Daily FX Market Commentary

Andy Harrison

Good morning,

NYK Close Asian open

USDJPY 78.366 78.30-40 | EURUSD 1.2575 1.2566-90 | EURJPY 98.548 98.39-71 | AUDUSD 1.03244 1.0280-89 | NZDUSD 0.8034 0.7995-0.8010| USDCAD 0.98624 0.9868-75 | EURCHF 1.20078 1.2009-10 | USDCHF 0.95506 0.9538-69 | GBPUSD 1.58671 1.5665-79 | EURGBP 0.79268 0.7914-40 |

 

Weekend News

CNY:

China’s manufacturing Unexpectedly Contracts as Orders Decline
Xinhua: Wen Says China to Firmly Curb Speculative Home Buying
China Announces Senior Party Roles Ahead of Leadership Change
EUR:

ECB Said to Give Central Banks 24 Hours to Digest Bond Plan
ESM Intends to Aid Spanish Banks in ‘Near Future,’ Regling Says
Orphanides Says ECB Shouldn’t Rush New Measures Against Crisis
Germany’s Debt Rose 390 Billion Euros on Crisis, Passauer Says
Merkel to Tell Rajoy Not to Seek Full Bailout: ABC 
Rajoy Says Spain Can’t Finance Itself in Call For ‘Sacrifices’
Catalonia Cut to Junk as Spain Bails Out Bankia, Deficit Swells
Greek Governing Parties See Support Fall Along With Opposition
Greece Will Vote on Budget Cuts After September 15: Kathimerini
Spain to Recapitalize Bankia After 4.45 Billion-Euro Loss
USD:

Fed’s Lockhart Says He’s Weighing Costs, Benefits of More Easing

Obama Trades Criticism on Economy With Romney in Swing States
JPY:

Japan pension fund hit by $26-bn investment loss
Japan Considers Increasing Home-Loan Tax Benefit, Nikkei Says
Japan Government to Pay 2b Yen for Disputed Islands, Nikkei Says
AUD:

Australia Carbon Price Seen Lower After Floor Scrapped, CMI Says

Harry Hindsight

·         EUR: Asia was quiet as usual with Bernanke’s comments in the offing keeping a lid on things, Europe ignored all the numbers which given their poor outcome was surprising, moving up during the London session as views on Bernanke’s speech set the markets doom and gloom merchants ignoring the facts, so from the Asian low 1.2500’s we moved steadily higher touching above 1.2620 before the comments, of course when he did start we saw the market retracing the gains as QE was again pushed back as likely to interfere with the general state of the US economy, we settled down into the 1.2560 area moving into the close.

·         GBP: To say the market had it in for the USD looks to be an understatement Cable did nothing throughout the Asian session holding just below the 1.5800 level, once London settled in the USD selling kicked off and GBP started to rise moving steadily to above 1.5880 by the time the speech started but while Euro backtracked in late trading Cable held onto its gains holding just below the 1.5880 level.

·         JPY: USDJPY went into a steady decline moving from 78.65 Asian opening and dropping slowly to hold 78.40 for the session, finding some early EURJPY buyers to hold it in the London session only for the US market to take it lower to trade below 78.20 before settling into 78.30 area for the close.

·         AUD: As with the other majors USD was the common denominator being sold over the 24hrs slowly during the Asian session hitting 1.0280 area before moving slowly back above 1.0300 the move into the London session saw it rise steadily to touch above 1.0350 before settling back into the 1.0320 area for the close.

Friday’s premiership results

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

GBP       GfK Consumer Sentiment Aug A -29 | C -27 | P -29          

JPY         Nomura/JMMA Manufacturing PMI Aug A 47.7 | P 47.9

JPY         Unemployment Rate Jul A 4.30% | C 4.30% | P 4.30%      

JPY         Household Spending Y/Y Jul A 1.70% | C 1.20% | P 1.60%              

JPY         Tokyo CPI Core Y/Y Aug A -0.50% | C -0.60% | P -0.60%  

JPY         National CPI Core Y/Y Jul A -0.30% | C -0.30% | P -0.20%

JPY         Industrial Production M/M Jul (P) A -1.20% | C 1.70% | P 0.40% 

JPY         Housing Starts Y/Y Jul A -9.60% | C -10.30% | P -0.20%    

EUR        German Retail Sales M/M Jul A -0.90% | C 0.20% | P -0.10% | R -0.50%

EUR        Eurozone CPI Estimate Y/Y Aug A 2.60% | C 2.50% | P 2.40%        

EUR        Eurozone Unemployment Rate Jul A 11.30% | C 11.30% | P 11.20%          

CAD       GDP M/M Jun A 0.20% | C 0.10% | P 0.10%         

USD       Chicago PMI Aug A 53 | C 53.5 | P 53.7   

USD       U. of Michigan Confidence Aug (F) A 74.3 | C 73.6 | P 73.6            

USD       Factory Orders Jul A 2.80% | C 1.20% | P -0.50%

For today

JPY
Topside: 78.45-78.65 light two-way interest 78.75-79.05 scaled offers, light 79.30-79.60 light scaled offers
Downside: 78.05-78.20 Light bids 77.85-78.05 two way interest with bidding bias 77.60-77.80  medium bids

