Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 101.747 | EURUSD 1.12401 | AUDUSD 0.76733 | NZDUSD 0.74459 | USDCAD 1.28857 | USDCHF 0.96993 | GBPUSD 1.33411 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.12578 | 1.12342

USDJPY                 101.922 | 101.414

GBPUSD               1.33588 | 1.33332

AUDUSD              0.76868 | 0.76635

USDCHF               0.97028 | 0.96847

USDCAD               1.28937 | 1.28659

NZDUSD               0.74746 | 0.74434

EURGBP               0.84302 | 0.84227

EURJPY                 114.543 | 114.14

EURCHF                1.09028 | 1.08971

 

For Today

• EUR: Another day in paradise and the market again limited by the upcoming Fed announcement. Rising from the opening 1.1240 level the market tested steadily through to the 1.1255 levels before drifting around the 1.1250 level for most of the session, Topside offers through the 1.1280 levels and likely weak stops on a break above the figure will possibly continue to see the offers appearing on any run to the 1.1340-60 areas, even beyond that level the offers are likely to continue and the 1.1400 level likely to be reasonably strong, downside bids light through to the 1.1200 levels with congestion through to the 1.1140 levels and the market contained in a tight range for the moment, weak stop through that level but quickly supported in any attempt to push onto the 1.10 handle.
• GBP: Cable was very quiet with the market slowly testing to the 1.3360 areas before holding through to the London session around the 1.3350 level and little movement overall, Topside offers light through to the 1.3400 areas and limited offers building to the 1.3420 areas with possible weak stops on a move above the 1.3430 areas however, from the 1.3450 areas the offers are likely to be stronger and the topside remains tight with the Fed announcement still dominating, Downside bids through to the 1.3250 areas likely to be light at best with congestive bids appearing below that level and into the 1.3200 areas and likely to be repeated every 50 pips on the sentimental levels,
• JPY: A very quiet session for the USDJPY with the market moving into the Tokyo session to make the highs just above the 101.90 levels however the early success saw a steady stream of selling forcing the market back to the opening levels, as the market moved towards the London session a steady but limited selling spree moved in however, the market was unable to force its way beyond the 101.40 levels and remains now around the opening levels into London. Topside offers light into the 102.00 areas and likely to continue through to the 102.30-40 areas before weakness appears, for the moment the weak stops are likely to be absorbed on a move towards that level with stronger offers appearing on a move towards the 103 handle and beyond. Downside bids light through to the 101.20 areas with stronger bids appearing the deeper you go and the rhetoric likely to appear on a dip through the 101 level this however, is likely to attract the buyers and the level is likely to become stronger with those comments, with any stops absorbed through the 101.00 level.
• AUD: Light choppy day with the market generally edging higher through the session pushing off the 0.7665 lows in early Tokyo to test towards the 0.7690 areas for a second day, Topside offers into the 77 cent levels will likely see stops appearing through the level and the market cable of spiking higher with limited offer into the 0.7740-60 areas and congestion in the area, downside bids into the 76 cent level possibly weak and better bids possibly limited on a retracement to the 75 cent handle however, through that level the market is likely to increase in size.

Overnight News

CNY:

China Aug. Exports Rise 5.9% Y/y in Yuan; Est. +2.9%

JPY:

Nakaso: BOJ to Decide If Necessary to Adjust Current Framework

Japan Revised 2Q GDP Rises Annualized 0.7%; Est. +0.2%

Japanese Sold Net 1.3 Trillion Yen Overseas Debt Last Week

Japan Panel to Discuss Crackdown on Corp Tax Avoidance: Nikkei

JPY/USD:

Japanese Buy Most U.S. Sovereign Bonds Since Record in March

JPY/CNY:

China Sold Japan Short-Term Debt by Most in 5 Years in July: MOF

AUD:

Australia July Trade Deficit A$2.41b; Est. A$2.7b Deficit

RBA’s Lowe: Strong Supervision Essential to Financial Stability

GBP:

