Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 98.753 | EURUSD 1.35323 | EURJPY 133.646 | AUDUSD 0.9551 | NZDUSD 0.84386 | USDCAD 1.03277 | EURCHF 1.23604 | USDCHF 0.91341 | GBPUSD 1.59487 | EURGBP 0.84847 |

 

Harry Hindsight

  • EUR: The Asian session was reasonably quiet opening around the 1.3530 with no sight of an end to the US impasse with the usual rumours and mutterings we’ve heard over the past couple of weeks but nothing concrete for the markets to go on. The market held in the mid 1.3520’s into the Tokyo opening before starting a steady decline to trade below the 1.3510 areas meeting support in the area sufficient from allowing the market to move any further. The move into London was just as uneventful with the market recovering to just below the opening and pushing slowly to above 1.3540. Speculation and reasonable numbers from the Eurozone allowed the market to rise to trade just below the 1.3570 level in slow trading. The opening of the NYK session saw more constructive comments from the US and it would seem the deal had been struck with details to follow. The market saw a broad based USD rally and the Euro dropped off slowly at the start and started to move quicker as we reached through stops around the 1.3510 area to touch below 1.3475 levels. The market sat on the lows for a couple of hours before a missed timed announcement from Fitch who have placed the AAA sovereign rating for the US as negative (one assumes last week would have been right rather than waiting for it to finish). This announcement took the market scrambling higher and the market peaked above the 1.3550 level after a mad scramble and decent flows. The market then settled back into the 1.3530 range for the close.
  • GBP: Cable traded uneventfully during Asia opening just below the 1.6000 to make the early highs dropping back through the early part of the session to the mid 1.5960’s and moving quietly thereafter into the London session. Early London started to see light buying in line with the Euro and the pair rose quietly to the starting point before triggering some weak stops just above the 1.6000 helped by a decent set of employment numbers the high was extended to above the 1.6060 on a spike only to drop quickly back to the 1.6020. The market saw some reasonable buying in the aftermath and continued to hold above the 1.6040, before the US deal was struck showing a quick selloff down through the 1.5900 level and like the Euro the bounce on the Fitch news moved it back to the 1.5950. EURGBP saw Euro’s rising from the low 0.8430 after the UK numbers and moving steadily higher as the Euro outperformed the GBP over the day pushing back to above the 0.8485 levels over the course of the day in a steady rise starting after the European releases.
  • JPY: The close saw a rejection of the AUDJPY 94.00 area only for a rebound to start as soon as the market opened in Asia moving USDJPY up slightly in pre-Tokyo before moving into the Tokyo session with the market running quickly to the 98.60 level before holding. The market held for a great portion of the day around those levels before beginning a long drift lower into the London session as USD waned across the board holding just above the opening levels. The move into NYK and talk of a resolution moved the USD higher taking the pair to above the 98.95 before failing the 99.00 level. The Fitch article dropped the market back a little however, the market immediately started to rise higher once the comments were absorbed finishing the day around the 98.80 levels.
  • AUD: A choppy day for the Oz opening around the 0.9525 level only to drop back to 0.9499 on the Tokyo opening only to see technical players pushing it back higher. To move the Oz the 0.9549 areas, from that point the OZ drifted as USDJPY took the cross higher. We moved into the London session holding the 0.9535 levels and we saw resurgence once the US news was released as the AUDJPY carry moved a little higher. Finishing the day around the 0.9555 levels.

Yesterday’s premiership results

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

NZD       CPI Q/Q Q3 A 0.90% | C 0.80% | P 0.20%

NZD       CPI Y/Y Q3 A 1.40% | C 1.20% | P 0.70%

AUD       Westpac Leading Index M/M Aug A -0.10% | P 0.60%

GBP       Claimant Count Change Sep A -41.7K | C -21.0K | P -32.6K

GBP       Claimant Count Rate Sep A 4.00% | C 4.20% | P 4.20%

GBP       ILO Unemployment Rate (3M) Aug A 7.70% | C 7.70% | P 7.70%

CHF        ZEW (Expectations) Oct A 24.9 | P 16.3

EUR        Eurozone CPI M/M Sep (F) A 0.50% | C 0.50% | P 0.10%

EUR        Eurozone CPI Y/Y Sep (F) A 1.10% | C 1.10% | P 1.10%

EUR        Eurozone CPI – Core Y/Y Sep (F) A 1.00% | C 1.00% | P 1.00%

EUR        Eurozone Trade Balance (EUR) Aug A 12.3B | C 12.4B | P 11.1B

CAD       Manufacturing Shipments M/M Aug A -0.20% | C -0.30% | P 1.70%

USD       NAHB Housing Market Index Oct A 55 | C 57 | P 58

 

