Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 103.424 | EURUSD 1.11576 | AUDUSD 0.75177 | NZDUSD 0.7256 | USDCAD 1.31048 | USDCHF 0.98387 | GBPUSD 1.31388 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.11664 | 1.11520

USDJPY                 103.446 | 103.060

GBPUSD               1.31536 | 1.31280

AUDUSD              0.75474 | 0.75098

USDCHF               0.98400 | 0.98293

USDCAD               1.31189 | 1.30939

NZDUSD               0.72631 | 0.72349

EURGBP               0.84972 | 0.84809

EURJPY                 115.391 | 115.051

EURCHF                1.09800 | 1.09699

 

For Today

• EUR: While volumes were reasonable over the session the Euro was contained in a very quiet 1.1155-65 areas for the most part topping just above that high before dipping slowly through the 1.1155 level as the market moved to the London session. Topside offers through the 1.1200 areas likely to be light and stronger offers likely to be building above the 1.1240 areas with stronger offers likely to continue the higher you go into the 1.1300 areas. Downside bids into the 1.1120 however, a push through the level would possibly see a deeper move from the technical traders and the market testing towards the 1.1050 levels and better congestive bids making an appearance with those bids lightening as you move lower before stronger bids appear into the sentimental 1.1000 areas.
• GBP: Cable ranged tightly through the session drifting from the opening 1.3140 levels to the 1.3130 levels before testing to the 1.3150 areas and holding around that level into the London session. Topside offers in the current areas with light offers behind the 1.3160 area, a move back to the 1.3200 levels could possibly see stronger offers with very little in the way of stops possibly until through the 1.3250 levels. Downside bids into the 1.3100 area likely to be reasonable with congestion from the last few weeks building in the areas as the market sees little direct impact from the Brexit vote and the general consensus of its not happening yet so keep calm and carry on, a push through the level could see a little stop selling moving in but generally bids continuing through to the 1.3050 and 1.3000 levels likely to slow any dips.
• JPY: Less interest in the USDJPY today with the early session falling back from the 103.50 areas to test to the 103.50 areas into early Tokyo before trading steadily to the 103.30 in a lacklustre session for the pair, Topside offers remain around the 103.50 levels and a strong push through would see limited offers into the 104.00 and the chance of a stronger move through to the 105-106 levels in time. Downside bids into the 102.20 levels are likely to and those bids likely to extend through to the 101.80 areas before weak stops appear and the market dipping to the 101.00 areas quickly before stronger bids appear again.
• AUD: The strength of JPY translated into a stronger AUDJPY with the market moving off the 0.7520 opening areas to test towards the 0.7550 areas through the early part of the session, this was tempered by weaker retail sales however, the market having moved higher held around the 0.7535-45 areas to the London opening. Topside offers into the 0.7560 levels are likely to be weak but offers likely to continue through to the 0.7580 in a similar fashion before the 76 cent level become vulnerable and the limited chance of a little squeeze through the level with stops appearing. Downside bids into the 75 cent level have broadly held over the past couple of days and those bids have probably been replenished by day traders through the previous session, weak stops are likely on a move through the 0.7480 levels and the market then opens through to the 0.7350 areas with only weak bids likely to be holding the 74 cent levels.

NFP today to watch for with initial jobless numbers.

Overnight News

CNY:

China Manufacturing PMI at 50.4 in Aug.

Caixin China Aug. Manufacturing PMI 50; Est. 50.1

JPY:

Japanese Bought Net 105.7 Billion Yen Overseas Debt Last Week

Japan 2Q Capital Spending Rose 3.1% Y/y; Est. +5.5%

Nikkei Japan Aug. Manufacturing PMI 49.5 vs 49.3 in July

JPY/RUB:

Japan Creates New Minister Post for Russia Economy Cooperation

AUD:

Australia 2Q Business Investment Fell 5.4% Q/Q; Est. 4% Drop

Australia Aug. Manufacturing Index Falls 9.5 Pts M/m to 46.9

NZD:

N.Z. Export Volumes Rise Most in 8 Years on Dairy, Meat

Today’s data

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

NZD       Terms of Trade Index Q/Q Q2 A -2.10% | C -1.40% | P 4.40% | R 4.10%

JPY         Capital Spending Q2 A 3.10% | C 5.60% | P 4.20%

CNY        Manufacturing PMI Aug A 50.4 | C 50 | P 49.9

CNY        Non-manufacturing PMI Aug A 53.5 | P 53.9

AUD       Retail Sales M/M Jul A 0.00% | C 0.30% | P 0.10%

CNY        Caixin PMI Manufacturing Aug A 50 | C 50.3 | P 50.6

07:15     CHF        Retail Sales (Real) Y/Y Jul C -3.10% | P -3.90%

07:30     CHF        SVME PMIs Index Aug C 50.5 | P 50.1

07:45     EUR        Italy Manufacturing PMI Aug C 51.3 | P 51.2

07:50     EUR        France Manufacturing PMI Aug (F) C 48.5 | P 48.5

07:55     EUR        Germany Manufacturing PMI Aug (F) C 53.6 | P 53.6

08:00     EUR        Eurozone Manufacturing PMI Aug (F) C 51.8 | P 51.8

08:30     GBP       PMI Manufacturing Aug C 49.1 | P 48.2

11:30     USD       Challenger Job Cuts Y/Y Aug P -57.10%

12:30     USD       Non-Farm Productivity Q2 (F) C -0.60% | P -0.50%

12:30     USD       Unit Labour Costs Q2 (F) C 2.10% | P 2.00%

12:30     USD       Initial Jobless Claims (AUG 27) C 265K | P 261K

14:00     USD       Construction Spending M/M Jul C 0.50% | P -0.60%

14:00     USD       ISM Manufacturing Aug C 52.3 | P 52.6

14:00     USD       ISM Prices Paid Aug C 54.5 | P 55

14:30     USD       Natural Gas Storage P 11B

 

Harry Hindsight              

• EUR: Limited action for the Euro over the course of the day, with the market opening around the 1.1145 levels and trading through the 1.1160 through the Asian session before starting to dip lower as the market moved to the London session, London were steady sellers with German employment numbers a little better but the Eurozone numbers poor thus leaving the Euro a little weaker into the NYK session and testing through the 1.1125 before starting a little bit of a recovery as Chicago PMI disappointed, and the market running through the high but only just, to finish just below the level.
• GBP: Early weakness saw the Cable test through to the 1.3070 levels before starting a steady recovery and a little squeeze through to the 1.3110 areas for the move into London, holding quietly from the opening through to mid-morning, poor Euro numbers saw EURGBP being sold back and the Cable leg took the lead pushing quickly to the 1.3150 levels and light resistance however, this level more or less held through the session to the close, ADP numbers were sufficient to reverse the early gains by GBP however, the market did test back to the 1.3140 levels in the run to London close and traded the 1.3130-40 to the close.
• JPY: USDJPY opened around the 103.00 levels and struggled a little through into the Tokyo session moving off the 102.85 areas the low of the day and triggered weak stops from the early sellers and pushed to the 103.20 area before slipping back to the opening level for the move into London, the London market moved higher through the session and the move into the NYK session saw the market testing through the 103.50 levels before finding sufficient interest to halt the movement, the market ranged from that point to the close down to the 103.25 areas finishing the day just off the highs.
• AUD: A rangy day overall with the market topping early in Tokyo around the 0.7535 levels and that remained the high throughout the day topping in the area several times however, the move into the London session saw the market dipping back to the 75 cent levels before reversing and holding around the opening levels into the NYK session before dipping lower from the start the market hit the lows around the 0.7490 areas before returning to the opening areas for a slow session to the close.

Yesterday’s premiership results

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%

CHF        UBS Consumption Indicator Jul A 1.32 | P 1.34 | R 1.21

EUR        German Unemployment Change Aug A -7K | C -4K | P -7K | R -8K

EUR        German Unemployment Rate Aug A 6.10% | C 6.10% | P 6.10%

EUR        Eurozone Unemployment Rate Jul A 10.10% | C 10.00% | P 10.10%

EUR        Eurozone CPI Estimate Y/Y Aug A 0.20% | C 0.30% | P 0.20%

EUR        Eurozone CPI – Core Y/Y Aug (A) A 0.80% | C 0.90% | R 0.90%

USD       ADP Employment Change Aug A 177K | C 173K | P 179K | R 194K

CAD       GDP M/M Jun A 0.60% | C 0.50% | P -0.60%

USD       Chicago PMI Aug A 51.5 | C 54.3 | P 55.8

USD       Pending Home Sales M/M Jul A 1.30% | C 0.70% | P 0.20% | R -0.80%

Good Luck,

Andy

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