Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close Wellington open

USDJPY 109.779 109.75-80 | EURUSD 1.25135 1.2506-19 | EURJPY 137.371 137.25-34 | AUDUSD 0.8675 0.8664-80 | NZDUSD 0.77698 0.7740-70 | USDCAD 1.12459 1.1250-60 | EURCHF 1.21047 1.2112-14 | USDCHF 0.9673 0.9666-90 | GBPUSD 1.59641 1.5963-80 | EURGBP 0.78382 0.7831-46 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               109.85 | 109.545

EUR/USD             1.2521 | 1.2504

EUR/JPY               137.435 | 137.17

AUD/USD            0.8700 | 0.8653

NZD/USD             0.7774 | 0.7715

USD/CAD             1.1265 | 1.1241

EUR/CHF              1.2127 | 1.2106

USD/CHF             0.9690 | 0.96695

GBP/USD             1.5983 | 1.5943

EUR/GBP             0.7845 | 0.7833

 

For today

  • EUR: With a typhoon raging around Japan and regional holidays the market has been particularly quiet after the movements on Friday. Euro’s is pretty much unchanged from the opening having stuck to a very tight range. Pre-market the Euro saw 1.2504 but had regained its losses into the official openings and traded to above the 1.2520 level if briefly before settling down to potter around the high teens for most of the session. Topside likely to see light offers into the 1.2540 levels before the market opens up for a likely move to 1.2600 areas and better offers around the 1.2620 areas. Downside bids through the 1.2500 levels and weak stops immediately below the most likely scenario, bids into 1.2480 before the market sees a little daylight with sporadic bids to 1.2400.
  • GBP: Cable opened around the mid 1.5970’s and early sellers pushed the Cable lower, with comments from Vince Cable on the subject of where the Cable should be, according to the erstwhile Liberal Democrat it should be 10-15% lower, whether the market actually knows who he is outside the UK it did dip a little lower trading through the 1.5960 levels before starting a steady recovery trading back through the 1.5980’s and continuing its steady rise into the grey hours. As with the Euro’s the topside looks to be a little exposed to a short squeeze and the last time I said that we got nothing however, a move through the 1.6020 levels will likely see stops triggered and a move towards the 1.6080 levels before any further offers appear, from there it looks very bland and likely to be a mix of offers and stops moving through the 1.6100 level to better offers from the 1.6120 areas. While to the downside the market has moved into a different range the Cable has to push on to the low end of 1.59 with possible decent bids around the 1.5920 level before opening up for a move to the 1.5800 levels. With little data out today the market though is likely to be a little quiet unless something out of the ordinary occurs.
  • JPY: USDJPY opened on its highs in the pre-market before trading around the 109.80 levels into Tokyo, the market saw small supply for the fix dipping the market a little and then a follow through of sorts to take the market gently to the 109.60’s and a little below. A typhoon and regional markets on holiday has left a little bit of a gap volume wise. Topside you still have to respect the 110.00 levels and through there to around the 110.20 before the market becomes a little thinner, stops are likely above there for the break out however, offers are likely to thicken as you approach 110.60 and onwards with better offers the closer you get to 111.00, with a lack of data today it maybe a struggle though to reach those dizzy heights. Light bids into the 109.40 areas before likely stops through the 109.40 area and selling to fill the gap from Friday, then into further support around the 109.00 levels.
  • AUD: No real data and a very quiet session saw the Oz tracking the USDJPY, as USDJPY moved lower so the Oz was able to slowly rise having hit the lows in the run to the Tokyo opening the market pushed back through the opening 0.8675 areas and up to the 87 cent level by midsession, it stalled at this point however, its remained close to the level for the most part. Through the 87 cent level the market sees a mix with light offers and stops in the area a strong push through the 0.8720 area will likely see the market moving back to above 0.8760 however, this is dependent on the USDJPY drifting lower in all likelihood and the market is not likely to be free flowing. Downside, well the 0.8658 supportive level was taken out on Friday however, this move back to 87 cent for the moment negates the move and 0.8660-40 is likely to be a strong bid area for range players before giving way to weak stops and then stubborn patches of support to 0.8620-00.

