Daily FX Market Commentary

Andy Harrison

LMAX Close

USDJPY 107.18 | EURUSD 1.09592 | AUDUSD 0.67072 | NZDUSD 0.62612 | USDCAD 1.33268 | USDCHF 0.99692 | GBPUSD 1.2301 |

LMAX highs and Lows 05.00 GMT

                                Highs | Lows

EURUSD               1.09648 | 1.09549

USDJPY                107.211 | 106.964

GBPUSD              1.23149 | 1.22856

USDCHF               0.99810 | 0.99623

AUDUSD             0.67195 | 0.6704

USDCAD              1.33338 | 1.33174

NZDUSD              0.62733 | 0.62589

EURCHF               1.09310 | 1.09204

EURGBP              0.89168 | 0.89037

EURJPY                117.539 | 117.253

For Today

• GBP: Another slow day with the market moving around the 1.2300 level with very little conviction, making the high on the move into the Tokyo session testing to the 1.2310 level before returning to the figure level, the market dipped through the level and spent a good proportion of the day holding just below the level before lifting up above for the move through to the grey hour. Downside bids cleared a little through to the 1.2210 area with strong bids likely to remain in play before weak stops likely on a push through the 1.2200 areas and opening up a deep move through to the 1.2100 area before support is likely to reappear, topside offers cleared through to the 1.2340 areas with resistance through the sentimental 1.2350 areas with weakness likely to continue through to the 1.2380-1.2400 areas where stronger offers likely.
• JPY: Quiet opening saw the market running into the Tokyo session holding the 107.20 level before dipping through to test the 107.00 level on limited supply for the Tokyo fix, with the fix over with the market made steady inroads to test back to the 107.20 level through into the grey hour, Topside offers light through to the 108.50 areas with limited resistance through the level but increasing on any move towards the 108.80-109.00 area with weak stops limited above the 109.20 areas. Downside bids into the current lows and then some limited congestion through to the 107.40 areas before the support starts to increase through to the 107.00 level, weak stops on a move through is likely to find congestive bids throughout the 106 handle and certainly difficult to move through.
• AUD: A slow rise on the move into the Tokyo session saw the market lifting off the 0.6705 area and pushing through to range around the 0.6715 level through to the grey hour, Downside bids through to the 0.6680 level with weak stops likely on a dip through the 0.6670 level with congestive bids then likely to be patchy but centred around the sentimental 50/00 areas, topside offers light through to the 68 cents level before stronger selling is likely to appear even a push through the 0.6820 area and weak stops are likely to find sellers willing to move in on the moves.
• EUR: A quiet ranged through to the Tokyo session with a minor push higher however, the range was limited to a few pips only through the bulk of the session unable to push beyond the 1.0965 level and then slipping slowly through to test the 1.0955 level towards the grey hour, Topside offers likely to be weak on any move through to the 1.1000 areas with congestion around the 1.1020 level and weak stops just beyond the level and opening the market through to the 1.1040-60 areas where congestion is likely, stronger offers then appear on any push through the 1.1080-1.1100 levels. Downside bids through the yesterday’s lows and then increasing as the market moves towards the 1.0890-70 areas, with stops likely on any dip through the 1.0880 areas and opening a longer-term downside move with some congestion around the 1.0860-40 areas and then increasing on any move to the 1.0820-00 areas.

Overnight News

HKD:

Hong Kong studies curfew to contain violent protests BBG

USD:

Fed will likely cut rates again, but it won’t have much impact on the economy CNBC

USD/EUR:

US set to announce 10-25% duties on European products Wednesday BBG

USTR: To target Single malt Irish and Scotch whiskies in EU Aircraft tariff list BBG

USTR: UK made sweaters, pullovers, cashmere items, wool clothing on tariff list BBG

USTR: Tariff list targets German tools, welding machinery, camera lenses, coffee BBG

USTR: Tariff targets wine and olives from France, German, Spain and UK BBG

USTR: Tariff list targets Cheese from most EU countries with 25% tariff BBG

EUR:

