Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 100.322 | EURUSD 1.1321 | AUDUSD 0.76272 | NZDUSD 0.72759 | USDCAD 1.2946 | USDCHF 0.96227 | GBPUSD 1.31368 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.13390 | 1.13152

USDJPY                 100.399 | 100.049

GBPUSD               1.31547 | 1.31284

AUDUSD              0.76473 | 0.76263

USDCHF               0.96318 | 0.96146

USDCAD               1.29480 | 1.29146

NZDUSD               0.73262 | 0.72740

EURGBP               0.86288 | 0.86149

EURJPY                 113.731 | 113.346

EURCHF                1.09032 | 1.08894

 

For Today

• EUR: A dip in USDJPY on the move into the Tokyo session saw the market in Euro’s make a little headway to test through the 1.1330 areas but with limited movement it was unable to push to far through the level and held in a tight range around the 1.1330 areas through to the London session. Topside offers through the 1.1350 areas are likely to increase on any move beyond the level into the 1.1400 areas with strong offers likely to appear from the 1.1380 level into 1.1420’s before any stops are likely to appear through the level and the market then opening to the 1.1500 areas. Downside bids light through to the 1.1220 areas where the bids start to increase with the market lightly congested on a move through the level into the 1.1150 levels. From there the market sees further congestion on any move through to the 1.1050 where better bids are likely to appear in the market.
• GBP: A very quiet day for the Cable with market ranging around the 1.3140 levels through the session and unable to break below 1.3130 or above 1.3150 by much, offers to the topside are limited but present around the 1.3150-60 areas with possible weak stops on a push through the level and the market then open to test the 1.3200 areas with limited congestion and the market open through to 1.3300 with little to slow the market, downside bids light through to the 1.3050 areas with increasing bids into the 1.3000 levels however, everything in Cable for the moment is to be taken with a pinch of salt as the market is still nervous.
• JPY: USDJPY opened around the 100.30 levels and drifted through into the Tokyo session holding those levels to dip a little to test towards the 100 level the market took time to recover to its opening levels however, as the market moved towards the London session the market dropped quickly again to test the lows. Topside offers through the 101.00 levels with stops likely to appear on a push through the 101.30 area and the market opening through to the 101.80 levels where better offers are likely to be seen a move through the 102.10-20 level though does open the prospect of a higher USDJPY with the market open to the 103-105 range. Downside bids into the 100 levels are likely to be fairly strong and the bids are not likely to disappear through the level and possibly increasing on any move lower through to the 99.00 areas where the market is likely to be very strong with big stops lurking below.
• AUD: Oz was limited with the market repeatedly pushing towards the 0.7650 areas and struggling on each push through the 0.7645 with those offers likely to remain to the 0.7660 areas before the market opens to the lighter offers and better offers then into the 77 cent levels. Downside bids into the 76 cent level are likely to be limited if there is a strong push with stops likely through the 0.7580 areas and the market opening to stronger bids into the 0.7550 levels.

Overnight News

NZD:

RBNZ’s Wheeler Sees No Need for Rapid Monetary Policy Easing

JPY:

Kuroda Doesn’t Comment on Policy in Tokyo Speech Tuesday

Japan to Spend $45b Under 2nd Extra Budget for FY2016: Kyodo

Japan Supplementary Budget Shows Plan for 3.3t Yen in Spending

Japan Govt. Eyes Corp. Tax Breaks for In-House Nurseries: Nikkei

Nikkei Japan Aug. Flash Manufacturing PMI 49.6 vs 49.3 in July

Shirai: BOJ Should Keep 2% Inflation Target as Long-Term Goal

Inada Says China Unilaterally Seeks to Change Status Quo: Kyodo

CNY:

China’s August MNI Business Indicator Falls to 54.3 (Table)

China to Eliminate Political Barriers for Private Investment

SGD:

Singapore July Consumer Prices -0.7% Y/y; Est. -0.5%

AUD:

Australia ANZ Consumer Sentiment Rises to Highest Since Nov. ‘13

Today’s data

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

JPY         PMI Manufacturing Aug (P) A 49.6 | C 49.5 | P 49.3

06:00     CHF        Trade Balance (CHF) Jul C 3.79B | P 3.55B

07:00     EUR        France Manufacturing PMI Aug (P) C 49.1 | P 48.6

07:00     EUR        France Services PMI Aug (P) C 50.6 | P 50.5

07:30     EUR        Germany Manufacturing PMI Aug (P) C 53.7 | P 53.8

07:30     EUR        Germany Services PMI Aug (P) C 54.3 | P 54.4

08:00     EUR        Eurozone Manufacturing PMI Aug (P) C 52.1 | P 52

08:00     EUR        Eurozone Services PMI Aug (P) C 53 | P 52.9

10:00     GBP       CBI Trends Total Orders Aug C -9 | P -4

13:00     CNY        Conference Board Leading Index Jul P 0.50%

14:00     EUR        Eurozone Consumer Confidence Aug (A) C -8 | P -8

14:00     USD       New Home Sales Jul C 579K | P 592K

 

Harry Hindsight              

• EUR: With little data and little news over the weekend the market was very quiet through the session with early strength in the USD slowly moving the Euro from the opening 1.1320 areas to test through the figure area and down into the low 1.1270 levels before finding support sufficient to hold the market up into the London session, a strong move in the Cable saw the Euro dragged higher and the market steadily pushing through the opening levels into the NYK session to peak just above the 1.1330 levels before holding steady around the opening levels to the close.
• GBP: With USD trading a little higher through the early part of the session the market pushed to the 1.3040 areas before slowly moving into the London session and a quick move higher as the market caught an article from a minor publication called Property Week suggesting that the government is likely to plough funds into building to help with a flagging economy and the housing crisis this caused the Cable to move quickly off the lows and test through the 1.3100 levels before finding some limited offers, the market then struggled in a tight range around the 1.3100 levels for the move into the NYK session before breaking the 1.3120 areas and testing to the 1.3150 levels towards the end of London and holding around the 1.3130-40 areas to the close of the day.
• JPY: Opening higher after an early rally in the pre-market period the USDJPY dipped from the 100.70 areas to fill the gap on the charts before moving deeper into the Tokyo session pushing through to the 100.90 levels however, with a lack of data and news the market struggled to push on and eventually started to dip into the London session seeing steady selling back through to the lows and closing around the 100.30 areas after a quiet day.
• AUD: Another range bound day for the Oz with early rises from a low opening filling the gap in the chart to test back to the Friday closing areas before dropping off sharply when the market moved into the Tokyo session and holding the 0.7585 areas through to the London session, the market rose in early London as the early USD strength waned and the Oz again pushed through to the NYK session holding the 0.7615 areas before rising to test to the 0.7640 areas and the light resistance and finishing the day around that level.

Yesterday’s premiership results

CAD       Wholesale Sales M/M Jun A 0.70% | C 0.50% | P 1.80% | R 1.90%

Good Luck,

Andy

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