Daily FX Market Commentary

Good morning,

 

LMAX Close

USDJPY 112.362 | EURUSD 1.16671 | AUDUSD 0.72195 | NZDUSD 0.65842 | USDCAD 1.29749 | USDCHF 0.96453 | GBPUSD 1.3148 |

 

LMAX Highs and Lows 5.15am GMT

                                High | Low

EURUSD               1.16824 | 1.16558

USDJPY                 112.431 | 112.229

GBPUSD               1.31755 | 1.31419

USDCHF               0.96512 | 0.96366

AUDUSD              0.72549 | 0.72137

USDCAD               1.29831 | 1.29642

NZDUSD               0.65971 | 0.65734

EURCHF                1.12608 | 1.12498

EURGBP               0.88784 | 0.88639

EURJPY                 131.252 | 130.916

 

For today

• GBP: Cable saw early buyers into the new session with the market moving off opening lows around the 1.3140 area to test through into the Tokyo session pushing the 1.3175 areas and holding into the Tokyo session, Tokyo saw slow selling through to the opening levels and holding for and extended period near the lows, the market moved a little higher above the 1.3150 areas through into the grey hour, topside offers into the 1.3200-10 with congestion likely to match off against the stops through the level and slowing the move higher and stronger offers continuing through to the 1.3300 level before thinning out and opening the market to a larger gain, downside bids light through to the 1.3080 areas where stronger bids are likely to be bidding with weak stop through the level but limited, a test through the 1.3050 level is likely to see stronger stops appearing and the market open for a strong test through the 1.3000 level and limited congestion to the 1.2900 areas.
• JPY: USDJPY slipped a little lower into the Tokyo session testing through to the 112.25 areas before moving back higher in a tight channel and testing above the 112.40 level on the release of the BoJ result and holding through to the grey hour holding just below the highs. Topside offers congestive through the 112.50 areas with stronger offers appearing on a push through to the 112.80 areas and likely to continue through to the 113.30 area before stronger stops are likely to appear and the market open to the 113.90 area where strong offers are likely to reappear. Downside bids light on any dip back through to the 111.00 areas with stronger bids reappearing in the area and fairly congested through to the 110.50 level with strong stops possible on a push through.
• AUD: Early buying saw the move into the Tokyo session testing the 0.7235 area before sliding slowly back to the opening level through into midsession testing the 0.7215 areas, with the BoJ to come some steady AUDJPY buying helping the market back to the highs and the push through the level saw a quick move to the 0.7255 area before drifting back to hold the 0.7240 areas through to the grey hour, Downside bids into the 0.7140 levels likely sees stronger congestive bids through to the 71 cents level however, so far this month the market has been fairly supportive in the area and any dip through is likely to see those bids continuing through the 0.7080 area with strong stops likely through the level, topside offers congestive through to the 73 cents level with some stronger offers around the level and weak stops just beyond the 0.7320 areas, stronger offers into the 0.7350 areas and likely to increase on any test to the 0.7380-0.7400 areas and strong congestion likely to continue through the level.
• EUR: A slow climb from the opening saw the market testing the 1.1680 areas before dropping back slowly and drifting through to the 1.1655 areas before renewing the slow rise to move into the grey hour holding just below the highs. topside offers into the 1.1740 area, with congestive offers likely to continue through to the 1.1760 areas what stops there are, are likely to be just behind the level however, the congestion from there is likely to increase on any move to push through to the July highs and increasing into the 1.1800 area. Downside bids light through to the 1.1640 area with congestion then appearing for any move to the 1.1600 level, possible weak stops on a move through but one suspects that the congestion is likely to continue through the level and 1.1540 and the months lows are likely to see bids appearing.

 

 

Overnight News

CNY:

China fires back at Trump with new tariffs on $60B

China formerly files complaint at WTO over $200B tariffs

China’s second in command; “we’re facing greater difficulties in keeping economy stable CNBC

NZD:

Consumer confidence falls to six year low Westpac

GBP:

May says exit deal virtually agreed, rules out 2^nd vote Express

May said to call for fair arrangement at EU meeting RTRS

OIL:

API is said to report US crude stocks rose 1.25M bbl last week

USD:

China cuts US treasury holdings as trade war starts to heat up

 

