Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 101.91 | EURUSD 1.11892 | AUDUSD 0.75686 | NZDUSD 0.72578 | USDCAD 1.3012 | USDCHF 0.9783 | GBPUSD 1.3104 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.11927 | 1.11681

USDJPY                 102.248 | 101.758

GBPUSD               1.31206 | 1.30758

AUDUSD              0.75799 | 0.75598

USDCHF               0.98075 | 0.97760

USDCAD               1.30336 | 1.30104

NZDUSD               0.72648 | 0.72370

EURGBP               0.85428 | 0.85300

EURJPY                 114.209 | 113.858

EURCHF                1.09586 | 1.09417

 

For Today

• EUR: Euros moved through the session quietly with even less volume than yesterday as the market has now adjusted somewhat to the commentary from Yellen, opening around the 1.1190 areas the market moved into the Tokyo session slipping only slightly lower and holding quietly through to the London session around the 1.1170 areas. Topside offers light through to the 1.1220 areas and likely to be a little stronger now, weak stops possible through the level and the market light through the 1.1240-60 areas and likely to see resistance into the 1.1280-1.1300 with the offers likely to be light but going back through to the 1.1340-60 areas where they increase. Downside bids likely to continue down through to the 1.1140 levels with weak stops likely to appear and the market opening to the 1.1100 levels with better bids just below the area and extending passingly to the 1.1050 areas, with stronger support likely towards the 1.1000 levels, confidence numbers to watch for on the day both in Europe and NYK.
• GBP: Cable opened just above the 1.3100 levels and held through into the Tokyo session before dipping slowly through to the 1.3080 areas in light trading and holding through to the London session, Topside offers light through to the 1.3200 areas and even there one suspects the offers are likely to be thin until around the 1.3250 areas and better offers from there to 1.3300. Downside bids light through to the 1.3050 areas and then likely to be reasonably strong on a test there through to the 1.3000 and sentimental buyers. Stops possibly through that level and opening up possibly a fresh test of the year’s lows.
• JPY: Opening just below the 102 levels the market pushed through into the Tokyo opening only to see light selling from the opening before starting a steady recovery with weak stops from the early shorts pushing the market to above the 102.20 areas before drifting in light trading, the market held through to the London session around the 102.10 areas. Topside offers into the 102.50 areas are likely to be key to any further gains with the level tested throughout the month with little success, comments from Hamada suggested that courageous intervention in the FX markets would stem the Yen’s appreciation and on a limited day the market was able to make only limited gains of course. If the market can push through the 102.80 areas then we could see some stronger stops coming into play and the market opening up to push towards the 104-105 areas however, the intervention story is just a story and I don’t think the rest of the economies around the world would appreciate open and aggressive intervention at this point. Downside bids light through to the 100 levels with better bids coming in from real money types being seen previously on pushes through the level over the past week or so, a push lower is likely to see those bids extending down to the 99.00 areas and the rhetoric increasing.
• AUD: Another quiet day for the Oz with the market holding in a tight 0.7560-80 range for the most part through the session and little data or interest today, Topside offers likely through the 0.7580-0.7600 areas before weak stops appear and the market then sees offers continuing from there through towards the 77 cent levels. Downside bids into the 0.7520 areas and likely to extend through the 75 cent level a little before stops appear, with possible light congestion through to the 0.7450 areas where the market is likely to see stronger selling moving in and the 73 cent levels becoming vulnerable.

