Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close Wellington open

USDJPY 98.244 97.75-85 | EURUSD 1.34224 1.3490-99 | EURJPY 132.854 131.585-132.145 | AUDUSD 0.93175 0.9307-10 | NZDUSD 0.82812 0.8252-80 | USDCAD 1.03048 1.0310-11 | EURCHF 1.2250 1.2237-56 | USDCHF 0.90588 0.9067-70 | GBPUSD 1.61381 1.6111-14 | EURGBP 0.83784 0.8362-81 |

 

Weekend News

USD:

Government Shutdown Nears as U.S. House Votes to Delay Obamacare
Obama’s White House to Strip to Skeleton Staff in a Shutdown
Rice Says Iran’s Nuclear Pledge May Lead to Normalized Relations
JPY:

Melco Crown Plans to Invest $5 Billion in Japan Casino-Resorts
Abe Coalition Partner Agrees on Japan Tax Hike, Stimulus Plan
Abe Likely Thinks Best to Offset Tax Hike With Stimulus: Amari
Mizuho Bank Penalized for Transactions With ‘Anti-Social’ Groups
EUR:

Italian Coalition Teeters as Berlusconi Pulls Support for Letta
Italy Halts Budget Decisions as Letta Seeks to Gauge Support
Italy Minister Says Confidence Vote to Occur Oct. 1: Ansa
EU Commission Says It’s Not Working on New Portugal Rescue: Lusa
Germany Dismisses Report on Raising Top Income Tax Rate: Reuters
German Social Democrats to Demand 6 Minister Posts in Talks: FAS
Samaras Says Greece Has Road Map to Exit Crisis, Axia Reports
Greek Finance Minister Says No Risk of Political Instability
Greece, Troika Disagree on Return to Bond Market: Kathimerini
Greek Police Arrest Leader of Nationalist Golden Dawn Party
UN:

Syria Chemical-Weapons Resolution Passed by UN Security Council
CNY:

PBOC Reiterated China to Promote Interest Rate Liberalization
China Inaugurates Shanghai Trade Zone in Finance Reform Push
China’s Xi to Attend APEC Bali Summit, Visit Malaysia: Xinhua
GBP:

BOE’s Broadbent Says Forward Guidance Is Right Policy: Telegraph
Cameron, Clegg Have Discussed Second U.K. Coalition: Telegraph
GBP/CNY:

U.K. Seeks to Simplify Visa Process for Chinese Tourists: FT
AUD:

Australia’s Stockland Says Housing Supply to Temper Price Rises
Australian Farmers Should Welcome Foreign Investors, Nufarm Says

Harry Hindsight

  • EUR: A quiet start in Asia for the Euro with the market opening just below the 1.3490 area and struggling for direction during the early part. The market dropped to the 1.3475 area in mid-session Asia before holding around the 1.3480 level for a few hours. Comments by Carney stirred the market in the grey hours helping the Euro’s to break out of the limited range we’d seen and a push above the 1.3500 level. Improving confidence numbers in the Eurozone underpinned the market and held it up against the gains seen in the GBP. The market started to move strongly through the 1.3510 area as we moved into the NYK session taking the market to above 1.3540 before slowing slightly in its ascent eventually topping above the 1.3560 to make the highs. German inflationary numbers continue to show weakness and then the US numbers are released with the numbers more or less in line with expectations however; the market has started to watch the wrangling’s on funds remaining or not as the case maybe for the Government. The market began to drift into the later part of the session moving back to more moderate gains and a close of 1.3520.
  • GBP: Cable was very dull through the Asian session the only point of note is that Cable remained tighter than the Euro for the most part and the opening around the 1.6040 was only slightly better than the low, we started to trade a little higher as we approached the grey hours, maybe there are more Yorkshire post readers out there than meets the eye seen as this was the paper that led reports on Carney making statements of no interest movements until 2016. The general release of this front page news from a small regional paper hit the major players in financial markets and the Cable leapt quickly to trade above the 1.6130 area in a quick move before drifting back as soon as the London session opened officially, we moved to the 1.6065 level in to the European numbers however, once the Euro started to move higher Cable went with it slowly trading in a tight channel to above the 1.6140 level into the close. One would suspect more of a technical move than anything else with EURGBP trading active for that short period dropping from above 0.8400 to 0.8360 before recovering as Euro’s became the focus. The cross returned to its lows later into the session dropping to below the 0.8380 level. Given the recent good numbers are we seeing a swing to safe haven as worries increase in the US and to a lesser extent in the Euro.
  • JPY: USDJJPY had a steady move lower with early cross selling against the JPY as possible safe haven flows started to move into the JPY. Having topped above the 99.00 level with the early buying from larger players was missing for the day and the rise was limited, having failed the 99.10 area so many times over the past few days the market was vulnerable to selling, cross selling increased over the session and the straight USDJPY was not so active but took the brunt of the movement. The market stabilized for a short period in the grey hours which is unusual in itself. We renewed the march lower from the 98.60 area as we moved into early NYK dropping to a low late in the session to 98.10 before finishing the day around the 98.20 level.
  • AUD: The Oz opened around the 0.9365 area and traded to its highs into early Tokyo above the 0.9375 areas, the market absorbed the upward movement before Japanese retail started to close the AUDJPY longs again. The market dropped to below 0.9340 as we moved into early NYK as focus shifted, holding the 0.9330 area for a while before renewing the descent. Early NYK opened around the bottom of the range having touched just below 0.9300 before running quietly over the rest of the session in a tight 15 pip range to finish the day around 0.9315.

