Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close Wellington open

USDJPY 97.476 97.42-49 | EURUSD 1.35563 1.3545-62 | EURJPY 132.128 131.96-132.22 | AUDUSD 0.94312 0.9425-47 | NZDUSD 0.83213 0.8304-55 | USDCAD 1.02956 1.0289-92 | EURCHF 1.22972 1.2278-1.2302 | USDCHF 0.90719 0.9043-89 | GBPUSD 1.60102 1.6011-40 | EURGBP 0.84676 0.8450-70 |

 

Weekend News

APEC:

APEC Leaders Urge Fewer Protectionist Policies to Boost Growth
APEC Sees Growth Risks as Moody’s Says Outlook Challenging
USD:

Obama Predicts Debt Ceiling Deal in Time as Shutdown Lingers
U.S. Government Shutdown a Momentary Disruption, Says Kerry
JPY:

Japan Prime Minister Abe Says Labour Reforms May Be Delayed: FT
Japan Pension Fund May Opt for Growth Stocks, Nikkei Says
Japan Banks Expand Foreign-Denominated Bond Issuance: Nikkei
Japan May Create Nuclear Decommissioning Agency, Shiozaki Says
JPY/PHP:

Philippine Central Bank Approves $436M Loan From Japan: Tetangco
CNY/TWD:

China’s Xi Says Taiwan Political Issue Needs Resolution: Xinhua
CNY/HKD:

China’s Xi Says Hong Kong Reform Must Follow Basic Law: Leung
TWD/CNY:

Taiwan-China Meeting Focused on Trade, Economy: Siew
CNY:

China Raises Highest Alerts as Typhoon Fitow Approaches: Xinhua
AUD:

Abbott Gathers Support to Scrap Carbon Pricing, Mining Tax
EUR:

EU’s Barroso Says Portugal Correctly Carrying Out Bailout Plan
Greek Draft Budget to Show Primary Surplus, Kathimerini Says
Berlusconi Will Face Senate Ouster Vote After Losing Challenge
GBP:

Clegg to Say Cameron EU Vote Hurts Economy, Sunday Times Says
U.K. Independence Party Leader to Seek Election in Kent, FT Says

Harry Hindsight

  • EUR: The Euro struggled in Asia with the market staying in a tight range moving from the 1.3620 level to tempt the topside a few times through 1.3630 but always falling back to the opening levels, the move into London saw the market beginning to fall back moving steadily after the German PPI figures down below the 1.3600 level, the market remained fairly well supported with Noyer’s hawkish comments about not requiring a new LTRO however, it wasn’t until we moved into the NYK and comments from both sides of the house helping the USD to rise and the Euro fell quickly from the 1.3600 level to trade just below 1.3540 as a knee jerk reaction ran through the marked. Once we’d traded to the lows the market seemed flat and unwilling to do much more in the remainder of the session finishing the day in the mid 1.3550’s with light volumes without the usual Non-Farm payrolls.
  • GBP: The day was set by EURGBP buying as the Euro continued to play catch up to the Cables moves over the past week however, as with yesterday the market was comfortable with the Euro demand but the GBP supply proved to be a little more difficult. The market opened around the 1.6160 area and held for the most part above the levels in Asia making a weak move into the 1.6170 levels into the final hours before the London opening however, from there it dropped back with the Euro and extended further in the initial fall back for the Euro with Cable dropping into the NYK session to a low of around the 1.6040 area. There was a little bit of a rally into the NYK option cut however, this was short lived before gamma players again sold the GBP against pretty much everything and the Cable remained weak all the way to the close finishing the day on its lows around the 1.6010 levels.
  • JPY: A very mixed day for the USDJPY with a choppy session with the market centring on the 97.20 area, moving choppily to either side of the line. Having opened around the 97.30 levels, we found the market in a fairly tight range moving down from the opening to trade below the 97.00 for the first time on the day with weak cross JPY selling as Yen remains the safe haven of choice. The market remained in a choppy 20 pip range then into the London session, and early Europeans took advantage to place small shorts for a more firm move lower only for the market to reject the lows with some stiff bids seen around the mid 96.90’s and move back to the 97.20 holding area. The move to NYK was of similar make up with movements between the 97.10/20 level. NYK opened and again tried the downside however, this time we saw earlier buyers as day traders lined up in front of the original bids and turned the market to just short of the 97.30 level. USD took a turn for the better with the rumours and commentary abounding with the lack of data providing a back drop of less liquidity as traders packed up and left early with none of the usual data available to trade on and the market rallied towards what would be the highs on the day above the 97.45 level. Once there the market held the levels with a lack of interest in changing its direction at this stage and we ran out close to those highs.
  • AUD: The early market was dominated by rumours that the RBA is not likely to touch the interest rates this year, while I would disagree with that fact as they are just likely to do it just to prove the market wrong. We opened around the 0.9400 level and saw some early AUDJPY selling before the rumours appeared and trading from the 0.9390 levels the market never looked back in Asia rising steadily to above the 0.9435 level in a decent move for the Oz with no data. From there this level seemed to be the centre of focus and we moved never too far away with the peak moving to just below the 0.9460 level before running out trading the 0.9430 level in what ended up being a quiet session in NYK.

