | 0.90086

EURJPY                 129.530 | 129.062

For today

• GBP: Opening around the 1.2855 areas the market moved into midmorning in Tokyo before rising a little and pushing through to test the 1.2870 areas, the market probed the area for several hours before drifting back off to the 1.2860 areas into the grey hour, Downside bids into the 1.2800 areas are beginning to look strong with congestion likely on a break through the level likely to find some strong congestive bids through to the 1.2760 areas with an old trend line supporting the market and continual congestion through to the 1.2700 areas where the market tested last month. Topside offers light through to the 1.2900 areas with some limited offers continuing through to the 1.2920 level with a possibility of weak stops on a move through the level and limited congestion through 1.2950 areas leading to stronger offers moving into the 1.3000 areas.
• JPY: A quiet start to the day saw the USDJPY rise quickly from its lows around the 111.40 area to quickly stab above the 111.70 level with strong GDP AUD number saw AUDJPY buying, the initial rush over with the market started to drift back to the 111.50 areas through to the grey hour, downside bids light through the 111.00 areas with stronger bids likely into the 110.80 level however, weak stops on a break and newly opened AUDJPY positions could be very weak on a dip through to the congestive 110.50 areas, some bids likely on any push through to the 110.40 area could balance the stops with stronger bids then lurking around the 110.00 area. Topside offers into the 111.80-112.00 with weak stops on a push through the 112.20 level and then congestive offers reappear on any attempt to push through the 112.60-80 areas with increasing offers around the 113.00 likely to slow any move beyond however, a break above the 113.25-30 area will likely see stronger stops appearing and the market opening to a stronger move.
• EUR: A quiet opening and holding around the 1.1585 area deep into the Tokyo session before lifting into the 1.1600 level and finally breaking through after a quiet hour, testing to just beyond the 1.1605 areas the market struggled with the area before drifting through to the grey hours falling back towards the opening levels, Topside offers light through to the 1.1660 areas with the market likely to strengthen on any move through to the 1.1700 areas and increasing on a move to the 1.1740 area, weak stops through the level could see a quick attempt to push towards the 1.1780 level with stronger offers into the area, downside bids light on any push through the 1.1540 areas with limited bids into the figure levels and stops on a push through the 1.1480 areas and the market open to further declines through to limited bids into 1.1420.
• AUD: A little quiet ranging around the 0.7180 areas before the release of the GDP numbers saw the market quickly rise through to towards the 0.7220 area chopping around a little before slipping back below the 72 cent level to hold quietly around the 0.7295 area through to the grey hour, a better than expected 2Q GDP and revision on 1Q seemed to be the catalyst for the markets moves across the board. Downside bids into the 0.7160-40 areas likely to be fairly strong and a move through the level will likely see further congestive bids appearing through to the 71 cent areas and increasing into the sentimental level and opening the market to further declines into the 70 cent level, topside offers light through to the 0.7250 areas light stops possible through the 0.7260 areas and weak congestion likely through to the 73 cents level but congestive above.

Overnight News

EUR:

Angela Merkel: I can’t rule out Brexit talks breakdown

Germany dismisses UK demands on banks post Brexit access

USD/CNY:

China may be digging in for protracted trade war Former USTR official Timothy Keeler

US can counter China’s “Belt and Road initiative” WPT

NZD:

NZ construction work rose less than forecast in 2Q 0.8% vs. est. 2.9%

NZ Job ads trend slowing with business confidence ANZ

CAD:

Trudeau: He’s pleased with NAFTA progress on auto’s

Trudeau: He won’t sign NAFTA that doesn’t benefit Canada

Trudeau: NAFTA without chapter 19 would be bad for Canada

Trudeau: Cultural exemption must also remain in NAFTA

EUR/GBP:

Telegraph running Barnier is said to deem chequers plan “not acceptable” know for weeks

ZAR:

Recession reignites S. Africa credit rating downgrade concern

AUD:

Lowe: Any move in cash rate still seems some way off

Australia’s 1Q GDP revised to 1.1% rise QoQ from 1%

USD:

Bullard: most of my colleagues see high chance of Sept hike

Bullard: Trump’s FED influence more on appointments than tweets

GBP:

Mark Carney is said expected to stay at BoE until 2020 FT

Carney: If economy stays on path, will need more rate hikes

JPY:

