Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 98.159 | EURUSD 1.35201 | EURJPY 132.719 | AUDUSD 0.94503 | NZDUSD 0.82863 | USDCAD 1.0398 | EURCHF 1.2324 | USDCHF 0.91156 | GBPUSD 1.59668 | EURGBP 0.84673 |

 

Harry Hindsight

  • EUR: The market opened around the 1.3525 level and slowly drifted lower into the Tokyo session, minor EURAUD selling was seen early in the session beginning the movement lower. With market talk of some resolution to the US’s woes USD started to pick up and we saw the Euro started to move further down. The market traded the lows as the grey hours started touching below the 1.3490 level with some light stops being triggered. Early London reversed the market back to above the 1.3500 level however; we then struggled for several hours until we saw quick buying in EURGBP before the BoE rate decision EURGBP moved quickly higher to above the 0.8492 level before a steady drift lower so while it looks like a technical move through short date moving averages its likely someone had a decent amount of interest for the pair. Euro’s lifted on the back of this buying and we saw the pair rally to above the 1.3547 before again falling during the US session to the 1.3505 levels. The market from there started to range in an ever tightening market as we moved through the afternoon of rumours and speculation about a 6 week short term debt limit increase hitting the news late into the day.
  • GBP: The market moved in a similar fashion to the Euro in early trading opening around the 1.5955 area and moving to a high above 1.5965 before the Cable started a steady drop lower to trade down to the 1.5915 level. The move into the grey hours saw the market bounce in front of the GBP rate decision which was not likely to change. Once the data was released the market moved steadily higher before EURGBP buying put it back from the 1.5970 areas to the 1.5930’s, flurry over the market again started a quiet climb to above the 1.5975 level were we moved around into the close.
  • JPY: USDJPY continued to strengthen throughout the day ignoring anything in its path, moving from the opening levels of 97.25 areas the market steadily climbed throughout the day rising to 97.80 by the grey hours. London hovered around the area for much of the session before the market again started to see good buying as talk of a temporary increase hit the market again and we rose to above 98.20 from that point on there was significant amounts changing hands but the market was unable to penetrate much higher than the 98.25/26 levels. Again the early buyers seemed to be large Japanese banks with plenty to do with some selling in AUDJPY and EURJPY in the Tokyo session from leveraged longs paring back there positions.
  • AUD: From an opening of 0.9447 the market initially moved higher and spiked higher on the unemployment data to move above the 0.9470 level before carry trade selling moved in as the market in USDJPY started to rise and USD’s began to rise against all the majors and minors. The market steadily moved lower pushing through the 0.9400 and triggering some minor stops below the figure. The grey hours led to the market touching the 0.9390 level before starting a long haul higher with early London players looking for the bottom and leading to a resurgence of the Oz moving steadily through the London session to the 0.9440 level and just short of the opening. The opening in NYK saw a resurgence of buying as the USDJPY levelled off to its topside, from the opening in NYK to the option cut the market rose to the mid 0.9460 before spending the next hour or so rising above to the previous highs, from there it was a slow crawl holding for the most part around the 0.9460 levels before dipping slightly into the close.

Yesterday’s premiership results

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

JPY         Tertiary Industry Index M/M Aug A 0.70% | C 0.40% | P -0.40%

JPY         Machine Orders M/M Aug A 5.40% | C 2.50% | P 0.00%

AUD       Consumer Inflation Expectation Oct A 2.00% | P 1.50%

AUD       Employment Change Sep A 9.1K | C 15.0K | P -10.8K | R -10.2K

AUD       Unemployment Rate Sep A 5.60% | C 5.80% | P 5.80%

JPY         Consumer Confidence Index Sep A 45.4 | C 43.5 | P 43

GBP       BoE Rate Decision A 0.50% | C 0.50% | P 0.50%

GBP       BoE Asset Purchase Target A 375B | C 375B | P 375B

CAD       New Housing Price Index M/M Aug A 0.10% | C 0.30% | P 0.20%

USD       Initial Jobless Claims (OCT 5) A 374K | C 307K | P 308K

USD       Import Price Index M/M Sep A 90B | C 0.30% | P 0.00%

 

For today

USDJPY:
Topside: 98.60-98.75 light buy stops 98.75-99.00 medium offers 99.00-99.20 light offers
Downside: 97.60-98.00 light bids 97.20-97.60 light bids (spread)

EURUSD:
Topside: 1.3545-1.3560 light offers 1.3560-1.3610 light mixed bag 1.3610-1.3640 medium offers 1.3640-1.3670 light mixed bag
Downside: 1.3480-1.3510 light bids 1.3460-1.3480 light mix 1.3440-1.3460 light bids

EURJPY:
Topside: Nothing of note
Downside: 131.80-132.20 light sell stops

AUDUSD:
Topside: 0.9470-0.9480 light mix 0.9480-0.9500 light buy stops 0.9540-0.9560 light buy stops 0.9580-0.9600 light offers
Downside: 0.9420-0.9440 light bids 0.9375-0.9400 light bids

