Daily FX Market Commentary

Andy Harrison

Good Morning,

LMAX Close

USDJPY 107.54 | EURUSD 1.1043 | AUDUSD 0.68609 | NZDUSD 0.64188 | USDCAD 1.31509 | USDCHF 0.99192 | GBPUSD 1.23574 |

LMAX highs and Lows 05.00 GMT

                                Highs | Lows

EURUSD               1.10556 | 1.1041

USDJPY                107.784 | 107.502

GBPUSD              1.23600 | 1.23411

USDCHF               0.99233 | 0.9913

AUDUSD             0.68817 | 0.68497

USDCAD              1.31518 | 1.31399

NZDUSD              0.64388 | 0.64079

EURCHF               1.09668 | 1.09532

EURGBP              0.89520 | 0.89351

EURJPY                119.144 | 118.717

For Today

• GBP: A slow drift through the session opening around the 1.2355 areas and holding into the Tokyo session before dipping slowly through to the 1.2340 areas before rising back to the opening level and testing lightly through the 1.2360 area before holding quietly into the grey hour, Topside congestion through the current levels with possible weak stops around the 1.2370 area and limited offers into the 1.2400 area and light congestion likely through the sentimental areas for any move to the stronger 1.2500 level. Downside congestion light through to the 1.2200 level and a little stronger on any test through before stronger bids start to appear on any attempt at the 1.2150 level notwithstanding Brexit news. A test through the level is likely to see varying degrees of strength with no real stops until below the 1.2100 area.
• JPY: USDJPY pushed steadily higher through the Tokyo session after a quiet opening around the 107.50 level, the move to the high was towards the move into the grey hour testing just short of the 107.80 level and holding around the 107.75 area, congestion through the 107.80 area and continuing into the 108.00 level l and congestion likely through the level to the 108.20 areas and stops likely to appear above there, downside bids light through the 107.00 level with congestion likely in the 106.60-40 areas and bids likely to increase through the 106.20-105.80 areas.
• AUD: After a weak start with the market holding through into the Tokyo session before dipping through to the 0.6850 level with weaker consumer numbers leading the way, however, having hit the level the market started a slow recovery and then a quick rise through the session pushing to the 0.6885 level before dropping back to trade around the 0.6875 areas to the grey hour, downside bids likely to forming around the 0.6800 areas and increasing through to the 0.6780 level, a break through the level is likely to see weak stops appearing and the market open to a move back through to the stronger 0.6720 levels., Topside offers into the 0.6880 level likely to be strong and continuing through the 69 cents level before weak stops appear on any test through the 0.6920 areas with light congestion then continuing through the level into 0.6960 areas before increasing.
• EUR: steady day for the Euro with the market holding quietly in a 10 pip range for the most part pushing a couple of times to the 1.1055 level and unable to push through the 1.1045 with any conviction and holding around the 1.1050 level into the grey hour, downside bids into the 1.0920 level and likely to continue through to the 1.0880 level however, congestion is then likely to start increasing as the market moves into the mid ranges from 2015-16 with limited bids until 1.0800,Topside offers through the 1.1040-60 area with increasing congestion on a test to the 1.1100 areas, weak stops likely on a break of the 1.1120 level and the market then running to weaker congestion into the 1.1140-60 and increasing on any move to the 1.1180 level.

Overnight News

CNY:

Chinese banks told to curb loans to developers, homebuyers Caixin NS6

USD:

Something is fishy about Trump’s John Bolton announcement WPT

Trump plans crackdown on Fentanyl shipments from China BBG

Will Trump sell out US on Huawei – WSJ

USD/CNY:

Critical window is about to close for US-China trade deal AXS

USD/HKD:

Hong Kong special treatment by US under microscope by US senators

GBP:

Poll reveals majority of public backs Boris Johnson over Brexit Tel

UK PM reiterated at cabinet on Tuesday his Brexit goal is unchanged by law passed by parliament ITV

KRW:

1. Korea says it tested super large multiple rocket launcher under Kim’s guidance TWT

OIL:

API reports US crude stockpiles fell 7.23m bbl last week BBG

AUD:

RBA now expected to cut cash rate to 0.5% by Feb 2020 DJ

Australian consumers remain in the doldrums despite tax relief – BBG

KRW/JPY:

1. Korea to lodge WTO complaint over Japan’s export curbs on Wednesday RTRS

CNY/USD/HKD:

US act adding fuel to the Hong Kong fire CHD

Today’s Data

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

AUD       Westpac Consumer Confidence (SEP) A -1.7% | P 3.6%

11:00     USD        MBA Mortgage Applications (SEP 6) P -3.1%

11:00     MXN      Industrial Production NSA (YoY) (JUL) P -2.9%

14:30     USD        DOE U.S. Crude Oil Inventories (SEP 6) C -2529k | P -4771k

23:01     GBP        RICS House Price Balance (AUG) C -10% | P -9%

23:50     JPY         Machine Orders (YoY) (JUL) C -4.3% | P 12.5%

Harry Hindsight

 

• GBP: A quiet Asian session with the market making early highs above the 1.2350 level and then slowly drifting into the Tokyo session to test lightly below the 1.2340 area and hold through to the London session around that area, another good employment number saw the market quickly rise through to the 1.2380 areas before dropping back on the stronger earnings numbers, the drop back was deep and the possible fact that Johnson continues to reiterate that no matter what Brexit will occur on time, the market tested through to the 1.2310 areas before bouncing and holding for a brief period around the 1.2330 area before making a steady rise into the NYK session with the new session pushing the market to above the 1.2370 level again and holding for an hour or so before giving up on the push and drifting through to hold just above the 1.2350 areas to the close.
• JPY: USDJPY saw containment until the end of the day with the market opening just above 107.20 and dipping a little lower before rising from the opening in Tokyo to push the 107.50 level and failing for the first time, Asia saw the market dip back to the 107.40 the move to the grey hour saw the market dipping through to the London opening testing back to the 107.30 area before running quietly through to just before the NYK session and again rising to test the highs and immediately dropping back for a run to the opening levels, the market failed to break through and the market then started a slow but steady rise through the NYK session breaking through the highs slowly and pushing towards the 107.60 before drifting a little to the close.
• AUD: A reasonably tight range throughout the day with the market opening around the 0.6865 level and drifting into the Tokyo session trading around the level deep into the session before dipping through to test the 0.6855 level for the first time, a light recovery to the 0.6860 level for the move into the London session and fresh buying again took the market towards the 0.6870 level only to fail again and hold around the 0.6860 level into the NYK session and a repeat performance a dip to the lows and a run to make the highs just above the 0.6870 level before drifting back for the close marginally weaker on the day.
• EUR: Euro’s remained fairly static trading for the most part around the 1.1040 areas for much of the day, rising a little above the 1.1050 level for the move into the Tokyo session the market then drifted off for the move into the London session basing on the 1.1040 level, early London saw buying take the market to the 1.1060 level in a steady move only to drop back just as quickly to push through the lows, the move into the NYK session saw the low close to the 1.1030 level but then holding through to the close around the 1.1040 level only to finish the day unchanged.

 

Yesterday’s Premiership results

CNY        Consumer Price Index (YoY) (AUG) A 2.8% | C 2.7% | P 2.8%

CNY        Producer Price Index (YoY) (AUG) A -0.8% | C -0.9% | P -0.3%

AUD       NAB Business Confidence (AUG) A 1 | P 4

JPY         Machine Tool Orders (YoY) (AUG P) A -37.1% | P -33.0%

GBP        Claimant Count Rate (AUG) A 3.3% | P 3.2%

GBP        Jobless Claims Change (AUG) A 28.2k | P 28.0k | R 19.8k

GBP        Average Weekly Earnings (3M/YoY) (JUL) A 4.0% | C 3.7% | P 3.8%

GBP        Weekly Earnings ex Bonus (3M/YoY) (JUL) A 3.8% | C 3.7% | P 3.9%

GBP        ILO Unemployment Rate 3Mths (JUL) A 3.8% | C 3.9% | P 3.9%

GBP        Employment Change 3M/3M (JUL) A 31k | C 55k | P 115k

CAD       Housing Starts (AUG) A 226.6k | P 222.0k | 222.5k

CAD       Building Permits (MoM) (JUL) A 3.0% | P -3.7%

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