Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close Wellington open

USDJPY 98.709 98.30-35 | EURUSD 1.33787 1.3380-85 | EURJPY 132.07 131.58-63 | AUDUSD 0.90268 0.9038-43 | NZDUSD 0.78104 0.7815-20 | USDCAD 1.04994 1.0496-1.0501 | EURCHF 1.23322 1.2328-33 | USDCHF 0.92178 0.9212-22 | GBPUSD 1.55661 1.5561-66 | EURGBP 0.85946 0.8591-96 |

 

Weekend News

JPY/GBP:

Kuroda-Bean Say Policies Spur Growth as Fed Weighs Tapering
JPY:

Kuroda Says BOJ Stimulus Starting to Benefit Economy
Japan’s Amari Says TPP Agreement Hinges on Working-Level Talks
Sakaiya Urges Sales Tax Hike to 8% in April as Scheduled: Kyodo
Tepco Says Leaking Tank Had Been Moved as Land Subsided
GBP:

Bean Says BOE Jobless Threshold Should Temper Yield Tightening
EUR:

Demetriades Says Cannot ‘Rule Out’ Another ECB Interest Rate Cut
Greece May Need EU10B in Aid, Stournaras Tells Proto Thema
Germany’s Schaeuble Rejects Euro Bonds, WirtschaftsWoche Reports.
Merkel Says G20 Needs to Push Harder to Control Hedge Fund Risks
USD/GBP:

U.S., U.K. Mull Response to Syria as Hagel Signals Forces Ready
USD:

Ballmer Exit Leaves Microsoft Searching for Hero in PC Slump
JPMorgan Reviews Dealings With Foreign Firms After Consent Order
CNY:

China Construction Bank Profit Growth Slows on Rising Bad Loans
Bo Contradicts Wife as Chinese Media Stress Trial’s Transparency
AUD:

Abbott Pledges Surplus within Decade as Australia Poll Nears

 

Harry Hindsight

EUR: The market began the day just above the 1.3355 level and traded quietly higher into the Tokyo session topping around the 1.3368 level in early trading before we started to see some light selling as USD started to rally across the board. With continuing talk of tapering starting in Sept and political wrangling in Italy one would have suspected any further mention of Greece would put the pair on a deep slide, however after a move lower during the Tokyo fix the market held around the 1.3345 area and stayed in a tight range for a good portion of the Asian session. As the market approached the grey hours we again saw renewed selling entering from the Middle East this time and the market traded and held the 1.3335 level into the London open. German figures remained unchanged which showed no surprise for the market and it was only after the UK numbers hit the wires that the Euro started to rise as Cable rallied. The market moved back above the opening levels and made highs above the 1.3370 level before settling down and to a slow drift back to the opening levels and then dipping to set new lows as NYK opened with fresh buying of USD’s, touching below the 1.3335 level. The applecart was then tipped over by an unexpected drop in the new home sales numbers out of the US and we started to move off the lows with weak stops triggering and tumbling into more as the market moved quickly through the previous high triggering a third level of stops and only halted on reasonable offers just above the 1.3410 level touching there twice before drifting back to hold around the 1.3380 level into the close.

GBP: With the USD dominating the Asian session the market trade similarly to the Euro with an early high above the 1.5600 level before drifting off to hold around the 1.5580 level into the grey hours. Early London bought taking the market back to the 1.5600 level however, we saw players reducing their longs in front of the GBP data, with a preliminary reading slightly better than expected in the GDP number the Cable rallied quickly to just below 1.5640 before attracting sellers. The market drifted from this point into the NYK session holding above 1.5610 however, once NYK opened we saw strong selling appear in the market and weak stops triggered as the market made its way back below the 1.5600 level, and then through the previous lows to trigger a second round of stops. The market held the 1.5540 level and was less reluctant to rise after the New home sales figures out of NYK and only moved after the news was digested and the market started to play catch up with the Euro. The market made its opening level but was unable to push any further and remained around the 1.5570 over the course of the latter part of NYK into a close around that level.
JPY: USDJPY rose from the opening once we moved into the Tokyo session moving from the 98.70 level quickly in the Tokyo fix and then a gradual climb to trade above the 99.10 level. The market stuttered during the grey hours before again making the move to test the highs. GBPJPY buying forced the USD lower and the market dipped back to the opening levels before recovering slowly to push to 99.15 areas to make the day’s high. With the release of US data and concerns over when tapering will enter the market the USD and in particular USDJPY dropped back quickly trading through the lows triggering weak stops before holding in the 98.40 area and bouncing slowly to settle the day almost unchanged.
AUD: The market started the day rallying with the help of some carry trade buying into the Tokyo session moving fr4om the 0.9010 level to touch above the 0.9040 area before early Japanese retail market took advantage to lighten their longs and the market moved steadily back to its starting levels. With no data for the region to boost the Oz the market held above the 0.9000 level for the best part of the session and it was only once we moved into the grey hours that the market started to weaken pushing below the figure level to trade off the 0.8985 area for the best part of the London session. In early NYK we extended the low to the low 0.8970’s before the market started to recover as the USD weakened, as the JPY strengthened we saw the same occur to the AUD moving the market back through the opening levels and triggering weak stops on the way to touch above the 0.9050 level before settling into a slow and narrow range around the 0.9030 into the close.

