Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 120.561 | EURUSD 1.11904 | AUDUSD 0.71333 | NZDUSD 0.63156 | USDCAD 1.32523 | USDCHF 0.9718 | GBPUSD 1.55078 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               120.61 | 120.34

EUR/USD             1.1206 | 1.1183

EUR/JPY               134.91 | 134.74

AUD/USD            0.7148 | 0.7123

NZD/USD             0.6331 | 0.6308

USD/CAD             1.3257 | 1.3232

EUR/CHF              1.0886 | 1.08795

USD/CHF             0.9723 | 0.9713

GBP/USD             1.5527 | 1.5500

EUR/GBP             0.7221 | 0.7211

For Today

• EUR: A range bound quiet session with Tokyo out for the second day, with the Euro rising to above the 1.1200 levels from the opening and then remaining in a quiet static market to the grey hours. Topside offers are possibly into the 1.1240 areas and then light through to the 1.1280 areas and possibly stronger into 1.1300, a lot of chatter about QE and rate hikes possibly mean very little given that nothing has really changed since the FOMC and/or before so the market has now moved back to the levels prior to that release, a move through to the 1.1320 is likely to see free movement to the 1.1360 areas before fresh offers are likely to appear. Downside bids into the 1.1180 level are likely to see light stops through the 1.1170 area and then light bids through to 1.1120 levels where the market is likely to be a little more supportive.
• GBP: Cable move up from the 1.5510 areas from the opening and briefly tested into the 1.5530 levels before finding limited selling and the market dipped back to the 1.5520 levels for the move into the London session. While the market through 1.5500 is likely to be weak the 1.5450 provides a better supportive area with the bids likely to be light but in depth with a push through the next big figure likely to hold the market in a quiet session, PSBR number likely to be the focus for the Cable, a push through the 1.5350 levels will likely to open the market for a deeper test down with the 1.5160 levels vulnerable. Topside offers into the 1.5550 areas are light and those light offers likely to be concentrated around the sentimental levels until a possibly stronger topside near 1.5650.
• JPY: Another day of light trading with the Tokyo market all but closed the market slowly dipped from the opening levels around the 120.60 areas into the 120.35 levels before slowly pushing into the 120.45 area and the grey hours. Topside offers into the 120.80 areas with those offers likely to continue through the 121.00 level, even a push through 121.20 is likely to see those offers continuing with resting orders likely to contain a quiet market. Downside bids light through to the 119.00 areas before the markets bids start to build and likely to increase through to the 118.80 levels, with a similar story to the topside and resting bids down to the 118.20 levels and again stronger bids.
• AUD: A very quiet market with the Oz rising slowly to the mid 0.7140’s before drifting back to the opening levels, Topside offers light into the 0.7170-0.7190 areas before the market opens a little to the 0.7220-30 areas and possibly better offers, above there a possibility of weak stops and the market then runs into stronger offers from the 0.7260 levels onwards and into 73 cents. Downside bids into the 71 cent level is likely to see better bids approaching the 0.7050-0.7000 areas with those bids likely to increase on a move through the 70 cent level and building increasingly stronger the closer you get to the years lows.

Overnight News

Asia:

Asia May Be Forced to Follow U.S. in Raising Rates, ADB Says

CNY:

Xi Says No Basis For Sustained Depreciation of Yuan: WSJ

ADB Chief Economist Says Pessimism Over China ‘Overblown’

CBRC Meets Foreign Banks Over Bad Loans in China: Apply Daily

China Aug. Leading Economic Index Rises 1% M/m to 334.4

AUD:

Australia Weekly Consumer Sentiment Rises 8.7%, Most on Record

Sydney House Prices Rose Most on Record in Second Quarter

RBA Names Michele Bullock Assistant Governor Business Services

Today’s data

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

AUD       House Price Index Q/Q Q2 A 4.70% | C 2.50% | P 1.60%

CNY        Conference Board Leading Index Aug A 1.00% | P 0.90%

06:00     CHF        Trade Balance (CHF) Aug C 2.97B | P 3.74B

08:30     GBP       Public Sector Net Borrowing (GBP) Aug C 8.7B | P -2.1B

10:00     GBP       CBI Trends Total Orders Sep C 0 | P -1

13:00     USD       House Price Index M/M Jul C 0.40% | P 0.20%

14:00    EUR       Eurozone Consumer Confidence Sep (A) C -7 | P -6.9

Harry Hindsight              

• EUR: Euro’s held around the 1.1300 levels through Asia with the Tokyo market on holiday, moving from the opening just above the 1.1280’s to test the 1.1320 areas into the grey hours in light trading, the move into London saw the market dip back below 1.1300 on the back of the German PPI numbers, the market recovered initially into the early morning session but again struggled above the 1.1320 levels before starting a steady drift lower through the session and into NYK, today saw Bullard on the tapes giving further indications that interest rates are likely to rise before the end of the year and the call not to rise was a close call and the USD rose a little with the Euro dipping from the 1.1240 areas to test into the 1.1180 levels before closing after a long quiet run to the end around the 1.1190 levels.
• GBP: Cable was no more active however, it faired a little better in the early part of the session running through the Asian session moving off the 1.5520 levels to test into early London pushing towards the 1.5570 levels as EURGBP dropped back from the 0.7280’s and steadily dipping back below 0.7220 into the close, and while the USD rose steadily through the session the Cable was held for the most part around the 1.5500 areas into the close.
• JPY: With no Tokyo market the early start saw the market opening above the 120.10 levels before drifting lower from that opening to test the 119.80 levels into the grey hours, early London were steady buyers from that point onwards and with Bullards comments the market made steady headway into the NYK session to test above the 120.60 levels before holding around the 120.50 in a very unexciting market to the close.
• AUD: As the USD recovered through the day so the Oz drifted ever lower, moving from an opening around the 0.7190 levels pushing to the 0.7170 levels in Asia and then drifting sideways into the London session, unusually for London the market remained in the area for much of the session before the NYK opening and once the US appeared the Oz slipped back to trade for the balance of the session trading around the 0.7120-30 areas to the close.

Yesterday’s premiership results

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

NZD       Westpac Consumer Confidence Q3 A 106 | P 113

GBP       Rightmove House Prices M/M Y Sep A 0.90% | P -0.80%

EUR        German PPI M/M Aug A -0.50% | C -0.30% | P 0.00%

EUR        German PPI Y/Y Aug A -1.70% | C -1.50% | P -1.30%

CAD       Wholesale Sales M/M Jul A 0.00% | C 0.30% | P 1.30%

USD       Existing Home Sales Aug A 5.31M | C 5.50M | P 5.59M | R 5.58M

Good Luck,

Andy

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