Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close Wellington open

USDJPY 124.312 124.16-40 | EURUSD 1.11103 1.1107-10 | AUDUSD 0.73778 0.7374-91 | NZDUSD 0.65366 0.6525-52 | USDCAD 1.30948 1.3085-95 | USDCHF 0.97615 0.9756-75 | GBPUSD 1.5643 1.5636-57 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               124.45 | 124.25

EUR/USD             1.1118 | 1.1083

EUR/JPY               138.08 | 137.875

AUD/USD            0.7399 | 0.7360

NZD/USD             0.6545 | 0.6528

USD/CAD             1.3116 | 1.3091

EUR/CHF              1.0854 | 1.0842

USD/CHF             0.9783 | 0.97615

GBP/USD             1.5665 | 1.5642

EUR/GBP             0.7104 | 0.70835

For today

• EUR: A very quiet start to the week with the market opening in line with Fridays close and steadily dipping lower over the course of the session, early selling into the Tokyo session saw the market dip below the 1.1100 levels and a push towards the 1.1080 areas before finding sufficient support to hold. Topside offers light through to the 1.1150 areas were limited congestion extends into the 1.1160 levels before opening for a further test of the 1.1200-20 areas with the 1.1220 looking key to any further gains on the topside, a push through 1.1230 areas will likely see stops from weak shorts and limited breakout trades for a move through the 1.1300 levels however, given today’s lack of European data with only the Eurozone Trade balance to upset the flow. Downside bids are likely to be light through to the 1.1050 areas, with better bids beyond the level and into the 1.1020 levels and likely to continue through to the 1.0950 areas.
• GBP: Cable spent the day trading around the 1.5650 levels with very little moving the market dipping into the low 1.5640’s the market recovered each time to push above 1.5650 but struggled for interest in either direction. Bids into the 1.5600 levels are likely to be weak however, a push through the figure could open stronger selling into the 1.5560 levels and open up a better move through the 1.5500 levels if momentum dictated however, beyond that has seen decent congestion over the past few weeks and with little data is difficult to see.
• JPY: A quiet opening with the market in line with Fridays close saw reasonable fixing demand for the USD to help the market move to the 124.45 levels through early Tokyo however, once the demand was over the market struggled to make any further headway and held around the 124.40 areas for much of the session with volumes remaining light. Topside offers increase into the 124.80 areas and are likely to continue to the months highs into the 125.30 level before stops are likely to appear, even so caution is the key to the topside with stronger offers likely to appear on any move through the 125.50 areas. Downside bids light through to the 124.20 levels before better support starts to appear however, this is likely to be fragile and weak stops are likely to appear on a push through the 123.80 areas opening a quick stab to the downside before bids again start to appear around the 123.00 levels.
• AUD: As with the other pairs the Oz traded in a narrow band with the market initially moving off the opening levels around the 0.7380 area to test into the mid 0.7360’s before recovering as the USDJPY slipped back from testing the highs, a lack of data and news over the weekend left the market dormant for the most part. Topside offers into the 74 cent level dominate the topside for the moment and a strong push through still leaves the 0.7440-60 areas to contend with, suspected stronger offers from then on as the market moves towards the 75 cent level with the possibility of a push through here opening the 77 cent level although this would seem to be against the fundamental data we’ve seen over the past few months. Downside bids light through the 0.7350 levels and then mixed into the 73 cent level with congestion through to the 0.7250 areas likely to hold a quiet market.

Overnight News

JPY:

Japan 2Q GDP Falls Annualized 1.6% Q/q; Est. -1.8%

Japan’s Amari Doesn’t Expect Economic Package at This Point

CNY:

PBOC’s Yuan Reference Rate Little Changed at 6.3969 Per Dollar

Chinese Banks May See Revenue Rise from Forex Hedging: S&P

Tianjin Death Toll Rises to 114 as Li Vows Swift Investigation

AUD:

Hockey: FTA with China Won’t Reduce Migration Safeguards

NZD:

New Zealand Services Industry Expanded at Slower Pace in July

GBP:

U.K. August House Prices Fall 0.8% M/m, Rightmove Says

 

 

Today’s data

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

GBP       Rightmove House Prices M/M Aug A -0.80% | P 0.10%

JPY         GDP Q/Q Q2 (P) A -0.40% | C -0.50% | P 1.00%

JPY         GDP Deflator Y/Y Q2 (P) A 1.60% | C 2.10% | P 3.40%

07:15     CHF        Retail Sales (Real) Y/Y Jun C -0.60% | P -1.80%

09:00     EUR        Eurozone Trade Balance (EUR) Jun C 19.3B | P 21.2B

12:30     CAD       International Securities Transactions (CAD) Jun P -5.45B

12:30     USD       Empire State Manufacturing Aug C 5 | P 3.86

14:00     USD       NAHB Housing Market Index Aug C 61 | P 60

20:00     USD       Net Long-term TIC Flows Jun P $93.0B

 

Weekend News

CNY:

China Raises Yuan Reference Rate First Time Since Devaluation

China July FDI Rises 5.2% Y/y in Yuan Terms

Premature to Say Yuan Devaluation Will Hit Dim Sum Mkt: Moody’s

AUD:

RBA’s Kent Says Jobless Rate Stable, Labour Demand Has Picked Up

RBA’s Kent Says Board Will Continue to Keep Open Mind on Rates

EUR:

IMF: EU Deal with Greece Is an Important Step Forward

IMF Must Stay Involved in Greece Bailout, Spahn Tells Passauer

Greece’s Tsakalotos Says MPs Must Approve Deal before Eurogroup

France’s GDP Stagnates in 2Q; Est. Expands 0.2% Q/q

NZD:

New Zealand Retail Sales Post Smallest Gain since 3Q 2013

JPY:

Abe to Use ‘Apology’ in War Anniversary Statement, Yomiuri Says

Friday’s premiership results

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

NZD       Retail Sales Q/Q Q2 A 0.10% | C 0.50% | P 2.70% | R 2.30%

EUR        French GDP Q/Q Q2 (P) A 0.00% | C 0.20% | P 0.60% | R 0.70%

EUR        German GDP Q/Q Q2 (P) A 0.40% | C 0.50% | P 0.30%

EUR        Italian GDP Q/Q Q2 (P) A 0.20% | C 0.30% | P 0.30%

GBP       Construction Output M/M Jun A 0.90% | C 2.40% | P -1.30% | R -1.00%

EUR        Eurozone GDP Q/Q Q2 (A) A 0.30% | C 0.40% | P 0.40%

EUR        Eurozone CPI M/M Jul A -0.60% | C 0.00% | P 0.00%

EUR        Eurozone CPI Y/Y Jul (F) A 0.20% | C 0.20% | P 0.20%

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

CAD       Manufacturing Shipments M/M Jun A 1.20% | C 2.10% | P 0.10%

USD       PPI M/M Jul A 0.20% | C 0.10% | P 0.40%

USD       PPI Y/Y Jul A -0.80% | C -0.90% | P -0.70%

USD       PPI Core M/M Jul A 0.30% | C 0.10% | P 0.30%

USD       PPI Core Y/Y Jul A 0.60% | C 0.50% | P 0.80%

USD       Industrial Production Jul A 0.60% | C 0.30% | P 0.30% | R 0.10%

USD       Capacity Utilization Jul A 78.00% | C 78.00% | P 78.40% | R 77.70%

USD       U. of Michigan Confidence Aug (P) A 92.9 | C 94 | P 93.1

Stay lucky

Andy

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