Overnight News

JPY:

Suga: Listening to Opinions of Lawmakers Who Urge Tax-Hike Delay

JPY/PHP:

Philippines’ Swap with Japan Doubled in Size to $12b: Japan MOF

AUD:

Australia Sept. ANZ Job Ads Rise 0.9% vs. 1.6% in Aug.

Australia’s Sept. TD Monthly Inflation Gauge Rises 0.1% M/m

NZD:

New Zealand House-Price Inflation Is Slowest in 19 Months

TWD/CNY:

Taiwan Says China Blocking Trade Talks With Other Nations: CAN

GBP:

U.K. Big Businesses Holding on to Cash, Report Finds: Telegraph

WorldBank:

World Bank Cuts Developing East Asia 2015 GDP Forecast on China

 

 

Today’s data

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

AUD       TD Securities Inflation M/M Sep A 0.10% | P 0.00%

06:00     EUR        German Factory Orders M/M Aug C -2.40% | P 4.60%

08:10     EUR        Eurozone Retail PMI Sep P 45.8

08:30     EUR        Eurozone Sentix Investor Confidence Oct C -11.8 | P -9.8

14:00     CAD       Ivey PMI Sep C 53.4 | P 50.9

 

Weekend News

JPY:

GPIF May Delay Portfolio Reform Release to Nov or Later: Jiji
Prime Minister Abe Is Neutral on Further Tax Hike, Amari Says
CNY:

China PBOC Says Complication in Economy Can’t Be Underestimated
EUR:

Rajoy Urges Talks as Mas Doubles Down on Vote in Catalonia
Weidmann Says Italy Needs Reform, Including Jobs Mkt: Corriere
Greece Can’t Cover Own Financing Needs, S&P’s Raynaud Says: Real
Greece Won’t Need Any More New Loans, PM Antonis Samaras Says
HKD:

Hong Kong Lawmakers Plea for Protesters to Go as Deadline Looms
Hong Kong Officer Says Gas Used to Avoid Injuries: Morning Post
H.K. Insurers May Lose HK$1 Bln From Week of Protests: RTHK
NZD:

New Zealand’s Key Loses Outright Majority in Final Count
N.Z.’s Key Announces Confidence Agreement With Maori Party
GBP:

Cameron Signals Early Start on U.K. Tax Cuts If Tories Win
U.K. Probes Islamic State Fighter’s Identity as Henning Mourned
USD/TRY:

Biden Apologizes to Erdogan after Reports He Criticized Turkey

 

