Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 120.279 | EURUSD 1.11847 | AUDUSD 0.70045 | NZDUSD 0.62496 | USDCAD 1.33218 | USDCHF 0.97985 | GBPUSD 1.52433 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               120.39 | 119.87

EUR/USD             1.11955 | 1.1164

EUR/JPY               134.65 | 134.035

AUD/USD            0.7024 | 0.6991

NZD/USD             0.6309 | 0.6264

USD/CAD             1.3333 | 1.3307

EUR/CHF              1.0955 | 1.0946

USD/CHF             0.9804 | 0.9781

GBP/USD             1.5260 | 1.5244

EUR/GBP             0.7337 | 0.73215

For Today

• EUR: A quiet session with the market holding the 1.1180-90 areas moving into the Tokyo session, strong EURJPY selling from just after the Tokyo fix moved the Euro down into the 1.1160’s before again returning to the quiet range previously. Topside offers through the 1.1220 levels with the market likely to see weak stops through the 1.1230 areas before light offers again appear into the 1.1250 areas and while there is a possibility of further light stops the offers are likely to increase as the market pushes into the 1.1280 levels and congestive area around the 1.1300 levels. Downside bids into the 1.1120 level and through the 1.1100 areas are likely to see stronger stops on a move through the 1.1070 areas and opening up fresh tests to the 1.1000 levels.
• GBP: A very quiet day for the Cable with the market moving from the 1.5240’s to push up around the 1.5260 level with hardly any movement, Topside offers light into the 1.5300 areas and the possibility of weak stops through the level and the market opening to the 1.5350 areas and possibly stronger offers to 1.5360, through there the offers are likely to be weaker and the push through 1.5380 will open up the 1.5440-50 areas with possibly little to protect in between. Downside bids to the 1.5200 area likely to be light however, the support will increase as we approach the area and on a push through likely to increase the closer you get to 1.5150 areas and only a breach here will be enough to open up further weakness to the downside.
• JPY: Slightly weaker equity markets have again led to JPY buying, with the market holding for the most part around the 120.20 areas before drifting to the 119.90 in mid-session, the market eventually moved back above 120.00 in lacklustre trading. Topside offers light through to the 120.30 areas however, better offers are likely into the 120.50 levels before weak stops are likely to be seen, from that point onwards though the market is likely to see stronger offers appearing around the 121.00 areas and continuing higher. Downside bids light into the 119.70 levels with no appreciable stops likely for the moment and better offers appearing on a dip through to the 119.30-00 areas, possibly at this point there may be some stops however, the downside from 118.50 is likely to be well populated with bids.
• AUD: A quiet day for the Oz with the market trading around the 70 cent level and unable to gain much traction in either direction, downside bids extend deeply below the 70 cents level and only a push through the 69 cent level opens up any deeper movement to the downside however, the topside offers seem to be light through the 0.7050 levels and once through the 0.7080 level opens up the market for further gains to the 0.7150 areas before the likelihood of stronger offers appear.

Overnight News

JPY:

Japan’s Abe to Prioritize Economy, Target 600t Yen GDP, NHK Says

Japan’s Abe to Meet U.S. Vice President Biden, NHK Says

Nikkei Japan Sept. Flash Manufacturing PMI 50.9 vs 51.7 in Aug.

NZD:

New Zealand Annual Trade Deficit Widest Since April 2009

Fonterra Raises Forecast 2015-16 Milk Pay-out to NZ$4.60/Kg

RBNZ Estimates Neutral 90-Day Interest Rate Sits at 4.5%

EUR:

Tusk Says Talks Started About Control of External Borders

Greece’s Tsipras Says Summit ‘Positive Step’ on Refugee Crisis

AUD:

Australia’s Population Growth Slows to Weakest Pace in 9 Years

Today’s data

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

22:45     NZD       Trade Balance (NZD) Aug A -1035M | C -875M | P -649M | R -726M

01:35     JPY         PMI Manufacturing Sep (P) A 50.9 | C 51.3 | P 51.7

04:30     JPY         All Industry Activity Index M/M Jul A 0.20% | C 0.10% | P 0.30% | R 0.50%

