Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 98.449 | EURUSD 1.3526 | EURJPY 133.136 | AUDUSD 0.93677 | NZDUSD 0.82467 | USDCAD 1.03136 | EURCHF 1.2299 | USDCHF 0.90926 | GBPUSD 1.60806 | EURGBP 0.84111 |

 

Harry Hindsight

  • EUR: A quiet early part to the session with the market opening around the low 1.3470’s and staying in a tight range into the Asian session rising eventually to above the 1.3480 level before dropping back below the 1.3465 levels to set the range for Asia. For a change the grey hours offered really no comfort and only once we moved into the London session did the market start to accelerate to the topside, with a decent consumer confidence number out of Germany and the never ending saga of the tapering question keeping a lid on the USD, we moved to the 1.3520 before meeting any real resistance and here we found a few offers from retail top pickers and profit takers forcing the market lower back below 1.3500 however, at this point we started to see another set of disappointing numbers from the US in durable goods and new home sales later and the Euro again started to rise with weak retail stops triggered through the previous high and we topped this time above the 1.3535 level before starting a steady decline to the close around the 1.3525. Less chatter about the LTRO today which is a bit surprising, but mixed commentary seems to be making the market a little nervous.
  • GBP: The mover of the day to a certain extent, opening around the 1.6000 area the market in Asia slowly drifted lower moving down to the 1.5980 area by mid-session attempting the level twice before running into the grey hours and an upturn into the London opening. We did manage to make it above the 1.6000 area again however, once the CBI reported sales number hit vastly above the expected we rallied quickly to above the 1.6030 levels and then continued at a more sedate pace to eventually top out just below the 1.6090 in mid-NYK and holding above 1.6080 into the close. EURGBP also altered its steady rise and started to move lower again moving away from the 0.8450 level that had been under threat in early London trading to touch below 0.8400 before holding steady around the 0.8410 levels.
  • JPY: USDJPY seems to have lost direction while the market tries to react to the no tapering story another side tries to react to Abenomics as continued fiddling with efforts to weaken the Yen continue. We opened around the 98.75 areas and traded slowly lower moving to below 98.60 in Asia and making a high of 98.80 for a narrow range. London started selling the USD’s and this led to a low below 98.40 a couple of times before GBPJPY and EURJPY buying helped to weaken the Yen again pushing the high to the 98.82 levels in the NYK session but again with the release of the data the gains were reversed as we saw a battle between leveraged types vs. retail sellers for the majority of the day. The market ended the day holding around the 98.45 levels as the battle petered out.
  • AUD: Having opened around the 0.9390 early selling of AUDJPY sent the market lower into the Tokyo opening with AUDNZD buying not quiet offsetting the plays, as the USDJPY fell the pressure on the Oz was released and the market moved to just above those opening levels. Again the downward pressure began to tell and straight Oz selling as well as AUDJPY, before we started to see funding buying entered the AUDJPY market for Thursdays A$ Tnote auction. Even though we saw a minor recovery again once the demand disappeared the market dropped precipitately during the grey hours continuing in the London opening to push below 0.9340 before holding and pushing back to mid-range. The release of the US data helped the AUD to move back towards the opening levels however the minor move higher ran out of steam and we ranged back to the 0.9365 levels for the close in reasonably quiet trading.

Yesterday’s premiership results

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

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%

CHF        UBS Consumption Indicator Aug A 1.32 | P 1.41

EUR        German GfK Consumer Sentiment Oct A 7.7 | C 7 | P6.9

GBP       CBI Reported Sales Sep A 34 | C 24 | P 27

USD       Durable Goods Orders Aug A 0.10% | C -0.10% | P -7.30%

USD       Durables Ex Transportation Aug  A -0.10% | C 1.10% | P -0.60%

USD       New Home Sales Aug A 421K | C 425K | P 394K

USD       Crude Oil Inventories A 2.6M | C -1.0M | P -4.4M

 