For today

USDJPY:
Topside: 99.00-99.20 large offers 99.20-99.50 medium offers 99.50-99.80 light offers 99.80-100.00 light buy stops 100.00-100.20 large offers
Downside: 98.30-98.50 light sell stops 98.20-98.30 98.00-98.20 light mix 97.70-98.00 medium bids

EURUSD:
Topside: 1.3560-1.3590 medium offers 1.3600-1.3640 light mix 1.3640-1.3670 light offers
Downside: 1.3480-1.3510 light sell stops 1.3440-1.3480 light mix 1.3425-1.3440 light sell stops 1.3400-1.3425 light bids

EURJPY:
Topside: 133.90-134.20 light buy stops
Downside: 133.00-133.40 light mix

AUDUSD:
Topside: 0.9560-0.9570 medium offers 0.9570-0.9600 light mix 0.9600-0.9620 light offers 0.9625-0.9635 light buy stops
Downside: 0.9520-0.9535 light bids 0.9480-0.9500 light sell stops 0.9460-0.9480 light mix

 

USD:

Impact of debt ceiling on US econ-getting worse by the day -DJ

Shutdown shaved at least 0.6% off yearly 4Q GDP growth DJ

Shutdown has taken $24B out of US economy S&P

S&P cuts 4Q US growth est. to closer to 2% from 3%

Senate votes 83-16 to advance accord to end US shut-down

EUR:

Draghi faces dilemma over falling inflation and already low interest rates

 

  • EUR: The Euro opened around the 1.3528 and traded quietly into the Tokyo session moving from the 1.3518 level to slowly rise above the 1.3550 level, in fairly healthy two way trading but clearly unadventurous movement as both sides look at the reopening of the Federal government while keeping an eye on the damage it has already caused. One supposes that the recriminations are not over and done with yet. The market holds for the moment around the 1.3540 area as we move towards London.
  • GBP: Cable performed a little bit better than the Euro moving slightly lower from the opening 1.5950 to trade close to the 1.5940 before a steep climb higher with some light GBPJPY buying helping the market to touch above the 1.5985 level, with light EURGBP selling for 10 pips lower however, the volumes were thin in GBP. We currently hold above the 1.5975 area as we move into the grey hours.
  • JPY: USDJPY opened around the 98.78 area and moved steadily higher into the Tokyo market to touch briefly above the 99.00 level in what looked like and option play moving through some half decent offers, once the market had made the mode safe haven currency became yesterday’s news as the market turned and continued a slow grind to below the 98.50 level touching the low 98.40’s as we move into the grey hours.
  • AUD: The opening of the Oz around 0.9555 with a quick rise higher to just below the 0.9570 with good confidence number helping the AUDJPY to hold its levels as USDJPY slipped lower. However, even though we moved a little high during mid-Tokyo the market the general direction has been lower moving to a low around the 0.9528 levels before holding in the 0.9540.

Today’s data

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

AUD       NAB Business Confidence Q3 A 3 | P -1

08:00     EUR        Eurozone Current Account (euros) Aug C 17.7B | P 16.9B

08:30     GBP       Retail Sales M/M Sep C 0.40% | P -0.90%

12:30     CAD       International Securities Transactions (CAD) Aug C 7.21B | P 6.09B

12:30     USD       Initial Jobless Claims (OCT 11) C 357K | P 374K

14:00     USD       Philly Fed Survey C 16 | P 22.3

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               99.01 | 98.505

EUR/USD             1.3553 | 1.35155

EUR/JPY               133.845 | 133.42

AUD/USD            0.9563 | 0.9527

NZD/USD             0.8447 | 0.8316

USD/CAD             1.0332 | 1.0316

EUR/CHF              1.2368 | 1.2356

USD/CHF             0.9146 | 0.9118

GBP/USD             1.5986 | 1.5940

EUR/GBP             0.8482 | 0.84765

 
Good Luck

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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