Daily FX Market Commentary

Good morning,

 

LMAX Close

USDJPY 111.135 | EURUSD 1.15947 | AUDUSD 0.71134 | NZDUSD 0.65224 | USDCAD 1.31633 | USDCHF 0.97503 | GBPUSD 1.30267 |

 

LMAX Highs and Lows 5.15am GMT

                                High | Low

EURUSD               1.16430 | 1.16229

USDJPY                 111.458 | 111.204

GBPUSD               1.30530 | 1.30385

USDCHF               0.97046 | 0.9691

AUDUSD              0.71996 | 0.7168

USDCAD               1.30132 | 1.29947

NZDUSD               0.65653 | 0.65492

EURCHF                1.12876 | 1.12744

EURGBP               0.89222 | 0.8910

EURJPY                 129.751 | 129.30

 

For today

• GBP: Another slow trading day in the far east with the Cable opening around the 1.3050 level and drifting to the 1.3040 area before recovering but unable to push beyond the 1.3055 level for the moment, topside sees light congestion through to the 1.3100 level with likely stronger offers around the level and stronger congestion then beyond the level with weak stops light through the level, 1.3150 sentimental level is likely to see similar selling with the market then opening to a quick test to the 1.3200 areas on a move through the level, downside bids light through to the 1.2980 area with some bids with weak stops on a move through the level and better bids likely on the approach to 1.2950 and congestion thereafter to the stronger 1.2900-1.2880 level.
• JPY: Opening and drifting a little through into the Tokyo session to hold the 111.20 area the market moved higher into the Tokyo fix and pushed through to the 111.40 to range around the level quietly through to the grey hour, Topside offers through to the 112.00 level likely to be strong with exporter sellers likely to be offering through to that level, strong stops on a move through the level and minor congestion through the 112.50 areas before again coming up to the 113.00 area and further strong sellers expected. Downside bids light through to the 111.00 areas with possibly only weak congestion in the area and opening a test through to the 110.50 stronger area with weak stops on a dip to that level, congestion then runs to likely yield bids into the 109.80-110.00 areas if it could make that area.
• AUD: Oz moved quietly through to the release of the employment data holding in a tight 0.7170-75 level before quickly rising on the strong number to test to the 72 cents level before again ranging through to the grey hours just off the figure level, topside sees congestive offers through the 72 cents level with weak stops likely on a push through the 0.7220 area however, some congestive offers through to the 0.7260 level is likely to counterbalance the weak stops and the market then struggling over the next 40 pips on any attempt at the 73 cents level with possibly strong offers in that area, downside bids into the 71 cents level and likely to continue through to the 0.7080 area, possibly strong stops on a dip through the level will only find strong congestive bids into the 0.7050 level and the market then struggling to dip further in the face of longer term buyers with less concerns about the housing interest and more the economics.
• EUR: Opening around the 1.1630 area the market saw limited buying through into the Tokyo session with the market rising off the early low around 1.1625 and into the 1.1635 level, the market stalled for a period before rising through to the 1.1640 areas and then ranging again through to the grey hour around the 1.1635 area on very quiet trading for the pair. Topside offers through the 1.1680-1.1700 level remain with strong congestive offers on any push through the level and limited potential for stops, stronger offers likely the closer the market moves towards the 1.1800 levels. Downside bids light through to the 1.1600 areas with limited congestion on any dips through to the 1.1540 area where the market has struggled over the past couple of weeks, a break through the level could see strong stops appearing and the market quickly moving to the sentimental 1.1500 level with only an old 1.1480 trendline to support the market from a deeper dip into the 1.1400 area.

 

Overnight News

CAD/NAFTA/USD:

CAD ForMin Freeland says officials will work on NAFTA in Washington on Thursday, she will not be there

Freeland: NAFTA talks are not at a stalemate

Freeland: For NAFTA negotiations to make progress officials need to do more work

Freeland: We really are in a place where a good NAFTA deal is possible

Freeland: Asked when she will be in Washington for NAFTA talks, said officials must do more work before ministers can meet.

USD:

USD to remain a dominant global reserve for foreseeable future, Moody’s (really)

Things are so much worse, but does anyone care- deficit for 11 months $222B above whole of 2017 FT

FED St Louis: Taking a closer look at US  exports to China

Feds Brainard: Gradual rate hikes over next year or two

Brainard: Gradual fed hikes appropriate over next year or two

Brainard: Growth likely to remain solid, Labour market strong

Brainard: Inflation data encouraging, little sign of breakout

Brainard: May have to raise rates above long run FED estimates

Brainard: A lot of the fiscal stimulus is still in pipeline

Brainard: Hard to see discernible trade impact in overall data

Kudlow confirms US invitation to China for New trade talks

AUD:

Australian employment rose 44k in Aug est. 18k

EUR:

ECB said to lower Euro area growth outlook on global demand BBG

Italy’s Di Maio pushes basic income as Tria future questioned

Italian FinMin Tria threatens to quit over budget La Stampa

NZD:

NZ August home sales rise 3.1% from year ago REINZ

GBP:

Tory rebels see three-week deadline for May to dump Brexit plan

Cabinet meeting to be held to discuss no deal Brexit BBC

TRY:

Turkey decides that property sales and rental agreements cannot be made in foreign currency Official gazette

