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Andy Harrison

For Today
GBP: A small drift from the opening around the 1.2335 level to test through the 1.2330 areas and holding for several hours before starting a steady rise as news of a new attempt to break the Government from rebel Conservative members recently ejected from the party saw the market slowly moving towards the 1.2350 areas before holding just below the level through into the London session, Topside congestion through to the 1.2380 level with stronger offers suspected through the 1.2400 level before weak stops appear and the market opens to the 1.2450 level and stronger congestion reappears through to the 1.2500 level and likely to continue through that level. Downside bids light back through the 1.2300 level with weak stops likely on a dip through the area with limited congestion until through the 1.2150 areas where stronger bids are likely to reappear and continue through to the 1.2050 level.
JPY: A quiet session for USDJPY with the market rising from the 108.10 level testing into the Tokyo session to the 108.20 level before holding quietly for several hours then testing through to make the highs around the 108.26 level before drifting to hold in the mid-teens into the grey hour, Topside offers likely to be weak through to the 108.80 areas where stronger offers likely to appear through to the 109.20 area before weak stops appear and the market opening on a break above the 109.30-40 areas. Downside bids likely to be weak through the 108.00 area with very little in the way of stops until the market pushes through the 107.40 area where weak stops are likely, with congestion then moving in on any move towards the 107.00 level.
AUD: Drifting from the opening slipping from the 0.6865 opening areas to test the 0.6860 level before starting a recovery through several hours initially pushing the 0.6870 area before extending the high as the market moved into the grey hour. Topside offers through the 0.6880 area still remain and likely to have been refreshed after yesterdays test, a push above the 0.6920 area is likely to see weak stops opening the market to a test through to the 0.6960 areas with congestion likely to continue through the level, downside bids light through the 68 cents level but running into congestion on the break with a like mix of stops and congestion continuing to stronger bids through the 0.6760-40 level before any weakness is likely to appear.
EUR: A slow dip through into the Tokyo session before starting a small rise from the 1.1055 low to test to just above the 1.1070 level before holding quietly through to the London session, Downside bids light through the 1.1000 areas with weak stops likely on a push through the 1.0980 area likely to see weak stops and the market opening to a test through to the 1.0950 areas and the stronger bids into 1.0920 level, any push beyond could signal a strong push lower over time. Topside offer light through to the 1.1100 areas with strong offers likely and weak stops lurking through the level for a retest to the 1.1150 areas and stronger offers again.

Overnight News
AUD:
Bill Evans says RBA could go for extreme policy measure next year AFR
EUR:
IFO institute says Germany at risk of recession as it cuts growth outlook DJ
German CDU leader: Debt rules only allow limited fiscal leeway RTRS
Draghi faced unprecedented ECB revolt as core Europe resisted QE
CNY:
Defaults among lower tier government backed bond issuers in China could rise as $560b matures in next 2 years SCMP
China needs money evidence in desperate FDI actions, no words Zero Hedge BLG
GBP:
Johnson denies lying to Queen as Brexit legal challenges mount BBG
Tom Newton Dunn: Expelled Tory rebels plotting to oust Boris Johnson – Twitter
NZD:
Manufacturing under duress as new orders hit 10 year low BBG
NZ August house sales fall 6.1% from year ago – REINZ
EUR/GBP:
EU’s Barnier says he is not optimistic on Brexit deal by mid-October RTRS
USD:
Trump say’s he’d consider an interim trade agreement with China – BBG

Today’s Data
Actual A | Consensus C | Previous P | Revised R | all timings GMT/UTC
NZD BusinessNZ Manufacturing PMI (AUG) A 48.4 | P 48.1
JPY Industrial Production (YoY) (JUL F) A 0.7% | P 0.7%
12:30 USD Import Price Index ex Petroleum (MoM) (AUG) C -0.1% | P 0.0%
12:30 USD Export Price Index (YoY) (AUG) P -0.9%
12:30 USD Retail Sales Advance (MoM) (AUG) C 0.2% | P 0.7%
12:30 USD Retail Sales Ex Auto and Gas (AUG) C 0.3% | P 0.9%
12:30 USD Retail Sales Control Group (AUG) C 0.3% | P 1.0%
14:00 USD U. of Mich. Sentiment (SEP P) C 90.8 | P 89.8
14:00 USD Business Inventories (JUL) C 0.3% | P 0.0%
17:00 USD Baker Hughes U.S. Rig Count (SEP 13) C 894 | P 898