 

  • EUR: Euro’s opened around the 1.3520 area and slowly moved higher into the Tokyo opening trading to just above the 1.3532 area on light volume, and for the first half of the session the market held the open and highs in a slow ranging market, as the meeting between the two sides in the US finished we saw a slight surge to the Euro with the comments generally that a resolution is likely to be met anytime up to Columbus day, with no one willing to speak after the meeting was held until Obama was said to have rejected the short term plan from the Republicans, further comments after this suggested that the difference was less significant and the debt ceiling would rise. The market moved to the 1.3544 level before stalling and drifting back to the mid 1.3530’s in a slowdown of trading.
  • GBP: The market in Cable was particularly quiet rising steadily from the opening around the 1.5965 level in a tight channel to reach the mid 1.5980’s into the grey hours with nothing to impact the market generally, the market saw some light EURGBP selling but it was light in GBP in particular through the session.
  • JPY: The market opened around the 98.25 area and initially the market the market saw good selling appear in AUDJPY from early Japanese sellers pre-Tokyo market, this seemed overly aggressive and was possibly one large piece taking the market in USDJPY through to the 97.95 area before bouncing and moving into the Tokyo session with fresh buying of USDJPY from the onset of the Tokyo market. Again large institutional types are suspected to be behind the rise using the large Japanese banks and into the fix the market had recovered its losses and was held by supply around the 98.35 level for a brief period before again pushing on with retail and leveraged entering the market. The market peaked around the 98.55 running into some reasonable resting offers just above. The market drifted from the levels from that point on however, what looks like a key level in the AUDJPY failed to break around the 93.50/60 area and the market again saw some strong selling into the grey hours taking both the USDJPY and AUDUSD legs lower leaving the USDJPY to run into the grey areas some 15pips away from its highs.
  • AUD: The Oz opened above the 0.9455 level and looked set to move higher before early Japanese sellers moved into the AUDJPY taking the market quickly lower with moving Oz to its lows against the USD around the 0.9435 level before bouncing, this looked indicative of a single hit rather than multiple trading, the market then stabilized as USDJPY ran higher the AUD struggled around the 0.9450-55 area as USDJPY rose, the AUDJPY moved with it and the USDJPY leg took all the force until after the Tokyo fix when the Oz leg started to rise, the failure in pushing through key levels in the AUDJPY left the market rejecting the highs and as with USDJPY, Oz began to drift away from the highs around 0.9485 into the grey hours and a 0.9470 level.

USD:

Lew, Bernanke Told G-20 Debt-Limit Solution Seen by 17th

U.S. House Republican-Obama fiscal deal could come by Friday -Rep. Sessions

Obama Making Progress on U.S. Shutdown Impasse: Kerry

New York Fed Is Sued By Ex-Staffer

JPY/USD:

Aso Told Lew That U.S. Debt Ceiling Isn’t Just a U.S. Issue

Japan EconMin urges U.S. to resolve fiscal standoff

JPY:

Japan Sept wholesale prices rise 2.3% YoY

CNY:

PBOC Vice Governor: China GDP Growth to Exceed 7.5% This Year — Report

China plans to raise insurers’ real estate and infrastructure investment cap

 

Today’s data

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

JPY         Japan Money Stock M2+CD Y/Y Sep A 3.80% | C 3.70% | P 3.70% | R 3.80%

JPY         Domestic CGPI M/M Sep A 0.30% | C 0.20% | P 0.30% | R 0.20%

6:00        EUR        German CPI M/M Sep (F) C 0.00% | P 0.00%

6:00        EUR        German CPI Y/Y Sep (F) C 1.40% | P 1.40%

8:30        GBP       Construction Output M/M Aug C 0.80% | P 2.20%

12:30     USD       PPI M/M Sep C 0.20% | P 0.30%

12:30     USD       PPI Y/Y Sep C 0.60% | P 1.40%

12:30     USD       PPI Core M/M Sep C 0.10% | P 0.00%

12:30     USD       PPI Core Y/Y Sep C 1.30% | P 1.10%

12:30     CAD       Unemployment Rate Sep C 7.10% | P 7.10%

12:30     CAD       Net Change in Employment Sep C 15.0K | P 59.2K

12:30     USD       Advance Retail Sales Sep C 0.20% | P 0.20%

12:30     USD       Retail Sales Less Autos Sep C 0.40% | P 0.10%

13:55     USD       U. of Michigan Confidence Oct (P) C 77 | P 77.5

14:00     USD       Business Inventories Aug C 0.30% | P 0.40%

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               98.56 | 97.91

EUR/USD             1.3544 | 1.35175

EUR/JPY               133.45 | 132.47

AUD/USD            0.9485 | 0.9434

NZD/USD             0.8315 | 0.8268

USD/CAD             1.0412 | 1.0393

EUR/CHF              1.2330 | 1.2311

USD/CHF             0.9118 | 0.91015

GBP/USD             1.5985 | 1.5968

EUR/GBP             0.84725 | 0.84645

 
Good Luck

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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