Friday’s premiership results

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

EUR        German GDP Q/Q Q2 (F) A 0.70% | C 0.70% | P 0.70%

GBP       BBA Mortgage Approvals Jul A 37.2K | C 39.2K | P 37.3K

GBP       GDP Q/Q Q2 (P) A 0.70% | C 0.60% | P 0.60%

GBP       Index of Services 3M/3M Jun A 0.60% | C 0.70% | P 0.80% | R 0.70%

CAD       CPI M/M Jul A 0.10% | C 0.20% | P 0.00%

CAD       CPI Y/Y Jul A 1.30% | C 1.40% | P 1.20%

CAD       BoC CPI Core M/M Jul A 0.00% | C 0.10% | P -0.20%

CAD       BoC CPI Core Y/Y Jul A 1.40% | C 1.50% | P 1.30%

EUR        Eurozone Consumer Confidence Aug (A) A -16.5 | C -16.5 | P -17.4

USD       New Home Sales Jul A 394K | C 490K | P 497K | R 455K

 

For today

USDJPY
Topside: 98.80-99.10 light offers 99.20-99.50 light mix 100.00-100.20 large offers
Downside: 97.60-98.10 light bids

EURUSD
Topside: 1.3410-1.3440 medium offers 1.3440-1.3460 light mix
Downside: 1.3320-1.3340 light bids 1.3280-1.3300 light bids

AUDUSD
Topside: 0.9070-0.9100 light offers 0.9100-0.9130 light offers
Downside: 0.8980-0.9010 light bids 0.8950-0.8980 light sell stops

 

JPY:

Abe Cabinet Approval Rating Rises to 68% in August: Nikkei Poll

Japan Sales Tax Hike Support Rate Rises to 43% in Aug.: Asahi

Japan to Decide on Sales Tax Increase by Early Oct.: Amari

Suga: Abe to Make Sales Tax Decision Before Autumn Diet Session

Japan to Seek 2016 G-20 Presidency, Nikkei Reports

CNY:

China economy showing clear signs of stabilisation-stats bureau

China Is ‘Deeply Aware’ of Debt Threat to Economy: Sheng

China Industry-Specific PMI Data Stopped As ‘Too Volatile’: Sheng

China to investigate vice president of oil firm CNPC

NZD:

New Zealand Records Widest July Trade Deficit Since 2008

New Zealand Ratings Affirmed, Outlook Remains Stable: S&P

EUR:

Germany’s Weak Loan Demand, Low Rates Hurt Banks, Moody’s Says

 

EUR: Early trading was in line with the close on Friday and the market did very little moving higher to above the 1.3393 in early trading and making a low just before the Tokyo opening to 1.3377 and trading for the most part between 1.3380/90 for a quiet session with AUD, GBP and CAD taking long weekends today.

GBP: Cable was no different to the Euro with a tight range opening around the 1.5565 and trading to above the mid 1.5580’s before dropping back to move around the 1.5570 area.

JPY: Pre official opening saw a quick sell off from the period that they turn the machines on to set the low at 98.17 before the market recovered as we moved towards the Tokyo opening, with the Sydney market all but closed one suspects an unscrupulous play possibly triggering of stops which immediately corrected with the market only slightly below the close for the official openings, from there the USDJPY moved to above the 98.80 area however, with the Ozzies out and a generally quiet market over all the market settled into a tight range around the 98.70 area for greater period before slowly drifting into the grey hours.

AUD: A narrow range for the AUD as would be expected for a bank holiday with the market opening around above the Friday close and trading around the 0.9030 area in early trading, we dipped lower from the Tokyo fix with the market continuing to dip as USDJPY recovered from its pre-market lows, taking the Oz to its lows before a steady rise higher as we moved to the grey hours.

 

Today’s data

Actual = A Consensus = C  Previous = P Timings GMT

NZD       Trade Balance (NZD) Jul A -774M | C -16M | P 414M | R 374M

JPY         Corporate Service Price Y/Y Jul A 0.40% | C 0.40% | P 0.40%

12:30     USD       Durable Goods Orders Jul C -3.60% | P 4.20%

12:30     USD       Durables Ex Transportation Jul C 0.50% | P 0.00%

 

Ranges as of 6am London time including Sydney open

Highs    Lows

USD/JPY               98.845 | 98.17

EUR/USD            1.3393 | 1.3377

EUR/JPY              132.30 | 131.41

AUD/USD            0.9054 | 0.9013

NZD/USD             0.7833 | 0.7785

USD/CAD             1.0516 | 1.0496

EUR/CHF              1.23405 | 1.2328

USD/CHF             0.92235 | 0.9207

GBP/USD             1.5587 | 1.5561

EUR/GBP             0.8596 | 0.85895

 

Stay lucky

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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