Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 102.907 | EURUSD 1.12044 | AUDUSD 0.76199 | NZDUSD 0.72132 | USDCAD 1.31916 | USDCHF 0.97889 | GBPUSD 1.27274 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.12286 | 1.12000

USDJPY                 102.893 | 102.669

GBPUSD               1.27458 | 1.27187

USDCHF               0.97954 | 0.97731

AUDUSD              0.76441 | 0.76060

USDCAD               1.32018 | 1.31730

NZDUSD               0.72073 | 0.71752

EURCHF                1.09736 | 1.09645

EURGBP               0.88192 | 0.87976

EURJPY                 115.500 | 115.122

For Today

• EUR: The Euro pushed gradually higher through the session testing towards the 1.1230 levels and holding around the 1.1220 areas as the market moves towards the London session in quiet trading, today sees PMI numbers from the area and more importantly retail sales. US employment and trade balance numbers early followed by factory orders lead to a possible busy day, Topside offers light through the 1.1240 and possibly to the 1.1260 levels from there though the market is likely to stiffen with the offers likely to be 1.1300 areas, from that point congestive offers continue and short term sellers are likely to kick in with stronger stops likely through the 1.1360 area and opening the market for a push through the 1.1400 areas and likely attempts to push out of the range of the past two years, Downside bids into the 1.1200 levels are likely to be fairly weak with bids likely to continue though through to the 1.1140 areas and more defence in depth than anything else, a push through to the 1.1100 areas could possibly see some bids however, the move lower will see stronger bids into the 1.1050-00 areas and a move back to the lows from the past couple of years.
• GBP: A quiet range through the Asian session with the market lifting a little from the opening 1.2725 areas and pushing through into Tokyo to test the 1.2745 levels before dipping back to the mid-range for the run into the London session, with what could be construed as bad news out of the way services PMI numbers has the ability to correct some of the downward pressure however, sentiment continues to weigh on the market with bids into the 1.2700 levels and likely to be sentimental from that point on with levels dating back to the 80’s the only bright star, Topside offers likely to be weak with a move back through the 1.2800 levels likely to trigger weak stops and the ability of the market to squeeze higher with that weakness continuing through to the 1.2950 levels.
• JPY: USDJPY holds quietly through the session with the market unable to push through the 103.00 levels and holding around the 102.80 areas into the London session on quiet trading, Topside offers seem to be strong into the 103.00 levels, with possible stops through the 103.20 areas and opening a quick test to the mid 103 areas and some congestion and short term sellers moving in, with the offers around the 104.00 levels opening to a larger move if breached, downside bids light into the 102.00 areas and the market likely to see weak stops on a move of the 101.80 and a test back to the 101-100.50 areas where stronger bids are likely.
• AUD: Oz moved through into the Asian session testing through to the 0.7610 areas again and held through to the release of the Retail sales numbers seeing an improvement in the numbers the market moved steadily from the lows to test towards the 0.7650 areas before losing appeal and drifting just below the 0.7640 areas through to the London session. Downside support remains into the 76 cent levels and while there is congestive bids through the level the weak stops could account for those and a test through to the 0.7550 areas with stronger bids into 75 cents. Topside offers into the 77 cent levels are likely to have stiffened as the rejection of the level continues to top the range over the past couple of months, however a push through the 0.7760 levels will likely see stops appearing and the market opens for a bigger move.

Overnight News

USD:

Evans Expects Fed to Increase Rates Once by End of Year

Evans Wants Fed to Update Inflation Message When It Hikes Again

CNY:

World Bank Cuts China 2018 GDP Growth Forecast to 6.3% From 6.5%

JPY:

BOJ’s Kuroda Says Rates to Rise If Inflation Target is Achieved

Nikkei Japan Sept. Services PMI 48.2 vs 49.6 in Aug.

GBP:

U.K. Sept. BRC Shop Price Index -1.8% Y/y vs Aug. -2% Y/y

AUD:

Australia August Retail Sales Rise 0.4% M/M; Est. 0.2%

Australia Sept. Services Index Rises 3.9 Pts M/m to 48.9

NZD:

N.Z. Commodity Price Index Rises to a 17-Month High, ANZ Says

SGD:

Nikkei Singapore Sept. Whole Economy PMI 52.9 vs 52.3 in Aug.