Forex property sales and rental agreements must be converted into TRY within 30 days OG

 

Today’s data

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

GBP       RICS House Price Balance Aug A 2% | C 2% | P 4%

JPY         Domestic CGPI Y/Y Aug A 3.00% | C 3.10% | P 3.10% | R 3.00%

JPY         Machine Orders M/M Jul A 11.00% | C 5.80% | P -8.80%

AUD       Consumer Inflation Expectation Sep A 4.00% | P 4.00%

AUD       Employment Change Aug A 44.0K | C 18.4K | P -3.9K | R -4.3K

AUD       Unemployment Rate Aug A 5.30% | C 5.30% | P 5.30%

06:00     EUR        German CPI M/M Aug (F) C 0.10% | P 0.10%

06:00     EUR        German CPI Y/Y Aug (F) C 2.00% | P 2.00%

07:15     CHF        Producer & Import Prices M/M Aug C 0.10% | P 0.10%

07:15     CHF        Producer & Import Prices Y/Y Aug C 3.40% | P 3.60%

11:00     GBP       BoE Bank Rate C 0.75% | P 0.75%

11:00     GBP       BoE Asset Purchase Target Sep C 435B | P 435B

11:00     GBP       MPC Official Bank Rate Votes C 00—9 | P 009

11:00     GBP       MPC Asset Purchase Facility Votes C 00—9 | P 009

11:45     EUR        ECB Rate Decision C 0.00% | P 0.00%

12:30     EUR        ECB Press Conference

12:30     CAD       New Housing Price Index M/M Jul C 0.10% |P 0.10%

12:30     USD       CPI M/M Aug C 0.10% | P 0.20%

12:30     USD       CPI Y/Y Aug C 2.70% | P 2.90%

12:30     USD       CPI Core M/M Aug C 0.20% | P 0.20%

12:30     USD       CPI Core Y/Y Aug C 2.40% | P 2.40%

12:30     USD       Initial Jobless Claims (SEP 8) C 210K | P 203K

14:30     USD       Natural Gas Storage P 63B

18:00     USD       Monthly Budget Statement Aug C -183.0B | P -76.9B

 

Harry Hindsight

• GBP: Early highs were short lived with talk of a Brexit coup to oust May leading to the market dropping quickly to the 1.3015 areas before ranging a little through into the Tokyo session and gradually moving through the lows to head into the grey hour testing to the 1.3000 level, London tested to below the level before rising quickly through towards the 1.3050 levels as London took previous comments to heart, a couple of hours testing the highs before dropping quickly back as Juncker did his state of the Euro speech and more or less decrying everything that had been said over the week, Cable dipped back through to the 1.2980 levels before stabilizing for a move into the NYK session and the market starting a steady rise through to the highs, the break through the 1.3050 level saw some weak stops triggered on a move through to the 1.3080 areas before drifting off through the session to close around the 1.3050 level.
• JPY: USDJPY moved through into the Tokyo session holding the 111.60 levels however, the opening highs were short lived with the market dropping steadily lower through to range around the 111.50 level and through into the London session, London did very little with the USDJPY with the market moving slightly lower but holding the 111.45 areas through to the NYK session, slightly weaker PPI numbers saw the USD weaken a little and the USDJPY pushing down initially to the 111.30 level and then holding in a tight range around the 111.30 areas before dipping again once the London market finished and testing to the 111.10 area and rising for the close into the mid 111.20’s
• AUD: A quiet start for the Oz with the market holding the opening level through into the Tokyo session dropping back to hold around the 71 cents levels with the market unable to push much beyond the 0.7095 level through to the London session, London were slower buyers from the lows and by mid-morning the market had recovered the opening 0.7120 level for a long run to the NYK session, quick buyers deep into the market saw the Oz rising through to the 0.7180 level on weak stops through the 0.7150 level and the market then struggling through to the close holding around the 0.7170 areas.
• EUR: A limp market saw the Euro slipping from the early highs around the 1.1600 area and trading quietly through to the grey hour, recovering most of the losses before London came in selling to take the Euro to the low bouncing off the 1.1570 area and testing back to the opening level, the market then ranged heavily through to the NYK session and only a weaker PPI number in the US saw the Euro recover testing through initially to the 1.1625 area before rising again to the 1.1650 before quickly returning to base off the 1.1625 level through to the close.

 

Yesterday’s premiership results

JPY         BSI Large Manufacturing Q/Q Q3 A 6.5 | C 8 | P -3.2

AUD       Westpac Consumer Confidence M/M Sep A -3.00% | P -2.30%

EUR        Eurozone Industrial Production M/M Jul A 0.80% | C -0.50% | P -0.70%

CAD       Capacity Utilization Rate Q2 A 85.50% | C 86.90% | P 86.10% | R 83.70%

USD       PPI M/M Aug A -0.10% | C 0.20% | P 0.00%

USD       PPI Y/Y Aug A 2.80% | C 3.20% | P 3.30%

USD       PPI Core M/M Aug A -0.10% | C 0.20% | P 0.10%

USD       PPI Core Y/Y Aug A 2.30% | C 2.80% | P 2.70%

USD       Crude Oil Inventories A -5.3M | C -1.3M | P -4.3M

USD       Federal Reserve Beige Book

 

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