Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 101.842 | EURUSD 1.12355 | AUDUSD 0.75659 | NZDUSD 0.73479 | USDCAD 1.30391 | USDCHF 0.97196 | GBPUSD 1.33362 |

 

LMAX Ranges 6am London time

Highs    Lows

EURUSD               1.12425 | 1.12256

USDJPY                 102.049 | 101.413

GBPUSD               1.33424 | 1.33170

AUDUSD              0.75683 | 0.75378

USDCHF               0.97264 | 0.97142

USDCAD               1.30560 | 1.30302

NZDUSD               0.73649 | 0.73356

EURGBP               0.84331 | 0.84200

EURJPY                 114.627 | 113942

EURCHF                1.09284 | 1.09119

For today

• EUR: Early buying into the Tokyo session made the highs just above the 1.1240 areas, before ranging through the session between the 1.1225-35 levels to the London session in a very quiet session for Asia, Decent run of numbers for the day however, only the CPI is the major number with maybe the budget statement in the US to watch for, Topside offers through the 1.1280 levels likely to slow any rally through to the 1.1300 levels with congestion building onwards and no clear headway without some fundamental changes, Downside bids into the 1.1200 areas with the bids possibly around the 1.1220 levels, a move through the 1.1180 levels would normally see weak stops however with strong bids into the 1.1160 areas the likelihood would suggest stops well below that area with weak bids likely through the 1.1100 areas.
• GBP: A light reversal of fortunes on the move into the Tokyo session testing to the 1.3320 levels before recovering back to the opening area just below 1.3340, topside offers sees light offers through the 1.3350 level before opening for a further test through the 1.3400 area with offers likely to extend through the level and into the 1.3450 areas and the recent highs, with inflationary data amassed for the day either side of the market could see good movement with anything out of line, Downside bids limited into the 1.3300 levels and the market through that level sees better and deep bids likely through to the 1.3250 areas with weak stops a possibility through the level with limited bids into 1.3200 and 1.3150 levels likely from then on.
• JPY: USDJPY had more of a range than the other markets with the market opening around the 101.90 areas and dropping back into the Tokyo session to test through the 101.50 levels as before the market started to see some decent buying moving in and taking the market steadily back to test through the 102.00 levels. Topside offers light through to the 102.80 areas where the market starts to see stronger offers, a push through the 103.00 levels will likely see stronger offers appearing once the market moves into the 103.40-60 areas. Downside bids light until the 101.50 areas and then some stronger bids starting to appear with the 101.10 areas becoming particularly strong with stops likely through the 100.80 areas and then likely to be importer bids all the way down from there.
• AUD: A very quiet session for the Oz opening around the 0.7560 levels and then drifting slowly to the 0.7540 area and holding around that level through to the London session, Downside bids into the 75 cent levels with weak stops likely through the 0.7480-90 areas and the market opening to weaker bids into the 0.7450 areas. Topside offers through the 76 cent level with weak stops likely but stronger offers immediately kicking into the 0.7650 areas.

Overnight News

CNY:

China Economy Strengthened as Factory Output, Retail Strengthen

China Jan.-Aug. Property Investment Rises 5.4% Y/y

China Aug. Fixed-Asset Investment Ex. Rural Rises 8.2% Y/y

China’s Economic Improvement Still Not Very Solid: NBS

China Property Policy Should Be Differentiated Among Cities: NBS

China August Fiscal Deficit 429.3b Yuan

CSRC Likely to Continue Operating Separately From PBOC: SCMP

Chinese Yuan’s Intl Status Is Low, State Council Researcher Says

AUD:

Kent: Aussie Hasn’t Dropped as Much as Expected in Recent Years

RBA’s Kent Says Inflation Target Has Achieved Goals, Is Flexible

Australia Aug. Business Confidence Rises 2 Pts M/m to 6

Australia ANZ Weekly Consumer Confidence Rises 3.3% to 118.1

JPY:

Abe’s Support Hits Two-Year High after North Korea Nuclear Test

Japan Public Favour Tougher N. Korea Sanctions, Yomiuri Poll

KRW/CNY:

1. Korea Informed China in Advance of Nuclear Test, Asahi Says

CNY/VND:

China’s Li Urges Vietnam to Help Ease Maritime Tensions: Daily

NZD:

NZ food prices rise 1.3 pct in August, boosted by record banana prices

Today’s data

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

JPY         BSI Large Manufacturing Q/Q Q3 A 2.9 | C -6.5 | P -11.1

AUD       NAB Business Confidence Aug A 6 | P 4

CNY        Industrial Production Y/Y Aug A 6.30% | C 6.20% | P 6.00%

CNY        Retail Sales Y/Y Aug A 10.60% | C 10.20% | P 10.20%

CNY        Fixed Assets Ex Rural YTD Y/Y Aug A 8.10% | C 7.90% | P 8.10%

06:00     EUR        German CPI M/M Aug (F) C 0.00% | P 0.00%

06:00     EUR        German CPI Y/Y Aug (F) C 0.40% | P 0.40%

07:15     CHF        Producer & Import Prices M/M Aug C -0.20% | P -0.10%

07:15     CHF        Producer & Import Prices Y/Y Aug P -0.80%

08:30     GBP       CPI M/M Aug C 0.40% | P -0.10%

08:30     GBP       CPI Y/Y Aug C 0.70% | P 0.60%

08:30     GBP       Core CPI Y/Y Aug C 1.40% | P 1.30%

08:30     GBP       RPI M/M Aug C 0.40% | P 0.10%

08:30     GBP       RPI Y/Y Aug C 1.90% | P 1.90%

08:30     GBP       PPI Input M/M Aug C 0.50% | P 3.30%

08:30     GBP       PPI Input Y/Y Aug C 8.10% | P 4.30%

08:30     GBP       PPI Output M/M Aug C 0.30% | P 0.30%

08:30     GBP       PPI Output Y/Y Aug C 1.10% | P 0.30%

08:30     GBP       PPI Output Core M/M Aug C 0.20% | P 0.40%

08:30     GBP       PPI Output Core Y/Y Aug C 1.30% | P 1.00%

08:30     GBP       House Price Index Y/Y Jul C 8.50% | P 8.70%

09:00     EUR        Eurozone Employment Q/Q Q2 C 0.20% | P 0.30%

09:00     EUR        German ZEW (Economic Sentiment) Sep C 2.5 | P 0.5

09:00     EUR        German ZEW (Current Situation) Sep C 56 | P 57.6

09:00     EUR        Eurozone ZEW (Economic Sentiment) Sep C 6.7 | P 4.6

18:00     USD       Monthly Budget Statement Aug C -98.0B | P -112.8B

 

Harry Hindsight

• EUR: Asian gains were lost on the move into the London session, opening around the 1.1235 levels the market edged higher through into the Tokyo session pushing to the 1.1250 levels before running out of steam and slowly drifting back to the opening, the move towards London saw the market rising again and this time testing through the 1.1250 levels and pushed to the 1.1265 levels in early London before the selling appeared, reversing from the highs the market traded steadily too the opening levels and then triggered weak stops through the level and quickly moved into the supportive 1.1220 areas testing through towards the 1.1210 area before starting a steady range through into the NYK session, the end of the London session saw the market bouncing around a little chatter from Fed’s Kashkari and Brainard, however, the market was really looking for something to do rather than anything meaningful and the market tested towards the 1.1270 with little conviction before reversing and testing towards the lows in what looked more like someone pushing it higher to sell. The market then returned towards the opening levels with nothing in the day to gain.
• GBP: Cable did very little through the Asian session in a narrow range rising just a little from the opening around the 1.3270 areas and pushing into the 1.3280 before dipping lower into the early part of London testing through the 1.3240 levels before pushing back to the highs as the market move into the NYK session, the break through the 1.3290 levels saw weak stops appear in an unlikely placing and the market pushing quickly through the 1.3320 areas and then struggling to clear the 1.3340 into late trading.
• JPY: A slowly weakening USD through the day against the JPY with the market opening around the 102.60 and not really extending the highs much beyond that level with a quiet range through into the London session who immediately tested the low side and pushed against the 102.20 levels slowly grinding through to the 101.80 areas into the NYK session, late selling pushed the market to the 101.60 levels with the market only able to make the 101.80 areas for the close.
• AUD: A very quiet session for the Oz moving from the opening 0.7540 level and slowly drifting through to the 0.7520, the move through into the London session saw steady selling following through and like the Asian session the market was pushed 20 pips or so lower before holding the level and reversing into the NYK session just as quickly as it came down, Late NYK saw the market push above the opening and triggering some weak stops and a move to the 0.7560 levels and holding quietly into the close.

Friday’s premiership results

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

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

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

JPY         Machine Tool Orders Y/Y Aug (P) A -8.40% | P -19.70%

Stay lucky

Andy

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