EUR
Topside: 1.2595-1.2615 light two way 1.2630-1.2650 medium two-way interest 1.2660-1.2690 medium offers
Downside: 1.2540-1.2560 medium bids 1.2510-1.2530 medium sell stops 1.2470-1.2490 light sell stops

EURJPY
Topside: 99.10-99.30 light buy stops 99.80-100.00 light offers
Downside: 97.90-98.10 medium sell stops AUD
Topside: 1.0355-1.0375 light offers 1.0385-1.0405 light buy stops
Downside: 1.0215-1.0245 light-medium stops

 

22:45     NZD       Terms of Trade Index Q/Q Q2 A -2.60% | C -2.00% | P -2.30%     

23:50     JPY         Capital Spending Q2 A 7.70% | C 8.90% | P 3.30%              

0:30        AUD       TD Securities Inflation M/M Aug  A 0.60% | P 0.20%           

1:00        CNY        Non-manufacturing PMI Aug A 56.3 | P 55.6       

1:30        AUD       Retail Sales M/M Jul A -0.80% | C 0.20% | P 1.00% | R 1.20%

2:30        CNY        HSBC Manufacturing PMI Aug (F) A 47.6 | P 49.3               

AUD: Australia retail sales suffer surprise fall

Australia manufacturing index edges up in August

Australia home prices rise, caution on mining slowdown-survey

EUR:

Germans want to cut Greece loose-poll

JPY:

Moody’s: Japan Censure, Political Stalemate Are Credit Negative

Japan MOF Survey: April-June Capex Up 7.7 % On Year

CNY: PBOC Has No Short Term Intention for Loose Money Policy: News

China HSBC PMI drops to 47.6, worst since March 2009

China Non-Manufacturing PMI Rises, But Risk Persists

People’s Daily: China Should Save Some Supportive Policies For Future

China August Average Home Prices Rise for 3rd Month

NZD:

N.Z. 2012 Growth May Exceed 2.2% Forecast, Treasury Says

NZ Purchasing Power Falls but Remains at High Level

NZ Govt Pushes Back Planned Sale of State Assets to Early 2013

·         EUR: Opened close to where it went out and remained around the opening area for the first couple of hours, we then saw EURJPY selling kicking in and the market slowly moved lower, the retail sales numbers out of Oz sent the Oz and with it the Euro lower holding at the 1.2560 area where we found some support mid-session but add the CNY figure and we saw a round or two of EURAUD cross buying sending the Euro back above the 1.2570 level

·         GBP: As with the Euro we saw the same pattern with early holding before a slow decline into mid-session moving from the 1.5880 level down to below 1.5850 before finding some buying kicking in to move it back to the high 1.5860’s and settling down to a tight range.

·         JPY: A very quiet day in USDJPY with 78.34-78.19 being the extent of the range with a steady decline over the session before moving into the London session around the 78.25 level.

·         AUD: Poor retail sales and the effect of the CNY numbers hung over the market having moved up in the early part of the session to top out at the 1.0300 level successive numbers sent us tumbling back first to below 1.0270 after the CNY PMI number and again after the HSBC PMI number, retail sales didn’t help and we traded to 1.0240 before finding some support and moving steadily back above 1.0260, with the expectations for tomorrows rate decision at unchanged the Oz continues to move higher as we move to the London opening.

Today’s data

Consensus = C  Previous = P Timings GMT

07:15     CHF        Retail Sales (Real) Y/Y Jul C 4.50% | P 3.70%         

07:30     CHF        SVME-PMI Aug C 49.1 | P 48.6   

08:00     EUR        Eurozone PMI Manufacturing Aug (F) C 45.3 | P 45.3      

08:30     GBP       PMI Manufacturing Aug C 46.1 | P 45.4 

 

Ranges as of 6am London time

                                Highs   Lows

USD/JPY             78.41 | 78.192

EUR/USD             1.2585 | 1.255

EUR/JPY             98.56 | 98.217

AUD/USD             1.0300 | 1.0239

NZD/USD             0.8016 | 0.7985

USD/CAD             0.9882 | 0.9852

EUR/CHF             1.2010 | 1.2009

USD/CHF             0.9560 | 0.9538

GBP/USD            1.5886 | 1.5851

EUR/GBP            0.7929 | 0.7906

Stay lucky

Andy