Harry Hindsight

  • EUR: The market opened around the 1.2670 areas and while it went slightly higher pre-Tokyo it was not by much before the market started to drift lower through the course of the Asian session. Holding around the 1.2655 area into the grey hours the market had not shown much in the way of range or volume with only those concerned about holding positions cutting rather than anything meaningful before the NFP numbers later in the day. The market increased its losses as the London market saw the same type of flow driving slowly down to just below the 1.2620’s and into the release. As set out below a larger than expected number set the Euro in a quick dive to the 1.2540 level before running into bids. The bids managed to slow the descent with the market moving to a whisker from the 1.2500 level with no bounce the day was over with very little happening from that point on and the market moving between the low and 1.2520 into a quiet close. Eurozone numbers were mixed with a very good retail sale number pretty much ignored while PMI numbers were very lacklustre. The ECB released more details of the ABS scheme however, the market took it in its stride as a non-event with what looks like more of the same give the money to banks so they can buy the national debt.
  • GBP: With less volatility than the Euro the Cable was in retreat for a good proportion of the day, opening around the 1.6150 levels the market held up during Asia slipping only around 10 pips before moving into London and a steady slide down through the 1.6100 as traders closed out long positions in preparation of the NFP numbers, by the time of the release the market had steadily moved into the 1.6070-80 areas and once the number was released tell a further 50 pips to the next set of bids, 1.6000-20 held for an hour or so before the move continued triggering weak stops from the 1.6000 area buyers and tumbling to 1.5980 and then steadily to 1.5960 before trading in a 20 pip range for the rest of the session. I had expected the Cable to be a little more resilient to the USD move and maybe a decoupling of the GBP from the Euro however, for the moment the GBP is joined at the him to some extent and with a slight slip in the Services PMI number could not find anyone in the market willing to go against the USD. Comments from S&P’s Kraemer also upset the market a little as he made comments of a potential downgrade if the UK left the EU, pretty much the same as when the UK joined the EU and there was an upgrade, ohh no there wasn’t, maybe there is something in the idea of the EU creating its own ratings agency, then we’ll have inane chatter from both sides.
  • JPY: What one US number can do for you. The USDJPY opened around the 108.40 and while the previous session’s failure to break below 108.00 the level still remained there to be broken however, the market had other ideas and buying once the Tokyo market opened sent the pair back towards the 109.00 levels through the early part of the session. The move into the grey hours saw some light profit selling enter the market but even that was limited with the market only retracing to the 108.65 areas before moving back to the 109.00 levels. The release of the NFP number caused the pair to jump to around the 109.20 and then quickly to 109.50 before slowing its ascent however, it did continue to rise moving to above the 109.80 levels a couple of hours after the release and like the other majors held in a tight range all the way to the close trading around the 109.80 levels and in striking distance of the highs from last week.
  • AUD: A slightly weaker non-manufacturing PMI number from China was all that hit the market able to influence the Oz, the market opened around the 88 cent level having recovered from the supportive 0.8660 levels a few days ago. Dipping from the opening levels to the 0.8780 area by mid-session the market recovered as it moved into the London session. Leveraged players decided the 88 cent level was a little strong and shorted over the early part of the session pushing the Oz lower into the NYK part of the day and the release of the NFP. USD obviously was rampant against everything and although the move in Oz was tempered by the early sellers taking some profit on the fall the move through the 0.8700 eventually occurred and hour or so after the release and the Oz moved steadily to test the downside pushing through the 0.8660 level area with good volumes going through before coming to a halt in the mid 0.8640’s before moving back to just below 0.8680 and a quiet close just below there.

Friday’s premiership results

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

CNY        Non-manufacturing PMI Sep A 54 | P 54.4

EUR        Italy Services PMI Sep A 48.8 | C 49.6 | P 49.8

EUR        Eurozone Services PMI Sep (F) A 52.4 | C 52.8 | P 52.8

GBP       Services PMI Sep A 58.7 | C 59 | P 60.5

EUR        Eurozone Retail Sales M/M Aug A 1.20% | C 0.10% | P -0.40%

CAD       International Merchandise Trade (CAD) Aug A -0.6B | C 1.50B | P 2.58B | R 2.2B

USD       Trade Balance Aug A -40.1B | C -$40.7B | P -$40.5B | R 40.3B

USD       Change in Non-farm Payrolls Sep A 248K | C 210K | P 142K | R 180K

USD       Unemployment Rate Sep A 5.90% | C 6.10% | P 6.10%

USD       ISM Non-Manufacturing Composite Sep A 58.6 | C 58.5 | P 59.6

 

Stay lucky

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

Any opinions, news, research, analyses, prices or other information ("information") contained on this Blog, constitutes marketing communication and it has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Further, the information contained within this Blog does not contain (and should not be construed as containing) investment advice or an investment recommendation, or an offer of, or solicitation for, a transaction in any financial instrument. LMAX Group has not verified the accuracy or basis-in-fact of any claim or statement made by any third parties as comments for every Blog entry.

LMAX Group will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. No representation or warranty is given as to the accuracy or completeness of the above information. While the produced information was obtained from sources deemed to be reliable, LMAX Group does not provide any guarantees about the reliability of such sources. Consequently any person acting on it does so entirely at his or her own risk. It is not a place to slander, use unacceptable language or to promote LMAX Group or any other FX and CFD provider and any such postings, excessive or unjust comments and attacks will not be allowed and will be removed from the site immediately.