Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close Wellington open

USDJPY 104.092 104.00-10 | EURUSD 1.31331 1.31335-42 | EURJPY 136.71 136.588-808 | AUDUSD 0.9342 0.9328-29 | NZDUSD 0.83625 0.8352-58 | USDCAD 1.08774 1.0858-84 | EURCHF 1.20616 1.2061-64 | USDCHF 0.91823 0.91655-83 | GBPUSD 1.66006 1.6579-1.6607 | EURGBP 0.79122 0.7913-18 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               104.215 | 104.08

EUR/USD             1.3135 | 1.3119

EUR/JPY               136.775 | 136.67

AUD/USD            0.9343 | 0.9318

NZD/USD             0.8377 | 0.8345

USD/CAD             1.0878 | 1.0861

EUR/CHF              1.20705 | 1.2061

USD/CHF             0.91955 | 0.9183

GBP/USD             1.6599 | 1.6587

EUR/GBP             0.7916 | 0.7906

 

For today

  • EUR: The Euro has drifted steadily over the course of the session moving from the 1.3135 areas to trade to the 1.3120 levels as the market moves to the grey hours, with the weekend seeing calls from France to dump austerity and free up funds for investment and forcing the Euro lower as if the 6% from the beginning of the years fall is insufficient, then Germany allegedly calling Draghi and taking him to task over Jackson Hole and his comments on QE and a move away from austerity, of course the supposed comments were later denied however, speculation in the market on the Jackson Hole commentary have been doing the rounds. Downside bids from current levels into the 1.3100 levels before likely stops through the levels and the market opened into the 1.2800-1.3100 range from 2013. Topside offers around the 1.3200 levels seem to the first line of defence, however, they are just the first and as long as the ECB continues to talk rather than walk the walk the movement is likely to be limited, with likely offers around the sentimental levels 1.3250/1.3300.
  • GBP: Cable dipped slightly in early trading, from the opening 1.6593 levels to around the 1.6587 area before starting a slow move higher but unable to break through the 1.6600 levels. With the US out for the day German numbers may have a little bearing however; the PMI Manufacturing number is likely to be the focus, and any further commentary from the Eurozone. Light offers from the 1.6600 levels and onwards, patchy through 1.6620 with light stops suspected before another round of selling around 1.6650. Downside sees bids through the 1.6550 level and into 1.6540 and seems fairly strong having traded through into the levels several times during August.
  • JPY: The USDJPY opened just below the 104.20 levels with the new weeks trading starting with a little bang however, although the market seems less funded in the 104.05-15 levels the offers hold above the 104.20 areas being tested a few times today but struggling to penetrate those levels in limited movement. Downside sees bids around the 104.05 levels however, they are light as are anything resting in the market with yield chasers entering into the market as and when however sufficient to keep putting the market back to the topside and into this 104.20 area. Through 103.50 the market is likely to see some stops before moving into 103.20 areas.
  • AUD: The Oz opened weaker than Friday’s close and possibly helped to put the USDJPY higher also as the AUDJPY level tried to remain static. Having opened on its lows 0.9325 and through the close support it then spent the rest of the session moving steadily higher through the day to close the gap on the charts and push to Friday’s close levels. Topside offers still remain around the 0.9370 areas and nervousness about any RBA chatter that might appear in the market. Downside has a congested area from the 0.9320 level with light stops suspected through the 0.9280 levels before running into the 0.9240 level having held during August however, with a US holiday the market is likely to be stuck for the day.

Today’s data

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

NZD       Terms of Trade Index Q/Q Q2 A 0.30% | C -3.50% | P 1.80%

JPY         Capital Spending Q2 A 3.00% | C 3.80% | P 7.40%

AUD       TD Securities Inflation M/M Aug A 0.00% | P 0.20%

CNY        Manufacturing PMI Aug A 51.1 | C 51.3 | P 51.7

CNY        HSBC Manufacturing PMI Aug (F) A 50.2 | C 50.5 | P 50.3

06:00     EUR        German GDP Q/Q Q2 (F) C -0.20% | P -0.20%

07:30     CHF        SVME PMI Aug C 53.8 | P 54.3

08:00     EUR        Eurozone Manufacturing PMI Aug (F) C 50.8 | P 50.8

08:30     GBP       Mortgage Approvals Jul C 66K | P 67.2K

08:30     GBP       M4 Money Supply M/M Jul C 0.50% | P 0.10%

08:30     GBP       PMI Manufacturing Aug C 55.1 | P 55.4

 

Weekend News

CHF:

SNB’s Jordan Pledges to Defend Cap as Risks Increase: NZZamS
GBP/EUR/RUB:

U.K. Said to Press EU to Block Russia from SWIFT Banking Network
EUR/RUB:

EU Vows to Hit Russia With New Sanctions If Ukraine War Worsens
EUR:

Hollande Says Low Inflation Is a European Problem, Sees ECB Role
Coeure Says ECB Ready to Alter Monetary Policy, Boost Bank Funds
EU Taps Tusk, Mogherini for Bloc’s Top Posts Amid Russia Discord
German Voters in Saxony Could Crimp Merkel’s Eastern Dominance
JPY/INR:

Mizuho, Nippon Life to Expand Operations in India: Nikkei
Japan to Loan India 50B Yen for Rail, Road Projects: Sankei
JPY/KRW:

Japan, N. Korea Hold Secret Meeting on Abduction Issue: Kyodo
USD:

Obama Downplays Threat of World Unrest in Remarks at Fundraiser
NZD:

New Zealand Justice Minister Collins Resigns, N.Z. Herald Says
CNY:

China’s Xi Urges Military Innovation, Support for Change: Xinhua
CNY/TWD:

China Agrees to Speed Trade Talks with Taiwan: Commercial Times
AUD/CNY:

Australia May Raise Fees for Chinese Property Buyers, AFR Says
AUD:

Australia to Aid Islamic State Foes as Terror Threat Increases

 

Harry Hindsight

  • EUR: The Euro started the day slowly moving just above the 1.3180 levels into Asia and holding deep into the session before starting to dip into the grey hours. Moving into the grey hours the market moved steadily lower to test the 1.3160 levels before holding quietly into the Eurozone numbers, with the numbers in line and a slight increase on YoY core CPI the market moved to make the highs although it was never able to push back through the 1.3200 levels it held around the 1.3190 into the NYK opening. A good Chicago PMI added to a better than expected Michigan number set the USD stronger and the Euro started a decline initially through the 1.3150 level before finishing the day slowly drifting lower to below the 1.3140 levels over the course of the remainder.
  • GBP: A narrow choppy day for the Cable with the market in a tight range through the Asian session moving between the 1.6585/90 areas for much of the session. The movement in the Euro was replicated in the EURGBP cross with the Cable pushing higher as the Euro weakened for the first move of the day above the 1.6600 levels, from there however, the market drifted into the US numbers and with only the consume confidence number underpinning the day the market touched below 1.6580 before bouncing on the early US numbers coming in close to the mark if a tad weak in the spending numbers, and GBP was again back above the 1.6600 level this time testing through the 1.6610 levels only to fall back on the later numbers with the Euro as the USD moved forward. Having pushed to new lows on the day below the 1.6565levels the market then found itself short into a long weekend and we saw a short squeeze into the close with the market moving quickly back above the 1.6600 level. EURGBP pushed lower trading through the 0.7915 levels around the close as the squaring of positions finished.
  • JPY: While the range was no particularly impressive it was a steady grind higher from the closing 103.70 areas, with the first half of the session limited to the closing/opening level, before steadily rising from that point on with the day locked into long weekend mode and limited volume. The numbers generated a minor dip however, it was limited and the rise continued to the 104.10 levels into the close.
  • AUD: The Oz remained in a tight range through the Asian session and into the early London market before starting a dip lower being dragged lower by the EURGBP cross and pressure from the AUDJPY as the JPY weakened. However, the market was only able to move from the 0.9360 highs to make lows just through the 0.9335 levels and near support, holding that base line for the session into NYK and into the close.

Friday’s premiership results

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

NZD       Building Permits M/M Jul A 0.10% | P 3.50%

GBP       GfK Consumer Sentiments Aug A 1 | C -1 | P -2

JPY         Unemployment Rate Jul A 3.80% | C 3.70% | P 3.70%

JPY         Household Spending Y/Y Jul A -5.90% | C -2.70% | P -3.00%

JPY         National CPI Core Y/Y Jul A 3.30% | C 3.30% | P 3.30%

JPY         Tokyo CPI Core Y/Y Aug A 2.70% | C 2.70% | P 2.80%

JPY         Retail Trade Y/Y Jul A 0.50% | C -0.10% | P -0.60%

JPY         Industrial Production M/M (JUL P) A 0.20% | C 1.40% | P -3.30% | P -3.40%

NZD       NBNZ Business Confidence Aug A 24.4 | P 39.7

JPY         Housing Starts Y/Y Jul A -14.10% | C -10.50% | P -9.50%

CHF        KOF Leading Indicator Aug A 99.5 | C 97.9 | P 98.1 | R 97.9

EUR        Eurozone Unemployment Rate Jul A 11.50% | C 11.50% | P 11.50%

EUR        Eurozone CPI Estimate Y/Y Aug A 0.30% | C 0.30% | P 0.40%

EUR        Eurozone CPI – Core Y/Y Aug (A) A 0.90% | C 0.80% | P 0.80%

CAD       GDP M/M Jun A 0.30% | C 0.30% | P 0.40% | R 0.50%

CAD       Industrial Product Price M/M Jul A -0.30% | C 0.20% | P -0.10% | R 0.10%

CAD       Raw Materials Price Index M/M Jul A -1.40% | C 0.70% | P 1.10%

USD       Personal Income Jul A 0.20% | C 0.30% | P 0.40% | R 0.50%

USD       Personal Spending Jul A -0.10% | C 0.20% | P 0.40%

USD       PCE Deflator M/M Jul A 0.10% | C 0.10% | P 0.20%

USD       PCE Deflator Y/Y Jul A 1.60% | C 1.60% | P 1.60%

USD       PCE Core M/M Jul A 0.10% | C 0.10% | P 0.10%

USD       PCE Core Y/Y Jul A 1.50% | C 1.50% | P 1.50%

USD       Chicago PMI Aug A 64.3 | C 56.3 | P 52.6

USD       U. of Michigan Confidence Aug (F) A 82.5 | C 80.4 | P 79.2

 

Stay lucky

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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