Friday’s premiership results

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

EUR        German PPI M/M Aug A -0.10% | C 0.10% | P -0.10%

EUR        German PPI Y/Y Aug A -0.50% | C 0.10% | P 0.50%

CAD       Ivey PMI Sep A 51.9 | C 52.6 | P 51

 

For today

USDJPY
Topside: 97.50-97.60 light offers  97.60-97.90 medium offers 98.00-98.20 medium offers
Downside: 97.00-97.15 light bids 96.80-97.00 medium bids 96.50-96.80 medium bids

EURUSD
Topside: 1.3580-1.3610 light mix  1.3610-1.3625 light buy stops 1.3625-45 light offers 1.3675-1.3685 light offers 1.3700-1.3710 medium mix
Downside: 1.3530-1.3560 light sell stops 1.3500-1.3530 light mix 1.3475-1.3500 light bids

AUDUSD
Topside: 0.9450-0.9465 light offers  0.94650-0.9500 medium buy stops
Downside: 0.9400-0.9415 light bids 0.9370-0.9400 light mix  0.9340-0.9360 light bids

 

Asia:

World Bank Cuts Developing East Asia Growth Forecast on China

USD:

U.S. May Continue Payments after Debt Cap Reached, Moody’s Says

JPY:

Japan Must Make Certain Deflation Is ‘Swept Away,’ Abe Says

Japan September foreign reserves rise to $1.273 trln

Japan Aug coincident indicator index down 0.1 point

JPY/EUR: Airbus close to landmark jet order with Japan Airlines sources

NZD:

New Zealand Dollar Exchange Rate Still Too High, English Says

 

  • EUR: A very quiet session today with both CNY and AUD closed for the day, the Euro opened slightly up from Friday’s close around the 1.3565 areas however with the aforementioned bank holidays the market had trouble moving in any particular direction moving initially above the 1.3570 levels it always returned to the low 1.3560’s we’d seen in pre-market trading. With the market holding those levels as we move towards the London market.
  • GBP: Cable opened the day slightly stronger in line with the Euro with the Cable rising from the opening fairly strongly in GBPJPY buying in pre-Tokyo buying, with Cable rising to above the 1.6040 level, with parts of the market closed once we moved to the 1.6045 area we remained there for several hours before slowly giving ground as we approach the grey hours and trading around the 1.6035 levels.
  • JPY: As with the other majors the USD was looking weaker as we opened with USJPY opening around the 97.25 area and struggling to maintain the level into the Tokyo opening, the whole session has remained particularly quiet, with mixed reactions for cabinet support after the decision on consumption tax, the market drifted off to its lows just above the 97.00 where the market see’s support building for the pair and currently holding around the 97.15 level in quiet trading.
  • AUD: The market moved higher once early Japanese players moved into the market having opened in a bank holiday Sydney around the 0.9430 level. Trading into the Tokyo session in a move towards the 0.9450 level as early players put fresh longs on the carry trade in a thin market. Supply for the same pair saw the market drop from the early highs trading down to the 0.9420 before running into minor supportive bids and struggling around the area as we head towards the grey hours.

 

Today’s data

Actual = A Consensus = C  Previous = P Timings GMT

JPY         Leading Index Aug (P) A 106.5 | C 106.6 | P 107.9

07:00     CHF        Foreign Currency Reserves Sep C 432.0B | P 434.2B

08:30     EUR        Eurozone Sentix Investor Confidence Oct C 10.6 | P 6.5

09:00     EUR        Eurozone GDP Q/Q Q2 (F) C 0.30% | P 0.30%

12:30     CAD       Building Permits M/M Aug C -2.40% | P 20.70%

 

Ranges as of 6am London time including Sydney open

Highs    Lows

USD/JPY               97.45 | 97.02

EUR/USD             1.3575 | 1.3553

EUR/JPY               132.00 | 131.63

AUD/USD            0.9451 | 0.9416

NZD/USD             0.8322 | 0.8285

USD/CAD             1.0307 | 1.0287

EUR/CHF              1.23085 | 1.2268

USD/CHF             0.9070 | 0.9039

GBP/USD             1.6048 | 1.6015

EUR/GBP             0.84685 | 0.8454

 

 

Stay lucky

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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