Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 96.709 | EURUSD 1.35814 | EURJPY 131.343 | AUDUSD 0.94288 | NZDUSD 0.83267 | USDCAD 1.0312 | EURCHF 1.22616 | USDCHF 0.90279 | GBPUSD 1.60972 | EURGBP 0.84368 |

 

Harry Hindsight

  • EUR: Euro opened slightly higher from Fridays close around the 1.3565 level and failed to do much else in the Asian session with both the Ozzies and Chinese taking a lazy day off. The market topped in the low 1.3570’s and really only started to move once London was open. The market peaked just before the Sentix number before slipping back from above the 1.3590 level dropping back to the previous holding area, the market then absorbed a no change in the GDP number for the quarter and slipped into NYK on the back foot. The market for the moment is moving on air with any news generating a little speculation and without the general data releases from the US seems to move on a whim as with the move lower in mid NYK dropping to the mid 1.3540’s before reversing back to the 1.3580 level in the space of an hour, before finishing the day only just in positive territory in the mid 1.3570’s.
  • GBP: Cable had a stronger day with the market trading higher in early trading from the opening around the 1.6020 level to move in pre-Tokyo to above 1.6040, from there the market held its value for the remainder of Asia in slow trading before finding more interest as EURGBP selling moved into the market for the first time since the end of the Italian job, EURGBP dropped from the early London from the 0.8465 level and stayed firmly weak into NYK touching the 0.8430 area and holding in those areas into the close. Cable continued to move steadily higher over the course of the session with safe haven movements pushing the market back to the 1.6100 peak before running out quietly just short of the highs, in a quiet market.
  • JPY: Safe haven flows dominated the USDJPY market and we saw the market drift lower from the Asian session onwards moving from the opening 97.25 area to top above 97.30 and then moving down to the first set of supportive orders around the 97.00 level. AUDJPY selling seemed particularly active in the mid Asian session with a lightening of long positions still going through the market. London continued the movement with fresh buying of the Yen and a further push in the pair to below 97.00 The market continued to hold into late into the session and the run to the close, with talk of a key pivotal point around the 96.68 the market made a move towards that level however, the market ended up closing around the area with the level holding.
  • AUD: The AUD rose in early pre-Tokyo trading with the Ozzies out for Labour day it would seem that early buyers of AUDJPY helped to push the AUD to its highs into the 0.9448 areas with light liquidity, fixing supply in the Tokyo session in AUDJPY turned the market on its head and with USDJPY on the back foot weak liquidity allowed the market to move steadily lower reversing the move high from the opening 0.9430 levels and we ended a quiet session in Asia resting on the 0.9420 areas. London opened with further selling with a sudden drop to the 0.9395 area with speculators seeing from the grey hours. The market stabilized on some light bids on the low 0.9390 level before starting a slow grind higher with light profit taking from the earlier sellers. The move into NYK was a quiet affair and the market saw some light buying to take the market to just short of the highs before slipping back into the close as USDJPY and therefore AUDJPY came under pressure to finish the day around the 0.9425.

Yesterday’s premiership results

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

JPY         Leading Index Aug (P) A 106.5 | C 106.6 | P 107.9 | R 107.8

CHF        Foreign Currency Reserves Sep A 432.4B | C 432.0B | P 434.2B

EUR        Eurozone Sentix Investor Confidence Oct A 6.1 | C 10.6 | P 6.5

EUR        Eurozone GDP Q/Q Q2 (F) A 0.30% | C 0.30% | P 0.30%

CAD       Building Permits M/M Aug A -21.20% | C -2.40% | P 20.70% | R 21.40%

 

For today

USDJPY
Topside: 97.00-97.30 Light buy stops 97.30-97.60 Light offers
Downside: 96.30-96.60 medium bids 96.00-96.30 medium sell stops 95.80-96.00 large bids

EURUSD
Topside: 1.3580-1.3620 light offers 1.3620-1.3650 light offers
Downside: 1.3520-1.3540 light bids 1.3510-1.3490 light sell stops

AUDUSD
Topside: 0.9450-0.9470 light mix  0.9470-0.9500 medium buy stops (spread)
Downside: 0.9380-0.9410 light bids (spread)  0.9365-0.9380 light bids 0.9350-0.9365 light bids (spread)

 

USD/JPY:

Aso: Must Be Aware Value of Japan’s U.S. Debt Holdings May Fall

JPY:

