Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 98.752 | EURUSD 1.34728 | EURJPY 133.051 | AUDUSD 0.93912 | NZDUSD 0.82821 | USDCAD 1.03019 | EURCHF 1.22985 | USDCHF 0.91283 | GBPUSD 1.60037 | EURGBP 0.81185 |

 

Harry Hindsight

  • EUR: Another slow start to the day with Asia crawling along moving from the low 1.3490’s opening to peak just below 1.3500 and then slip back in slow trading to below the 1.3490’s for about a 12 pip range, movement started to occur as we moved into the grey hours and the market pushed higher in expectations of decent IFO numbers, if that were the case though they were disappointed and having moved to just short of the 1.3520 level the market fell back a little quicker than it rose and continued through the Asian lows pausing only briefly around the 1.3480 level before renewing the downward trend as we moved into the NYK session and trading to the 1.3465 level before finding a base. US numbers were really no different to the European ones with the numbers just off expectations to which the Euro recovered from the lows in slow trading to touch the opening areas, comments by ECB member Couere dovish in nature (surprise) left the market feeling weak and one suspects he’s not going to be the last. The market exited the day just above the lows with volumes dropping off as we move to the close.
  • GBP: Cable again remained under pressure and focus still remains to be on the solitary retail sales figures, moving from an opening around the 1.6045 area Asia slowly sold the pair lower to below 1.6030 in quiet trading before an uptick during the grey hours to the opening areas. With no particular news or data the market moved closely with the Euro although we did see some initial gains in the EURGBP cross as it pushed to the 0.8450 level from the mid-teens we’d seen during the Asian session, I suppose the only worthwhile worries for some companies is the Labour (opposition parties) ploys to attract votes by broadcasting its Robin Hood stories of capping energy companies to neigh on zero rises for their services. Either way there was a fall out on the Euro numbers and the market sold GBP more than the Euro taking Cable to the mid 1.5970’s if you could call that significant, and some dovish comments from BoE members helped to lower the rate, the market held for the next few hours in the 1.5980/90 with some reasonable volume changing hands before dipping in early selling to below 1.5960, from there both the EURGBP and Cable reversed its moves and we saw the cross pretty much unchanged on the day and Cable returning to just above the 1.6000 level where the market settled.
  • JPY: A reasonably quiet session in Asia with the market opening around the 98.85 level the market then struggled to move to much beyond that level and spent the Asian session in a 98.65/95 range pretty much in slow trading with AUDJPY dominating the market more than anything else, early buyers of EURJPY were met by the carry trade sellers as the market seems to be continually covering long built up positions. It wasn’t until the market in London opened that we saw some significant buying driving through the offers below 99.00 and again around the 99.10 area to trade eventually above 99.15, helped a little by the European numbers the rally was short lived and the market moved off the highs as we moved towards the NYK opening to touch around the opening area, NYK walked in and sold from the start pushing the market to close to the eventual lows below 98.50 before recovering later in the session with Fed commentaries suggesting a. that tapering would occur and b. the FTA system was in play which to all intents and purposes disposes of assets bought to the secondary market, so more or less the opposite to the QE operation. We moved off the low to trade back to the 99.00 in mid-session buying but really struggled for the last few hours as volumes dropped off for a finish around the 98.75 areas.
  • AUD: The Oz was in a steady decline from the opening at around the 0.9430 we moved to the 0.9420 before the Tokyo market opened and the movement accelerated with Tokyo fix supply in the AUDJPY driving the Oz to a low of 0.9395 before holding and slowly attempting to claw its way back to the 0.9420 level over the course of the Asian session, it ran out of time moving into the London market and some end of Asian selling moved into the market during early London to push the Oz to below the 0.9375 level. The market stalled from that point with only minor attempts higher into the NYK session where we again saw some strong selling which appeared to be funds related impacting in mid-session to touch a low below 0.9365 before rallying back to the 0.9400 level. The day then drifted from that point slowly into a lower close around 0.9390 areas for a reasonably quiet session over all.

Yesterday’s premiership results

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

EUR        German IFO – Business Climate Sep A 107.7 | C 108 | P 107.5

EUR        German IFO – Current Assessment Sep A 111.4 | C 112.6 | P 112

EUR        German IFO – Expectations Sep A 104.2 | C 104 | P 103.3

GBP       BBA Mortgage Approvals Aug A 38.2K| C 38K | P 37.2K

CAD       Retail Sales M/M Jul A 0.60% | C 0.50% | P -0.60%

CAD       Retail Sales Less Autos M/M Jul A 1.00% | C 0.60% | P -0.80%

USD       S&P/Case-Shiller Composite-20 Y/Y Jul A 12.4% | C 12.50% | P 12.10%

USD       House Price Index M/M Jul A 1.00% | C 0.90% | P 0.70%

USD       Consumer Confidence Sep A 79.7 | C 80.3 | P 81.5

 

