Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 102.704 | EURUSD 1.12329 | AUDUSD 0.75394 | NZDUSD 0.73227 | USDCAD 1.30486 | USDCHF 0.9755 | GBPUSD 1.32683 |

 

LMAX Ranges 6am London time

Highs    Lows

EURUSD               1.12507 | 1.12283

USDJPY                 102.672 | 102.299

GBPUSD               1.32764 | 1.32569

AUDUSD              0.75495 | 0.75213

USDCHF               0.97614 | 0.97440

USDCAD               1.30786 | 1.30392

NZDUSD               0.73442 | 0.73130

EURGBP               0.84787 | 0.84615

EURJPY                 115.480 | 114.936

EURCHF                1.09712 | 1.09540

For today

• EUR: Asia remains quiet with very little movement and no real data for the day, trading broadly higher to test the 1.1250 levels from the unchanged opening the Euro struggled on its highs and has remained below the level for the move into the London session, Topside offers through the 1.1280 areas are likely to continue through to the 1.11320 areas before likely weakness appears through that level however, the congestive offers are likely to reappear from the 1.1340 areas and increase on any attempt at the 1.1360 areas, stops are likely through the level and these will probably run into the stronger 1.1380-1.1400 areas offers, some light offers beyond there with a possibility of stronger stops on a move through the 1.1410 areas. Downside bids through the 1.1200 areas and extending possibly to the 1.1180 areas, even through the area the bids are likely to increase a little on a dip into the 1.1160-40 areas with congestive bids likely through those areas into 1.1100.
• GBP: A very quiet session for the Cable with the market trading for the day around the 1.3270 levels with very little deviation, Topside offers through to the 1.3340-50 areas possible weak stops and a move towards the 1.3400 areas and then stronger offers likely to be seen on a move through the level, Downside bids around the current level with weak stops on a push through the 1.3200 areas opening the downside stronger 1.3150 areas for a test.
• JPY: USDJPY opened a little lower and traded in a reasonably narrow range through the session around the 102.50 levels with one early Tokyo test to the 102.30 levels being reversed and then holding in a tighter pattern, Topside offers through the 102.80 level likely to extend through the 103.00-10 areas before weak stops appear, from there the market is likely to see congestive offers over the next big figure with possibly stronger offers from 104. Downside bids light through to the 102.00 areas and then likely to continue lightly through the level on any move back into the 101.00 areas, bottom picking types likely to increase on a move through the level and the possibility of rhetoric on a deeper move expected.
• AUD: Very quiet with the Oz dipping through the lows from Friday and testing into the 0.7520 areas before holding just belong the 0.7540 opening areas for the move into the London session, Topside offers a little weak through to the 0.7640-60 areas where there is likely to be stronger offers with weaker offers into the 0.7700 areas if the market could make the move, Downside bids light through the 75 cent levels however, through the level there is likely to be stronger bids between that 75 cent level and 0.7450 with weak stops likely on a deeper move through the 0.7420 areas.

Today’s data

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

JPY         Machine Orders MoM Jul A 4.90% | C -2.80% | P 8.30%

JPY         Domestic CGPI YoY Aug A -3.60% | C -3.50% | P -3.90%

JPY         Machine Tool Orders YoY Aug (P) A | P -19.70%

Weekend News

JPY:

BOJ to Consider Review of Monetary Easing Methods: Nikkei
Japan’s Abe Calls for Stronger Sanctions against N. Korea: Kyodo
USD:

Trump Tries to Capitalize as Clinton Regrets `Deplorable’ Comment
Clinton, Trump in Tight Contests in 4 States: WSJ/NBC/Marist Poll
USD/KRW:

U.S. and S. Korea Plan Joint Naval Exercise Oct. 10-15: Yonhap
KRW:

S.Korea Has Pyongyang Attack Plan If Nuclear Weapon Used: Yonhap
S.Korea Yun Says North Nuclear Capacity Has Advanced: Yonhap
South Korea’s Park Says Kim Jong UN’s Mentality ‘Uncontrollable’
N. Korea to Continue Strengthening Nuclear Capability
GBP:

