Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 110.254 | EURUSD 1.18619 | AUDUSD 0.79696 | NZDUSD 0.71596 | USDCAD 1.23934 | USDCHF 0.96478 | GBPUSD 1.29542 |

 

LMAX Ranges 6am London time

Highs    Lows

EURUSD               1.18899 | 1.18761

USDJPY                 109.935 | 109.683

GBPUSD               1.29657 | 1.29516

AUDUSD              0.79729 | 0.79566

USDCHF               0.96178 | 0.96019

USDCAD               1.23979 | 1.23766

NZDUSD               0.71761 | 0.71614

EURGBP               0.91753 | 0.91633

EURCHF                1.14270 | 1.14070

EURJPY                 130.619 | 130.347

For today

• EUR: Labour day bank holiday for the US sees a fairly quiet market for Euro considering the Korean news, Opening around the 1.1880 areas the market held through the session around that level and unable to move beyond the 1.1890 level. Topside is likely to be weak up to the 1.1980 levels with thick offers likely through to the 1.2000 areas with possible weak stops on a push through the level and limited congestion through to the 1.2040 area and continuing through to stronger offers into the 1.2060 level, a push through the level will possibly see further offers appearing into the 1.2100 areas however, the move through to the 1.2500 is likely to be dominated by the sentimental areas. Downside bids light through to the 1.1840 level with bids increasing into the 1.1820-00 levels with continuing bids through the 1.1800 levels with congestion in the area through to the 1.1780 level and possible weak stops appearing.
• GBP: Opening around the 1.2950 level and moving from the levels to push above the 1.2960 areas before drifting through the session towards the opening levels, Topside offers a little lighter after Fridays run towards the 1.3000 level, however, there still remains offers around the level and the market would need to push through the 1.3020 areas before finding weak stops and the market likely testing to the stronger 1.3050 level. Downside bids light through the 1.2900 area again and congestion to the 1.2850 levels likely to slow any declines for the moment.
• JPY: The Korean news saw the USDJPY opening in the 109.50 areas having been a little lower in the pre-market period before attempting to move higher running into the 109.90 level before ranging around the 109.80 areas. USDJPY has the availability of around 2 big figures with congestion in the 109.50-109.00 areas the main part of the downside, Topside offers into the 110.50 level is likely to see weak stops through the level before running into stronger offers into the 111.00 areas. Downside bids congestive into the 109.00 areas with stronger bids on a test through the 108.50 areas and the lows for last month continue to hold for the moment while the volatile rhetoric in Korea continues.
• AUD: The Oz opened around the 0.7950 and a gap on the charts, moving quickly through to the 0.7970 level top fill the gap on the charts and range quietly through to the grey hour in the 0.7960-70 areas. Downside bids light through to the 0.7920 levels with better congestive bids on a move through the 79 cent level and into the 0.7860 areas where the market is likely to see stronger bids through to 0.7840, from there weak stops opens up a test of the 78 cent level with possibly stronger bids appearing around the 0.7780-75 levels. Topside offers thinned a little and the 80 cent area a little more vulnerable to a test through the level and weak stops appearing for a move to the 0.8040-60 areas and stronger offers protecting the highs of the year.

Overnight News

EUR:

Merkel backs end to EU-Turkey membership talks

Merkle wants to stop Turkey’s EU membership talks

GBP:

UK says defence commitment in Nordic and Baltic states won’t waver after Brexit

JPY:

Japan PM Abe says aims to increase missile defence capabilities

Abe to pursue strong UN sanctions against N. Korea Blue house

AUD:

Australia Job ads climb 2% in August ANZ

Australian 2Q inventories fall 0.4% QoQ; Est 0.3%

USD:

Trump to scrap protection for dreamers, give congress 6 months to fix

Trump, advisers craft more orderly response to N. Korea after latest test

Trump reaffirms US commitment to defend the US and allies using full range of diplomatic conventional and nuclear capabilities

Trump touts US nuclear capabilities as option for dealing with N Korea

GOLD:

Gold quickly tested $10 higher from the opening as Commodities and tangibles gained on the Korean news

NZD:

Migrant figure underestimated by 60k Statistics NZ say

Today’s data

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

JPY         Monetary Base Y/Y Aug A 16.30% | C 15.60% | P 15.60%

AUD       TD Securities Inflation M/M Aug A 0.10% | P 0.10%

AUD       Company Operating Profit Q/Q Q2 A -4.50% | C -4.00% | P 6.00%

08:30     EUR        Eurozone Sentix Investor Confidence Sep C 27 | P 27.7

08:30     GBP       Construction PMI Aug C 52 | P 51.9

09:00     EUR        Eurozone PPI M/M Jul C 0.10% | P -0.10%

09:00     EUR        Eurozone PPI Y/Y Jul C 2.10% | P 2.50%

Weekend News

KRW:

9. Korea quake is 9.8 times stronger than last year’s test Yonhap
10. Korea to hold meeting market impact at 8am on Monday BBG
11. Korea finance chief says should prepare for N. Korea risk
12. Korea says it conducted test of H Bomb to be loaded into ICBM

