Andy Harrison
Good morning,
LMAX Close
USDJPY 120.561 | EURUSD 1.12921 | AUDUSD 0.71969 | NZDUSD 0.63614 | USDCAD 1.31724 | USDCHF 0.97121 | GBPUSD 1.54943 |
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Interbank Ranges as of 6am London time
Highs   Lows
USD/JPYÂ Â Â Â Â Â Â Â Â Â Â Â Â Â 120.685 | 120.345
EUR/USDÂ Â Â Â Â Â Â Â Â Â Â Â 1.1318 | 1.1287
EUR/JPYÂ Â Â Â Â Â Â Â Â Â Â Â Â Â 136.335 | 136.095
AUD/USDÂ Â Â Â Â Â Â Â Â Â Â 0.7208 | 0.7178
NZD/USDÂ Â Â Â Â Â Â Â Â Â Â Â 0.6378 | 0.6332
USD/CADÂ Â Â Â Â Â Â Â Â Â Â Â 1.3184 | 1.3169
EUR/CHFÂ Â Â Â Â Â Â Â Â Â Â Â Â 1.0973 | 1.0959
USD/CHFÂ Â Â Â Â Â Â Â Â Â Â Â 0.9715 | 0.9690
GBP/USDÂ Â Â Â Â Â Â Â Â Â Â Â 1.5520 | 1.5493
EUR/GBPÂ Â Â Â Â Â Â Â Â Â Â Â 0.7295 | 0.72755
For Today
- EUR: Good 2 way trading from the opening with the buyers slowly pushing the Euro higher into the Tokyo session from the opening around 1.1290 to trade to the 1.1320 level and into waiting offers, having failed to capitalize on the move the market stared to drift again and as the market moves to the grey hours has already slipped to below the 1.1300 areas, with the ECB monthly bulletin not likely to set the world on fire the market is almost surely going to be quiet until the FOMC decision and with the market expecting no change the market will likely see a small flurry before settling down to finish the day just as quietly, obviously if they were to surprise the market then it won’t be a small flurry and the market will instantly be on the back foot as it copes with the knee jerk reaction however, topside offers light through the 1.1320 areas and then likely to see stronger offers from the 1.1340-60 levels before opening for a test to the 1.1400 areas and the market opening for a large move if it can push through those levels with offers likely to be light to the 1.1550 areas. Downside bids limited on the way down until the market moves towards the 1.1220 areas and through to 1.1180 before the bids start to weaken however, those bids are likely to continue in there weakened state down into the 1.1100 areas and possibly stronger bids.
- GBP: Cable saw limited gains during the Asian session moving to the 1.5520 levels in early Tokyo before drifting through the session holding above the 1.5500 levels, Topside offers in the current areas will likely be patchy to the 1.5550 areas where better offers are likely to be seen those offers are likely to continue through to the 1.5650 areas and mirror the congestive areas from July and August however, with the FOMC the possibility of the market squeezing through the level and opening up a large move is possible even if slim. Downside bids are likely to be weaker and the market has light bids into the 1.5450 level with the likelihood of weak stops through there and the market opening quickly to a test into the better bids around the 1.5350 areas.
- JPY: USDJPY saw early selling quickly absorbed as the USD longs closed out positions before today’s FOMC however, having pushed into the 120.30 levels the market soon started to recover with the market again pushing to the 120.70 levels as it moved into the grey hours in a reasonably quiet session for the JPY. Topside offers light through the 121.00-20 areas and then patches of resistance appear on the way to the 121.80 levels and stronger offers moving towards 122.00 however, a strong push will likely see the market give ground and a push higher with the 124.00 levels exposed to a quick move. Downside bids through the 120.00 levels and into the 119.80 areas before the market opens for another test of the 119.00 levels and stronger bids into the 118.80 areas, however this could then see a similar scenario from last month were the market disappears and the downside becomes vulnerable to a spike.
- AUD: A choppy day but contained market with AUD/NZD cross being active after the GDP release in NZD however having pushed to the 0.7210 areas the market was unable to continue and drifted from that point with sellers looking for a break on the downside disappointed as the market held and then moved around the 72 cent level for much of the session. Topside offers are likely to continue through the 72 cent level with the chance of weak stops above the recent highs a push through the level will likely open the market to a move towards the 0.7250 areas and more selling, and this is likely to continue into the 73 cent levels and possibly the pair with better resistance to a sudden move, Downside bids are a little thinner for the most part with the 71 cent level providing only minor support before the market moves to test the stronger 0.7050 levels and then the solid bids below 70 cent.
