Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 99.581 | EURUSD 1.31708 | EURJPY 131.138 | AUDUSD 0.90614 | NZDUSD 0.77919 | USDCAD 1.05342 | EURCHF 1.23347 | USDCHF 0.93653 | GBPUSD 1.55598 | EURGBP 0.84645 |

 

Harry Hindsight

  • EUR: With the market now back on after the summer numbers are beginning to pick up however, volumes are still curtailed by the hurry up and wait scenario, as we sit and wait for the next ECB policy meeting and what Syria may bring at some stage. The market opened around the 1.3190 area and struggled around the area for most of the session with a brief move to just below the 1.3200 level. We managed to move into the grey hours before the market again started to move as with the day before dropping down into the London opening around the 1.3165, a little help from the UK’s GDP number moved the Euro back towards the opening levels however, the move was short lived as EURGBP came under pressure and we again moved to the lows. Overall the range was fairly contained. NYK entered the market and again the Euro was pushed lower to touch 1.3140 low before recovering somewhat to the 1.3170 area where we traded for several hours into the close. With only technical levels making a show the market saw strong bids around the 1.3140 area and leveraged technical guys happy to buy with weak stops behind.
  • GBP: Cable remains bid trading slowly higher through Asia from the 1.5545 area to move steadily a big 20 pips higher. The market moved into the grey hours with a dip lower as early Europeans decided to cut positions in front of the GDP numbers even though the market had been forewarned of a better reading. The market moved up in the run to the London opening to the 1.5565 level with early UK day traders moving into the market and on the release the market moved quickly higher triggering minor stops as we broke through the barriers and touching above the 1.5600 level, having seen the highs the market started to move lower holding around the break out level of 1.5575. NYK opened with the market selling back the pair to the opening levels with a technical failure. The market limped then into a good set of US numbers and USD became the darling of the hour and Cable now pushed to its lows below 1.5525 and the range for the day was set. Some late profit taking slowly pushed the market higher with real money entering the market as the market again rose to above 1.5570 however, the market was reluctant to push through the 1.5575 level for a second time and we ran out holding a slight gain around the 1.5560 level.
  • JPY: The USDJPY had a choppy day with the market contained for the moment in a 70 pip range, rising quickly from the opening 99.35 level to above 99.70 in early cross trading, the market struggled from that point dropping back not quite as quickly to the opening levels to then trade the 99.35-99.55 levels into the grey hours which was helped along by a stay on RBA rates and a dovish commentary. From the London opening the market moved steadily higher to trade again at a similar high before Cable rise saw the market dip lower in a quick move triggering some minor stops below the previous lows and catching day traders in particular. The lows of 99.20 held and the market started to steadily rise again and once we moved into NYK the US figures set the USD higher and we saw the market hit above the 99.85 level to set the highs. Institutional funds were seen as the main buyers during the rally, and option demand in calls with reverse knockouts. Comments from Congressional leaders supporting Obama’s request for action seemed to be the catalyst for the next sell off, with the market not quiet dropping to previous lows but giving a significant drop off from the highs and then rallying back to the 99.60 level to hold into the close helped by Kerry suggesting a negotiated resolution in Syria even if he couldn’t see it.
  • AUD: From the start the market saw limited trading to the upside moving from the opening levels 0.8980 to the 0.9020 areas, the market stalled at this point and we saw some weak AUDJPY selling in front of the RBA release as retail Japan lightened their longs. We held around the 0.8980 area until the release. The rate was unchanged which was expected however, a dovish tone to the commentary the market moved quickly higher to just below the 0.9050 level before holding the level in the London session, the range in London remained limited with 0.9020-40 being about all she wrote until moving in NYK, even then it was a minor step higher to touch briefly above 0.9070 and holding the 0.9040-70 level into the close around 0.9060 in a lacklustre end to Asia.

Yesterday’s premiership results

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

GBP       BRC Sales Monitor Y/Y Aug A 1.80% | P 2.20%

JPY         Monetary Base Y/Y Aug A 42.00% | C 41.30% | P 38.00%

AUD       Retail Sales M/M Jul A 0.10% | C 0.40% | P 0.00%

AUD       Current Account Balance (AUD) Q2 A -9.4B | C -8.5B | P -8.5B

JPY         Labour Cash Earnings Y/Y Jul A 0.40% | C 0.80% | P 0.60%

AUD       RBA Rate Decision A 2.50% | C 2.50% | P 2.50%

CHF        GDP Q/Q Q2 A 0.50% | C 0.30% | P 0.60%

GBP       PMI Construction Aug A 59.1 | C 58.4 | P 57

EUR        Eurozone PPI M/M Jul A 0.30% | C 0.10% | P 0.00%

EUR        Eurozone PPI Y/Y Jul A 0.20% | C 0.10% | P 0.30%

USD       ISM Manufacturing Aug A 55.7 | C 54 | P 55.4

USD       ISM Prices Paid Aug A 54 | C 51.6 | P 49

USD       Construction Spending M/M Jul A 0.60% | C 0.30% | P -0.60%

 

