Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 109.401 | EURUSD1.19533 | AUDUSD 0.80298 | NZDUSD 0.72456 | USDCAD 1.21095 | USDCHF 0.95637 | GBPUSD 1.31647 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.19641 | 1.19458

USDJPY                 109.586 | 109.243

GBPUSD               1.31823 | 1.31608

USDCHF               0.95744 | 0.95544

AUDUSD              0.80345 | 0.79981

USDCAD               1.21242 | 1.20979

NZDUSD               0.72677 | 0.72226

EURCHF                1.14400 | 1.14283

EURGBP               0.90831 | 0.9070

EURJPY                 130.909 | 130.681

For today

• EUR: Reasonably quiet session overall with the market ranging around the 1.1950-60 areas with early highs above the range but only just and then dipping away into the Tokyo session once the weaker business numbers were released, the market recovered however, the market did remain in the range through to the grey hour, Topside offers into the 1.2000 areas with limited congestion through to the 1.2060 areas, stronger offers start to appear on a move towards the 1.2080-1.2100 level with stronger stops likely on a move through the 1.2100 areas and the market likely to see limited offers through to sentimental levels and the breakdown point from 2015. Downside bids congested through the 1.1900 levels with weak stops on a move through the 1.1880 areas likely and the market opening to the 1.1820-00 areas with stronger congestive bids.
• GBP: Cable saw a little stronger range with the market pushing initially higher to the 1.3175 areas from the opening and moving into the Tokyo session around that area, dipping lower after the Oz number to test through to the low 1.3160’s before slowly recovering and pushing above the 1.3180’s and holding in a tight 1.3175-80 through to the grey hour, Topside offers into the 1.3220 areas with offers likely to be thin from there into the 1.3250 level and some further offers likely to appear, a move through the level will possibly see weak stops appearing and the market likely to test towards 1.3300 and sentimental offers only in the area and congestion limited through to the 1.3400 area. Downside bids likely to be weak back through the 1.3100 areas with a stronger possibility of weak stops moving up from the 1.3000 areas with congestion limited through to the 1.3050 areas.
• JPY: A narrow range for the USDJPY with the market dipping from the opening 109.30 level to test towards the 109.20 areas through Sydney before starting a slow recovery once the market moved into the Tokyo session rising towards the 109.60 levels before holding around the 109.35 areas through into the grey hour, Topside offers into the 109.80 areas with those offers likely to be light through the 110.00 level, possible weak stops on a move through the level however, the 110.50 level is likely to see stronger offers appearing and continuing through to the 111.00 area, larger stops on a move through this level will likely see the market opening to stronger congestive offers into the 111.50 level and then increasing in size on any move towards the 111.80 area. Downside bids into the 108.50 areas are likely to be congestive however, the area has recently been pushed through and therefore is a little weaker than normal, a test below the level will possibly see fresh impetus to test lower with stronger bids not likely to appear until 107.50-00 areas and the lows from last week.
• AUD: The market opened around the 0.8025 areas and a limited push to the 0.8035 level before slipping slowly through the session to test the 80 cent levels once the weaker business number was released the market moved off the 80 cent level in quiet trading to hold around the 0.8010 levels through to the grey hour, Light downside bids into the 80 cent level with congestive bids likely to continue through to the 0.7950 areas where bids are likely to improve and any move through to the 79 cent level becoming more of a grind with the previous month or so holding broadly in that area, a test through the 79 cent level will likely see stronger stops appearing and the market opening to the 0.7840 levels. Topside offers light through to the 0.8050 and even here not really particularly strong but could slow any move higher with the market open to a retest through the 81 cent levels before running into stronger offers and no real stops likely until the market tests towards the 0.8120-30 areas.

 

Overnight News                                                                  

UN:

UN votes new N. Korea sanctions stopping short of oil embargo

US drafted resolution bans N. Korean textile exports and imports of condensates, natural gas liquids, caps refined petroleum, crude oil imports

USD:

US is said to temper N. Korea sanctions before UN vote

US envoy to UN Nikki Haley says we are done trying to prod N. Korea to do the right thing, we are now acting to stop it from doing the wrong thing

Haley: says strong relationship between trump XI played key role in negotiating new UN sanctions on N. Korea

Haley: says US not looking for war with N. Korea and Pyongyang has not yet passed the point of no return

McConnel: No new debt ceiling vote until well into 2018

CHF:

SNB domestic bank sight deposits rise to CHF 471.5B

EUR:

ECB’s Coeure warns persistent Euro gains may weigh on inflation

Juncker, will set out plans for more thorough vetting of foreign investment screening in EU

NZD:

NZ traffic gauge may signal lacklustre 3Q growth ANZ

NZ Property market stalls as election looms

EUR/USD:

EU worries grow over US economic chaos

KRW:

Rumours spread in N. Korea about deaths from nuclear test

AUD:

Australian regulator not scared of taking on any entity says banks very powerful RTRS

OECD:

William White chairman of OECD say’s situation looks very similar to 2008.

