Daily FX Market Commentary

Good morning,

 

LMAX Close

USDJPY 112.286 | EURUSD 1.16724 | AUDUSD 0.7264 | NZDUSD 0.66177 | USDCAD 1.29189 | USDCHF 0.96716 | GBPUSD 1.31438 |

 

LMAX Highs and Lows 5.15am GMT

                                High | Low

EURUSD               1.16868 | 1.16691

USDJPY                 112.338 | 112.087

GBPUSD               1.31542 | 1.31364

USDCHF               0.96776 | 0.96668

AUDUSD              0.72694 | 0.72541

USDCAD               1.29278 | 1.29151

NZDUSD               0.66535 | 0.66015

EURCHF                1.13040 | 1.12918

EURGBP               0.88891 | 0.88798

EURJPY                 131.204 | 1.30952

 

For today

• GBP: A quiet rising market through the session with nothing we didn’t already know in the news dipping from the 1.3150 opening level the market tested to the 1.3135 areas before slowly moving through to test above the 1.3150 level and holding close to those highs for the move into the grey hour, topside congestion likely through to the 1.3250 level with stronger offers likely on a move through the levels and into the 1.3300 area, possible weak stops on a move above the level with stronger offers a possibility on any test to the 1.3350 area. Downside bids congested through the 1.3150 area with weak ness likely to appear just beyond the level and the market possibly a little thin around the 1.3100 level with better bids more likely around the 1.3050 onwards.
• JPY: Slow move higher from the opening around the 112.25 areas to test to the 112.35 level before drifting off through the balance of the day to base around the 112.10 area in a very quiet USDJPY session, 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: As with the USDJPY very quiet for the Oz with no push through of yesterday’s run, opening around the 0.7265 area the market drifted through the session to base around the 0.7255 level for the bulk of the Tokyo session and unable to regain the early highs near the 0.7270 area, 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: Quiet session with the Euro basing along the 1.1670 levels through into the Tokyo session before slowly rising through the 1.1680 level and holding around that level into the grey hour with minor attempts to push towards the 1.1700 areas, 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

GBP:

May ally Mike Penning calls Brexit chequers plan dead Tel

May told leaders in N. Ireland can’t have separate customs regime

May told leaders extending Brexit talks Is not an option

UK official speaks on condition of anonymity on May comments

May: There won’t be a second referendum

May: Extending Brexit talks is not an option

EUR:

EU leaders again pressuring May as Brexit deadline set

Slovakia PM says May told other EU leaders Britain will leave bloc next March, there will be no second referendum

Lithuania Pres. Says after PM May addressed EU leaders on Brexit, there is standstill, no progress at this point

Slovakia PM no progress on Irish border issue after May spoke at EU leader’s dinner

USD:

Profit repatriation slows in the second Quarter after tax overhaul WSJ

AUD:

RBA says Oz may jump 6% in all out trade war

JPY:

Investors still waiting to really buy into Abenomics

Japan’s Shinzo Abe wins ruling LDP party leadership election

CNY:

China bond yields rise as borrowing cost pressures build

China said to plan broad import tax cut as soon as October

NZD:

NZ GDP beats 1%

 

Today’s data

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

NZD       GDP Q/Q Q2 A 1.00% | C 0.80% | P 0.50%

NZD       GDP Y/Y Q2 A 2.80% | C 2.50% | P 2.70% | R 2.60%

06:00     CHF        Trade Balance (CHF) Aug C 2.41B | P 2.26B

07:30     CHF        SNB Sight Deposit Interest Rate C -0.75% | P -0.75%

07:30     CHF        SNB 3-Month Libor Lower Target Range C -1.25% | P -1.25%

07:30     CHF        SNB 3-Month Libor Upper Target Range C -0.25% | P -0.25%

08:30     GBP       Retail Sales M/M Aug C -0.10% | P 0.70%

12:30     CAD       ADP Payrolls Report Aug P 11.6K

12:30     USD       Philly Fed Manufacturing Index Sep C 16.3 | P 11.9

12:30     USD       Initial Jobless Claims (SEP 15) C 210K | P 204K

14:00     USD       Leading Index Aug C 0.50% | P 0.60%

14:00     EUR        Eurozone Consumer Confidence Sep (A) C -2 | P -2

14:00     USD       Existing Home Sales Aug C 5.39M | P 5.34M

14:30     USD       Natural Gas Storage P 69B

 

