Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 97.263 | EURUSD 1.36185 | EURJPY 132.459 | AUDUSD 0.93934 | NZDUSD 0.82972 | USDCAD 1.03312 | EURCHF 1.22481 | USDCHF 0.89942 | GBPUSD 1.61556 | EURGBP 0.84296 |

 

Harry Hindsight

  • EUR: Euro’s opened around the 1.3580 area and with the Italian job out of the way had space to catch up the USD moves we’ve seen this week. We moved quietly into the Tokyo session and struggled around the 1.3590 level before finding some liquidity and pushing quickly with the Help of the CNY number to above the 1.3600 level and triggering light stops along the way pushing to above the 1.3620 level, having made the move we ran into some light resistance and this was enough to dissuade the market from any more movement, so the market saw a slow drift back towards the figure and into the grey hours. The grey hours saw the market pressing again at the 1.3600 level and some weak stops were triggered to put the market back to the opening areas. The market remained quiet strong on the downside and we were unable to break out to the downside and Euro was supported through the cross EURGBP as that particular market started to play catch up with a steady rise throughout the day moving from the 0.8370 levels too just short of 0.8440 before settling around the 0.8430 area. The buying in the cross and some light NYK buying pushed the Euro higher to above the 1.3645 with US numbers mixed if not on the weak side and the continuing stalemate in the US. The market saw light profit taking towards the later part of the day and drifted back to just below the 1.3620 area.  Several speakers during the day offering several different views however, the crux looks to be that they have been told to stay clear of affecting the markets as the Euro talk in the market is looking at 1.40 which as I’ve said previously cannot be a good rate for exporters.
  • GBP: With plenty of two action in the Euro the Cable was left to its own devices for much of the day, we opened around the 1.6230 area and while we remained fairly well bid during the Asian session, moving to the 1.6240 highs there was always going to be risk in either the Euro rising quicker or the Cable being forced lower as the EURGBP cross began to close up now that the Italian job had been resolved. However, the Euro for the most part seemed reasonably capped and unable to push too far so Cable was forced ever lower, moving from the highs into the grey hours early sellers took the market to 1.6220 and then London open followed through to break just below 1.6200. While the figures were closely in line with expectations causing the market to rebound however, the weakness for in GBP remained and we drifted lower over the course of the day trading down through the previous low to trigger some minor stops and then bottomed around the 1.6160 levels as we approach the close.
  • JPY: USDJPY surprised to the topside during Asia however, one has to remember it was Thursday and so there is generally a demand for USD’s for the weekend roll. We moved from the opening 97.38 area to just below 97.50 into the Tokyo opening before seeing early selling in AUDJPY pushing the USDJPY to the mid 97.20’s where the market held before putting in a strong rally after the release of the CNY numbers. The market quickly reversed the losses and pushed through some weak stops before struggling through some reasonable resistance from 97.60 onwards. As we moved into the grey hours the market was still not finished and remained in and around the highs into London opening where a quick push took the market to above the 97.80 level without a follow through this time the resistance was too strong and we never reached the mid 97.80’s again dropping slowly off throughout the day as medium term players lightened there long positions and retail players were squeezed as the market dropped through 97.20 in later trading. The market eventually dipped through the 97.00 level before bouncing weakly into a close around the 97.30 levels. US data as mentioned was slightly on the weak side but the Fed impasse continues to draw down the market.
  • AUD: The AUD had a mixed day as the revisions early in the week balance out with the Fed impasse, opening around the 9385/90 area the market moved quietly into the Tokyo session which saw some fairly aggressive early selling in the AUDJPY carry trade taking the market to the lows for the day below 0.9368. A good number out of CNY saw the market rise quickly through the opening levels to trigger some minor stops before sticking in a 0.9380-0.9400 range for the most part for the remainder of the session. London entered the market with day traders selling from the opening and pushing the market lower and back to the 0.9375 level moving the range play to that level to 0.9390 before the weak numbers in the US helped the market higher once again with the NYK cut setting the high above 0.9415 and almost the low with a quick drop back to below 0.9375 as the market swung one way then the other. The market has gradually moved off those lows and now holds just above the 0.9400 level into the close as the USD selling continues.

