Daily FX Market Commentary

Andy Harrison

Good morning,

NYK Close and Asia open

USDJPY 78.167 78.13-22 | EURUSD 1.29805 1.2976-84 | EURJPY 101.442 101.38-56 | AUDUSD 1.04549 1.0442-65 | NZDUSD 0.82854 0.8270-0.8305 | USDCAD 0.97642 0.9758-67 | EURCHF 1.21114 1.2108-10 | USDCHF 0.93303 0.9292-0.9343 | GBPUSD 1.62303 1.6227-49 | EURGBP 0.79989 0.7990-0.8003 |

Weekend News

EUR:

Merkel, Hollande EU Unity Pledge Fails to Stretch to Bank Union
Monti Says Greek Exit Not Being Considered, Kathimerini Reports
Moscovici Says France Wants to Maintain Universal Banking Model
Merkel Affirms Bid for Third Term in Clearest Statement Yet
New Greek Haircut Would Cost German Taxpayer at Least EU8b: Bild
Rajoy Says Spanish Pensions Will Probably Increase in 2013
Troika Calls Week’s Truce in Haggling Over Greek Budget Package
CNY:

China’s Economic Growth May Slow to 7.4% in 3Q: Qiu Xiaohua
China Has More Room than U.S., Europe to Aid Growth, Xinhua Says.
China Property Market Still at ‘Critical’ Period: People’s Daily
CNY/PHP:

Xi Calls for Normalization of China-Philippines Ties: Xinhua
CNY/JPY:

China ‘Strongly’ Opposes Japan Landing on Disputed Islands 
JPY:

Japan to Study Malaysia’s Rare Earth Mining Potential: Nikkei
Japan Rescue Fund May Counter KKR Bid for Chipmaker Renesas 
AUD:

Australia Needs Spending Cuts More Than Mining, Emerson Says
USD:

Romney Forgoes Full Charity Tax Break for 2011 Rate Above 13%
GBP:

Clegg Seeks More U.K. Tax on Unearned Wealth, Top-End Property
Clegg Says ‘Not Going to Flinch’ From Staying Lib Dem Leader

Harry Hindsight

·         EUR: Asia was happy to do nothing really with the Euro it managed to touch just above 1.3000 from the opening 1.2970 area however, early rumours that we were closer to resolving the Spain issue (told you not) and it was buy the rumour moving to above 1.3040 a couple of times as its on its off flowed into the market needless to say we finished the day slightly higher just above the 1.2980 level.

·         GBP: Cable benefited from the move’s in Euro however, like the Euro it couldn’t keep the majority of it and having hit above 1.6300 again it was forced down to finish only about 20 tics above the opening 1.6220 area opening.

·         JPY: USDJPY outside of the Asian range of 78.20-37 struggled moving down in late trading to the lows London kept it subdued in a very tight range and NYK took it slightly lower to set the low just below 78.12.

·         AUD: The Oz rallied with the Euro triggering stop losses above the 1.0500 area but having made it there in early London could not keep the momentum going into the NYK session and was sold off during the session to just above the 1.0440 level into the close.

Yesterday’s premiership results

Actual = A | Consensus = C | Previous = P | Revised = R 

AUD       Conference Board Leading Index Jul A 0.00% | C 0.20% | P 0.50%

GBP       Public Sector Net Borrowing (GBP) Aug A 12.4B | C 13.2B | P -1.8B           

CAD       Wholesale Sales M/M Jul A -0.60% | C -0.20% | P -0.10%              

CAD       CPI M/M Aug A 0.20% | C 0.30% | P -0.10%         

CAD       CPI Y/Y Aug A 1.20% | C 1.30% | P 1.30%               

CAD       BoC CPI Core M/M Aug A 0.30% | C 0.30% | P -0.10%     

CAD       BoC CPI Core Y/Y Aug A 1.60% | C 1.60% | P 1.70%

For today

USDJPY
Topside: 78.20-78.50 light offers 78.60-78.90 light buy stops 79.00-79.30 light offers  79.30-79.60 medium offers 
Downside: 77.80-78.00 mixed light sell stops 77.50-77.80 decent bids 77.00-77.30 decent sell stops 76.50-76.80 decent bids EURUSD
Topside: 1.2990-1.3020 light buy stops  1.3030-1.3060 light offers  1.3070-1.3100 light buy stops 
Downside: 1.2920-1.2930 light sell stops 1.2890-1.2920 medium sell stops 1.2850-1.2880 light bids

EURJPY
Topside: 101.50-101.80 light offers  101.90-102.20  light offers 
Downside: 100.50-100.80 light sell stops AUDUSD
Topside: 1.0480-1.0510 light offers  1.0520-1.0550 medium buy stops 
Downside: 1.0350-1.0380 light sell stops 1.0300-1.0330 medium sell stops 

 

JPY:

BOJ Dep Gov Yamaguchi: BOJ Will Continue to Act Decisively in Flexible Manner if Needed

BOJ minutes: may need to up inflation expectations via FX-one member

Japan PM says dispute with China could hurt economy report

Japan FinMin Azumi tapped for ruling party Post-NHK

JPY/CNY:

Japan: China surveillance ships enter waters near disputed islands

Japan To Send Foreign Ministry’s Top Bureaucrat To China -Kyodo

CNY:

China’s poorer regions fare better in downturn-survey

AUD/CNY:

China’s SWF Targets Australian Dairy Farms – Report

Asia:

Chinese, Japanese, Indian Growth Forecasts Cut for 2012 at S&P

AUD:

Australia’s Falling Tax Revenue Overshadows Budget Surplus Plan

NZD:

Outgoing RBNZ Chief Sees Positive Signs for New Zealand Economy

GBP:

UK pledges $1.6 bln for state-backed business bank

  

·         EUR: Weekend news put paid to any more rises the market opened in line with Friday’s close but was on the back foot from the beginning trading steadily lower before tipping midway through the session taking us to below 1.2930 we recovered slightly but volumes have been small since the lows.

·         GBP: Dragged by the Euro the Cable moved from the opening 1.6242 level to touch just below 1.6200 in thin trading, from there we’ve moved back to the 1.6220 level but again very quiet and looking vulnerable.

·         JPY: A choppy day if somewhat restricted in range, moving down from the opening 78.16 level to hit a low of just below 78.02 before moving back to the mid teen area later in the session. Apart from one or two larger tickets going through causing the choppy nature it’s been reasonably quiet overall.

·         AUD: Moving steadily off the opening 1.0450 area until mid-session when we bit the 1.0400 level to find some minor support to push back to the mid 1.0420’s before drifting sideways for the last hour or so.

 

 

 

Today’s data

Consensus = C  Previous = P Timings GMT

08:00     EUR        German IFO – Business Climate Sep C 102.5 | P 102.3      

08:00     EUR        German IFO – Current Assessment Sep C 111 | P 111.2  

08:00     EUR        German IFO – Expectations Sep C 95 | P 94.2      

Ranges as of 6am London time

                                Highs   Lows

USD/JPY               78.23 | 78.00

EUR/USD             1.2990 | 1.2928

EUR/JPY               101.53 | 100.87

AUD/USD            1.0456 | 1.0398

NZD/USD             0.8305 | 0.8221

USD/CAD             0.9801 | 0.9750

EUR/CHF              1.2115 | 1.2100

USD/CHF             0.9360 | 0.9326

GBP/USD             1.6250 | 1.6200

EUR/GBP             0.7995 | 0.79805

Stay lucky

Andy

  Andy Harrison  

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