Overnight News

JPY:

Abe Adviser Hamada Calls in Editorial for Japan FX Intervention

Suga Says Japan to Respond Firmly to Any Excessive Market Moves

Japan’s Household Spending and Unemployment Fall in July

JPY/RUB:

Japan Mulls Economic Help for Russia amid Island Dispute: Kyodo

CNY/IDR:

China’s SDIC to Expand Indonesia Investment over 5 Years: Daily

CNY:

China to Increase Return of Private Investment in PPP Projects

NZD:

RBNZ’s McDermott Doesn’t Expect NZ Will Need Zero Interest Rate

RBNZ’s McDermott Say NZ Doing Well Relative to Rest of World

New Zealand July Home-Building Approvals Fall 10.5% From June

AUD:

Australia July Building Approvals Rise 11.3% M/M; Est 1.1% Gain

Australia ANZ Weekly Consumer Confidence Falls 2.8% to 118.4

Today’s data

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

NZD       Building Permits M/M Jul A -10.50% | P 16.30% | R 21.90%

JPY         Unemployment Rate Jul A 3.00% | C 3.10% | P 3.10%

JPY         Household Spending Y/Y Jul A -0.50% | C -1.30% | P -2.20% | R -2.30%

JPY         Retail Trade Y/Y Jul A -0.20% | C -0.90% | P -1.40% | R -1.30%

AUD       Building Approvals M/M Jul A 11.30% | C 1.20% | P -2.90% | R -4.70%

07:00     CHF        KOF Leading Indicator Aug C 103.1 | P 102.7

08:30     GBP       Mortgage Approvals Jul C 63K | P 64.8K

08:30     GBP       M4 Money Supply M/M Jul C 1.20% | P 1.10%

09:00     EUR        Eurozone Business Climate Indicator Aug P 0.39

09:00     EUR        Eurozone Economic Confidence Aug C 104.2 | P 104.6

09:00     EUR        Eurozone Industrial Confidence Aug C -2.8 | P -2.4

09:00     EUR        Eurozone Services Confidence Aug C 11.1 | P 11.1

09:00     EUR        Eurozone Consumer Confidence Aug (F) C -8.5 | P -8.5

12:00     EUR        German CPI M/M Aug (P) P 0.30%

12:00     EUR        German CPI Y/Y Aug (P) P 0.40%

12:30     CAD       Industrial Product Price M/M Jul P 0.60%

12:30     CAD       Raw Materials Price Index M/M Jul P 1.80%

13:00     USD       S&P/Case-Shiller Composite-20 Y/Y Jun C 5.10% | P 5.20%

14:00     USD       Consumer Confidence Aug C 96.5 | P 97.3

 

Harry Hindsight              

• EUR: A steady session with the Euro holding for the most part below the 1.1200 areas, opening around the 1.1180 the Asian session slowly pushed to above the figure levels in a quiet session, the opening of the Bank holiday London session saw light selling to test the opening levels and the market pushed to the 1.1160 levels and light support however, with the holiday in mind and limited data for the day the market held the level and eventually pushed back through the NYK session to finish the day little changed on a tight range overall.
• GBP: Cable like the rest of the market struggled through the Asian session, opening around the 1.3120 areas and ranging to the 1.3140 area before slipping on the opening in London to test through the 1.3100 levels, as with the other currencies little data and the session through to mid-NYK saw the market test through to the 1.3060 levels before recovering as the session moved through towards the close to hold above the 1.3100 levels.
• JPY: With USD opening a little stronger in the Asian session after the Jackson Hole commentary the USDJPY pushed a little higher from the opening around the 102.00 levels to test into the London session to the 102.40 areas, the move through to the NYK session saw the market again in a tight range and holding the 102.10-30 areas for the most part before slipping back to the opening areas as the market moved to the close in quiet trading.
• AUD: The Oz opened in line with Fridays close but slipped in early Tokyo to test towards the 0.7520 levels before steadily recovering throughout the day to push back to the 0.7580 areas and hold close to those levels in very quiet trading.

Yesterday’s premiership results

USD       Personal Income Jul A 0.40% | C 0.40% | P 0.20% | R 0.30%

USD       Personal Spending Jul A 0.30% | C 0.30% | P 0.40% | R 0.50%

USD       PCE Deflator M/M Jul A 0.00% | P 0.10%

USD       PCE Deflator Y/Y Jul A 0.80% | P 0.90%

USD       PCE Core M/M Jul A 0.10% | C 0.10% | P 0.10%

USD       PCE Core Y/Y Jul A 0.60% | P 1.60%

Good Luck,

Andy

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