Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 100.532 | EURUSD 1.1286 | AUDUSD 0.76178 | NZDUSD 0.73018 | USDCAD 1.29219 | USDCHF 0.96768 | GBPUSD 1.31921 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.12941 | 1.12806

USDJPY                 100.604 | 100.385

GBPUSD               1.32173 | 1.31848

AUDUSD              0.76340 | 0.76138

USDCHF               0.96829 | 0.96674

USDCAD               1.29230 | 1.29065

NZDUSD               0.73160 | 0.72957

EURGBP               0.85572 | 0.85451

EURJPY                 113.540 | 113.355

EURCHF                1.09262 | 1.09147

 

For Today

• EUR: A slow climb from the opening 1.1280 levels to push towards the 1.1295 areas before settling down into a quiet range around the 1.1290 level for the balance of the session. Topside offers likely to be light through the 1.1300 areas, with possibly only light stops on a push through the 1.1320 levels if anything, stronger offers are then likely to move in around the 1.1340 levels and continue increasing on a move higher through to 1.1400 levels. Downside bids light through to the 1.1240-60 areas and then possible weak stops appearing on a move through the areas with better bids moving in around the 1.1210-00 areas and likely to continue through to 1.1160.
• GBP: Moving from the opening 1.3190 areas the market tested towards the 1.3220 areas before ranging in the 1.3200-10 levels for the most part, Topside offers light through the 1.3250 areas and increasing in size to the 1.3270-1.3300 level, the market remains congested through the level and while there maybe some weak stops chances are they will be light. Downside bids are likely to be spread around and weak through to the 1.3100-1.3050 areas where the market could possibly become a little stronger overall for the bids,
• JPY: Another tight range for the USDJPY with the market opening around the 100.50 areas and slipping to just below the 100.40 levels before ranging around the opening levels through to the London session, Topside offers through the 100.60 levels and although the market is likely to see offers through the 101.00 level the 101.50 area is likely to be stronger on any rise and above this likely to see the congestion continuing. Downside bids strong through the 100 level with the bids likely to be thick and close down through to the 99.00 areas with the possibility of strong stops on a push through the 0.9880 areas.
• AUD: Still very quiet for the Oz with the market opening around the 0.7615 areas and steadily rising through the session to just above the 0.7630 areas and holding the level through to the London session, Topside offers strong through the 0.7640 levels with weak stops possibly through 0.7660 before a renewal of offers on any attempt on the 77 cent levels. Downside bids through the 76 cent levels possibly light at best and the market starts to see better bids as the market pushes through to the 0.7550 areas and congestion to 75 cent.

Overnight News

USD:

Fed’s Kaplan Urges Gradual Rate Hikes That Keep Dollar in Mind

JPY:

Japan Pension Fund’s Return Seen Sliding to Loss: Nikkei

Japan July Core Consumer Prices Fall 0.5% Y/y; Est. -0.4%

Japan Considers Allowing Off-Hours Margin Trading: Nikkei

CNY:

PBOC’s Yi Says 14-day Reverse Repo Gives Market More Choices

China Interbank Market Liquidity ‘Plentiful’: PBOC’s Yi Gang

China Should Guide Interest Rates Lower, NDRC Says

China Local Govt. Fiscal Balance Pressure Rises: Info. Daily

China to Guide Development of Digital Finance, Online Financing

SGD:

Singapore July Factory Output -3.6% Y/y; Est. +0.8%

CZK:

Czech Central Bank Ready to End FX Cap Around Mid-2017: Nidetzky

Today’s data

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

23:30     JPY         National CPI Core Y/Y Jul A -0.50% | C -0.40% | P -0.50%

23:30     JPY         Tokyo CPI Core Y/Y Aug A -0.40% | C -0.40% | P -0.40%

06:00     EUR        German GfK Consumer Confidence Sep C 10.2 | P 10

08:00     EUR        Eurozone M3 Y/Y Jul C 5.00% | P 5.00%

08:30     GBP       GDP Q/Q Q2 (P) C 0.60% | P 0.60%

08:30     GBP       Index of Services 3M/3M Jun C 0.40% | P 0.30%

12:30     USD       Advance Goods Trade Balance Jul C -62.3B | P -63.3B

12:30     USD       GDP (Annualized) Q2 (S) C 1.10% | P 1.20%

12:30     USD       GDP Price Index Q2 (S) C 2.20% | P 2.20%

14:00    USD       U. of Michigan Confidence Aug (F) C 90.6 | P 90.4

 

Harry Hindsight              

• EUR: Opening around the 1.1265 areas the market moved quietly through the Asian session initially dipping a little into the Tokyo session before rallying to the 1.1275 levels with cross JPY buying in the early part of the session, the market then held around the 1.1270 levels through into the London session with a small dip from the opening before rallying steadily through to the 1.1295 levels and steady offers through to the NYK session, the end of London saw end of day selling move through the market however, overall the market was light at best and the market finished around the 1.1280 areas with nothing exciting to stir the market.
• GBP: Cross JPY buying into the Tokyo session saw the Cable testing to the 1.3265 area before slipping quickly back through the session and then pushing into London testing the 1.3200 levels even though the release retail sales saw a good leap for Aug, the move through to the NYK session saw the 1.3200 level eventually give way and the market tested to the 1.3170 levels before running out of steam in a lightly trade market.
• JPY: USDJPY rose into the Tokyo session with the market pushing up through the 100.60 levels however, that was all the market could do and the movement seemed to be cross dominated before quickly moving back to the opening range around 100.45 levels, the market ranged quietly through to the London session before dipping a little from the opening to test to the 100.30 areas into mid-morning in London, the session then saw light buying taking over and steadily rising through into the NYK session and the market started to range above the 100.50 levels and attempted to push through the 100.60 on several occasions before holding to the range. Decent durable goods numbers did very little for the market with next month’s rate announcement still dominating the market.
• AUD: As with the other markets very subdued and range bound with early buying into the Tokyo session taking the market to the 0.7625 areas before pushing through the 0.7630 late in Tokyo and London stepping in too take the high through to close to 0.7640 before spending the rest of London slipping steadily lower to make the lows close to 0.7600, the day then more or less ended flat with a slow rise back to the opening areas.

Yesterday’s premiership results

JPY         Corporate Service Price Y/Y Jul A 0.40% | C 0.10% | P 0.20%

EUR        German IFO – Business Climate Aug A 106.2 | C 108.5 | P 108.3

EUR        German IFO – Current Assessment Aug A 112.8 | C 114.9 | P 114.7 | R 114.8

EUR        German IFO – Expectations Aug A 100.1 | C 102.5 | P 102.2 | R 102.1

GBP       CBI Retailing Reported Sales Aug A 9 | C -5 | P -14

USD       Initial Jobless Claims (AUG 20) A 261K | C 265K | P 262K

USD       Durable Goods Orders Jul (P) A 4.40% | C 3.40% | P -3.90% | R -4.20%

USD       Durables Ex Transportation Jul (P) A 1.50% | C 0.20% | P -0.40% | R -0.30%

USD       Natural Gas Storage A 11B | C 18B | P 22B

Good Luck,

Andy

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