For today

USDJPY
Topside: 99.70-100.00 light offers 100.00-100.40 large offers, offers barrier related
Downside: 99.00-99.30 light bids 98.70-99.00 light sell stops 98.40-98.65 light sell stops

EURUSD
Topside: 1.3170-1.3190 light offers 1.3190-1.3210 light buy stops 1.3220-1.3250 light buy stops 1.3250-1.3285 medium offers
Downside: 1.3120-1.3160 light bids 1.3100-1.3120 light sell stops

EURJPY
Topside: 131.20-131.50 light offers  131.50-131.80 light offers
Downside: Nothing of note
AUDUSD
Topside: 0.9110-0.9140 light mix nothing of note beyond
Downside: 0.9020-0.9030 light sell stops 0.8970-0.9020 light bids 0.8900-0.8880 medium stops

 

JPY:

Japan PM says he will tell G20 Japan to pursue growth and fiscal discipline

Japan PM Abe Says Fukushima Leak Will Not Be a Problem in 2020

BOJ May Consider More Easing If Sales Tax Is Raised: Asahi

Komeito’s Yamaguchi Says Tax Rise Should Be after Economic Steps

Quake jolts southern Japan, felt in Tokyo

USD:

U.S. Senate panel reaches deal on draft authorization on Syria

RUB:

Russia May Back Syria Strikes If Assad Culpability Is Proven: AP

AUD:

Australia Economy Expanded Faster Than Expected Last Quarter

CNY:

China President: Can Handle Local Debt, Overcapacity Problems

China August HSBC services PMI rises to five-month high

NZD:

New Zealand 2Q Construction Work Fell 0.4% from Previous Qtr.

GBP:

U.K. Aug. BRC Shop Price Index -0.5% Y/y vs. July -0.5% Y/y

 

 

  • EUR: A very quiet session for the Euro with the market contained in a 12 pip range for the most part opening around the 1.3173 area and generally missing any of the movements. We currently hold just above the lows as the pair weakened on EURAUD selling related to the Oz rise.
  • GBP: Cable had a slightly better range opening around the 1.5565 mark and rising to make the highs at 1.5572 before dropping back to below 1.5556 in pre-Tokyo trading, the market the held in a tight range around the 1.5565 level for the most part as the GBP was side lined for the session.
  • JPY: I’d be lying if I said USDJPY did any better than the Euro and Cable. We opened around the 99.55 level with a steady rise into the Tokyo opening to touch above 99.68 before early retail Japan began the day lightening their longs in front of the Oz GDP number steadily dropping in light trading to below 99.42, the actual data release did very little for the JPY however, once the news was out of the way we started to rise again with early reports of an earthquake of 6.9 hitting Japan with no tsunami threat. The market ended the day higher pushing back above the day’s highs to 99.70 levels as we head towards the grey hours.
  • AUD: The Oz drifted from the opening moving from the 0.9060 level to a low below 0.9040 on the GDP release which was in line with expectations, the market then jumped back higher as retail buying kicked in on the expected number to touch above the 0.9100 level before holding just below the figure area as the market slowed.

Today’s data

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

GBP       BRC Shop Price Index Y/Y Aug A -0.50% | P -0.50%

AUD       GDP Q/Q Q2 A 0.60% | C 0.60% | P 0.60%

07:45     EUR        Italian PMI Services Aug  C 49.2 | P 48.7

08:00     EUR        Eurozone PMI Services Aug (F) C 51 | P 51

08:30     GBP       PMI Services Aug C 59.8 | P 60.2

09:00     EUR        Eurozone GDP Q/Q Q2 (P) C 0.30% | P 0.30%

09:00     EUR        Eurozone Retail Sales M/M Jul C 0.50% | P -0.50%

11:30     USD       Challenger Job Cuts Y/Y Aug P 2.30%

12:30     USD       Trade Balance Jul C -$38.7B | P -$34.2B

12:30     CAD       Trade Balance (CAD) Jul C -0.40B | P -0.47B

14:00     CAD       BoC Rate Decision C 1.00% | P 1.00%

18:00     USD       Fed’s Beige Book

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               99.75 | 99.41

EUR/USD             1.3176 | 1.3162

EUR/JPY               131.32 | 130.965

AUD/USD            0.9106 | 0.9038

NZD/USD             0.7821 | 0.7794

USD/CAD             1.0542 | 1.0531

EUR/CHF              1.2342 | 1.2330

USD/CHF             0.9376 | 0.9359

GBP/USD             1.5567 | 1.5556

EUR/GBP             0.84635 | 0.8458
Good Luck

Andy

 

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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