Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close Wellington open

USDJPY 99.369 99.45-52 | EURUSD 1.32974 1.3308-09 | EURJPY 1.32122 1.3205-525 | AUDUSD 0.92468 0.9245-60 | NZDUSD 0.81337 0.8089-0.8189 | USDCAD 1.03526 1.0351-55 | EURCHF 1.23608 1.2375-82 | USDCHF 0.92943 0.9280-0.93175 | GBPUSD 1.58748 1.5856-88 | EURGBP 0.8376 0.8367-845 |

 

Weekend News

JPY:

Kyodo Poll Shows Approval for Abe Rising to 61.8% in September
LDP’s Komura: Difficulty to Cut Japan Corporate Taxes Now: Kyodo
Japan to Expand Fukushima Radiation Testing Points, Yomiuri Says
CNY:

Shanghai Trade Zone to Open This Month as Li Tackles Reform
World Bank’s Kim: China 2013 Growth Target Appears Within Reach
Four Chinese Ships Enter Japanese Territorial Waters, Kyodo Says
USD:

Summers Suspends Citigroup Ties as Obama Weighs Fed Nominee
Obama Hails Syria Weapons Deal While Keeping Force as Fallback
Obama to Mark Lehman Brothers Collapse, Financial Recovery
Obama to Attend APEC, ASEAN Summits in October on Asia Trip
EUR:

EU Bank-Failure Push Hits Rocky Road as Germany Leads Revolt
ECB’s Liikanen Says Problems Still Remain in Banking System
Merkel Warns Against German Tax Rises as Euro Crisis Not Over
Greek Budget Surplus in 2013 Is Realistic, Staikouras Says: Real
Spain’s De Guindos Says He Will Back Steps to Form Banking Union
Former ECB Head Trichet Sees New Crisis Without Reforms: Monde
SEK:

Borg Says Sweden Won’t Join Bank Union in Foreseeable Future
GBP:

BOE to Discuss Whether U.K. Has Real-Estate Bubble, FT Reports
NZD:

N.Z. Opposition Labour Party Elects David Cunliffe as New Leader

Harry Hindsight

  • EUR: The Euro opened around the 1.3300 level and struggled into the first half of the session with some minor stops being triggered, with Summer’s expected to be nominated as the next chairman of the Fed the market was USD bid for the most part. Making early lows below the 1.3280 level before the market moved sideways into the grey hours. Early Europeans also sold pushing it to the mid 1.3260’s before finding a base. Once we moved into the London session proper the market recovered and held around the 1.3290 area with very little occurring until the NYK session opened. A drop in retail sales in the US led to a recovery to above the 1.3320 area before again slipping back to make new lows below 1.3260 into the mid-session in NYK and then a steady grind to the close just below the 1.3300 for only a minor negative on the day.
  • GBP: Early trading was contained in a fairly narrow range however, declining slightly into the grey hours over the session from the open around the 1.5805 area we managed a move to above 1.5813 before dropping into the grey hours to a low below 1.5780 before finding a base and then rallying for the most part throughout the day. US figures seemed to be the catalyst for the greater part of the moves higher seeing the market move from the 1.5810/20 levels to above 1.5860 and steadily rising into a 1.5880 close on an otherwise quiet day for the pair with it all being USD related in the markets.
  • JPY: The market started to rise from the opening moving from the 99.50 level to push in a steady rise to above 99.80 before running into some minor offers which returned the market to 99.60. The move into the grey hours saw the same level of buying kicking in pushing this time too just below the 100.00 with the second run missing some light AUDJPY selling we’d seen on the first run higher. Once we moved into the grey hours the market reversed as we saw fresh selling of USD creep into the market from short term guys and the market declined back to the 99.60 confirming a rejection of the topside. London remained reasonably quiet until we moved into the NYK session and renewed selling again kicked in to take the market steadily lower to the 99.20 level lows where we held and finished the day just off those levels.
  • AUD: The Oz drifted from the opening dropping from the 0.9270 levels with some light AUDJPY profit taking kicking in, we held in a very tight range into the afternoon in Tokyo where the market started to drop off a little more quickly falling to below the 0.9240 level before again holding as the market meandered into the grey hours. Early Europeans again sold the AUD in line with the USD buying across the board however, it was short lived and the market reversed from the mid 0.9220’s before moving back to trade around the 0.9250 area for the majority of the day before going out just below that level.