Harry Hindsight

• GBP: Early buyers in Sydney moving from the opening 1.3150 level through to test to 1.3175 before moving into the Tokyo session drifting back to the 1.3140 area and a slow rise through to the opening levels for the move into the grey hour, London opening saw some steady movement and the market pushing back to the highs on the release of stronger than expected inflationary news, breaking through the highs on the second move the market quickly pushed through the 1.3200 level before stopping quickly around the 1.3215 level and dropping back steadily to hold below the 1.3200 level, the market drifted to the 1.3180 areas, early NYK sold the market back quickly with commentary on Brexit and a better current account deficit for the US the market quickly triggered weak stops and the market touching the 1.3100 level before bouncing back to trade widely around the 1.3135 level and then a steady rise into the London close pushing slowly to the 1.3170 areas before dipping again and then holding through to the end of the day around the 1.3150 level.
• JPY: A reasonably quiet ranging day, opening around the 112.35 level the market moved into the Tokyo session to see fix supply driving the market to below the 112.25 area before slowly recovering through to make the Asian high around the 112.40 area, the move through into the London session saw the market trading in the 112.30-40 areas through to NYK with a minor push to the 112.45 area before NYK came in as light sellers and the market drifted through the session and into the London close testing through to the 112.15 areas before rising and holding the 112.25 to the close.
• AUD: A slow and steady rise through the day with the market opening around the 0.7220 areas with a slightly worse low on the move through the early part of the Tokyo session, better than expected leading index from Westpac saw the market moving through to the 0.7250 areas and a quiet range through the London session holding around that level through into the NYK session and another round of slow buying to push the market up above the 0.7270 areas before drifting to the close from the end of London.
• EUR: Early gains to the 1.1680 areas were quickly lost on the move into the Tokyo session with the market heading steadily through to midsession testing towards the 1.1650 areas and then slowly recovering through into the grey hour, early London were quick buyers taking the market through the 1.1710 level with some effort and a grind to the 1.1715 area before drifting back to the 1.1690 level and weak stops on a move through setting the market to another round of selling on the move into the NYK session for the lows to be extended for the day to the 1.1650 area, the move to the London close saw the market rally a little before dropping back from the `1.1690 level to settle into a tight range just above the 1.1670 to the close.

 

Yesterday’s premiership results

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%

EUR        Eurozone Current Account (EUR) Jul A 21.3B | C 22.4B | P 23.5B

GBP       CPI M/M Aug A 0.70% | C 0.50% | P 0.00%

GBP       CPI Y/Y Aug A 2.70% | C 2.40% | P 2.50%

GBP       Core CPI Y/Y Aug A 2.10% | C 1.80% | P 1.90%

GBP       RPI M/M Aug A 0.90% | C 0.60% | P 0.10%

GBP       RPI Y/Y Aug A 3.50% | C 3.40% | P 3.20%

GBP       PPI Input M/M Aug A 0.50% | C 0.40% | P 0.50% | R 0.00%

GBP       PPI Input Y/Y Aug A 8.70% | C 9.10% | P 10.90% | R 10.30%

GBP       PPI Output M/M Aug A 0.20% | C 0.20% | P 0.00%

GBP       PPI Output Y/Y Aug A 2.90% | C 2.90% | P 3.10%

GBP       PPI Output Core M/M Aug A 0.10% | C 0.20% | P 0.00% | R 0.10%

GBP       PPI Output Core Y/Y Aug A 2.10% | C 2.10% | P 2.20% | R 2.30%

GBP       House Price Index Y/Y Jul A 3.10% | C 2.90% | P 3.00%

USD       Current Account (USD) Q2 A -101B | C -103B | P -124B | R -122B

USD       Housing Starts Aug A 1.28M | C 1.24M | P 1.17M

USD       Building Permits Aug A 1.23M | C 1.31M | P 1.31M | R 1.30M

USD       Crude Oil Inventories A -2.1M | C -2.7M | P -5.3M

 

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