Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 100.424 | EURUSD 1.1214 | AUDUSD 0.76671 | NZDUSD 0.72964 | USDCAD 1.31974 | USDCHF 0.97089 | GBPUSD 1.30229 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.12207 | 1.12027

USDJPY                 100.704 | 100.257

GBPUSD               1.30270 | 1.29924

USDCHF               0.97199 | 0.96964

AUDUSD              0.76820 | 0.76638

USDCAD               1.32293 | 1.31947

NZDUSD               0.73062 | 0.72657

EURCHF                1.08915 | 1.08768

EURGBP               0.86250 | 0.86113

EURJPY                 112.888 | 112.469

For Today

• EUR: Another quiet session with the market drifting from the opening around the 1.1220 levels to test back into the 1.1200 areas and then ranging in the later part of the session around the 1.1210 level. Topside offers likely to be light into the 1.1240-60 areas with the offers increasing around the 1.1280 level; a move through the 1.1300 areas sees no real light and the offers are likely to continue in strength through the 1.1320 level. Downside bids light through the 1.1200 areas with a little support appearing on any move to the 1.1180 levels, a push here is likely to then see stronger bids in a move to the 1.1150 areas with the market likely to see stops appearing on a break through the 1.1140 areas and the 1.1100 vulnerable to a strong test.
• GBP: Opening around the 1.3020 level the Cable struggled for any momentum in a quiet session drifting into Tokyo to test to the 1.3000 level and drift around that level into the London session, Topside offers likely to be light through the 1.3020 areas and the market seeing only minimal offers on any further moves higher with stronger offers likely to appear on a move to the 1.3100 level. Downside bids light to the 1.2950 areas however, there are likely to be a few bids along the way however, into the 1.2950-1.2900 area the market is likely to see the bids stacked and waiting as long as media speculation remains quiet, no real news for the GBP however, Durable goods orders could cause some movement in the market.
• JPY: USDJPY traded steadily higher however, it was a struggle and the volumes were limited as the market drifted from the 100.40 areas to test through the 100.30 levels before moving steadily higher through the session to test the 100.70 before slowing and holding the 100.60 in the move to London, little news in the market leaves the Topside offers into the 101.00 areas with likely weak stops on a move through the 101.20 levels however, a move through the 101.50 areas is likely to find congestion from there into the 102.00 areas with stronger offers likely and those offers likely to extend further. Downside bids light through too the 100.20 levels with the market likely to see better bids from then on, possibly weak stops on a move through the 99.80 areas however, from then on is likely to see better bids appearing and the bottom pickers moving in to wait for BoJ/MoF market interference.
• AUD: Opening around the 0.7670 areas the market was unable to really move off the level pushing through the 0.7680 at one point only to drift and hold around the opening levels until the move towards London and the market again catching early buyers to test the topside again. Topside offers into the 77 cent level is likely to find weak stops on a move through before meeting stronger bids into the 0.7740 areas and through. Downside bids light through to the 0.7620 areas with stops likely on a push through the 0.7570 areas and the market struggling in the 0.7540-60 bids.

Overnight News

JPY:

Yen Strength Threatens to Hurt BOJ, Abe’s Adviser Hamada Says

Abe Says Will Continue to Work Closely With Bank of Japan

Japan Opposition Head Says BOJ Decision ’Admission of Failure’

KRW/JPY:

1. Korea, Japan May Sign Currency Swap of More Than $50b: Daily

CNY:

China Should Allow Bigger Yuan Moves, Researchers Say: Sec. News

Westpac-MNI China Sept. Consumer Sentiment +3.3% M/m to 115.2

CNY/USD:

Chinese State Media Say U.S. Debate Shows Vote Is ‘Lose-Lose’

GBP:

Carney Confident Scottish Economy Will Adjust to Brexit: Herald

Today’s data

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

06:00     EUR        German GfK Consumer Oct C 10.2 | P 10.2

06:00     CHF        UBS Consumption Indicator Aug P 1.32

07:00     CHF        KOF Leading Indicator Sep C 100.5 | P 99.8

12:30     USD       Durable Goods Orders Aug (P) C -1.00% | P 4.40%

12:30     USD       Durables Ex Transportation Aug (P) C -0.50% | P 1.30%

14:30     USD       Crude Oil Inventories P -6.2M

Harry Hindsight              

• EUR: The market opened around the 1.1250 levels and then drifted into the Tokyo session through the level only to drop to the 1.1240 levels on fixing supply in Tokyo, the market then ranged through the Asian session holding a narrow range between the two levels, the move into the London session saw some light buying to post the highs around the 1.1260 level before falling back to the lows again, the move into the NYK session saw stronger selling moving in and US numbers pushed the pairs lower to test the 1.1200 level dipping through to the 1.1190 level before pushing quietly back to the 1.1220 levels to hold to the close.
• GBP: A better range for the Cable and the downside continues to hold with the market moving off the opening 1.2970 levels to trade through the 1.2950 areas in early Tokyo before regaining the opening levels and triggering a few weak stops taking the market to the 1.2990 levels before moving into the London session, limited selling then saw the market pushing through to the UK retailing report which should a sharp drop and the market slipped quickly back to the 1.2950 level and pushed slightly through the area into the 1.2940 areas before starting a slow but steady climb through to the 1.3020 level late in the session holding through to the close.
• JPY: With the help of the BoJ minutes the USDJPY eventually lifted off the lows in Tokyo around the 100.10 levels and pushed quickly through the opening 100.30 levels and triggered weak stops on a move to the 100.80 areas , the move into the London session saw the market attempt a push at the 101.00 level only to fail quickly and dip back to the 100.50 levels in early London, the move to the NYK session saw the market holding the 100.20 bid and ranged to the 100.50 levels through the session to finish just below the topside of the range.
• AUD: AUDJPY buying from the Tokyo fix saw the market in the Oz lift off the lows around the 0.7610 level pushing through the opening 0.7635 and trading quietly to the 0.7665 areas holding the level into London, the early traders attempted to push the market higher through the waiting offers and the market eventually ran out of steam on the move through the 0.7695 areas drifting back to the 0.7650 into the NYK session the market then struggled through the rest of the day however, it remained above the NYK lows to run out in the 0.7665 areas.

Yesterday’s premiership results

JPY         Corporate Service Price Y/Y Aug A 0.20% | C 0.30% | P 0.40% | R 0.30%

JPY         BOJ Minutes of July Meeting

EUR        Eurozone M3 Y/Y Aug A 5.10% | C 4.90% | P 4.80% | R 4.90%

GBP       CBI Retailing Reported Sales Sep A -8 | C 8 | P 9

USD       S&P/Case-Shiller Composite-20 Y/Y Jul A 5.00% | C 5.00% | P 5.10%

USD       Consumer Confidence Sep A 104.1 | C 98.9 | P 101.1 | R 101.8

Good Luck,

Andy

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