Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close Wellington open

USDJPY 98.146 98.30-35 | EURUSD 1.32222 1.3197-1.32275 | EURJPY 129.745 129.425-130.00 | AUDUSD 0.8905 0.8938-44 | NZDUSD 0.77268 0.7741-55 | USDCAD 1.05382 1.0523-30 | EURCHF 1.22948 1.2312-15 | USDCHF 0.92982 0.9296-0.93395 | GBPUSD 1.55043 1.5515-18 | EURGBP 0.85307 0.8519-405 |

 

Weekend News

USD:

Obama Seeks Congress Approval Before Syria Military Strike
CNY:

China Factory Gauge Jumps to 16-Month High in Recovery Sign
China Anti-Graft Agency Probes State Assets Chief Jiang
Shanghai Aug. Avg New-Home Price Falls 5.42% on Month, Uwin Says
China to Start Bond Futures Trading Next Week After 18-Year Halt
JPY:

Amari: Japan Tax Panel Majority for Raising Sales Tax as Planned
Abe Adviser Honda: Japan Shouldn’t Hike Taxes While in Deflation
Honda: Japan Should Increase Sales Tax 1% Pt Or 2% Pts in 2014
New Leak at Tepco’s Fukushima Plant Potentially Lethal: Asahi
G20/USD/JPY:

U.S. Official Says Japan Should Avoid Targeting Exchange Rate
JPY/INR:

Honda Plans India Expansion to Quadruple Unit Sales, Nikkei Says
EUR:

Euro-Area Recovery Under Way, ECB’s Coeure Tells Dagens Industri
Spanish Economy on Threshold of Growth, PM Rajoy Says
Staikouras Says Greek Debt Not Sustainable, Parapolitika Reports
Greece’s New Democracy, Syriza Parties Vie for 1st Place in Poll
Schaeuble Sees Volatile Markets If Merkel Coalition Doesn’t Win
Merkel Criticizes Russia, China Over Syria, Augsburger Reports
GBP:

U.K. Families Face Pension Bill for Nannies from 2015, FT Says

 

Harry Hindsight

  • EUR: The market opened around the 1.3240 area and while we had a few peaks and troughs through the early sessions the market was pinned into a very narrow range until into NYK. Peaking above the 1.3250 level into the middle of the Tokyo session the rally was weak and volumes were vastly off from normal. Having made the highs the market struggled through Asia and moved only slightly below the opening level and we had to wait until the grey hours for the next real move with the market trading off the 1.3250 level as early Europeans moved into the market and dropping it to just above the 1.3220 level into the official opening. The selloff was short lived before the market moved back towards the highs and we traded around the 1.3240 level into the NYK opening. While we saw a plethora of data through the early part of London nothing happened as the data was bland to an extreme. NYK fixing seemed to do some of the damage with NYK selling before the US figures however, it was the Michigan number that seemed to send the market further down with a good number hitting and the Euro dropping to the low 1.3170’s before seeing a recovery in the market as the upcoming long weekend started to kick in with liquidity dropping off as we moved back to the 1.3200 level finishing the day around the 1.3220 area.
  • GBP: Cable opened around the 1.5505 level and traded steadily higher in the early part of the Tokyo session before holding in a tight 1.5510-1.5525 range into the London session. The market was initially driven by news that the UK had voted against involvement in the Syrian situation for the moment however, that is likely to change given the games that the opposition party are playing. We saw some early selling during London as is usually the case when imminent military action by the US is about to take place and the Cable was no exception with the pair declining to below 1.5480 in London before resuming the slide into the NYK session with the drag of the Euro, the market eventually finished the day with very little difference on the day and with very little in the numbers the day was limited in volume.
  • JPY: In the greater scheme of things the market was reasonably quiet. With early trading higher and the Tokyo fix taking it higher to just below the 98.50 level, the market then started a steady drift downwards to hold just above the 98.00 area and move towards the grey hours quietly with limited impact from the figures or the Syrian rumours and titbits. The grey hours dropped the market from the rally above 98.35 before touching back to the lows and holding only until the official London open taking the market quickly to just below 97.90 however, the market held and started a steady recovery into NYK opening where the market held around the 98.20 level into the close in very quiet trading.
  • AUD: The Oz opened around the 0.8920 level and immediately dropped to below the 0.8905 holding into the Tokyo session and starting a minor rally as the carry trade and safe haven flows seemed to take hold of the market, it traded to just above the 0.8950 level before finally dipping for the first time. The dip was very shallow and we quickly moved to a new high above the 0.8955 level. The London open took the market back to the opening levels and action in the Oz was very limited until we moved into the NYK session. With the USD bid into the early part of the session the Oz drifted to new lows around the 0.8900 for the day and holding for several hours into the close of the market.