Today’s data

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

JPY         BoJ Rate Decision A -0.10% | P -0.10%

NZD       Current Account (NZD) Q2 A -1.62B | C -1.32B | P 0.18B | R 0.09B

JPY         Trade Balance (JPY) Aug A -0.19T | C -0.14T | P -0.05T | R -0.10T

AUD       Westpac Leading Index M/M Aug A 0.10% | P 0.00%

08:00     EUR        Eurozone Current Account (EUR) Jul C 22.4B | P 23.5B

08:30     GBP       CPI M/M Aug P 0.00%

08:30     GBP       CPI Y/Y Aug C 2.40% | P 2.50%

08:30     GBP       Core CPI Y/Y Aug C 1.80% | P 1.90%

08:30     GBP       RPI M/M Aug P 0.10%

08:30     GBP       RPI Y/Y Aug C 3.40% | P 3.20%

08:30     GBP       PPI Input M/M Aug C 0.40% | P 0.50%

08:30     GBP       PPI Input Y/Y Aug P 10.90%

08:30     GBP       PPI Output M/M Aug C 0.20% | P 0.00%

08:30     GBP       PPI Output Y/Y Aug P 3.10%

08:30     GBP       PPI Output Core M/M Aug C 0.20% | P 0.00%

08:30     GBP       PPI Output Core Y/Y Aug C 2.10% | P 2.20%

08:30     GBP       House Price Index Y/Y Jul C 2.90% | P 3.00%

12:30     USD       Current Account (USD) Q2 C -103B | P -124B

12:30     USD       Housing Starts Aug C 1.24M | P 1.17M

12:30     USD       Building Permits Aug C 1.31M | P 1.31M

14:30     USD       Crude Oil Inventories P -5.3M

 

Harry Hindsight

• GBP: Choppy day overall for the Cable with the market dipping away from the opening in Tokyo to test through to the 1.3140 areas and spending several hours through the session holding in that area before climbing back to the 1.3160 area for the move into the grey hour, early London buyers took the market to the 1.3170 level for the first time before moving into the London session and the market again dropping quickly off through to the 1.3130 level, again the market held for a few hours around the level before dipping and testing to the low of the day just through the 1.3120 area and starting a slower recovery through to the NYK session and another test to the highs and the 1.3170 area, a wide choppy range through to the London close and the market falling back once they had left on a dip to 1.3130 and again a quiet recovery to the 1.3145 area for the close. All driven on Brexit commentary with May talking about a deal and others talking about a no deal and the EU trying to limit any fall out.
• JPY: Early selling into the opening Tokyo session saw the lows of the day just below the 111.70 before moving through the session gaining slowly through to the grey hour and the 112.00 area, early European buyers saw the market quickly move towards the 112.30 level in what looked like a single large order moving through as the market soon reversed and dipped back to the 111.90-112.00 through into the London full session, midmorning saw the USDJPY again start a slow rise and by the opening in NYK the highs again were under threat and an eventual push saw the market run towards the 112.40 area and hold quietly through to the close in the 112.35 area.
• AUD: The Oz dipped into the Tokyo session to make the lows of the day around the 0.7145 area before slowly rising through the session to move into the grey hour holding around the 0.7200 areas, and a quick move from early London buyers and the market testing the 0.7220 area, from there though the market was dull with a narrow range through to the close with brief flirtations with the 0.7190 areas but remaining for the most part above the 72 cents level into the close just off the highs of the day.
• EUR: As with the rest of the market USD strength in early trading saw the Euro dip to the 1.1670 level before making its way steadily back to the 1.1680 areas and eventually pushing through to the 1.1690 level and above the opening level, the market pushed to the 1.1700 level before holding through to the grey hour with a limited dip before London moved in to push the market firmly through towards the 1.1720 areas, London saw the market dropping quickly and testing back to the opening 1.1680 areas and holding quietly through to the NYK session, NYK were limited buyers and the market traded through to test just above the 1.1720 areas and then saw the market drifting off back to the opening levels, a push through saw weak stops on a move through and testing through to the 1.1650 area before finding some limited support and holding through to the close with the market slowly rising to the opening levels again.

 

Yesterday’s premiership results

AUD       House Price Index Q/Q Q2 A -0.70% | C -0.70% | P -0.70%

AUD       House Price Index Y/Y Q2 A -0.60% | P 2.00%

AUD       RBA Minutes Sep

CAD       Manufacturing Sales M/M Jul A 0.90% | C 1.00% | P 1.10% | R 1.30%

USD       NAHB Housing Market Index Sep A 67 | C 66 | P 67

USD       Net Long-term TIC Flows (USD) Jul A $74.8B | C 65.1B | P -36.5B

 

 

 

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