Overnight News
CNY:
China Forex Regulator Says Yuan ‘Basically Stable’ Now
Yuan’s Real Effective Rate Drops from Record High in Aug.: BIS
China SAFE to Increase Punishment on Irregular Fund Outflows
China’s Rate Liberalization May Hurt Banks’ Profits: Info Daily
China to Reform Agricultural Subsidy System in 2016-2020: Daily
CNY/USD:
China Says Fed Hike Impact to Be Limited on Outbound Investment
JPY:
Japanese Bought Net 514 Billion Yen Overseas Debt Last Week
Foreign Investors Sold Record 1.42t Yen of Japan Stocks Last Wk
Japan’s Pension Funds Turn Sellers of Japanese Stocks in 2Q
Japan Aug. Exports Rise 3.1% Y/y; Est. +4.3%
Japan’s Household Assets Rise 4.4% in Second Quarter, BOJ Says
Global Funds Cut JGB Holdings in 2Q From Record High: BOJ Data
Japan Auto Industry Group Says FOMC Decision ‘Biggest Concern’
NZD:
New Zealand Annual Growth Rate Slowed to 2.4% in 2nd Qtr.
N.Z. Government Declines Overseas Purchase of Lochinver Station
Today’s data
Actual = A | Consensus = C | Previous = P | Revised = R All timings GMT
NZDÂ Â Â Â Â Â GDP Q/Q Q2 A 0.40% | C 0.60% | P 0.20%
JPYÂ Â Â Â Â Â Â Â Trade Balance (JPY) Aug A -0.36T | C -0.35T | P -0.37T | R -0.38T
05:45Â Â Â Â CHFÂ Â Â Â Â Â Â SECO Economic Forecasts
07:30Â Â Â Â CHFÂ Â Â Â Â Â Â SNB 3-Month Libor Lower Target Range C -1.25% | P -1.25%
07:30Â Â Â Â CHFÂ Â Â Â Â Â Â SNB 3-Month Libor Upper Target Range C -0.25% | P -0.25%
07:30Â Â Â Â CHFÂ Â Â Â Â Â Â SNB Sight Deposit Interest Rate C -0.75% | P -0.75%
08:00Â Â Â Â EURÂ Â Â Â Â Â Â ECB Monthly Bulletin
08:30Â Â Â Â GBPÂ Â Â Â Â Â Retail Sales M/M Aug C 0.20% | P 0.10%
12:30Â Â Â Â USDÂ Â Â Â Â Â Current Account Balance Q2 C -$110.0B | P -$113.3B
12:30Â Â Â Â USDÂ Â Â Â Â Â Housing Starts Aug C 1.16M | P 1.21M
12:30Â Â Â Â USDÂ Â Â Â Â Â Building Permits Aug C 1.15M | P 1.13M
12:30Â Â Â Â USDÂ Â Â Â Â Â Initial Jobless Claims (SEP 12) C 276K | P 275K
14:00Â Â Â Â USDÂ Â Â Â Â Â Philly Fed Survey Sep C 5.5 | P 8.3
18:00Â Â Â Â USDÂ Â Â Â Â Â FOMC Rate Decision C 0.25% | P 0.25%
18:00Â Â Â Â USDÂ Â Â Â Â Â FOMC Economic Projections
18:30Â Â Â USDÂ Â Â Â Â Â FOMC Press Conference
Harry Hindsight             Â
- EUR: Early trading saw the market move slowly from the 1.1270 levels to move towards the 1.1300 levels as USD longs cut positions in readiness for the FOMC announcement, having pushed towards the 1.1300 level the market ran into sufficient offers to hold the market into the grey hours, the move into the grey hours saw light selling and the market moving steadily lower and into the London session, the selling continued and was exuberated by another decline in the UK unemployment rate and movement in the EURGBP, and the selling quickly triggered weak stops on the move through the 1.1270 levels and the selling continuing into the NYK session, Eurozone CPI numbers did little to dent the selling and while the monthly number was better than expected YoY failed to impress, the move into the NYK session saw the market holding the 1.1220 areas and with the NYK session came fresh USD profit taking and the Euro again started to move higher with US CPI at best flat but showing a little weakness for the Month of August doing little to deflect the USD sellers. The move back through the 1.1240 areas saw weak stops triggered and the market quickly moved back to the highs of the day pushing through 1.1300 and eventually topping around the 1.1320 levels before sufficient offers appeared in the market and a slow drift to the close.