06:00     EUR        German GfK Consumer Sentiment Oct C 9.8 | P 9.9

08:00     EUR        German IFO – Business Climate Sep C 108 | P 108.3

08:00     EUR        German IFO – Current Assessment Sep C 114.9 | P 114.8

08:00     EUR        German IFO – Expectations Sep C 101.5 | P 102.2

08:30     GBP       BBA Loans for House Purchase Aug C 46.3K | P 46.0K

12:30     USD       Initial Jobless Claims (SEP 19) C 268K | P 264K

12:30     USD       Durable Goods Orders Aug C -2.20% | P 2.00%

12:30     USD       Durables Ex Transportation Aug C 0.20% | P 0.60%

14:00    USD       New Home Sales Aug C 515K | P 507K

Harry Hindsight              

• EUR: A choppy day overall with the market in the Euro opening around the 1.1130 areas before falling back to test the 1.1100 areas before recovering to the former levels and pushing to the 1.1140 level and into the grey hours, early sellers again attempted to push the 1.1100 areas and again failed with PMI numbers for the different countries coming in mixed but still positive and the Euro again rallied higher to test the 1.1150 levels, London continued to flirt with the downside however, the move to the NYK session saw strong buying early into the opening and again increasing the high to above 1.1170 levels with no data the market again dipped and rallied on several occasions however, generally those dips became shallower and the rallies pushed the high ever higher until the market pushed through the 1.1200 levels once the London market had left for the day touching above the 1.1210 levels before drifting back to the 1.1180’s into the close.
• GBP: A steady decline through the Asian session before moving in the London session and fresh buying in EURGBP and Cable sellers with yet another MPC make noises, is that a full house or we waiting for 1 more to say his piece, either way the market in GBP was sold with EURGBP initiating the move higher to move off the 0.7250 areas and push quickly above 0.7280 before steadily pushing through the 73 cent level and continuing into the NYK session pushing towards the 0.7350 levels, as a consequence of the movement in EURGBP in particular the Cable found itself quickly at the 1.5300 level and although it struggled to break through for a couple of hours it did eventually break triggering weak stops to the 1.5280 level and then a steadier move to test to the 1.5240 areas and holding the 1.5220 into the London close, before quietly ranging in the 1.5240-50 areas to the close.
• JPY: USDJPY had a reasonably tight day with the market opening around the 120.10 areas and drifting a little lower initially to the 120.00 levels, reversing off the level and testing to the 120.30 levels before the release of the Chinese PMI number and dropping quickly as a reaction to dropping equity markets on the back of a perceived poor number, and USDJPY moved quickly below 120.00 eventually trading into the mid 119.60’s before moving into the London session and earlier buyers, the market moved back to the highs with weak offers left and the market then traded sideways through the session trading around the 120.20 into the NYK session, NYK saw some further buying to set the highs above the 120.50 however, it again returned to the opening levels to finish the day only lightly higher from the opening.
• AUD: Opening around the 0.7090 areas the market drifted until the China numbers dropping quickly back to test the 0.7020 areas and then held quietly to the grey hours and early buyers, by the time NYK entered the market the Oz had managed to recover to the 0.7060 levels however, that was all it could muster and again drifted a little before quickly dropping around the NYK option cut and this time the market managed to test to the 70 cent level, and then traded through the rest of the session around that level dipping into the 0.6990 areas to make the lows.

Yesterday’s premiership results

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

AUD       Conference Board Leading Index Jul A 0.30% | C -0.20% | P -0.30%

CNY        Caixin China PMI Mfg Sep (P) A 47 | C 47.8 | P 47.3

EUR        France Manufacturing PMI Sep (P) A 50.4 | C 49.2 | P 48.3

EUR        France Services PMI Sep (P) A 51.2 | C 50.9 | P 50.6

EUR        Germany Manufacturing PMI Sep (P) A 52.5 | C 52.8 | P 53.3

EUR        Germany Services PMI Sep (P) A 54.3 | C 54.5 | P 54.9

EUR        Eurozone Manufacturing PMI Sep (P) A 52 | C 52.2 | P 52.3

EUR        Eurozone Services PMI Sep (P) A 54 | C 54.1 | P 54.4

CAD       Retail Sales M/M Jul A 0.50% | C 0.50% | P 0.60% | R 0.40%

CAD       Retail Sales Less Autos M/M Jul A 0.00% | C 0.40% | P 0.80% | R 0.50%

USD       Crude Oil Inventories A -1.9M | C -1M | P -2.1M

Good Luck,

Andy

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