For today
USDJPY:
Topside: 98.10-99.30 medium offers 99.30-99.60 medium offers
Downside: 98.10-98.30 light mix 97.80-98.10 medium bids 97.50-97.80 light bids 97.50-97.30 light sell stops

EURUSD:
Topside: 1.3540-1.3550 light offers 1.3570-1.3580 light buy stops 1.3580-1.3600 medium offers 1.3600-1.3640 medium offers
Downside: 1.3480-1.3500 medium bids 1.3460-1.3480 light bids 1.3450-1.3460 light sell stops

AUDUSD:
Topside: 0.9390-0.9430 light buy stops 0.9440-0.9460 light offers 0.9500-0.9510 large offers
Downside: 0.9300-0.9320 light sell stops 0.9280-0.9300 light bids

 

JPY:

Japan Pension Fund Reform Advisory Panel to Brief at 6pm Today

Japan Government to “Urgently Consider” Reducing Corporate Tax Rate – Kyodo

JPY: Japan PM Abe Calls for ‘Womenomics’ in WSJ Opinion Piece

JPY/EUR:

Lixil reaches basic agreement to buy Grohe for $4 bln -Lixil CEO

AUD:

Australia job vacancies rose 3.2% in Aug qtr. – ABS

 

 

  • EUR: Euro’s remained in a reasonably tight range opening around the 1.3525 levels dropping initially to below the 1.3515 with cross selling doing most of the damage. Once the Tokyo fix ended the market again moved back to the original levels and so we continued for the session and we look to move into the grey hours around the opening levels.
  • GBP: Cable moved in a little bit wider range however, it was very little different to the movement in the Euro, we opened just above the 1.6080 area and peaked above the 1.6087 levels before making the lows on the USDJPY rise touching to the 1.6068 area and currently holds around the opening levels.
  • JPY: A quiet start to the day opening around the 98.45 area and trading to the 98.50 into the Tokyo opening, some supply for the fixing set the market to the lows below 98.30 however a nervousness in the market in front of a discussion by the public pension fund Chairman (which was then delayed) add to which discussions and rumours of corporate tax cuts to counterbalance a sales tax had the large Japanese banks buying USDJPY strongly, moving the market quickly through some light offers to above the 99.00 level before running out of steam and into some larger offers. The market started to drift off from there to hold around the 98.80 levels as we move towards the grey hours.
  • AUD: The market opened quietly around the 0.9365 area and held the levels into the Tokyo session, we started to rise a little as USDJPY dipped on the Tokyo fix pushing to above the 0.9377 level as the action in USDJPY kicked off reversing the move higher and dropping quickly to trade below the 0.9348 level as the AUDJPY ran into some profit taking. Once the move in the USDJPY halted the market reversed and started to move higher attempting the topside for the second time before stalling and holding only just above the opening levels into the grey hours.

 

Today’s data

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

08:00     EUR        Eurozone M3 Y/Y Aug C 2.20% | P 2.20%

08:30     GBP       Current Account (GBP) Q2 C -10.0B | P -14.5B

08:30     GBP       GDP Q/Q Q2 (F) C 0.70% | P 0.70%

12:30     USD       Initial Jobless Claims (SEP 20) C 319K | P 309K

12:30     USD       GDP (Annualized) Q2 (T) C 2.70% | P 2.50%

12:30     USD       GDP Price Index Q2 (T) C 0.80% | P 0.80%

14:00     USD       Pending Home Sales M/M Aug C -1.00% | P -1.30%

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               99.12 | 98.27

EUR/USD             1.35365 | 1.3512

EUR/JPY               133.93 | 132.90

AUD/USD            0.9377 | 0.9347

NZD/USD             0.8261 | 0.8235

USD/CAD             1.0325 | 1.0313

EUR/CHF              1.2311 | 1.22955

USD/CHF             0.91105 | 0.9092

GBP/USD             1.6087 | 1.6067

EUR/GBP             0.8413 | 0.8408

 
Good Luck

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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