Japan Aug Current Acct Surplus Y161.5B; Expected Surplus Y540B

Japan to Decide on Further Sales Tax Increase End-2014: Sankei

Abe Cabinet Support Rate Drops 6.6 Pts to 58.6%: Sankei Poll

TPP Talks May Lose Momentum after Obama’s APEC Absence: Tamaki

USD:

Fed’s Fisher Says U.S. ‘Cannot Afford to Default’

CNY:

China Sets Yuan Reference Rate at Strongest Since July 2005

China Faces ‘Severe’ Trade Frictions, MOFCOM Official Says

PBOC Researcher Urges China to Join TPP Negotiations: Caijing

Yuan Slips to 12th among Global Payments Currencies: SWIFT

China Sept. HSBC Services PMI 52.4 vs. 52.8 in Aug.

China 4Q, 2013 Economy May Grow ~7.6%: China Securities Journal

AUD:

Australia business confidence hits 3-1/2 year high in Sep-survey

Australia job ads rise 0.2% in September -survey

NZD:

NZ business confidence hits 14-yr high in Q3 – NZIER survey

 

 

  • EUR: The market seems to have stalled and gone to sleep with very little USD selling appearing in the market. We opened quietly around the 1.3580 level and held in a 5 pip range into the Tokyo session until the market reached the Tokyo fixing with some light supply in EURJPY in the face a USDJPY bid market. Euro’s was slowly forced lower to trade down to the waiting bids around 1.3560 before holding around the area as we move towards the London open. Very light flows through the session.
  • GBP: Cable opened quietly around the 1.6090 area and initially attempted the topside 1.6100 levels before we ran into the Tokyo fix, this move in USDJPY triggered a mild USD buying or at least a halt to the previous few days of selling. Cable started to drift lower pulled by the Euro with only a minor few pips movement in EURGBP. Cable moved to the 1.6076 area and currently holds around the level on very light interest.
  • JPY: Having held into the close above the 96.68 level the Sydney market was less reluctant to give up on the idea of pushing through the level and sold aggressively in the early part of the session pushing it eventually through to 96.58 however, the market must have expected more movement but instead of dropping the market started to see strong buying from major Japanese banks driving up and triggering some weak fresh buy stops. The move to the 97.00 was slow for the most part however, determined and negating the move lower. The market held at the 97.00 area for a good period of time before making a quick move to the 97.13 areas before holding just above the 97.00 level.
  • AUD: The AUD traded higher as USDJPY buying helped to renew Japanese retail buying in AUDJPY with major Japanese banks buying in the USDJPY the retail market followed and the AUD was taken to above the 0.9445 area in moves similar to yesterday’s openings. However, once we neared the fix there appeared a similar amount of counter flow for the market to contend with and the USDJPY leg was not going down. The market held in the 0.9415 area again similar to yesterday and has risen a little from the lows with the movement of USDJPY helping the Oz to the 0.9430 level.

 

Today’s data

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

GBP       BRC Sales Like-For-Like Y/Y Sep A 0.70% | P 1.80%

GBP       RICS House Price Balance Sep A 54% | C 40% | P 40% | R 41%

JPY         Current Account (JPY) Aug A 0.35T | C 0.65T | P 0.33T

AUD       NAB Business Confidence Sep A 12 | P 6 | R 4

JPY         Eco Watchers Survey: Current Sep A 52.8 | C 52 | P 51.2

05:45     CHF        Unemployment Rate Sep C 3.20% | P 3.20%

06:00     EUR        German Trade Balance (EUR) Aug C 15.1B | P 14.5B

07:15     CHF        CPI M/M Sep C 0.20% | P -0.10%

07:15     CHF        CPI Y/Y Sep C -0.10% | P 0.00%

07:15     CHF        Retail Sales (Real) Y/Y Aug C 1.70% | P 0.80%

10:00     EUR        German Factory Orders M/M Aug C 1.00% | P -2.70%

12:15     CAD       Housing Starts Sep C 175.0K | P 180.3K

12:30     CAD       International Merchandise Trade (CAD) Aug C -0.70B | P -0.93B

12:30     USD       Trade Balance Aug C -$39.3B | P -$39.1B

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               97.135 | 96.55

EUR/USD             1.3582 | 1.35575

EUR/JPY               131.70 | 131.15

AUD/USD            0.9449 | 0.9412

NZD/USD             0.8312 | 0.8270

USD/CAD             1.0329 | 1.0314

EUR/CHF              1.2272 | 1.22605

USD/CHF             0.90515 | 0.9028

GBP/USD             1.6107 | 1.6071

EUR/GBP             0.8439 | 0.84335
Good Luck

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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