Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 103.502 | EURUSD 1.12055 | AUDUSD 0.76216 | NZDUSD 0.71756 | USDCAD 1.31758 | USDCHF 0.9742 | GBPUSD 1.27501 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.12125 | 1.11983

USDJPY                 103.610 | 103.357

GBPUSD               1.27600 | 1.27125

USDCHF               0.97549 | 0.97347

AUDUSD              0.76250 | 0.75953

USDCAD               1.31936 | 1.31772

NZDUSD               0.71906 | 0.71537

EURCHF                1.09242 | 1.09165

EURGBP               0.88111 | 0.87861

EURJPY                 116.088 | 115.796

For Today

• EUR: A very quiet session with the market slipping from early highs above 1.1210 area to trade along the 1.1200 areas with the market barely slipping through the level, downside bids into the 1.1180 areas with only limited stops to the downside with increasing congestion into the 1.1150 area and with possible stronger bids on a move through the 1.1100 area, the market having traded a reasonably tight range over the past year todays numbers are not likely to upset the market too much, Topside offers sees offers into the 1.1240 levels and possibly light stops on a push above the 1.1260 areas with then stronger offers appearing as the market pushes towards the 1.1300 levels.
• GBP: The market drifted into the Tokyo session slowly testing to the 1.2760 levels before starting a steady decline through to the 1.2720 areas with very light trading moving through the day, Topside offers light into the 1.2765 areas with limited stops likely to appear through the level but with very little to halt a push through the 1.2800 areas and again only limited offers through the 1.2850 area. Downside bids into the 1.2700 levels and 31yr lows again vulnerable against the economic news but uncertainty about the future continuing to dominate the market, with historic levels around the 1.2630 area likely to attract attention.
• JPY: As with the rest of the market a very quiet session for the USDJPY with the market dipping to the 103.35 areas in early trading before rising a little as fixing demand moved into the session to push lightly above the 103.60 level and holding quietly from then on around the 103.40-45 areas through to the London session, Topside offers sees some congestion through to the stronger 104.00 areas with a push through the 104.20 levels likely to see some weak stops with a break here opening the Topside for a test through to the 105.00 and likely stronger offers, Downside bids light through the 102.00 level with possible weak stops on a break through the level before stronger bidding starts to increase as the market moves back through the 101.50 level with particular strength from 100.50 onwards.
• AUD: Having opened around the 0.7620 levels and drifting lower through the session after a slight improvement in the trade balance numbers both for July’s numbers as well as the reported Aug number, Oz drifted with little interest in the market and a lack of news worthy information with just the IMF pointing out increasing household debt as a brief spark in an endless sea of darkness, the market dipped through the 76 cent levels to match yesterday’s lows around the 0.7595 area before holding through to London holding the 76 cent level, Topside offers light through to the 0.7640 level with some increasing offers through there to the 0.7660 level, from there the market is likely to open only slightly with further offers from 0.7680-0.7700 area, Downside bids through the lows likely to see weak stops on a dip through the 0.7580 areas with limited bids into the 0.7560-40 areas, if the market pushes through those levels is likely to see stronger bids moving into the 75 cent areas and possibly deeper bids.

Overnight News

USD:

Fed’s Fischer Says Central Banks Need Fiscal Help to Spur Growth

Lacker: Higher Rates Warranted as Inflation Nears Fed Target

JPY:

Foreigners Buy Most Japan Bonds in 13 Months: MOF Data

AUD:

Australia August Trade Deficit A$2.01b; Est. A$2.3b Deficit

Today’s data

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

AUD       Trade Balance (AUD) Aug A -2.01B | C -2.32B | P -2.41B | R -2.12B

06:00     EUR        German Factory Orders M/M Aug C 0.30% | P 0.20%

07:15     CHF        CPI M/M Sep C 0.20% | P -0.10%

07:15     CHF        CPI Y/Y Sep C -0.10% | P -0.10%

08:10     EUR        Eurozone Retail PMI Sep P 51

11:30     USD       Challenger Job Cuts Y/Y Sep P -21.80%

12:30     CAD       Building Permits M/M Aug P 0.80%

12:30     USD       Initial Jobless Claims (OCT 1) C 255K | P 254K

14:30     USD       Natural Gas Storage P 49B

Harry Hindsight              

• EUR: A very quiet and narrow range for the day with the market in the Asian session opening around the 1.1205 level and then steadily rising to test towards the 1.1230 level into the Tokyo session, holding around the 1.1220 area through to the London session and testing to above the 1.1230 level in quiet trading through London before the NYK session kicked in. NYK were steady sellers from the opening however, the selling could only push the market through 1.1200 and was held at the 1.1190 areas into the US numbers, with Factory orders while better than expected the revision from the previous number balanced the number and the Euro eventually pushed back through the 1.1200 areas and finished no different from the start of the day.
• GBP: Cable made new lows eventually however, the move through the Asian session saw the market moving off the 1.2720 levels and pushing slightly over 1.2740 area before drifting around the level into the London session, stronger PMI numbers did very little for the market but at least Cable was able to recover from new 31yr lows having seen opening London selling taking the market to below the 1.2700 levels, pushing off the 1.2685 areas and slowly rising back to the 1.2720 levels, NYK were quiet buyers reacting more to the PMI number than the previous sessions and the Cable made meagre gains to push against the 1.2760 levels and a quiet finish holding around the 1.2750 area.
• JPY: Opening around the 102.90 levels the market struggled through the Asian session attempting to break through the 103.00 levels early Tokyo pushed the market to the 102.80 levels and local support returned the market from the lows around the 102.70 areas and held the 102.80-103.00 level through to the London session, early buying again saw the market push against the 103.00 levels but only managed to break the level late into the session to hold around 103.10 areas, the release of the US numbers initially saw the USD drop pushing back into the 102.90 before returning to the previous levels and the Factory order number pushed the USD to above the 103.50 and traded quietly through to the close pushing to the 103.65 areas before holding around the 103.50 to the end of the day.
• AUD: A very quiet day for the Oz with the market rising after a good retail sales number from the 0.7610 early lows and testing through the opening level to push above the 0.7640 area and making the highs of the day, the move through to the end of the day saw the market caught between the 0.7600-0.7630 levels with little movement at all with the test below 76 cents just after the Factory order number and limited at best only to finish the day more or less unchanged.

Yesterday’s premiership results

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%

EUR        Italy Services PMI Sep A 50.7 | C 52.1 | P 52.3

EUR        France Services PMI Sep (F) A 53.3 | C 54.1 | P 54.1

EUR        Germany Services PMI Sep (F) A 50.9 | C 50.6 | P 50.6

EUR        Eurozone Services PMI Sep (F) A 52.2 | C 52.1 | P 52.1

GBP       Services PMI Sep A 52.6 | C 52.1 | P 52.9

EUR        Eurozone Retail Sales M/M Aug A -0.10% | C -0.10% | P 1.10% | R 0.30%

USD       ADP Employment Change Sep A 154K | C 166K | P 177K | R 175K

USD       Trade Balance Aug A -40.7B | C -41.1B | P -39.5B

CAD       International Merchandise Trade (CAD) Aug A -1.9B | C -2.5B | P -2.5B | R -2.2B

USD       ISM Non-Manufacturing Composite Sep A 57.1 | C 53 | P 51.4

USD       Factory Orders Aug A 0.20% | C -0.40% | P 1.90% | R 1.40%

USD       Crude Oil Inventories A -3M | C 1.5M | P -1.9M

Good Luck,

Andy

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