U.K. Said to Decide Against Lowering Corp Tax Rate Below 17%
U.K. Business Has Become Too Lazy to Export, Trade Minister Says
EUR/GBP:

U.K. Labour’s Smith: Would Potentially Seek to Re-join EU in 2020
Brexit Talks Need to Start Early 2017 at Latest: EU’s Moscovici
U.K.’s Rudd: Too Early for Specifics on Post-Brexit Migration
EUR:

Tsipras Says Greece Is Closer Than Ever Before to Debt Relief
Dijsselbloem Sees No Euro-Area Fiscal Capacity in Short Term
Schaeuble Says Global Bank Capital Rules Mustn’t Punish Europe
CNY:

PBOC’s Ma Says Measures Needed to Tackle Housing Bubble: Yicai
China Graft Probe Snares Tianjin Mayor, a Former Xi Associate
China’s Capital Markets Must Avoid Systemic Risks: CSRC’s Liu
China Vows to Punish Rumour Mongering by Real-Estate Agencies
Shanghai Port to Invest Up to $2.4b in Postal Savings Bank IPO
CNY/RUB:

China, Russia to Hold Naval Drills in South China Sea: Xinhua
HKD:

Hong Kong Advisory Body Opposes Some IPO Reform Measures
AUD:

Australia PM Says Sanctions Against North Korea Must Be Enforced
TRY:

Turkey’s Erdogan Vows to Finish Off Islamic State in Syria: AA

Harry Hindsight

• EUR: Opening around the 1.1260 levels the market made steady headway through the Asian session rising quietly through to the London opening testing above the 1.1280 areas, London were just as quick as the Asian session in selling the Euro back to its starting levels and only when the NYK session opened did we see a limited reaction to the days data and weaker than expected German trade balance with the market being sold from the opening levels down to the 1.1200 in a stronger move than the rest of the day, the market recovered a little too the close pushing towards the 1.1230 areas to finish a reasonably quiet day.
• GBP: With a similar pattern to the Euro the early gains moving from the 1.3300 areas to 1.3330 in the Asian session were reversed into the early part of the London session and then the lows were made once the NYK session moved in, the market dipped to the 1.3250 areas in fairly light trading to hold the level through to the close where there was a small recovery.
• JPY: USD day in the end with the USDJPY opening around the 102.50 areas and then drifting through the Asian session to test the 102.00 areas for several hours into the London session, slightly weaker European numbers and fixed income products suffering through the day saw the USD rally off its lows and the USDJPY rose steadily through the NYK session to test the 103 level for a few hours before drifting to a close around the 102.70 areas.
• AUD: The Oz was queit through the Asian session trading in a tight range around the 0.7650 levels before heading into the London session slipping steadily lower in a tight channelled move to test into the 0.7540 areas into the close.

Friday’s premiership results

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

JPY         Japan Money Stock M2+CD YoY A 3.30% | C 3.30% | P 3.30% | R 3.40%

CNY        CPI YoY Aug A 1.30% | C 1.70% | P 1.80%

CNY        PPI YoY Aug A -0.80% | C -1.00% | P -1.70%

AUD      Home Loans Jul A -4.20% | C -1.30% | P 1.20% | R 1.70%

JPY         Tertiary Industry index MoM Jul A 0.30% | C 0.40% | 0.80% | R 0.70%

CHF        Unemployment rate Aug A 3.40% | C 3.30% | P 3.30%

EUR        German Trade Balance Euro Jul A 19.4B | C 21.2B | P 21.7B | R 21.4B

GBP       Visible Trade Balance GBP Jul A -11.8B | C -11.7B | -12.4B | -12.9B

GBP       Construction output MoM Jul A 0.00% | C -1.00% | P -0.90% | R -1.00%

CAD       Net Change in Employment Aug A 26.2K | C 15.0K | P -31.2K

CAD       Unemployment rate Aug A 7.00% | C 6.90% | P 6.90%

USD       Wholesale Inventories MoM Jul A 0.00% | C 0.10% | P 0.30%

Stay lucky

Andy

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