JPY:

This is a new level of threat for Japan

Have to consider what is source of trade, FX for N. Korea SUGA

CNY:

China’s anger at West to overshadow tougher action on N. Korea

USD:

Trump Condemns rogue nations hostile dangerous nuclear test ABC news

Texas Governor says Harvey damage could climb to $180B

Mattis warns N. Korea of massive military response if it threatens US

RUB:

Russia: US closure of diplomatic sites a blatantly hostile act

EUR:

EU Brexit head says UK must be Educated on cost of Brexit – BBC

Harry Hindsight

• EUR: With a long weekend coming and NFP later in the session the market in Asia peaked early rising to the 1.1920 levels before slowly slipping through to trade into the grey hour testing the 1.1890 level, the move into the London session saw the market test to the 1.1880 areas before holding and then rising as the PMI numbers started to hit the market, mixed numbers with headline German manufacturing less than expected with no change for the Eurozone in general, the move through to the NYK session saw a spike higher to the 1.1930 areas, the release of the NFP saw an initial charge higher with both a lesser number and a revision of the July number, having peaked at the 1.1980 areas though the market dropped quickly back from the level triggering weak stops as the market dropped through the 1.1900 level to trade to a low of 1.1850 as the following numbers particularly the ISM saw the USD rebound, the market then narrowed down to trade around the 1.1860 levels through to the close.
• GBP: Cable traded quietly through the Asian session moving off the 1.2920’s pushing slowly into the mid 1.1940’s before holding quietly through towards the grey hour, the market at this point into the early European period saw the market dropping back to the 1.2910 areas into the grey hour, holding in the area through to the PMI numbers the market moved to the 1.2930 areas before holding quietly through towards the NYK session rising back to the highs of Asia, the NFP number saw the market test quickly through to the 1.2990 areas clearing much of the congestive areas before dropping back to the 1.2950 areas and all though the market did push through to the 1.2970 areas again the market basically held just above the 1.2950 level to the close.
• JPY: USDJPY saw a quiet session through to the NFP numbers with the market through the Asian period rising from just below the 110.00 areas to test through to the 110.10 levels and ranging around the two levels through to the grey hour, London extended the high to the 110.20 areas however, the market remained becalmed until the move into the NYK area and NFP dropping quickly back to the 109.60 areas before testing quickly back as the ISM numbers boosted the USD to the 110.50 area before ranging around the 110.20-30 areas into the close.
• AUD: Opening around the 0.7950 areas the market drifted a little lower before ranging around the 0.7940-55 levels into the grey hour, London saw the market drifting back into the 0.7925 areas before the NFP saw the Oz rally to the 0.7995 area and back to the opening levels on the ISM numbers, the market dropped slowly back from the second attempt higher only pushing through the 0.7985 areas and holding the 0.7970 level into the close.

Yesterday’s premiership results

NZD       Terms of Trade Index Q/Q Q2 A 1.50% | C 3.00% | P 5.10% | R 3.90%

JPY         Capital Spending Q2 A 1.50% | C 8.30% | P 4.50%

JPY         PMI Manufacturing Aug (F) A 52.2 | C 52.8 | P 52.8

CNY        Caixin PMI Manufacturing Aug A 51.6 | C 51 | P 51.1

JPY         Consumer Confidence Index Aug A 43.3 | C 43.6 | P 43.8

CHF        Retail Sales (Real) Y/Y Jul A -0.70% | C 1.70% | P 1.50% | R 1.70%

CHF        SVME PMI Aug A 61.2 | C 60.2 | P 60.9

EUR        Italy Manufacturing PMI Aug A 56.3 | C 55.3 | P 55.1

EUR        France Manufacturing PMI Aug (F) A 55.8 | C 55.8 | P 55.8

EUR        Germany Manufacturing PMI Aug (F) A 59.3 | C 59.4 | P 59.4

EUR        Eurozone Manufacturing PMI Aug (F) A 57.4 | C 57.4 | P 57.4

GBP       PMI Manufacturing Aug A 56.9 | C 55 | P 55.1

USD       Change in Non-farm Payrolls Aug A 156K | C 180K | P 209K | R 189k

USD       Unemployment Rate Aug A 4.40% | C 4.30% | P 4.30%

USD       Average Hourly Earnings M/M Aug A 0.10% | C 0.20% | P 0.30%

CAD       Manufacturing PMI Aug A 54.6 | P 55.5

USD       Manufacturing PMI Aug (F) A 52.8 | C 52.6 | P 52.5

USD       ISM Manufacturing Aug A 58.8 | C 56.5 | P 56.3

USD       ISM Prices Paid Aug A 62 | C 63 | P 62

USD       U. of Michigan Confidence Aug (F) A 96.8 | C 97.3 | P 97.6

USD       Construction Spending M/M Jul A -0.60% | C 0.50% | P -1.30%

Stay lucky

Andy

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