Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 103.433 | EURUSD 1.11481 | AUDUSD 0.75838 | NZDUSD 0.73075 | USDCAD 1.29278 | USDCHF 0.97991 | GBPUSD 1.33041 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.11578 | 1.11438

USDJPY                 103.811 | 103.362

GBPUSD               1.33270 | 1.32958

AUDUSD              0.76368 | 0.75785

USDCHF               0.98103 | 0.97960

USDCAD               1.29337 | 1.29127

NZDUSD               0.73232 | 0.73018

EURGBP               0.83834 | 0.83675

EURJPY                 115.682 | 115.25

EURCHF                1.09347 | 1.09215

 

For Today

• EUR: A narrow quiet range through the Asian session with the market centring around the 1.1150 levels with very little in the market as the market continues to wait on the Fed decision, topside offers into the 1.1180 levels were sufficient in a bank holiday session to hold the market however, a push through the 1.1200-20 areas are likely to continue to see offers with the Eurozone economy still limited and deflation still a threat as the ECB continue to buy diminishing European bonds, likely to keep the pressure on the Euro, with the becoming stronger as the market moves through the 1.1260 levels and onwards. Downside bids into the 1.1140 areas with likely weak stops appearing through the level and the market then seeing stronger bids just below the 1.1100 sentimental bids and through to the 1.1070 with congestive bids continuing through to the 1.1000 and stronger bids.
• GBP: Cable saw steady buying through the session as the market pushed off the low 1.3300 areas pushing quietly to the 1.3320 areas having opened just above those lows, offers to the topside are likely to increase into the 1.3400 levels with with weak stops on a push through the level and possibly stronger offers moving into the 1.3440-50 levels with 1.3600 likely to be the key areas for a break higher. Downside bids light through to the 1.3200 levels however, the downside is very congested now after 2 months of trading in the 1.29-1.32 levels and only a strong move through the 1.3200 levels and possibly every 50 pips likely to have bids as the improving numbers suggest its business as usual.
• JPY: After yesterday’s USDJPY selling on the back of various commentaries the market saw a steady rise from the opening 103.40 levels to push slowly through to the 103.80 areas in limited action, dropping back quickly through to the opening levels again as the market nervously awaited the RBA announcement only to recover once the no change decision was made. Moving into the London session around the 103.65 levels the Topside through the 104.00 area is likely to be weak however, from the 104.10 areas the market is likely to see the same type of offers we’ve seen over the past few days, and a strong push through the 104.30 levels will likely see some weak stops appearing in the market and push through towards the 104.50 likely weakly defended however, the move on from there is possibly going to see stronger offers appearing. Downside bids light through the 103.00 levels with weak stops likely with a strong move through the area opening a deeper move to the 102 level and possibly stronger bids however, for the moment the USDJPY seems to be creeping higher and the current buying on the talk of further easing is a lot less than has been seen on the passed rumours.
• AUD: Opening around the 0.7585 levels the market moved steadily higher through the session with expectations for the RBA announcement remaining unchanged were not disappointed and the movement in the market once we’d pushed to the 0.7635 high levels was muted for the most part and the market moved back to the 0.7620 levels only before moving quietly into the London session. Downside bids light through to the 0.7580 areas where the bids a little stronger before the market is likely to see limited weak stops, better bids through the 0.7560-40 areas see the stronger bids start to appear around the 75 cent levels with possible strong stops on a move through the 0.7480 levels. Topside offers through the 0.7640 levels and increasing through the 0.7660 areas, limited offers until 0.7680 level with stronger offers from then on through the 0.7700-20 areas.

Overnight News

JPY:

Abe’s Adviser Hamada Says BOJ Should Wait for Fed Before Acting

Japan’s Kato: Long Working Hours Should Be Corrected

AUD:

RBA Leaves Key Rate at 1.5%; All 26 Economists Saw No Change

Australia 2Q Net Exports Cut 0.2% Pt from GDP, Est. Flat

Australia ANZ Weekly Consumer Confidence Falls 3.5% to 114.3

EUR/USD:

Bayer Willing to Raise Monsanto Bid 2% to Win Agreed Pact

GBP:

U.K. LFL Aug. Retail Sales Fall 0.9% Y/y, BRC Says

SGD:

Singapore Finance Sector Vulnerable to Risk, Volatility: Menon

Banks Seen Absorbing Losses Under Worst Scenarios: MAS’s Menon

NZD:

New Zealand House-Price Inflation Accelerates for a Fifth Month

Today’s data

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

GBP       BRC Sales Monitor Y/Y Aug A -0.90% | P 1.10%

AUD       Current Account Balance (AUD) Q2 A -15.5B | C -20.2B | P -20.8B | R -14.9B