White: debt level in China worrisome

SGD:

Singapore July retail sales up 1.8% YoY

JPY:

PM Abe’s rating regains the 50% mark amid N. Korea security jitters

AUD:

Australia business conditions strong in Aug, employment jumps

GBP:

EU repeal bill wins first commons vote 326 vs. 290 with cross party voting against party lines

Today’s data

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

AUD       NAB Business Confidence Aug A 9 | P 12

08:30     GBP       CPI M/M Aug C 0.50% | P -0.10%

08:30     GBP       CPI Y/Y Aug C 2.80% | P 2.60%

08:30     GBP       Core CPI Y/Y Aug C 2.50% | P 2.40%

08:30     GBP       RPI M/M Aug C 0.60% | P 0.20%

08:30     GBP       RPI Y/Y Aug C 3.80% | P 3.60%

08:30     GBP       PPI Input M/M Aug C 1.30% | P 0.00%

08:30     GBP       PPI Input Y/Y Aug C 7.30% | P 6.50%

08:30     GBP       PPI Output M/M Aug C 0.10% | P 0.10%

08:30     GBP       PPI Output Y/Y Aug C 3.10% | P 3.20%

08:30     GBP       PPI Output Core M/M Aug C 0.10% | P 0.10%

08:30     GBP       PPI Output Core Y/Y Aug C 2.30% | P 2.40%

08:30     GBP       House Price Index Y/Y Jul C 4.80% | P 4.90%

14:00     USD       JOLTS Job Openings Jul C 5950 | P 6163

Harry Hindsight

• EUR: The market started the week with USD a little stronger, the Euro opened around the 1.2020 levels and drifted down to the 1.2000 area in steady selling through to mid-Tokyo the move through to the grey hour saw the market holding just off the lows and the move into the London session saw a dip through the 1.2000 level, rising through into the 1.2030 areas to make the highs of the day before slowly drifting back to the lows into the NYK opening, concerns from the ECB about the high Euro, and there was I thinking that they wanted to have a strong Euro and become the lead reserve currency however, these concerns are about the level of inflation and therefore a drop in exports to drive the market, and while that may be a concern for the Eurozone in general it possibly has more relevance to German exports. The market dropped through to the 1.1970 areas in the first few hours of NYK before saw further selling moving in to test the 1.1950 areas into the close areas.
• GBP: As with the rest of the market Cable opened a little lower before filling the small gap in the market to test towards the 1.3200 areas again, USD selling still continued through the Tokyo session with the market moving into the grey hours testing the 1.3170 areas, London saw some early strong buying to take the market back to the opening areas testing through to the 1.3200 areas before holding for a few hours, the market run to the NYK session again saw Cable buying with the vote on EU to UK law bill and the Cable managed a steady rise through to the 1.3220 areas moving into the NYK session holding those highs, weakness against the USD then ensued with the GBP like the rest slipping back through to the opening levels and eventually following through to trade into the close of London holding the 1.3170 areas, the close saw the market test through to new lows but holding in the 1.3160.
• JPY: Pre market saw the USDJPY pushing quickly above the 108.50 areas before settling back to around the 108.20 areas for the official opening, moving from that level the market moved up to the 108.50 areas and ranging quietly through the Asian session testing a little above that high, the move into the grey hour saw the market testing the 108.60 areas and a slow range into the NYK session, NYK were steady buyers through the session pushing slowly through the day to test above the 109.00 areas with some limited resistance late into the session above the 109.40 levels and into the close.
• AUD: The Oz did lose ground to the USD over the course of the day however, it was limited with the market opening around the closing level on Friday around the 0.8055 level, the move through to the mid-Tokyo session saw the market drifting down to the 0.8030 areas before recovering and testing back to the opening levels, the move into the grey hours saw some stronger selling and the market pushing through the previous low and into the 0.8020’s the market continued to slowly range in that area through towards the end of London before dipping to the 0.8020 level and holding a tight range through to the end of the session.

Yesterday’s premiership results

JPY         Machine Orders M/M Jul A 8.00% | C 4.10% | P -1.90%

JPY         Japan Money Stock M2+CD Y/Y Aug A 4.00% | C 4.10% | P 4.00%

JPY         Tertiary Industry Index M/M Jul A 0.10% | C 0.10% | P 0.00% | R -0.20%

JPY         Machine Tool Orders Y/Y Aug (P) A 36.30% | P 28.00%

CAD       Housing Starts Aug A 223K | C 220.0K | P 222.3K

Good Luck,

Andy

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