Friday’s premiership results

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

NZD       Building Permits M/M Jul A -0.80% | C 1.30% | P -4.00% | R -4.30%

GBP       GfK Consumer Sentiments Aug A -13 | C -14 | P -16

JPY         Nomura/JMMA Manufacturing PMI Aug A 52.2 | P 50.7

JPY         Household Spending Y/Y Jul A 0.10% | C 0.20% | P -0.40%

JPY         Jobless Rate Jul A 3.80% | C 3.90% | P 3.90%

JPY         National CPI Core Y/Y Jul A 0.70% | C 0.70% | P 0.40%

JPY         Tokyo CPI Core Y/Y Aug A 0.40% | C 0.40% | P 0.30%

JPY         Industrial Production M/M Jul (P) A 3.20% | C 3.70% | P -3.10%

JPY         Housing Starts Y/Y Jul A 12.00% | C 14.30% | P 15.30%

EUR        German Retail Sales M/M Jul A -1.40% | C 0.60% | P -1.50% | R -0.80%

CHF        KOF Leading Indicator Aug A 1.36 | C 1.33 | P 1.23 | R 1.25

GBP       Mortgage Approvals Jul A 60.6K | C 59.0K | P 57.7K | R 58.8K

GBP       M4 Money Supply M/M Jul A 0.60% | P 0.10%

GBP       M4 Money Supply Y/Y Jul A 1.80% | P 1.50%

EUR        Eurozone Economic Confidence Aug A 95.2 | C 93.8 | P 92.5

EUR        Eurozone Industrial Confidence Aug A -8 | C -9.6 | P -10.6

EUR        Eurozone Consumer Confidence Aug (F) A -16 | C -16 | P -16

EUR        Eurozone Services Confidence Aug A -5.3 | C -6.7 | P -7.8

EUR        Eurozone Unemployment Rate Jul A 12.10% | C 12.10% | P 12.10%

EUR        Eurozone CPI Estimate Y/Y Aug A 1.30% | C 1.40% | P 1.60%

EUR        Eurozone CPI – Core Y/Y Aug (A) A 1.10% | C 1.10% | P 1.10%

CAD       GDP M/M Jun A -0.50% | C -0.50% | P 0.20%

USD       Personal Income Jul A 0.10% | C 0.20% | P 0.30%

USD       Personal Spending Jul A 0.10% | C 0.30% | P 0.50%

USD       PCE Core M/M Jul A 0.10% | C 0.20% | P 0.20%

USD       PCE Core Y/Y Jul A 1.20% | C 1.30% | P 1.20%

USD       Chicago PMI Aug A 53 | C 53 | P 52.3

USD       U. of Michigan Confidence Aug (F) A 82.1 | C 80.5 | P 80

 

For today

USDJPY
Topside: 98.65-98.80 medium offers 98.80-99.00 light offers 99.00-99.20 light buy stops 99.40-99.80 medium offers
Downside: 97.90-98.20 light mix 97.50-97.80 medium bids 97.20-97.45 medium bids

EURUSD
Topside: 1.3220-1.3250 light buy stops 1.3250-1.3280 light buy stops 1.3280-1.3300 light mixed
Downside: 1.3160-1.3180 light sell stops 1.3100-1.3140 medium bids
EURJPY
Topside: Nothing of note
Downside: 129.30-129.60 light sell stops

AUDUSD
Topside: 0.8980-0.9010 light mix 0.9010-0.9030 light buy stops
Downside: 0.8880-0.8900 light bids 0.8800-0.8820 light sell stops 0.8780-0.8800 medium bids

 

JPY:

Japan’s Abe Reiterates He’ll Make Sales Tax Decision in Autumn

Japan MOF Survey: April-June Capex Flat on Year, Up 2.9% on Qtr.

