Daily FX Market Commentary

Andy Harrison

Good morning,

NYK Close

USDJPY 78.947 | EURUSD 1.31191 | EURJPY 103.573 | AUDUSD 1.03825 | NZDUSD 0.82138 | USDCAD 0.97801 | EURCHF 1.21009 | USDCHF 0.9223 | GBPUSD 1.6147 | EURGBP 0.81255 |

 

 

Harry Hindsight

·         EUR: The Moody’s comments set the tone for the day and Euro’s rallied quickly on it moving from 1.3050 area to peak at the 1.3125 level in early Asia from there we settled down to range around the 1.3100 level for the remainder of the session, early London caught the buy Euro’s bug and again we pushed up this time to 1.3130 area however, with no data we awaited the US opening they like the others bought on the opening and we set the high just below 1.3140 and now we sit awaiting the forth coming EU meeting the 10,041^st this year. Sorry bit of cynicism creeping in.

·         GBP: While Euro’s ran away on the Asian open, Cable remained in a tight range moving from 1.6110 to 1.6135 area as EURGBP was bought one of the limiting factors in the Euro rise seemed to be cross selling particularly again JPY and GBP as EURGBP struggled once it touched the 0.8135 level, As we moved into the London session decent employment figures gave GBP the impetus to play catch up with the Euro and we saw Cable rise to 1.6180 before moving into the NYK session where they were happy to sell into the strength limiting any further gains. The market fell back to 1.6150 in late trading and quietly moved to the close, with EURGBP doing a lot of work around 0.8125.

·         JPY: As risk appetite took over the market after the Moody’s announcement on Spanish debt USDJPY dipped lower, we saw any number of exporters willing to sell EURJPY above the 103 mark and this pushed the USDJPY leg from the 78.90 area to trade below 78.65 London did very little to support the pair and we waited until the NYK session before we saw players willing to buy at the 78.65 level but as we moved towards the back end of NYK we saw the pair move briefly above the 79.00 area helped in part by healthy Housing data.

·         AUD: Oz moved on as the Euro drag helped it move ahead again leaping through the 1.0270 level to hit 1.0310 quickly on the Moody’s news then after staying static during the early London session we again saw fund buying move into the market steadily forcing the market up to reach 1.0390 area as risk appetite increased..

Yesterday’s premiership results

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

AUD       Westpac Leading Index M/M Aug A 0.50% | C 0.40% | P 0.30%

GBP       BoE Minutes A 0—0—9 | C 0—0—9 | P 0—0—9     

GBP       Jobless Claims Change Sep A -4.0K | C -3.0K | P-15.0K    

GBP       Claimant Count Rate Sep A 4.80% | C 4.80% | P 4.80%    

GBP       ILO Unemployment Rate (3M) Aug A 7.90% | C 8.10% | P 8.10%

CHF        ZEW Survey (Expectations) Oct A -28.9 | P -34.9

USD       Housing Starts Sep A 872K | C 770K | P 750K | R 758K

USD       Building Permits Sep A 894K | C 810K | P 803K    

USD       Crude Oil Inventories A 2.9M | C 1.4M | P 1.7M

For today

USDJPY:
Topside: 79.10-79.40 light mix 79.40-79.75 medium offers
Downside: 78.60-78.90 medium bids 78.30-78.60 light mix

EURUSD:
Topside: 1.3140-1.3170 medium offers 1.3170-1.3205 light scaled buy stops 1.3210-1.3240 light buy stops
Downside: 1.3060-1.3080 light mix 1.3020-1.3055 light sell stops

EURJPY:
Topside: 103.80-104.20 light mix
Downside: 103.20-103.50 light bids 102.70-103.10 light sell stops

AUDUSD:
Topside: 1.0395-1.0420 light buy stops 1.0420-1.0450 light offers
Downside: 1.0330-1.0360 light bids 1.0290-1.0320 light bids

 

EUR:

Greece lenders say near austerity deal for fresh aid, of course no details

Eurozone crisis takes its toll on German economy as growth for 2013 is reduced to 0.8%

Frances Hollande urges Eurozone growth effort

EU seeks way to involve non Euro states in banking Union

Europe banking supervisor plan illegal FT

Spain’s PM Rajoy continues to push for a Euro banking union in talks with Merkel

Spain’s PM continues to waiver on a bailout insisting on guarantees for aid while also seeking to mitigate political fallout. 