Friday’s premiership results

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

NZD       Business NZ Manufacturing Index Aug A 57.5 | P 59.5

JPY         Industrial Production M/M Jul (F) A 3.40% | C 3.20% | P 3.20%

CHF        Producer & Import Prices M/M Aug A 0.20% | C 0.20% | P 0.00%

CHF        Producer & Import Prices Y/Y Aug A 0.20% | P 0.50%

USD       PPI M/M Aug A 0.30% | C 0.10% | P 0.00%

USD       PPI Y/Y Aug A 1.40% | C 1.30% | P 2.10%

USD       PPI Core M/M Aug A 0.00% | C 0.10% | P 0.10%

USD       PPI Core Y/Y Aug A 1.10% | C 1.30% | P 1.20%

USD       Advance Retail Sales Aug A 0.20% | C 0.30% | P 0.20% | R 0.40%

USD       Retail Sales Less Autos Aug A 0.10% | C 0.30% | P 0.50% | R 1.00%

USD       U. of Michigan Confidence Sep (P) A 76.8 | C 81.7 | P 82.1

USD       Business Inventories Jul A 0.40% | C 0.20% | P 0.00%

 

For today

USDJPY
Topside: 99.00-99.30 light offers
Downside: 98.20-98.50 light mix 97.90-98.20 light bids

EURUSD
Topside: 1.3380-1.3410 light offers 1.3440-1.3470 light buy stops
Downside: 1.3300-1.3330 light bids 1.3250-1.3280 light sell stops

AUDUSD

Topside: 0.9390-0.9410 light offers

Downside: 0.9300-0.9320 light mix 0.9260-0.9280 light sell stops

 

USD:

Summers Withdraws Name for Fed Chairmanship

Geithner still not interested in being Fed chair -source

CNY:

PBOC fixes yuan mid-point at record 6.1554/dollar

PBOC head: China should accelerate private bank development

JPY:

Poll Shows Japan Tax Increase to Curb Consumer Spending: Yomiuri

AUD:

Abbott Announces Cabinet after Coalition Election Victory

NZD:

N.Z. Economists Forecast Slower Growth, More Inflation: NZIER

NZ House Prices Continue to Rise Ahead of Mortgage Lending Curbs

NZ Govt expects Meridian stock exchange listing by October-end

 

 

  • EUR: The news that Summer’s has declined the offer of Chairman of the Board caused the market to open higher than Fridays close and while above you can see the pre-market opening the actual open was much higher around the 1.3360/70 area in some rapid trading in the first hour of trading. The market peaked above the 1.3380 level before drifting off to below the 1.3360 level and this set the range for the day. Volumes were brisk as shorts covered and the market saw technical types buying from the onset as signals converted into trades. For the moment we hold in the mid 1.3360 areas.
  • GBP: As with the Euro the Cable was not to be left behind on the opening gapping to a 1.5940 area opening. The market having gapped remained contained for the most part rising slightly over the course of the session to just below the 1.5960 level with lows in the mid 1.5930’s for the bottom. We currently hold only just short of the highs.
  • JPY: The market opened around the 98.80 level some 50 pips away from the close with some strong early selling kicking in just after the opening to set the low below 98.50 in pre-Tokyo trading. From the lows the market has pushed steadily higher into the Tokyo session topping just above the 99.10 however, fixing supply cooled the buyers and the market again dipped into the 98.80-90 range for a quiet afternoon session in Tokyo. We hold for the moment above the 98.90 level as we head to the grey hours.
  • AUD: As with the rest of the market USD was a big sell on the opening and the Oz opened around the 0.9320-40 level in some quick trading. The market peaked in the first hour of trading above the 0.9390 level before some stronger offers kicked in to hold the market and we fell back to the opening area to trade the rest of the day in basically the opening levels. Good volumes were seen across the board in all currencies and one could say that Summers come to an end.

 

Today’s data

Actual = A Consensus = C  Previous = P Timings GMT

NZD       Westpac NZ Consumer Confidence Q3 A 115.4 | P 116.6

GBP       Rightmove House Prices M/M Sep A -1.50% | P -1.80%

9:00        EUR        Eurozone CPI M/M Aug C 0.10% | P -0.50%

9:00        EUR        Eurozone CPI Y/Y Aug (F) C 1.30% | P 1.30%

9:00        EUR        Eurozone CPI – Core Y/Y Aug (F) C 1.10% | P 1.10%

12:30     CAD       International Securities Transactions (CAD) Jul C -2.23B | P -15.41B

12:30     USD       Empire Manufacturing Sep C 9 | P 8.24

13:15     USD       Industrial Production Aug C 0.40% | P 0.00%

13:15     USD       Capacity Utilization Aug C 77.80% | P 77.60%

 

Ranges as of 6am London time including Sydney open

Highs    Lows

USD/JPY               99.54 | 98.45
EUR/USD             1.33825 | 1.3298
EUR/JPY               132.41 | 131.61
AUD/USD            0.9370 | 0.9250
NZD/USD             0.8234 | 0.8130
USD/CAD             1.0357 | 1.0302
EUR/CHF              1.2375 | 1.2336
USD/CHF             0.9301 | 0.9225
GBP/USD             1.5958 | 1.5869
EUR/GBP             0.8392 | 0.8372

 

Stay lucky

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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