U.K. Aug. RICS House Price Index at 12 vs Est. 2

Today’s data

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

GBP       RICS House Price Balance Aug A 12% | C 2% | P 5%

JPY         Current Account (JPY) Jul A 1.45T | C 1.59T | P 1.65T

JPY         GDP Q/Q Q2 (F) A 0.20% | C 0.00% | P 0.00%

JPY         GDP Deflator Y/Y Q2 (F) A 0.70% | C 0.80% | P 0.80%

AUD       Trade Balance (AUD) Jul A -2.41B | C -2.65B | P -3.20B | R -3.25B

CNY        Trade Balance Aug A 52.1B | C 58.3B | P 52.3B

CNY        Trade Balance CNY Aug A 346B | C 372B | P 343B

11:45     EUR        ECB Rate Decision C 0.00% | P 0.00%

12:30     CAD       New Housing Price Index M/M Jul C 0.20% | P 0.10%

12:30     CAD       Building Permits M/M Jul C 2.10% | P -5.50%

12:30     USD       Initial Jobless Claims (SEP 3) P 263K

12:30     CAD       Capacity Utilization Rate Q2 C 81.50% | P 81.40%

14:30     USD       Natural Gas Storage P 51B

14:30     USD       Crude Oil Inventories P 2.3M

Harry Hindsight              

• EUR: A limited day with the market opening around the 1.1255 levels and struggling into the Asian hours, trading to the 1.1235 levels with JPY strength generally dominating the market through the period, the move into the London session saw the market spike to the 1.1265 levels without triggering anything major and drifting from that high through to the NYK session, beige book release was sufficient to set the highs however, as with the London opening the market quickly found little to grasp on the move higher and the market failed to push to far beyond the previous high before dipping back quickly through to the lows of 1.1230 before settling for a quiet run to the close.
• GBP: The moves higher over the past few days seem to have run there course for the moment and a poor manufacturing number offset the better industrial number and the Cable dipped lower through the day, opening around the 1.3440 levels the market moved through to the Tokyo session never seeing those opening levels again, trading in a narrow range of 1.3410-20 to the London opening before dipping once the numbers were released to the 1.3360 areas and ranging deep into the NYK session, beige book commentary saw the USD rising a little and the Cable dipped to its lows around the 1.3320 levels before settling to trade around the 1.3340 levels to the close.
• JPY: The initial drop in the Tokyo session saw the market move off the highs around the 102.10 levels wo quickly test towards the 101.20 supportive bids however, the bounce was limited and the market then traded around the 101.40-60 areas into the London session, while the market eased a little higher pushing to the 101.80 levels after the beige book the market struggled through to the close but held the balance of its recovery.
• AUD: Better GDP numbers than expected saw the market initially test to the 0.7690 levels, this move was quickly eroded as the early strength of JPY tempered the move and eventually the cross AUDJPY selling began to tell on the Oz leg and the market tested back to the 0.7650 areas before all the selling moved away the move through to the London session again testing the highs, as with further attempts towards the 0.7700 areas the market failed again and this failure saw some strong selling appear and early London saw the market again testing to the lows, although the market saw a choppy session the range gradually narrowed down through into the NYK session with the highs made early in the session and then drifting into the London session and a quiet run to the close with the market only slightly short of the opening levels.

Yesterday’s premiership results

NZD       Manufacturing Activity Q2 A 2.20% | P -2.60% | R -2.00%

AUD       GDP Q/Q Q2 A 0.50% | C 0.40% | P 1.10%

JPY         Leading Index Jul (P) A 100 | C 98.6 | P 99.2

EUR        German Industrial Production M/M Jul A -1.50% | C 0.10% | P 0.80% | R 1.10%

CHF        Foreign Currency Reserves Aug A 627B | P 615B

GBP       Industrial Production M/M Jul A 0.10% | C -0.20% | P 0.10%

GBP       Industrial Production Y/Y Jul A 2.10% | C 1.90% | P 1.60% | R 1.40%

GBP       Manufacturing Production M/M Jul A -0.90% | C -0.50% | P -0.30% | R -0.20%

GBP       Manufacturing Production Y/Y Jul A 0.80% | C 1.60% | P 0.90% | R 0.60%

CAD       BoC Rate Decision A 0.50% | C 0.50% | P 0.50%

GBP       NIESR GDP Estimate Aug A 0.30% | P 0.30% | R 0.40%

CAD       Ivey PMI Aug A 52.3 | C 56.3 | P 57

Good Luck,

Andy

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