BoJ is said to see tweaks working, satisfied with yield range

BoJ would need to see 10yr JGB yield test 0.20% before any change

Today’s data

Actual = A | Consensus = C | Previous = P | Revised = R All timings GMT

AUD       AiG Performance of Service Index Aug A 52.2 | P 53.6

NZD       ANZ Commodity Price Aug A -1.10% | P -3.20% | R -3.30%

AUD       GDP Q/Q Q2 A 0.90% | C 0.80% | P 1.00% | R 1.10%

AUD       GDP Y/Y Q2 A 3.40% | C 2.80% | P 3.10%

CNY        China PMI Services Aug A 51.5 | C 52.7 | P 52.8

07:45     EUR        Italy Services PMI Aug C 53.2 | P 54

07:50     EUR        France Services PMI Aug (F) C 55.7 | P 55.7

07:55     EUR        Germany Services PMI Aug (F) C 55.2 | P 55.2

08:00     EUR        Eurozone Services PMI Aug (F) C 54.4 | P 54.4

08:30     GBP       Services PMI Aug C 53.9 | P 53.5

09:00     EUR        Eurozone Retail Sales M/M Jul C -0.10% | P 0.30%

12:30     CAD       Trade Balance (CAD) Jul C -0.8B | P -0.6B

12:30     CAD       Labour Productivity Q/Q Q2 C 0.20% | P -0.30%

12:30     USD       Trade Balance (USD) Jul C -47.6B | P -46.3B

14:00     CAD       BoC Rate Decision C 1.50% | P 1.50%

Harry Hindsight

• GBP: Continuing squabbles both with the EU and with the UK government overshadowed the market, opening around the 1.2870 area the market drifted from the opening in Tokyo testing through into midsession holding the 1.2855 level and then a slight recovery through to the grey hour, early selling saw the market immediately dip through the 1.2850 areas and then hold for a short period before dipping again and heading to the stronger 1.2800 area holding the 1.2815 before moving into the NYK session rising back to the 1.2850 areas before dropping quickly back to the 1.2810 level to make the low for the day, the close in London saw the market rise quickly through to the opening levels before slowly drifting through to the close just above the 1.2850 area.
• JPY: Quiet opening saw the market moving in a tight 111.05-10 range with a quick dip lower to make the lows for the day testing the 110.90 level before slowly recovering and ranging quietly just short of the 111.15 area through to the grey hour, USD buying saw the USDJPY quickly rise through to the London opening and then a slow rise through the 111.50 areas and then ranging through to the 111.40 area to the NYK session, while the range increased a little the minor dip to the 111.15 area recovering immediately and then ranging to the 111.50 area through to the close.
• EUR: Barnier comments, attacks on UK fishermen and talks between Macron and Merkle would seem to suggest that EU commissioners have had an ear bashing over Brexit, whether that is good or bad remains to be seen however, Italy remains the focus and its deficit. Opening around the 1.1615 areas and slipping lower through into the Tokyo session testing initially through the 1.1600 areas and then holding and recovering into the grey hour, the market dropped quickly with early Europeans selling through to the 1.1575 areas and then a steady decline through to midmorning, the move into the NYK session saw the market again pushing quickly lower and testing to the 1.1530 areas before recovering eventually to push quickly through to the 1.1575 level and a slow rise to the 1.1585 to range around the level to the close.
• AUD: A little choppy around the RBA announcement otherwise a reasonably quiet session, opening around the 0.7215 level the market moved into the Tokyo session sliding a little lower trading slowly through the 72 cent area to the 0.7190 and holding through to the announcement, no change for the RBA saw the market quickly rise through to the 0.7235 level holding into the grey hour before early London started strong selling and the market falling back quickly through into early London testing to the 0.7160 areas before finding some confidence and slowly pushing to the 0.7185 areas and a quiet range through London to the close in a narrow range.

Yesterday’s premiership results

GBP       BRC Sales Monitor Y/Y Aug A 0.20% | P 0.50%

JPY         Monetary Base Y/Y Aug A 6.90% | C 6.30% | P 7.00%

AUD       Current Account Balance (AUD) Q2 A -13.5B | C -11.1B | P -10.5B | R -11.7B

AUD       RBA Rate Decision A 1.50% | C 1.50% | P 1.50%

CHF        CPI M/M Aug A 0.00% | C 0.00% | P -0.20%

CHF        CPI Y/Y Aug A 1.20% | C 1.00% | P 1.20%

GBP       Construction PMI Aug A 52.9 | C 54.9 | P 55.8

EUR        Eurozone PPI M/M Jul A 0.40% | C 0.10% | P 0.40%

EUR        Eurozone PPI Y/Y Jul A 4.00% | C 4.30% | P 3.60%

CAD       Manufacturing PMI Aug A 56.8 | P 56.9

USD       Manufacturing PMI Aug (F) A 54.7 | C 54.5 | P 54.5

USD       Construction Spending M/M Jul A 0.10% | C 0.50% | P -1.10% | R -0.80%

USD       ISM Manufacturing Aug A 61.3 | C 57.8 | P 58.1

USD       ISM Prices Paid Aug A 72.1 | C 74 | P 73.2

USD       ISM Employment Aug A 58.5 | P 56.5

 

 

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.