Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 104.008 | EURUSD 1.11555 | AUDUSD 0.75723 | NZDUSD 0.72915 | USDCAD 1.29873 | USDCHF 0.98029 | GBPUSD 1.32951 |

 

LMAX Ranges 6am London time

Highs    Lows

EURUSD               1.11749 | 1.11512

USDJPY                 104.159 | 103.543

GBPUSD               1.33269 | 1.32892

USDCHF               0.98044 | 0.97866

AUDUSD              0.76010 | 0.75628

USDCAD               1.30065 | 1.29562

NZDUSD               0.73366 | 0.72766

EURCHF                1.09396 | 1.09338

EURGBP               0.83958 | 0.83801

EURJPY                 116.183 | 115.622

For today

• EUR: US Labour day bank holiday today leaves the market a little thin on the ground and the ranges likely to be tight, opening around the 1.1160 levels the market slowly rose through the session testing into the mid 1.1170’s before moving into the London session quietly, Topside offers likely to be light through the 1.1200 areas with the market likely to see stronger offers moving in around the 1.1250 areas and through to the 1.1260 level, a push here will likely see some light stops however, stronger offers are likely to appear on a move to the 1.1280 levels and beyond. Downside bids into the 1.1150 areas have been tested repeatedly and this level is likely to be weakening with the market seeing stronger bids into the 1.1100 areas with congestive bids below that level and light stops likely to be absorbed by further bids into the 1.1060 levels all the way through to the 1.1000 stronger bids.
• GBP: Opening slightly higher and closed the gap on the charts touching into the 1.3290 levels before rising steadily higher through the 1.3300 levels towards the 1.3330 areas before running into the London session, Topside offers into the 1.3350 areas with a congestive offers dominating the topside through to the 1.3400 levels and likely stronger offers appearing from then until the 1.3450 areas with possibility of strong stops appearing above that level, Downside bids light through to the 1.3200 levels with possibility of stronger stops appearing around the area, a push through will likely see a mixed bag of bids and stops into the 1.3150 level and possibly forming a base for the pair.
• JPY: The market drifted from the start of the session testing a few times above the 104.10 areas but never looking convincing and drifting lower once the Tokyo session opened drifting down through to the 103.50 before holding into the London session, Topside offers through the 104.00 level and likely to continue through to the 104.30 levels before any weakness appears, a move through to the 104.50 areas will likely open the market for a test through congestive offers to the 105.00 levels with stronger offers then protecting the next big figure. Downside bids limited with the 103.00 levels likely to be weak and a break through the 102.80 areas likely to trigger weak stops on a move back to the 102.00 level.
• AUD: A weaker USD overall saw the Oz move off the 0.7560 lows and trade steadily hight to push again the 76 cent level again, and hold into the London session, Topside offers likely to appear above the 0.7620 areas and again around the 0.7640 levels however, a break through the level will likely see the market opening to the 77 cent and just beyond before stronger offers appear towards the mid 77 cent. Downside bids through the 0.7560-40 areas likely to be supportive for the day however, the stronger bids are likely to still be around the 75 cent level for the moment with weak stops on a drop through the 0.7480 areas.

Overnight News                                                                  

JPY:

BOJ Kuroda: Won’t Consider Cutting Level of Policy Accommodation

BOJ Review to Reaffirm Easing Stance to Meet Goal: Nikkei

Japan’s Aso Says Told G-20 of Need for Market Stability

Japan Needs New Body to Oversee Fiscal Policy: IMF Paper

Japan’s July Cash Earnings Rise 1.4%; Est. +0.4%

North Korea Missiles May Have Fallen in Japan EEZ, NHK Says

Nikkei Japan Aug. Services PMI 49.6 vs 50.4 in July

JPY/CNY:

Suga Says Candid Exchanges Between Japan’s Abe, Xi Important

CNY:

China to Continue Transition to Market-Determined Exchange Rate

China 2H FDI to Rise About 4%, State Researchers Say: Journal

Caixin China Aug. Services PMI 52.1 vs 51.7 in July

AUD:

Australia’s Economic Strength Supports AAA Rating, Moody’s Says

Australia Aug. Services Index Falls 8.9 Pts M/m to 45.0

Australia Aug. Melbourne Inst. Inflation Gauge Rises 0.2% M/m

Australian 2Q Inventories Rose 0.3% Q/Q; Est. 0.3% Gain

NZD:

RBNZ Confirms Restrictions on Property Investor Loans From Oct 1

Auckland August Average House Price Rises 4.5% M/M: Barfoot

N.Z. Commodity Price Index Rises for a Fourth Month, ANZ Says

SGD:

Nikkei Singapore Aug. Whole Economy PMI 52.3 vs 50.7 in July

HKD:

Nikkei Hong Kong Aug. Whole Economy PMI 49 vs 47.2 in July

GBP:

U.K. Aug. BRC Shop Price Index -2% Y/y vs July -1.6% Y/y

U.K. 3Q Factory Output Balance at -7% Versus -4% in 2Q: EEF/BDO

Today’s data

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

JPY         Labour Cash Earnings Y/Y Jul A 1.40% | C 0.50% | P 1.30% | R 1.40%

AUD       Melbourne Institute Inflation M/M Aug A 0.20% | P -0.30%

CNY        Caixin PMI Services Aug A 52.1 | C 51.9 | P 51.7

07:45     EUR        Italy Services PMI Aug C 51.8 | P 52

07:50     EUR        France Services PMI Aug (F) C 51.8 | P 52

07:55     EUR        Germany Services PMI Aug (F) C 53.3 | P 53.3

08:00     EUR        Eurozone Services PMI Aug (F) C 53.1 | P 53.1

08:30     GBP       Services PMI Aug C 49.1 | P 47.4

08:30     EUR        Eurozone Sentix Investor Confidence Sep C 5.1 | P 4.2

09:00     EUR        Eurozone Retail Sales M/M Jul C 0.50% | P 0.00%

Weekend News

G20:

Global Growth Still Weaker Than Desirable: G-20 Leaders’ Draft
CNY:

Xi Says Confident China Can Maintain Medium-High Rate of Growth
China Official Says Nations Should Counter Rising Protectionism
China Eases Rules on Foreign Investments, Mofcom Says
CNY/USD:

China Wants No Confrontation With U.S.: President Xi
USD/CNY:

Obama, Xi Discuss Maritime Tensions, Climate, Steel, North Korea
CNY/JPY:

Xi, Abe Said to Hold Talks Monday on Sidelines of G-20 Summit
EUR/GBP:

EU’s Dombrovskis Wants Brexit Talks ‘Without Undue Delay’
Junker to Outline EU-Brexit Bargaining Points Sept. 14: Spiegel
EUR:

ECB’s Mersch Says Euro-Area Recovery Pace ‘Unsatisfactory’
USD:

Clinton Left Politically Exposed by FBI Report on Her E-Mail
GBP:

May Warns of ‘Difficulties Times Ahead’ for U.K. Economy
U.K. Business Says Outlook Unclear as Brexit Slowdown Forecast
OIL:

Iran Says It Will Support Any Measure to Revive Oil Prices: Mehr
CAD:

Canada’s Trudeau Says Foreign Investment Rules Important Tool
JPY/RUB:

Abe Tells Putin Their Generation Should See Peace Treaty
RUB/JPY:

Russia Made Signal on Recovering Ties With Japan, Likhachev Says
Russia, Japan Agree to Set Up Economic Cooperation Working Group
HKD:

Hong Kong Votes in Test of China Influence Over Finance Hub
AUD/CNY:

China-Australia Ties Getting Stronger and Stronger: Turnbull
USD/IDR:

Lew, Indonesia’s Finance Minister Discuss Growth in Meeting
TRY:

Turkey May Change Terror Law in Future for Visa Deal: Celik

Harry Hindsight

• EUR: A slow day overall with the market awaiting the NFP numbers, with the market holding round the 1.1200 areas through the Asian session in a very narrow range around the level and then slowly dipping through to the 1.1180 areas in early London with little change for the Eurozone numbers, the move to the NYK session saw the market slowly making its way back to the opening levels and then the release of the US numbers with a slightly better trade balance with the NFP coming in worse than expected and the Euro quickly spiking to the 1.1250, now normally this would be the usual reaction however, given that the market is looking at the next Fed movement is likely to be a hike the number did little to deflect that assumption and so the market reversed quickly with news that full employment number albeit government numbers rose while the short term and part time new jobs were less than expected. The market triggered weak stops on the move back through the 1.1200 levels and dipped to the 1.1150 levels before holding around the 1.1160 through to the close of the session.
• GBP: Making early gains through the Asian session as the market strived for the 1.3300 levels again but struggling on each move above the 1.3290 levels saw the market drift into the London session dipping slowly lower through to NYK and finding the lows in the 1.3250’s, the release of the US data saw the market rally quickly through the 1.3300 levels triggering some weak stops on a move to the 1.3330 levels and then a steady grind to push through the 1.3350 levels before interest was lost, the market then drifted back to the 1.3300 areas and held in the area through to the close.
• JPY: Only meagre gains through the Asian session with the USDJPY moving off the 103.20 areas and testing towards the 103.50 levels through until the London session, the opening in London finally saw the level break and although it could only make it to the 103.70 areas much of the resistance was removed from the market, the initial reaction of the USDJPY was obviously lower as the USD dipped to the 102.80 areas before bouncing back and trading back through to the previous highs, the market held in the area for a short period unlike the other pairs before stops were triggered moving the market quickly through the 104.00 area and pushing to the 104.30 level before meeting sufficient resistance to the move and stalling in the area, the market then drifted to a quiet close in the run to a long weekend closing around the 104 level.
• AUD: trading around the 0.7550 levels the market struggled through the Asian session topping repeatedly around the 0.7560 areas before drifting into the London session to test the 0.7540 levels, the move to NYK was quiet and the release of the US data saw the market spike through to the 0.7615 levels with weak stops triggered through the 0.7560 areas and resistance disappearing initially, before reappearing above the 76 cent level and forcing the market from the highs back into the 0.7580 areas, the market struggled in the area for several hours before the market stabbed lower as the USDJPY rallied sharply and the Oz was quickly on the back foot and testing the 0.7540 areas, the move to the close was a steady rise through the session to the 0.7570 in a quiet finish to the day.

Friday’s premiership results

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

JPY         Monetary Base Y/Y Aug A 24.20% | C 23.10% | P 24.70%

JPY         Consumer Confidence Aug A 42 | C 41.6 | P 41.3

GBP       Construction PMI Aug A 49.2 | C 46.6 | P 45.9

EUR        Eurozone PPI M/M Jul A 0.10% | C 0.10% | P 0.70%

EUR        Eurozone PPI Y/Y Jul A -2.80% | C -2.90% | P -3.10%

CAD       Labour Productivity Q/Q Q2 A -0.30% | C 0.20% | P 0.40%

CAD       International Merchandise Trade (CAD) Jul A -2.5B | C -3.2B | P -3.6B | R -4.0B

USD       Trade Balance Jul A -39.5B | C -43.0B | P -44.5B | R -44.7B

USD       Change in Non-farm Payrolls Aug A 151K | C 188K | P 255K | R 275K

USD       Unemployment Rate Aug A 4.90% | C 4.80% | P 4.90%

USD       Average Hourly Earnings M/M Aug A 0.10% | C 0.20% | P 0.30%

USD       Factory Orders Jul A 1.90% | C 2.10% | P -1.50%

Stay lucky

Andy

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