JPY:

BoJ to cut growth, CPI forecasts, may debate easing at the next meeting 30^th Oct

USD:

US will get downgraded, question is when, PIMCO’s Mather says

Fiscal cliff means US recession scheduled for Jan1 Mather

AUD:

Australia’s treasury says RBA in position to cut rates if it sees fit DJ

Says No question China growth weaker than thought

A$ supported by safe haven flows, foreign demand,

Sounds like the Ozzies are getting a little concerned with Oz strength – me

·         EUR: The Euro was primarily driven by cross trading today with stops close to the downside beginning to attract attention, we moved off from the open 1.3125 area and slowly declined moving to the 1.3100 level were we hit stops losses in related crosses notably EURJPY and EURGBP moving us through to touch below 1.3090 before holding. CNY figures dominated the flows somewhat but did nothing for the Euro.

·         GBP: Drifted steadily over the Asian session with very little to spur it on the drag in Euro’s moving it from the opening around 1.6150 to touch 1.6124 where we seemed to have found a base for the moment moving into the London session.

·         JPY: Found some movement as early buying of the USD helped the pair move from just below 79.00 to peak above 79.20 and hold in the area.

·         AUD: The traded lower with the Euro in early trading as USD seemed to be well favoured against everything however on the release of the data Oz was bid although the headline number was the seventh monthly decline the detail was better than expected and the Oz moved back higher from its 1.0366 low to hit 1.0396 several times with suspected options barriers in play at the level. Oz biz sentiment was pretty much inline after a revision to last month’s number but played only a minor role in the movement down. 

Today’s data

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

00:30     AUD       NAB Business Confidence Q3 A -2 | P -2 | R -3   

02:00     CNY        Industrial Production Y/Y Sep A 9.20% | C 7.70% | P 8.90%           

02:00     CNY        Real GDP Q/Y Q3 A 7.40% | C 7.40% | P 7.60%    

02:00     CNY        Retail Sales Y/Y Sep A 14.20% | C 14.00% | P 13.20%        

05:00     CHF        Trade Balance (CHF) Sep C 2.42B | P 1.73B           

08:30     GBP       Retail Sales M/M Sep C 0.50% | P -0.30%              

08:30     GBP       Retail Sales Y/Y Sep C 2.60% | P 3.10%   

08:30     GBP       Retail Sales w/Auto Fuel M/M Sep C 0.60% | P -0.20%   

08:30     GBP       Retail Sales w/Auto Fuel Y/Y Sep C 2.20% | P 2.70%         

12:30     CAD       Wholesale Sales M/M Aug C 0.20% | P -0.60%   

12:30     USD       Initial Jobless Claims (OCT 13) C 363K | P 339K    

14:00     USD       Philly Fed Survey Oct C 0.2 | P -1.9          

14:00     USD       Leading Indicators Sep C 0.10% | P -0.10%           

14:30     USD       Natural Gas Storage C 46B | P 72B

Ranges as of 6am London time

                                Highs   Lows

EUR                        1.30885 | 1.3120

JPY                         78.91 | 79.22

GBP                       1.6124 | 1.6143

CHF                        0.9223 | 0.92435

AUD                       1.0366 | 1.0397

CAD                       0.9764 | 0.9791

NZD                       0.8206 | 0.8223

EURCHF                1.20945 | 1.2116

EURGBP               0.8117 | 0.8128

EURJPY                 103.54 | 103.85

 

 Stay lucky

Andy