For today

USDJPY
Topside: 98.85-99.10 medium offers 99.20-99.50 light offers   99.50-99.60 medium mix 99.60-80 light buy stops
Downside: 98.40-98.55 light sell stops 98.10-98.30 medium sell stops 97.80-98.00 large bids 97.30-97.50 light sell stops

EURUSD
Topside: 1.3480-1.3500 light mix   1.3500-1.3530 light buy stops 1.3530-1.3550 light offers  1.3580-1.3600 medium buy stops 1.3600-1.36200 medium offers
Downside: 1.3430-1.3460 medium bids 1.3400-1.3430 light bids 1.3350-1.3380 medium bids

EURJPY
Topside: 133.30-133.60 light offers  133.70-134.00 light buy stops
Downside: 132.40-132.70 light bids 132.00-132.30 light sell stops

AUDUSD
Topside: 0.9400-0.9430 light mix  0.9430-0.9460 light offers 0.9500-0.9520 medium offers

Downside: 0.9360-0.9380 light bids 0.9320-0.9350 light bids 0.9300-0.9320 light sell stops 0.9280-0.9300 light bids

 

CNY:

China Trade Shows ‘Good Trend,’ MoF com Says: Sec. Journal

Shanghai FTZ to Announce 32 Policies on Sept. 29: Info. Daily

China Names New Monetary Policy Committee

CNY/HKD:

Alibaba Talks With Hong Kong Over IPO Said to Break Down

AUD:

Australia Central Bank Warns Against Loose Mortgage Lending

NZD:

N.Z. August Trade Deficit Widens on Drilling Platform

JPY:

Abe Says Japan Economy Now for Sure on a Path of Solid Growth

JPY/EUR:

Japan, France to Cooperate On Scrapping Fukushima Nuclear Plant -Kyodo

GOLD:

Turkey raises gold reserves by 23 tonnes in August – IMF

Russia raised Aug gold reserves by nearly 13 tonnes from July-IMF

 

 

  • EUR: Early trading was dominated by cross trading and most of that being the AUD/NZD pair with a ballooning trade balance forcing the NZD lower across the board, Euro opened quietly around the low 1.3470’s and stayed in a very tight range for several hours into the Tokyo session before pushing to above the 1.3480 level before slipping slowly back to trade below 1.3465 to set the range. The move lower, seemed to be more connected to the EURJPY which the market sold during the latter part of the session. The market remained pretty much in between the light bids and offers.
  • GBP: Cable opened on its highs just above the 1.6000 and moved steadily lower to just below 1.5990 before bouncing back to the opening levels and then dropping with the drag of the Euro, we saw EURGBP buying move in as comments yesterday from the BoE did the rounds in Tokyo and Cable moved to just below 1.5980, with the EURGBP moving to above the 0.8425 level. Obviously being the consummate cynic this is in line with what the BoE wants same as the ECB wants the Euro lower to stop the higher rates affecting the green shoots. We currently hold just off the lows as we head to London.
  • JPY: USDJPY opened around the 98.75 areas and held into the Tokyo open in the area before slipping a little lower before the fix, fixing demand took the market to the highs just above the 98.80 before dropping off reasonably quickly to make the lows at 98.56 before recovering over the remainder of the session and currently holds around the 98.70 area in dare I say it, a quiet session.
  • AUD: Moving off from the 0.9390’s as NZD moved lower after the poor numbers the AUD was dragged with it not being able to stay bid in spite reasonable buying of the cross. The market moved to below 0.9375 initially before seeing some recovering with AUDJPY buying with real money buying for 3-7yr bonds. Once the market was finished with that run back to just above the opening the market turned and moved back to trade to the near downside bids before holding in the mid 0.9370’s as we head to London.

 

Today’s data

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

NZD       Trade Balance (NZD) Aug A -1191M | C -700M | P -774M

JPY         Corporate Service Price Y/Y Aug A 0.60% | C 0.50% | P 0.40%

06:00     CHF        UBS Consumption Indicator Aug P 1.41

06:00     EUR        German GfK Consumer Sentiment Oct C 7 | P6.9

10:00     GBP       CBI Reported Sales Sep C 24 | P 27

12:30     USD       Durable Goods Orders Aug C -0.10% | P -7.30%

12:30     USD       Durables Ex Transportation Aug  C 1.10% | P -0.60%

14:00     USD       New Home Sales Aug C 425K | P 394K

14:30     USD       Crude Oil Inventories P -4.4M

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               98.80 | 98.555

EUR/USD             1.3481 | 1.3462

EUR/JPY               133.10 | 132.81

AUD/USD            0.9394 | 0.9367

NZD/USD             0.8277 | 0.8222

USD/CAD             1.0308 | 1.0302

EUR/CHF              1.2310 | 1.2300

USD/CHF             0.9138 | 0.91255

GBP/USD             1.6004 | 1.5980

EUR/GBP             0.8427 | 0.8420

 
Good Luck

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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