German growth outlook dims on waning export demand, trade spats BBG

GBP:

PM BoJo will suspend parliament from 8-14 for Queens speech containing plans for coming year – PTI

Today’s Data

Actual A | Consensus C | Previous P | Revised R | all timings GMT/UTC

2330       AUD       AiG Performance of Service Index (SEP) A 51.5 | P 51.4

0230       AUD       Trade Balance (AUG) A | C A$6100m | P A$7268m

0930       GBP       Markit/CiPS UK Composite PMI (SEP) C 50 | P 50.2

0930       GBP       Markit/CiPS UK Services PMI (SEP) C 50.3 | P 50.6

1000       EUR        Eurozone Retail Sales YoY (AUG) C 2.0% | P 2.2%

1330       USD       Continuing Claims (SEP21) C 1654k | P 1650k

1330       USD       Initial Jobless Claims (SEP28) C 215k | P 213k

1500       USD       ISM Non-Manufacturing/Services Composite (SEP) C 55.1 | P 56.4

1500       USD       Durable Goods Orders (AUG F) P 0.2%

1500       USD       Factory Orders (AUG) C -0.2% | P 1.4%

Harry Hindsight

 

• GBP: Opening around the 1.2310 areas the market drifted through into the Tokyo session falling back to the 1.2285 areas and while early trading in Tokyo saw the market pushing the 1.2300 level again but after a few hours of quiet trading the market drifted lower through to the grey hour testing through to the 1.2280 level and then dropping at a quicker pace into the London opening touching the 1.2250 level before recovering a little and the UK construction number put paid to that rally with a sharp move through to the 1.2225 areas before holding for a couple of hours and then steadily pushing through into the NYK session rallying towards 1.2300 level, as Boris Johnson revealed his Brexit plan with mixed reviews and most of the negative coming from the EU but after some initial nervousness the market rallied through the early part of NYK pushing through to the 1.2325 areas before eventually drifting back to the figure for a long run to the close.
• JPY: Initially quiet through the early part of the day trading from the opening around the 107.75 level and testing through to the 107.65 level before starting a slow climb through to test the 107.90 level and holding above 107.80 through to the London opening, stronger selling in London push the market through to the 107.60 level and the market held for several hours before giving up the level on a slow push to the 107.50 area for the move into the NYK session however, the sellers continued through NYK and the market slowly traded through to the 107.05 level before finding a base and finishing the day holding around the 107.20 level through to the close.
• AUD: Pushing steadily higher from the opening the market tested through to the 0.6720 areas before holding through to the London session and the appearance of the sellers and by mid-morning in London the market was extending its offers through the 0.6680 level and the weak stops cleared to just above the 0.6670 level before finding a base and starting a low steady climb through into the NYK session and running back to the opening levels to finish the day very little changed on the day.
• EUR: Running quietly through the early part of the session some light buying on the move into early Tokyo saw the market pushing lightly above the 1.0940 level before drifting through the balance of the Asian session, early London were sellers and the move through to midmorning in London saw the market testing the 1.0905 areas before starting a slow steady recovery through the balance of the day edging through to the 1.0960 levels before holding around the level on a long run to the close.

 

Yesterday’s Premiership results

JPY         Monetary Base End of period (SEP) A ¥520.4t | P ¥515.9t

JPY         Consumer Confidence Index (SEP) A 35.6 | P 37.1

CHF        CPI Core YoY (SEP) A 0.4% | C 0.4% | P 0.4%

CHF        CPI EU harmonized YoY (SEP) A 0.1% | P 0.5%

CHF        CPI YoY (SEP) A 0.1% | C 0.3% | P 0.3%

GBP        Markit/CIPS UK Construction PMI (SEP) A 43.3 | C 45.0 | P 45.0

USD       MBA Mortgage applications A 8.1% | P -10.1%

USD       ADP Employment Change (SEP) A 135k | C 140k | P 195k

USD       DOE US Crude Oil Inventories (SEP 27) A 3104k | C 1539k | P 2412k

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