Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 102.562 | EURUSD 1.12207 | AUDUSD 0.74635 | NZDUSD 0.72421 | USDCAD 1.31766 | USDCHF 0.97643 | GBPUSD 1.31927 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.12267 | 1.12117

USDJPY                 103.198 | 102.427

GBPUSD               1.32060 | 1.31695

AUDUSD              0.74867 | 0.74584

USDCHF               0.97773 | 0.97616

USDCAD               1.31730 | 1.31481

NZDUSD               0.72678 | 0.72388

EURGBP               0.85205 | 0.84952

EURJPY                 115.760 | 114.926

EURCHF                1.09678 | 1.09547

 

For Today

• EUR: A slow grind higher with some reasonable volumes for the day, moving off from the 1.1215 levels the market pushed towards the 1.1230 with a limited range and most of the movement generated from EURJPY buying. Topside offers through the 1.1240-60 areas with little respite through that level, IP numbers for the Eurozone on a limited data day for Europe is likely to dampen expectations of any decent movement however, through those levels the market thickens a little on a move through towards the 1.1300 areas and stops are not likely to figure much on a move to those areas, downside bids light through to the 1.1200 levels with stronger bids in the area however, limited stops through the area and the 1.1160-40 levels likely to provide a stronger bid area with weak stops through the 1.1100 areas and opening the market to a deeper move through to the 1.1050 areas.
• GBP: Early sellers into the Tokyo session saw the market recovering from the 1.3170 area and pushing slowly back to the 1.3200 levels, Topside offers light through the 1.3220 areas and a slight possibility of weak stops through the levels with only slightly better offers into the 1.3250 areas, stronger offers are not likely to appear until through the 1.3300 areas, with employment numbers today, downside bids into the 1.3150 areas and very congested for the next big figure with stronger bids likely to be into the 1.3050 levels.
• JPY: A quiet opening saw the market drifting from the 102.60 levels to trade into the 102.40s before the Tokyo session started to kick in pushing quickly through to the 102.80 areas from the fixing period, the market held the area for a short period however, the cross buying moved in and the market tested quickly through the 103.00 levels before running out of steam on a test to the 103.20 levels and then trading around the 103.00 level for the balance of the session. Topside offers through into the 103.50 areas with congestion from earlier in the month and the offers likely to continue through to the stronger level around the 104.00 areas, limited data will likely see cross interest dominating the market especially from the GBPJPY. Downside bids limited down to the 101.50 areas with better bids appearing from there into the 101.20 levels, possibly stops appear on a move through the 101 level however, the 100.50 onwards is likely to be very strongly bid.
• AUD: AUDJPY was the movement today with consumer confidence numbers weaker than expected possibly tempering the steady rise higher, opening around the 0.7465 level and pushing towards the 0.7490 area before slowing and holding close to the area to the London session, Topside offers light through the 75 cent levels with better offers likely to be around the 0.7540-60 areas through that level is likely to see some limited stops and better offers into 76 cent. Downside bids into the 0.7450-40 areas and while there is a possibility of weak stops through the level the market is likely to be congested into the 74 cent level and the downside possibly limited.

Overnight News

JPY:

Japanese PM to discuss N.Korea, economic ties during rare Cuba trip

Yen slips broadly on fears BoJ may cut negative rates more deeply

JPY: Japan PM Abe: BOJ’s policy impact spreading gradually

JPY: BOJ to Explore Delving Deeper Into Negative Rates: Nikkei

CNY/TWD:

China warns Taiwan not to allow Dalai Lama to visit

CNY:

CNY: China Economy May Hit Bottom in 2H Or 2017 1H: Info. Daily

Equities:

Continue falling into the Asian session following yesterday’s European and US losses on Oil concerns

AUD:

Australia plans its first ever 30 year bond offering next month

JPY/USD:

Takeda Said to Allocate Up to $15b for U.S. Pharma Deals: FT

NZD:

N.Z. Posts Narrower Annual Current Account Deficit

New Zealand House Prices Rise Amid Declining Inventory

RBNZ Publishes 2017-18 Dates for Cash Rate Announcements

CNY/USD:

China Says Support for Agriculture Complies With WTO Rules

Today’s data

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

NZD       Current Account Balance Q2 A -0.95B | C -0.30B | P 1.31B | R 1.18B

AUD       Westpac Consumer Confidence Sep A 0.30% | P 2.00%

JPY         Industrial Production M/M Jul (F) A -0.40% | C 0.00% | P 0.00%

08:30     GBP       Jobless Claims Change Aug C 1.7K | P -8.6K

08:30     GBP       Claimant Count Rate Aug P 2.20%

08:30     GBP       Average Weekly Earnings 3M/Y Jul C 2.10% | P 2.40%

08:30     GBP       ILO Unemployment Rate 3M Jul C 4.90% | P 4.90%

09:00     EUR        Eurozone Industrial Production M/M Jul C -0.80% | P 0.60%

09:00     CHF        ZEW (Expectations) Sep P -2.8

12:30     USD       Import Price Index M/M Aug C -0.40% | P 0.10%

14:30     USD       Crude Oil Inventories P -14.5M

Harry Hindsight              

• EUR: A mixed day for the Euro with the market still stuck in the tight range having failed above the 1.1300 areas last week, moving into the Tokyo session around the 1.1235 levels before dipping back a little to range around the 1.1230 levels for most of the Asian session, London saw a small dip to the 1.1220 areas but the only difference was that slightly expanded range than anything meaningful and then the opening of the NYK session saw EURGBP buying continue after the UK numbers and Euro’s testing to its highs and into the offers around the 1.1260 levels, with London closed the Euro started to reverse those gains dropping back through the 1.1220 area and triggering weak stops and testing to the 1.1205 level late into the session before finishing the day around the 1.1220 levels.
• GBP: Cable opened around the 1.3340 levels and held through the Asian session dipping to the 1.3320 areas but returning to the opening levels for the move into London, the move into the new session saw expectations for inflationary news, and broadly speaking the expectations were placed around the high side with the 10% decrease in Cable post Brexit vote the market was expecting some higher numbers however, the numbers disappointed a little with the inflationary generally weaker and the follow through from the currencies depreciation still to kick in if it ever does however, this does give more scope for the BoE to reduce rates if necessary this year which would explain the selling moving into the session post numbers and the market drifting through the 1.3300 areas and holding the 1.3260 area into the NYK session, with a lack of US data until late in the session the opening saw the market drop quickly through to the 1.3200 areas as the US session reacted to the inflation data and the market then traded generally lower through the balance of the session testing to the 1.3160’s but holding just below the 1.3200 level to the close.
• JPY: Opening around the 101.80 areas the early market was unable to push through the 102.00 level and the move into the Tokyo session saw the market dipping and trading down to the 101.40 levels with a decent large Manufacturing number driving the market, the market started to recover through the session to again test into the London opening to the 102.00 areas, London did very little with the market and only as the early US market moved into the market did the USDJPY push through the 102.00 catching weak shorts and squeezing the market to the 102.30 levels before holding quietly through to the end of London. With London out of the way the USDJPY buyers moved in and the market tested steadily higher to the close trading close to the 102.80 levels before settling a little into the end of the day.
• AUD: With a stronger USD over the day with the market drifting a little lower through the Asian session with cross AUDJPY selling effecting the market a little and the Oz drifted from the opening around the 0.7560 areas and pushing down to the 0.7530 levels into the London opening, and the early sellers appeared to push the market to 0.7510 before running out of ideas, London then remained quiet for the most part with GBP/Oz selling lifting the market a little for the move into the NYK session, as the USD strengthened through NYK the Oz continually lost ground with a tight channelled move down through to the 0.7450 areas before holding to the close.

Yesterday’s premiership results

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%

EUR        German CPI M/M Aug (F) A 0.00% | C 0.00% | P 0.00%

EUR        German CPI Y/Y Aug (F) A 0.40% | C 0.40% | P 0.40%

CHF        Producer & Import Prices M/M Aug A -0.30% | C -0.20% | P -0.10%

CHF        Producer & Import Prices Y/Y Aug A -0.40% | P -0.80%

GBP       CPI M/M Aug A 0.30% | C 0.40% | P -0.10%

GBP       CPI Y/Y Aug A 0.60% | C 0.70% | P 0.60%

GBP       Core CPI Y/Y Aug A 1.30% | C 1.40% | P 1.30%

GBP       RPI M/M Aug A 0.40% | C 0.40% | P 0.10%

GBP       RPI Y/Y Aug A 1.80% | C 1.90% | P 1.90%

GBP       PPI Input M/M Aug A 0.20% | C 0.50% | P 3.30% | R 3.10%

GBP       PPI Input Y/Y Aug A 7.60% | C 8.10% | P 4.30% | R 4.10%

GBP       PPI Output M/M Aug A 0.10% | C 0.30% | P 0.30%

GBP       PPI Output Y/Y Aug A 0.80% | C 1.10% | P 0.30%

GBP       PPI Output Core M/M Aug A 0.20% | C 0.20% | P 0.40%

GBP       PPI Output Core Y/Y Aug A 1.30% | C 1.30% | P 1.00%

GBP       House Price Index Y/Y Jul A 8.30% | C 8.50% | P 8.70% | R 9.70%

EUR        Eurozone Employment Q/Q Q2 A 0.40% | C 0.20% | P 0.30% | R 0.40%

EUR        German ZEW (Economic Sentiment) Sep A 0.5 | C 2.5 | P 0.5

EUR        German ZEW (Current Situation) Sep A 55.1 | C 56 | P 57.6

EUR        Eurozone ZEW (Economic Sentiment) Sep A 5.4 | C 6.7 | P 4.6

USD       Monthly Budget Statement Aug A 107.1B | C -108.0B | P -64.4B

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.