Yesterday’s premiership results

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

CNY        Non-manufacturing PMI Sep A 55.4 | P 53.9

07:45     EUR        Italian PMI Services Sep A 52.7 | C 49.3 | P 48.8

08:00     EUR        Eurozone PMI Services Sep (F) A 52.2 | C 52.1 | P 52.1

08:30     GBP       PMI Services Sep A 60.3 | C 60.4 | P 60.5

09:00     EUR        Eurozone Retail Sales M/M Aug A 0.70% | C 0.30% | P 0.10%

11:30     USD       Challenger Job Cuts Y/Y Sep A 19.10% | P 56.50%

12:30     USD       Initial Jobless Claims (SEP 27) A 308K | C 315K | P 305K

14:00     USD       ISM Non-Manufacturing Composite Sep A 54.4 | C 57.2 | P 58.6

 

For today

USDJPY:
Topside: 97.40-97.60 light mix 97.70-98.00 light offers 98.00-98.30 medium offers 98.80-99.00 large offers
Downside: 97.00-97.10 light bids 96.80-97.00 large bids 96.70-96.80 light bids 96.40-96.70 large bids  medium bids 96.00-96.40 large sell stops 95.60-95.80 light sell stops

EURUSD:
Topside: 1.3640-1.3670 medium offers 1.3670-1.3700 light mix 1.3700-1.3730 light mix 1.3730-1.3760 light mix 1.3780-1.3800 medium offers
Downside: 1.3570-1.3600 light mix 1.3540-1.3560 light bids 1.3520-1.3540 light stops 1.3480-1.3500 light bids

AUDUSD:
Topside: 0.9440-0.9450 light buy stops  0.9460-0.9490 light mix 0.9500-0.9540 medium offers
Downside: 0.9350-0.9380 light bids (spread around) 0.9310-0.9350 light bids 0.9260-0.9280 medium sell stops

 

JPY:

BOJ stands pat on monetary policy, revises up view on capex

Abe Adviser Honda Wants Stronger Commitment From Kuroda: WSJ

Aso: Should Alter Tax Rules So Japan Companies Not Disadvantaged

Japan casinos would get Vegas-style regulator under legalisation plan

USD:

Obama cancels visits to Indonesia, Brunei due to U.S. government shutdown

Gross Says Janet Yellen 100% the Next Federal Reserve Chairman

 

 

  • EUR: The Fed fiasco continues and the hollowness of the Republican stance has shown through with the comments from a Republican backbencher by the name of Marlin Stutzman who stated “We’re not going to be disrespected” In other words until they’ve broken it they are just going to continue causing trouble, and the whole situation has gone beyond Obamacare and all about humiliating Pres. Obama. It would seem politics have changed in pretty much all western countries, with self-motivation rather than representing the people who elected them (apart from the Italians).  In more home news Klaus Regling, Director of the European Stability Mechanism stated that Greece will need a third aid package according to the daily Handelsblatt, stating it was still unable to refinance its debt needs on the open market. The market however, has ignored these tidbits and it is extremely dull session of trading, the market opened around the 1.3620 level and managed to move above the 1.3630 late into the session and holding the opening levels. For the moment the market holds above the opening levels as we move towards the grey hours.
  • GBP: The Cable was only slightly better than the Euro, the market opened around the 1.6158 area dipping to 1.6154 lows into the Tokyo session before moving higher over the course of the session to above the 1.6178 level. The market continues to hold towards the highs with light profit taking in EURGBP.
  • JPY: USDJPY opened around the 97.30 area and the market remained in a tight range throughout the session moving slightly higher into the BoJ rate decision which was unchanged as expected and touching above the 97.40 area, the market then dropped down to 97.05 before bouncing back to the 97.25 area in a quiet range considering.
  • AUD: The market opened around the 0.9395 level moving quietly for the first hour before talk and rumours that the RBA is not likely to raise interest rates during the current year. A shot in the dark if you ask me as we’ve seen them cut, just for the sake of chasing the market lower, making a noise while doing it. So it would not bother them in the least to do it again but that’s just my opinion. We saw the market rise over the course of the session as the big guys tell a story and we eventually ran into resistance around the 0.9440 level, and currently hold around the 0.9430 levels just off the highs into the grey hours.

 

Today’s data

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

JPY         BoJ Rate Decision A 0.1% | C 0.1% | P 0.1%

JPY         BoJ 2014 Monetary base Target Oct 4 A Y270T | C 270T | P 270T

06:00     EUR        German PPI M/M Aug C 0.10% | P -0.10%

06:00     EUR        German PPI Y/Y Aug P 0.50%

12:30     USD       Change in Non-farm Payrolls Sep C 179K | P 169K (cancelled)

12:30     USD       Unemployment Rate Sep C 7.30% | P 7.30%

14:00     CAD       Ivey PMI Sep C 52.6 | P 51

 

Interbank Ranges as of 6am London time

Highs    Lows

EUR                        1.36315 | 1.3619

JPY                         97.41 | 97.03

GBP                       1.6179 | 1.6153

CHF                        0.8995 | 0.8980

AUD                       0.9441 | 0.9387

NZD                       0.8309 | 0.8281

CAD                       1.0330 | 1.0323

EURCHF                1.2250 | 1.2237

EURGBP               0.8433 | 0.8422

EURJPY                 132.67 | 132.25
Good Luck

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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