Today’s data

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

GBP       BRC Shop Price Index Y/Y Sep A -1.80% | P -2.00%

AUD       Retail Sales M/M Aug A 0.40% | C 0.20% | P 0.00%

07:45     EUR        Italy Services PMI Sep C 52.1 | P 52.3

07:50     EUR        France Services PMI Sep (F) C 54.1 | P 54.1

07:55     EUR        Germany Services PMI Sep (F) C 50.6 | P 50.6

08:00     EUR        Eurozone Services PMI Sep (F) C 52.1 | P 52.1

08:30     GBP       Services PMI Sep C 52.1 | P 52.9

09:00     EUR        Eurozone Retail Sales M/M Aug C -0.10% | P 1.10%

12:15     USD       ADP Employment Change Sep C 166K | P 177K

12:30     USD       Trade Balance Aug C -41.1B | P -39.5B

12:30     CAD       International Merchandise Trade (CAD) Aug P -2.5B

14:00     USD       ISM Non-Manufacturing Composite Sep C 53 | P 51.4

14:00     USD       Factory Orders Aug C -0.40% | P 1.90%

14:30     USD       Crude Oil Inventories P -1.9M

Harry Hindsight              

• EUR: Euro’s opened around the 1.1210 levels and drifted through the Asian session to hold around the 1.1200 areas unable to push to far below the levels, London were quick sellers and the push through to the 1.1180 levels saw the market break with weak stops triggered before running into congestion into the 1.1160-40 levels and holding the level as the market bounced around those levels through into the NYK session, with talk of the ECB near tapering of QE with little too really show from the event and the added movement in EURGBP saw the Euro push quickly back through the opening levels and testing to the 1.1240 levels before running out of steam, IMF commentary the doomsayer of the world sees subdued global growth and marked down the forecast from 2.2% to 1.6% following the disappointing first half of the year and advanced economies at 1.6% from 2.1% with the European led IMF urging the ECB to continue with its current easing and stating that the Economy would continue to improve with the area expanding by 1.7% over last year’s 1.5% in 2015. The market eventually ran out little changed on the day and Brexit taking a backseat for the day, but then Euro has been resilient to the upcoming cut of 20% from the economy.
• GBP: Cable saw limited movement in the Asian session with the market opening around the 1.2840 levels testing briefly to the 1.2860 areas before starting a steady dip down to the 1.2820 levels, the market held the lows again after the previous days push however, the move into the London saw the market quickly testing through to the 1.2765 levels and levels from 31yrs ago and then trading below the level into the NYK session drifting to the 1.2720 levels and holding too the close, a Hard Brexit from Europe seems to have continued to weigh on the Cable while the situation is unclear that uncertainty seems for the moment to be outweighing continual improvement to economic numbers.
• JPY: Opening around the 101.65 levels the USDJPY saw a steady rise through the early part of the Asian session testing gradually through the 102.00 levels holding briefly before breaking to the 102.40 levels and then trading quietly in a quiet range through to the opening in London, the movement through the London session pushing quietly through to the 102.50 areas, NYK continued the move through the day with the market gradually testing towards the 103.00 levels and further resistance to the move.
• AUD: The move through into the Asian session saw the market testing early towards the 0.7700 levels and holding around the 0.7690 area was the high for the day, Tokyo moved in and the steady selling down through the 0.7670 levels and the release of no change saw a brief spike before the market dipped to 0.7660 and into the London session holding the 0.7680 areas again, London were quick sellers and the push lower was contained within a tight range given the RBA announcement, the move through to the NYK session saw the deal done to cut oil production and the Oz suffered from the quick move from the $48.70 levels to $49.50 on the announcement and the market dipped to the 0.7610 levels before holding into the close.

Yesterday’s premiership results

JPY         Monetary Base Y/Y Sep A 22.70% | C 23.40% | P 24.20%

AUD       Building Approvals M/M Aug A -1.80% | C -5.80% | P 11.30% | R 12.00%

AUD       RBA Rate Decision A 1.50% | C 1.50% | P 1.50%

JPY         Consumer Confidence Sep A 43 | C 41.8 | P 42

GBP       Construction PMI Sep A 52.3 | C 49.1 | P 49.2

EUR        Eurozone PPI M/M Aug A -0.20% | C 0.10% | P 0.10% | R 0.30%

EUR       Eurozone PPI Y/Y Aug A -2.10% | C -2.20% | P -2.80% | R -2.60%

Good Luck,

Andy

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