 

Friday’s premiership results

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

GBP       GfK Consumer Sentiment Sep A -10 | C -11 | P -13

JPY         National CPI Core Y/Y Aug A 0.80% | C 0.70% | P 0.70%

JPY         Tokyo CPI Core Y/Y Sep A 0.20% | C 0.30% | P 0.40%

CHF        KOF Leading Indicator Sep A 1.53 | C 1.46 | P 1.36 | R 1.37

EUR        Eurozone Economic Confidence Sep A 96.9 | C 95.9 | P 95.2

EUR        Eurozone Industrial Confidence Sep A -6.7 | C -7 | P -7.9

EUR        Eurozone Consumer Confidence Sep (F) A -14.9 | C -15 | P 14.9

EUR        Eurozone Services Confidence Sep A -3.3 | C -5 | P -5.3 | R -5.2

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

EUR        German CPI Y/Y Sep (P) A 1.40% | C 1.50% | 1.50%

USD       Personal Income Aug A 0.40% | C 0.40% | P 0.10%

USD       Personal Spending Aug A 0.10% | 0.30% | 0.10%

USD       PCE Core M/M Aug A 0.20% | C 0.10% | P 0.10%

USD       PCE Core Y/Y Aug A 1.20% | C 1.20% | P 1.20%

USD       PCE Deflator Y/Y Aug A 1.20% | C 1.20% | P 1.40%

USD       U. of Michigan Sentiment Sep (F) A 77.5 | C 78 | P 76.8

 

For today

USDJPY:
Topside: 98.30-98.60 light offers 98.60-98.90 decent buy stops
Downside: 97.40-97.70 light bids 97.00-97.40 medium mix

EURUSD:
Topside: 1.3510-30 light offers 1.3570-1.3600 light mix 1.3600-1.3630 light offers
Downside: 1.3430-1.3460 light mix 1.3400-1.3430 light bids

AUDUSD:
Topside: 0.9350-0.9390 light buy stops
downside: 0.9250-0.9280 light mix 0.9210-0.9240 light bids

 

CNY:

China September final HSBC PMI at 50.2 on firmer exports

JPY:

Japan Govt econ stimulus package draft doesn’t have income-tax cut

Japan Considers Ending Reconstruction Tax Early to Boost Wages

Japan fund managers raise Asian, US stock weightings after Fed delays tapering

Japan Sept PMI shows manufacturing expanding at fastest since 2011 quake

Japan Aug output slips but seen rising on exports, domestic demand

Japan Aug Overall Retail Sales +1.1% On Year

JPY/CNY:

Japan’s Coastguard Arrests Chinese Crew Member Over Fatal Crash

AUD:

Australia inflation gauge stays subdued in Sept-TDMI

NZD:

Key Says RBNZ May Raise Rates More Slowly Due to Loan Limit

N.Z. Treasury Sees GDP Growth at 1% in Third, Fourth Quarters

N.Z. Business Confidence Rises to Highest Since March 1999

 