Harry Hindsight

GBP: Through to the NYK session the Cable was very quiet with the market holding around the opening 1.2325 areas pushing only to the 1.2335 area in Asia and holding the opening levels through to London, the range increased in London but the result was the same, holding around the opening level, initially testing to the 1.2315 level and making London highs just above the 1.2340 area, NYK saw the move with the Cable dropping on the opening with the comments that prorogue request to the Queen was based on a lie and MP’s (a few) turned up to an empty House of Commons, the market quickly dipped through to the 1.2285 level before starting a rally back through to test above the 1.2350 level on the initial move then after a small dip renewed its push through to the 1.2365 level to make the high before drifting through to the close.
JPY: Opening quietly the market jumped quickly to the 108.00 level on the move into the Tokyo session and then steadily rising through to the 108.15 areas into the final hours before London, from the highs the market drifted through to midmorning in London back to the opening levels and the move into the NYK session the USDJPY dipped through to the 107.50 areas and recouping its losses through the balance of the session topping just short of the 108.20 level again and holding into the close around the 108.10 area.
AUD: Better movement for the AUD through the session with the market drifting a little from the opening before early Tokyo took the market from the 0.6860 areas through to the 0.6880 area for the early high, the market then spent several hours drifting before starting a second push from the 0.6870 and extending the highs to the 0.6885 areas then holding through into the London session around that level, the move into the NYK session saw the Oz dip to just above the opening 0.6860 level before rallying quickly high34 through to the 0.6895 areas to make the highs before dropping quickly back to hold around the 0.6875 areas before slipping lowly back to the opening levels for the close.
EUR: For the most part a very quiet session for the Euro, opening around the 1.1010 level and running through into the London session almost unchanged through the Asian session, London saw the market rising through to the 1.1030 areas before hitting the NYK session and the US data impacting the market with an initial rise to the 1.1070 areas and then dipping quickly from the spike to the 1.0960 level, the market held for a brief time before testing again to the 1.0930 areas before rallying steadily through to the highs again, the market run to the close saw the highs extended to the 1.1090 area before drifting a little through to the close.

Yesterday’s Premiership results
GBP RICS House Price Balance (AUG) A -4% | C -10% | P -9%
JPY Machine Orders (YoY) (JUL) A 0.3% | C -4.3% | P 12.5%
AUD Consumer Inflation Expectation (SEP) A 3.1% | P 3.5%
JPY Tertiary Industry Index (MoM) (JUL) A 0.1% | C -0.3% | P -0.1%
EUR German Consumer Price Index (YoY) (AUG F) A 1.4% | C 1.4% | P 1.4%
CNY Foreign Direct Investment (YoY) (AUG) A 3.6% | P 8.7%
EUR Euro-Zone Industrial Production w.d.a. (YoY) (JUL) A -2.0% | C -1.3% | P -2.6% | R -2.4%
EUR European Central Bank Rate Decision (SEP 12) A 0.00% | C 0.00% | P 0.00%
EUR ECB Marginal Lending Facility (SEP 12) A 0.25% | C 0.25% | P 0.25%
EUR ECB Deposit Facility Rate (SEP 12) A -0.50% | C -0.50% | P -0.40%
USD Real Avg Weekly Earnings (YoY) (AUG) A 1.2% | P 0.8% | R 0.9%
EUR ECB’s Draghi Speaks in Frankfurt After Policy Decision
CAD New Housing Price Index (YoY) (JUL) A -0.4% | C -0.2% | P -0.2%
USD Consumer Price Index (MoM) (AUG) A 0.1% | C 0.1% | P 0.3%
USD Consumer Price Index Ex Food and Energy (MoM) (AUG) A 0.3% | C 0.2% | P 0.3%
USD Consumer Price Index (YoY) (AUG) A 1.7% | C 1.8% | P 1.8%
USD Consumer Price Index Ex Food and Energy (YoY) (AUG) A 2.4% | C 2.3% | P 2.2%
USD Initial Jobless Claims (SEP 7) A 204k | C 215k | P 217k
USD Real Avg Hourly Earnings (YoY) (AUG) A 1.5% | P 1.3%
USD Continuing Claims (AUG 31) A 1670k | C 1675k | P 1662k
USD Monthly Budget Statement (AUG) A -6.1% | P -$119.7b

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