Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 102.964 | EURUSD 1.11425 | AUDUSD 0.75095 | NZDUSD 0.72207 | USDCAD 1.30994 | USDCHF 0.98386 | GBPUSD 1.30805 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.11622 | 1.11364

USDJPY                 103.235 | 102.858

GBPUSD               1.31165 | 1.30661

AUDUSD              0.75330 | 0.75085

USDCHF               0.98406 | 0.98234

USDCAD               1.31126 | 1.30808

NZDUSD               0.72532 | 0.72209

EURGBP               0.85266 | 0.85078

EURJPY                 114.972 | 114.702

EURCHF                1.09678 | 1.09557

 

For Today

• EUR: A slow rise through the session from below the 1.1145 levels drifting initially to the 1.1130’s before starting a steady push to the 1.1160 level in quiet trading for the pair and holding the levels through to the London open, Topside offers light through the 1.1180 areas and likely still building around the 1.1200 level and likely to be only slightly better offered through the level, a test through the level is likely to see some weak stops however, these are likely to be absorbed by some further congestive offers through to the 1.1250 areas. Downside bids likely to be strong into the 1.1100 areas with any weakness below the level quickly soaked up by congestive bids into the 1.1060 levels and below with 1.1020 area possibly seeing stronger bids and likely to continue through the 1.1000 areas.
• GBP: As with yesterday the market tested higher over the session but struggled on the approach to the 1.3120 areas again, early traders in the Tokyo session saw the market testing the 1.3060 levels to set the early ranges too match yesterday’s levels before moving higher, for the moment 1.3120 is a light offering area and a push through the level is likely to see weak stops appearing and the market testing through to the 1.3150 levels before finding further offers appearing, from there though would still see stronger congestive offers from the 1.3200 levels and likely to continue through to the 1.3250 level. Downside bids light through to the 1.3050 levels where the congestive bids are likely to increase, for the moment GBP could benefit from the differences between the US and Europe however, this still remains to be seen with the Brexit decision always remaining in the background. A push through the 1.3000 levels is possibly not so difficult however one would suspect that the downside could see further bids in the area, with some pessimistic types point out chart points of significance however, those indications would change the meaning of the term sterling and not likely for me.
• JPY: Reasonably quiet through the session with some buying in the early part of the Tokyo session moving the market off the opening levels around the 103.00 levels to test slightly through the 103.20 levels before dropping back to trade around the opening levels for the rest of the session and into London, Topside offers into the 103.50 levels with possible stops through the level and 104.00 becoming vulnerable with possible stronger offers before opening up a stronger move through to 105-106. Downside bids light through the downside with limited bids into 102. And the market then congested through to 101.00.
• AUD: Light buying off the opening 0.7510 areas and the market not really making much of an effort at all testing to the 0.7530 areas and holding a tight range through to the London session between the 0.7520-30’s, Topside offers light through to the 0.7580 areas and even there not likely to be very heavy and only thickening around the 76 cent levels. Downside bids into and through the 75 cent levels will possibly give way to stops around the 0.7480 areas and the market struggling in congestive bids before the range below 74 cents becomes vulnerable.

Overnight News

JPY:

Don’t See Any Debate to Change BOJ’s 2% Target to 3% Or 1%: Funo

BOJ Will Firmly Continue Monetary Easing, Board Member Funo Says

Abe Adviser Hamada Notes Risk Abenomics May Not Do Well

Japan July Industrial Production Unchanged M/m; Est. +0.8%

Tokyo Governor Seeks to Make Tokyo International Finance Centre

Tokyo Governor Seeks to Bring Foreign Domestic Help to Capital

CNY:

Westpac-MNI China Aug. Consumer Sentiment -2.2% M/m to 111.5

SDR Won’t Change Yuan’s Risk Status, Ex-SAFE Official Says: MNI

GBP:

U.K. Aug. GfK Consumer Confidence -7 vs Est. -8

AUD:

Australia Loan Balances Rise 0.2% M/m to A$2.4t, APRA Says

Australia July Credit to Business, Consumers Rose 0.4 % M/M

Debelle: Global FX Code Phase II to Be Circulated in October

NZD: N.Z. Business Confidence Survey ‘Points to Good Times’: ANZ

Today’s data

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

GBP       GfK Consumer Sentiment Aug A -7 | C -8 | P -12

JPY         Industrial Production M/M Jul (P) A 0.00% | C 0.70% | P 2.30%

NZD       NBNZ Business Confidence Aug A 15.5 | P 16

JPY         Housing Starts Y/Y Jul A 8.90% | C 7.60% | P -2.50%

06:00     CHF        UBS Consumption Indicator Jul P 1.34

07:55     EUR        German Unemployment Change Aug C -4K | P -7K

07:55     EUR        German Unemployment Rate Aug C 6.10% | P 6.10%

09:00     EUR        Eurozone Unemployment Rate Jul C 10.00% | P 10.10%

09:00     EUR        Eurozone CPI Estimate Y/Y Aug C 0.30% | P 0.20%

09:00     EUR        Eurozone CPI – Core Y/Y Aug (A) C 0.90% | P 0.90%

12:15     USD       ADP Employment Change Aug C 173K | P 179K

12:30     CAD       GDP M/M Jun C 0.50% | P -0.60%

13:45     USD       Chicago PMI Aug C 54.3 | P 55.8

14:00     USD       Pending Home Sales M/M Jul C 0.70% | P 0.20%

14:30     USD       Crude Oil Inventories P 2.5M

 

Harry Hindsight              

• EUR: Drifting from the opening the Asian session saw the Euro slip away from the 1.1190 opening levels pushing to the 1.1170 levels before holding through to the London session, with confidence numbers suffering with the uncertainty of Brexit and the tensions building between the US the disappointment saw the market rapidly touch into the 1.1150 levels before returning to the 1.1170 areas to trade in a tight range through to the NYK session, NYK were steady sellers as the Apple story played out through the session with European officials passing judgement on the Tax issue to the tune of €13bn to be collected by the Irish taxman, Euro’s then tested steadily through to the 1.1130’s before holding around the 1.1140 levels through to the close.
• GBP: Cable had a rangy day with the market initially opening around the 1.3105 levels and trading to the 1.3120 in the early part of the session before slipping lower through the Tokyo session with cross JPY selling showing early in the session and drifting to the 1.3080 areas, the move into the London session saw the market testing lower further however, the move was limited and the market eventually started to see the market moving off the low 1.3060 levels to steadily rise as Euro weakened further and the EURGBP drifted lower through into the NYK session, Cable again tested the 1.3120 levels through the early part of the NYK session however, the USD found some strength late in the session as nervousness over the Apple story saw the GBP dragged lower with the Euro and Cable finished the day around the 1.3080 areas.
• JPY: With commentary indicating possible easing to come and/or intervention muted by some the USDJPY found some strength through the session, opening around the 101.90 areas the early sellers into the Tokyo session reversed their positions and the market climbed steadily through the 102.00 areas and touched through the 102.20 levels, the market then held above the 102.00 areas through into the London session and then started to rise slowly through to the 102.40 levels, any fallout over the Apple tax situation seems to have been beneficial for the USD and the USDJPY climbed from the opening in the NYK session, and with a stronger consumer confidence number for the US the USDJPY tested through to the 103.00 area before finding some light offers holding the market in place to the close.
• AUD: As the USD rose the Oz slipped slowly through the day opening around the 0.7565 areas the market tested to the 0.7580 areas in early trading and held fairly well through the Asian session as AUDJPY buying countered the early limited strength in Asia, the move into London saw the market dropping back testing through the 0.7550 before holding in the areas through to the NYK session and further USDJPY buying seeing the Oz slipping back to test the 75 cent levels through towards the end of the session before rising into the close just above that low.

Yesterday’s premiership results

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%

CHF        KOF Leading Indicator Aug A 99.8 | C 103.1 | P 102.7 | R 103.5

GBP       Mortgage Approvals Jul A 61K | C 63K | P 64K

GBP       M4 Money Supply M/M Jul A 1.20% | C 1.20% | P 1.10% | R 1.20%

EUR        Eurozone Business Climate Indicator Aug A 0.02 | P 0.39 | R 0.38

EUR        Eurozone Economic Confidence Aug A 103.5 | C 104.2 | P 104.6 | R 104.5

EUR        Eurozone Industrial Confidence Aug A -4.4 | C -2.8 | P -2.4 | R -2.6

EUR        Eurozone Services Confidence Aug A 10 | C 11.1 | P 11.1 | R 11.2

EUR        Eurozone Consumer Confidence Aug (F) A -8.5 | C -8.5 | P -8.5

EUR        German CPI M/M Aug (P) A 0.10% | C 0.10% | P 0.30%

EUR        German CPI Y/Y Aug (P) A 0.40% | C 0.50% | P 0.40%

CAD       Industrial Product Price M/M Jul A 0.20% | C -0.10% | P 0.60% | R 0.70%

CAD       Raw Materials Price Index M/M Jul A -2.70% | C -1.20% | P 1.80% | R 2.00%

USD       S&P/Case-Shiller Composite-20 Y/Y Jun A 5.10% | C 5.10% | P 5.20% | R 5.30%

USD       Consumer Confidence Aug A 101.1 | C 96.5 | P 97.3 | R 96.7

Good Luck,

Andy

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