- GBP: Cable opened around the 1.5340 areas and traded slowly around that area through the Asian session pushing at times above the 1.5350 areas however, the movement was very limited and the market didn’t move until the release of the Unemployment numbers and the market moved quickly to push through the 1.5400 levels before rising through early London to push through the 1.5450 levels and then slowly rising into the NYK session pushing through 1.5460, NYK were quick sellers of USD’s and Cable quickly moved above the 1.5520 levels before settling down to trade below 1.5500 for the balance of the session in quiet trading. EURGBP started to edge lower as the market moved into London having pushed towards the 0.7360 levels into Asia, the move lower started as a trickle but once the Unemployment numbers were released the EURGBP quickly dropped to the 0.7300 level and continued at a more leisurely pace to trade below 0.7270 into the NYK session and although showed signs of recovery could only manage to hold the 0.7290 areas into the close.
- JPY: USDJPY moved quietly through the day with the market trading down from the opening levels in Asia touch just above the 120.10 levels before recovering into the grey hours and pushing back through the opening 120.40 areas to push to the 120.70 into the NYK session, while the USD was sold against most currencies it remained in a tight range through the NYK session to finish around the 120.60 levels on slow trading for the pair.
- AUD: Carry trade buying against the back drop of USD selling helped the Oz move steadily higher over the course of the day, with Asian trading keeping the Oz in a tight range the market eventually pushed above the opening levels to test the 0.7150 before moving into the London session and a quick move as early traders moved into the market in the grey hours and pushed the pair to above the 0.7160 levels, London after the opening again took it another leg pushing to the 0.7180 areas before finding strong offers to curtail the market and profit taking by early buyers saw the market dip back towards those opening levels, NYK and the USD sellers again renewed the rally and although the market found the offers to the topside still waiting the market ground steadily higher to touch the 0.7200 areas over the remaining part of the session and finishing just short of the highs.
Yesterday’s premiership results
Actual = A | Consensus = C | Previous = P | Revised = R All timings GMT
NZDÂ Â Â Â Â Â Current Account Balance Q2 A -1.22B | C -1.51B | P 0.66B | R 0.82B
AUDÂ Â Â Â Â Â Westpac Leading Index M/M Aug A -0.30% | P 0.00% | R 0.10%
GBPÂ Â Â Â Â Â Jobless Claims Change Aug A 1.2K | C -5.1K | P -4.9K | R -6.8K
GBPÂ Â Â Â Â Â Claimant Count Rate Aug A 2.90% | C 2.50% | P 2.30% | R 2.60%
GBPÂ Â Â Â Â Â ILO Unemployment Rate (3M) Jul A 5.50% | C 5.60% | P 5.60%
CHFÂ Â Â Â Â Â Â ZEW (Expectations) Sep A 9.7 | P 5.9
EURÂ Â Â Â Â Â Â Eurozone CPI M/M Aug A 0.00% | C -0.60% | P -0.60%
EURÂ Â Â Â Â Â Â Eurozone CPI Y/Y Aug (F) A 0.10% | C 0.20% | P 0.20%
EURÂ Â Â Â Â Â Â Eurozone CPI – Core Y/Y Aug (F) A 0.90% | C 1.00% | P 1.00%
CADÂ Â Â Â Â Â Manufacturing Shipments M/M Jul A 1.70% | C 1.00% | P 1.20%
USDÂ Â Â Â Â Â CPI M/M Aug A -0.10% | C 0.00% | P 0.10%
USDÂ Â Â Â Â Â CPI Y/Y Aug A 0.20% | C 0.20% | P 0.20%
USDÂ Â Â Â Â Â CPI Core M/M Aug A 0.10% | C 0.10% | P 0.10%
USDÂ Â Â Â Â Â CPI Core Y/Y Aug A 1.80% | C 1.90% | P 1.80%
CADÂ Â Â Â Â Â International Securities Transactions (CAD) Jul A -10.12B | P 8.51B | R 8.79B
USDÂ Â Â Â Â Â NAHB Housing Market Index Sep A 62 | C 61 | P 61
USDÂ Â Â Â Â Â Crude Oil Inventories A -2.1M | C 0.7M | P 2.6M
USDÂ Â Â Â Â Â Net Long-term TIC Flows Jul A $141.9B | P $103.1B | R -$129.7B
Good Luck,
Andy
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