Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 99.892 | EURUSD 1.33113 | EURJPY 132.972 | AUDUSD 0.9329 | NZDUSD 0.80852 | USDCAD 1.03183 | EURCHF 1.23853 | USDCHF 0.93046 | GBPUSD 1.58184 | EURGBP 0.84153 |

 

Harry Hindsight

  • EUR: Asia and London again remained fairly limited, opening around the 1.3265-70 area moving quietly into Tokyo and then steadily rising to above the 1.3280 levels with the help of some fixing demand in EURJPY, and a record high fix on the Yuan. Once we’d moved past those events the market again drifted to the opening levels in light volumes. Comments by Obama started the market moving again with a response of we will wait for diplomacy however, inaction would send the wrong  signal to other tyrants on the subject of using chemical weapon, the market started to move lower as the USD went bid across the board. By the time we moved into the grey hours the market had moved to close to the 1.3250 level and early Europeans joined in to set the low below 1.3245. The market then started a steady rise into the London session to press back above the opening levels. London still remained quiet overall with the CPI numbers doing very little for the Euro. Only once the NYK session opened did we see a concerted effort higher for the Euro trading quickly to touch through the 1.3300 wiping out USD longs that have built up over the past couple of weeks. Having broken the 1.3300 level the market looked to be finished only for renewed buying just after the NYK option cut taking the market to the 1.3325 and breaking what resistance remained on the topside. We eventually settled around the 1.3310 area in a quiet afternoon session in NYK.
  • GBP: A very quiet Asian session with the Cable holding around the 1.5730 are for the most part topping above 1.5740 and touching briefly below the 1.5720 level in a stunning range. The market moved into the London session barely moving until the data releases with good employment figures beating expectations the market spiked higher moving from the 1.5725 level to touch above the 1.5825 level, the market triggered a number of weak stops and some larger fund related stuff before settling back to mid-range 1.5270. The market moved into the NYK session rising steadily with no real resistance to the move and as they say more buyers than sellers taking the market back to above the 1.5820 level and peaking just below 1.5830, the market then ranged quietly around the 1.5820 settling with much of the gains in the bag. EURGBP dropped with the spike in GBP dropping from the 0.8435 to push as low as 0.8385 before recovering and holding the 0.8415 into the close on quiet trading. Of course with a drop off in unemployment will obviously spark a short debate on when forward guidance will result in a rate move higher, 0.1% is the difference mind you.
  • JPY: A quiet opening around the 100.40 level before dropping off in early Tokyo to touch below the 100.20 after reasonably good numbers. A higher fix for the Yuan saw the market move back higher helped by the Obama comments and moving to above the 100.60. The market then started to drift lower into the London session and the selling did not stop falling off through the whole day to dip to the 99.80 level before holding into the close around the 99.90. Moody’s affirmed Japan’s AA3 rating with comments on the revised GDP figures supporting the rating and that Abenomics are gaining at least some traction as we move forwards. Giving a general strengthening tone for the Yen
  • AUD: The market drifted from the opening levels of 0.9310 areas touching below 0.9290 and bouncing back after the release of the Consumer confidence before renewing its drift lower into the London market. Once we moved into the London session a combination of a drifting USDJPY and a USD decline in general reversed the market and we initially started to recover the losses in Asia moving back to the opening levels. Decent numbers from both the UK and Europe had the cross markets buying against the Oz and the market dipped into the NYK session to set a low just below 0.9280 before the USD selling started to take over the markets. The market steadily moved through the remainder of the session with AUDJPY cross attracting more attention as USDJPY weakened. The market topped out just below the 0.9340 area before drifting to a close around the 0.9330 area.

Yesterday’s premiership results

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

JPY         BSI Large Manufacturing Q/Q Q3 A 15.2 | C 7.2 | P 5

JPY         Domestic CGPI Y/Y Aug A 2.40% | C 2.30% | P 2.20% | R 2.30%

AUD       Westpac Consumer Confidence Sep A 4.70% | P 3.50%

EUR        German CPI M/M Aug (F) A 0.00% | C 0.00% | P 0.00%

EUR        German CPI Y/Y Aug (F) A 1.50% | C 1.50% | P 1.50%

GBP       Claimant Count Change Aug A -32.6K | C -21.2K | P -29.2K

GBP       ILO Unemployment Rate 3M Jul A 7.70% | C 7.80% | P 7.80%

USD       Wholesale Inventories Jul A 0.10% | C 0.30% | P -0.20%

USD       Crude Oil Inventories A -0.2M | P -1.8M

 