AUD       RBA Rate Decision A 1.50% | C 1.50% | P 1.50%

05:45     CHF        GDP Q/Q Q2 C 0.20% | P 0.10%

06:00     EUR        German Factory Orders M/M Jul C 0.50% | P -0.40%

07:15     CHF        CPI M/M Aug C -0.10% | P -0.40%

07:15     CHF        CPI Y/Y Aug C -0.10% | P -0.20%

08:10     EUR        Eurozone Retail PMI Aug P 48.9

09:00     EUR        Eurozone GDP Q/Q Q2 (F) C 0.30% | P 0.30%

14:00     USD       Labour Market Conditions Index Change Aug P 1

14:00     USD       ISM Non-Manufacturing Composite Aug C 55.5 | P 55.5

 

Harry Hindsight              

• EUR: A narrow range over the course of the day with the Asian market buying the Euro steadily through the session to push into the London session testing the 1.1180 levels and held the levels through the early morning session, the release of the service PMI numbers through the session saw the market drop back quickly with the good numbers in Italy and France offset by the poor numbers in London with the Euro dropping back through the run into the non-existent NYK session pushing to the opening 1.1155 areas and then breaking through to test to the 1.1140 in the limited session, the move through to the close of the session saw steady and quiet evening trading around the 1.1150 levels.
• GBP: Light trading through the Asian session saw the Cable slowly pushing from the opening levels just above the 1.3300 areas to test gradually through to the 1.3330 areas before holding the levels into the London session, early traders sold the market off back to the opening levels through to the release of the Service PMI numbers, with a good recovery from the previous months very low reading and sending the Cable higher quickly with weak stops triggered through the 1.3330 level and testing to the 1.3370 areas before dropping back to hold the 1.3330 levels for several hours until what would have been the NYK option cut period where the market dipped back quickly to the opening levels, from there to the close the market based on the 1.3300 levels finishing the day just off the opening areas.
• JPY: While the different departments continued to discuss easing and other measures to keep Abenomics on track the market has become inured by the continual disappointment along the way and the G20 meeting continuing in the background did little for the market on a Labour day US bank holiday and so the USDJPY drifted from the recent highs moving off the opening around 104.10 areas and dropping initially back to the 103.60 levels before finding a little bit of stability, however, as time moved on and the various comments the market dipped again and moved steadily through the 103.50 levels and holding around the 103.30 levels through into the London session with the market moving a little lower as the various PMI numbers were released and testing to the 103.20 levels before rising back to the 103.40 levels and holding around those levels through to the close in a long drawn out dead market.
• AUD: The Oz was dominated by the Melbourne institute inflation report and the market edged higher from the release to test from the 0.7565 opening levels to the 76 cent areas and running into the London session holding those3 levels for several hours, the market did slip back from the level and trade around the 0.7580-90 levels in a quiet session to the close.

Yesterday’s premiership results

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

EUR        Italy Services PMI Aug A 52.3 | C 51.8 | P 52

EUR        France Services PMI Aug (F) A 52.3 | C 51.8 | P 52

EUR        Germany Services PMI Aug (F) A 51.7 | C 53.3 | P 53.3

EUR        Eurozone Services PMI Aug (F) A 52.8 | C 53.1 | P 53.1

GBP       Services PMI Aug A 52.9 | C 49.1 | P 47.4

EUR        Eurozone Sentix Investor Confidence Sep A 5.6 | C 5.1 | P 4.2

EUR       Eurozone Retail Sales M/M Jul A 1.10% | C 0.50% | P 0.00%

Good Luck,

Andy

Any opinions, news, research, analyses, prices or other information contained on this Blog, whether by LMAX, its employees, partners or contributors, does not constitute investment advice nor has it been prepared in accordance with legal requirements designed to promote the independence of investment research. Further, the material contained within this Blog does not contain (and should not be construed as containing) investment advice or an investment recommendation, or an offer of, or solicitation for, a transaction in any financial instrument. Whilst information provided on this Blog may help with your investment research you must consider carefully whether you should make (or refrain from making) investment or other decisions based on what you see without doing further research on the investments you are interested in. Participating in this Blog cannot be a substitute for obtaining advice from an appropriate expert independent adviser who takes into account your circumstances and specific investment needs in selected investments that are appropriate for you. LMAX has not verified the accuracy or basis-in-fact of any claim or statement made by any third parties as comments for every Blog entry.

LMAX will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. No representation or warranty is given as to the accuracy or completeness of the above information. While the material produced in this Blog was obtained from sources deemed to be reliable, LMAX does not provide any guarantees about the reliability of such sources.

Consequently any person acting on it does so entirely at his or her own risk.

If you currently hold an account with LMAX for the purposes of trading FX and CFD’s, you are encouraged to use a different Username and Password to access the Blog or any other online systems. The Blog is a place to learn, discuss and share information and ideas with Blog followers. It is not a place to slander, use unacceptable language or to promote LMAX or any other FX, Spread Betting and CFD provider and any such postings, excessive or unjust comments and attacks will not be allowed and will be removed from the site immediately.