  • EUR: Concerns over a close down of the US government on one side and a stumbling coalition in Italy created a tug of war in pre-market trading before the US became the overriding point of the market sending the market higher however, the market still struggles to fill the gap having opened around the 1.3495 level and trading to the lows below 1.3480 in early trading. The market for the moment has been one way since pre Tokyo trading slowly pushing above the 1.3500 level with good volumes seen changing hands in early trading and a more than likely limited close down of the Federal Government.
  • GBP: Cable opened only slightly higher than the close as the market seems to have ignored the pre-market trading, opening around the 1.6145 level we have steadily moved higher into the Tokyo session pushing to a high above the 1.6180 level before slipping back to the 1.6160 level where we currently hold, with the only news over the weekend reported in the Telegraph and personally I’d prefer the trustworthy Yorkshire post for financial news. With the US govt. deadlock the USD remains weak however, the Eurozone situation maybe just as bad to some extent.
  • JPY: Pre-Market saw the USDJPY touch the 97.53 level before making a comeback as the market moved into the normal session, opening just above the 97.70 level the market struggled to above the 97.95 level and has remained in that range for the rest of the session with the market unable to decide which is the bad guy the Italians with the it’s my ball and I’m going home, oh and buy the way everything is now on hold, or the US who are just going to go home with or without the ball who cares, of course we know how this plays out as the US go to the wire before doing something about it, and the Italians are well renowned for changing their minds. For the moment with a flip a coin situation the Japanese retail players have been side-lined for the most part and we hold just below the 98.00 level.
  • AUD: Pre market selling in USDJPY triggered some AUDJPY selling in the market and we saw a low print of 0.9298 before moving back to open in line with Fridays close around the 0.9315 area before dropping off on continued selling in Pre Tokyo, Tokyo opened around the 0.9290 area and tried to recover as early retail players started to move the market higher, it was short lived with the market quickly running out of demand and falling again to just below the previous levels with Chinese PMI causing some gyration mid-session having touched to nearly 0.9280 the market has struggled over the remainder to move back above the 0.9300 level as we move to the grey hours.

Today’s data

Actual = A Consensus = C  Previous = P Timings GMT

NZD       Building Permits M/M Aug A 1.40% | C 2.50% | P -0.80%

JPY         Nomura/JMMA Manufacturing PMI Sep A 52.5 | P 52.2

JPY         Industrial Production M/M Aug (P) A -0.70% | C -0.30% | P 3.40%

JPY         Retail Trade Y/Y Aug A 1.10% | C 1.00% | P -0.30%

NZD       NBNZ Business Confidence Sep A 54.1 | P 48.1

AUD       TD Securities Inflation M/M Sep A 0.20% | P 0.10%

CNY        HSBC/Market Manufacturing PMI Sep (F) A 50.2 | C 51.2 | P 50.1

JPY         Housing Starts Y/Y Aug A 8.8% | C 12.80% | P 12.00%

06:00     EUR        German Retail Sales M/M Aug C 0.80% | P -0.50%

08:30     GBP       Mortgage Approvals Aug C 61.5K | P 60.6K

08:30     GBP       M4 Money Supply M/M Aug C 0.70% | P 0.60%

08:30     GBP       M4 Money Supply Y/Y Aug P 1.80%

09:00     EUR        Eurozone CPI Estimate Y/Y Sep C 1.20% | P 1.30%

12:30     CAD       GDP M/M Jul C 0.50% | P -0.50%

12:30     CAD       Industrial Product Price M/M Aug C 0.20% | P 0.30%

12:30     CAD       Raw Materials Price Index M/M Aug C 0.30% | P 4.20%

13:45     USD       Chicago PMI Sep C 54 | P 53

 

Ranges as of 6am London time including Sydney open

Highs    Lows

USD/JPY               98.06 | 97.53

EUR/USD             1.35065 | 1.3467

EUR/JPY               132.39 | 131.385

AUD/USD            0.9334 | 0.9280

NZD/USD             0.8289 | 0.8252

USD/CAD             1.0319 | 1.0302

EUR/CHF              1.2241 | 1.2215

USD/CHF             0.9078 | 0.9046

GBP/USD             1.6183 | 1.6100

EUR/GBP             0.8374 | 0.8338

 

Stay lucky

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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