Suga: Hope Effect of Econ Policies Will Eventually Expand to Households, Investment

Japan aims to present steps on Fukushima water problem on Tuesday

Japan’s giant pension fund picks new managers for foreign stocks

CNY:

China August HSBC Final Manufacturing PMI 50.1 Vs. 47.7 in July

China Housing Price Growth Accelerates in August

EUR:

Merkel Says ‘Reform Pressure’ Must Remain on Greece

AUD:

Australia July Building Permits Rise 10.8%; Est. 4% Gain

Australia inflation gauge slows sharply in Aug-TDMI

Australia Manufacturing Contracts at Slower Pace

GBP:

U.K. Hometrack House Prices Rise in Strongest Market Since 2007

NZD:

N.Z. Economic Recovery to Gain Momentum in 2h, Treasury Says

NZ Terms of Trade Rises to 18-Month High on Dairy Prices

New Zealand August Residential Inventory Falls to Record Low

N.Z. Business Confidence Little Changed, BNZ Survey Shows

 

  • EUR: The opening in the Euro was slightly lower than Fridays close around the 1.3212 levels drifting a little lower into the Tokyo opening before again pushing down through the 1.3200 level to 1.3192 areas, with the market quiet with most US players away for the day. The market only spent a brief period at the lows before pushing back to above the 1.3200 level and we currently hold around that level as we head towards the grey hours.
  • GBP: Unlike the Euro the Cable opened a little higher opening above the 1.5520 levels and holding in early trading between 1.5510-20. An article in the FT that suggests that Factory order numbers maybe rising and the recovery is not just consumer lead, add to which a run to try and break above the 1.5570 area which is a key technical area opening up the 1.5700 level. For the moment the market holds most of its gains with EURGBP dipping below the 0.8500 level. We currently hold around the 1.5550 level as we head to the grey hours.
  • JPY: A steady rise for the USDJPY with the market moving in two waves to above the 98.65 level having opened around the 98.45 and then holding the 98.30 lows. A slowing of Capital spending helped the market initially. We currently hold above the 98.60 level with volumes moderately quiet in the pair.
  • AUD: The Oz opened above the Friday close around the 0.8935 level before starting a steady climb higher as the JPY weakened across the board; we reached the highs in mid-session to above 0.8970 in quiet trading with the carry trade doing some moderate work and reasonable PMI figures out of CNY. The market holds with most of its gains  around the 0.8965 level as we move to the grey hours.

 

Today’s data

Actual = A Consensus = C  Previous = P Timings GMT

CNY        Manufacturing PMI Aug A 51 | C 50.6 | P 50.3

NZD       Terms of Trade Index Q/Q Q2 A 4.90% | C 3.80% | P 4.10% | R 4.20%

JPY         Capital Spending Q2 A 0.00% | C -2.00% | P -3.90%

AUD       TD Securities Inflation M/M Aug A 0.10% | P 0.50%

AUD       Building Approvals M/M Jul A 10.80% | C 4.00% | P -6.90% | R -6.30%

CNY        HSBC/Market Manufacturing PMI Aug A 50.1 | C 50.2 | P 47.7

6:45        EUR        Italian PMI Manufacturing Aug C 50.7 | P 50.4

7:30        CHF        SVME-PMI Aug C 55.2 | P 57.4

8:00        EUR        Eurozone PMI Manufacturing Aug (F) C 51.3 | P 51.3

8:30        GBP       PMI Manufacturing Aug C 55 | P 54.6

 

Ranges as of 6am London time including Sydney open

Highs    Lows

USD/JPY               98.68 | 98.27

EUR/USD             1.3237 | 1.3192

EUR/JPY               130.32 | 129.80

AUD/USD            0.8973 | 0.8924

NZD/USD             0.7794 | 0.7739

USD/CAD             1.0552 | 1.0518

EUR/CHF              1.2318 | 1.23015

USD/CHF             0.9340 | 0.9310

GBP/USD             1.5567 | 1.5507

EUR/GBP             0.8520 | 0.8485

 

Stay lucky

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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