For today

USDJPY:
Topside: 100.10-100.30 light offers 100.30-100.60 light mix 100.60-100.90 medium offers 100.90-101.20 large offers
Downside: 99.50-99.80 light mix 99.20-99.50 light sell stops 98.60-98.80 light bids

EURUSD:
Topside: 1.3320-1.3350 light mix 1.3360-1.3380 light offers 1.3400-1.3420 light offers
Downside: 1.3260-1.3280 light bids 1.3200-132.25 medium bids 1.3180-1.3200 light sell stops

EURJPY:
Topside: 133.50-133.80 light mix
Downside: 132.40-132.80 medium sell stops

AUDUSD:
Topside: 0.9340-0.9370 light offers 0.9380-0.9400 medium offers
Downside: 0.9220-0.9240 light sell stops

 

JPY:

Japan PM Abe Decided to Go Ahead With Sales Tax Hike in April – Report

Japan Govt spokesman: PM Abe undecided on sales tax hike

Japanese Sold Net 66.5 Billion Yen Overseas Debt Last Week

Japan July Core Machinery Orders Unchanged M/m vs. Est. +2.4%

AUD:

Australia jobs drop, unemployment at 4yr high

CNY:

PBOC fixes yuan mid-point at record 6.1575/dollar

China should pursue “high-quality” urbanisation-top economic planning body

NZD:

NZ Central Bank Leaves Cash Rate Unchanged at 2.5%

Wheeler Says Overvalued New Zealand Dollar Is a Problem

RBNZ says lending limits will go when housing market balanced

 

 

  • EUR: Euro opened around the 1.3310 level trading quietly into the Tokyo session where the market moved from its lows around 1.3308 to move to the low 1.3320’s. The Euro moved back to the opening levels quickly after the AUD numbers however, with some EURAUD cross buying going through the market remained fairly steady and again rose to the 1.3320 where we hold as we move to the grey hours.
  • GBP: Cable remained quiet throughout the session opening around the 1.5822 level moving to a high of 1.5832 and a low of 1.5816 with the drag lower however, the Cable was on the side lines which is nothing new for the pair during Asia.
  • JPY: USDJPY moved higher in pre Tokyo as early carry trade buyers moved into the market taking the early market towards the 100.00 level again, the market stalled as we moved towards the Tokyo opening and from there it was all one way traffic dropping steadily through the session to eventually touch the 99.40 level with the help of those early carry trade buyers dumping their positions after the AUD number. For the moment we are holding above the lows in the 99.60 area.
  • AUD: A reasonably quiet opening around the 0.9330 level, drifting lower before moving into Tokyo and moving higher in front of employment numbers, to the 0.9354 level. A poor number saw the market drop quickly from this point dropping in the first 5 minutes to below 0.9290 and then continuing at a slow pace to drop below 0.9260 with reasonable volumes going through. This also dragged on the USDJPY as the carry trade was sold quickly through weak stops. The market for the moment seems to be holding on some light bids around the 0.9250-60 area as we move towards the grey hours.

Today’s data

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

NZD       RBNZ Decision A 2.50% | C 2.50% | P 2.50%

JPY         Machine Orders M/M Jul A 0.00% | C 3.10% | P -2.70%

AUD       Employment Change Aug A -10.8K | C 10.2K | P -10.2K

AUD       Unemployment Rate Aug A 5.80% | C 5.80% | P 5.70%

08:00     EUR        ECB Monthly Bulletin

09:00     EUR        Eurozone Industrial Production M/M Jul C -0.10% | P 0.70%

12:30     CAD       New Housing Price Index M/M Jul C 0.20% | P 0.20%

12:30     USD       Initial Jobless Claims (SEP 6) C 332K | P 323K

12:30     USD       Import Price Index M/M Aug C 0.50% | P 0.20%

18:00     USD       Monthly Budget Statement Aug C -155.3B | P -97.6B

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               99.99 | 99.39

EUR/USD             1.3325 | 1.3307

EUR/JPY               133.00 | 132.35

AUD/USD            0.9355 | 0.9252

NZD/USD             0.8151 | 0.8112

USD/CAD             1.0324 | 1.0306

EUR/CHF              1.23905 | 1.2374

USD/CHF             0.9311 | 0.9294

GBP/USD             1.5832 | 1.5816

EUR/GBP             0.84165 | 0.8412
Good Luck

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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