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Daily FX Market Commentary

Good morning,

 

LMAX Close

USDJPY 110.169 | EURUSD 1.19666 | AUDUSD 0.80192 | NZDUSD 0.72931 | USDCAD 1.21858 | USDCHF 0.96012 | GBPUSD 1.32831 |

 

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.19932 | 1.19643

USDJPY                 110.293 | 109.982

GBPUSD               1.33152 | 1.32835

USDCHF               0.96071 | 0.95853

AUDUSD              0.80386 | 0.80116

USDCAD               1.21854 | 1.21616

NZDUSD               0.72988 | 0.72576

EURCHF                1.15003 | 1.14839

EURGBP               0.90166 | 0.90001

EURJPY                 132.009 | 131.762

 

For today

  • EUR: A quiet start to the day saw a steady rise through from the opening around the 1.1965 areas to push to the 1.1975 level, a break in Cable above the 1.3300 level was sufficient to send the Euro a little higher quickly testing to the 1.1990 areas before ranging around the 1.1985 level through to the grey hour, Light bids into the 1.1940-60 areas for the moment with stronger congestive bids then appearing on a run down through the 1.1900 areas, weak stops possibly on a strong break of the 1.1880 level will likely see the market finding little support until closer to the 1.1800-20 areas. Topside offers into the 1.2000 level are likely to be light with a move through the level likely to see weak stops on a move towards the 1.2050 areas where stronger offers are likely to start appearing, and increasing in size as the market closes towards the 1.2080 areas with possible option plays.
  • GBP: A steady move into the Tokyo session with the Cable pressing the 1.3290 for several hours before breaking through the 1.3300 levels for the first time since October last year and the snap election, while the market pushed to the 1.3315 levels it continued to struggle with the market unable to move any further into the light offers and ranged between the figure and the highs through to the grey hour, Topside offers around the sentimental levels with possible congestive offers through to the 1.3440 areas before stops are likely to appear and the market opens to fairly weak resistance and the market opening to a large gain, Downside bids light through the 1.3300 areas and through to possibly weak bids into the 1.3250 levels however, bids are likely to be still building and not firm enough to dissuade the market from pushing back onto the 1.31 handle where possibly stronger bids are likely to start appearing,
  • JPY: Early gains into the Tokyo session saw the market slipping a little as the market moved deeper into the day, trading back from the early highs just short of the 110.30 level the market tested the 110.00 just as briefly as the highs and then drifted steadily higher to the opening level, Topside is likely to see congestive offers continuing from the current highs and into the 110.50 areas, weak stops could appear on a move through the level however, stronger offers are probably going to be waiting into the 110.80-111.00 areas before allowing the market to make its way back onto the 112 handle tor a renewed test of the levels, Downside bids light through to the 109.30-60 areas with plenty of congestion around those levels, a potential for weak stops on a move back through the 108.50 areas and test to the lows possible however, with consensus of Japanese economists expecting an extra budget to help the economy downside is likely to be limited.
  • AUD: No change for the Oz with the market moving around the 0.8015-20 areas in early trading to move steadily through to test towards the 0.8040 area and then back to the lows just above the 0.8010 area in a lacklustre day, Topside offers light through to the 81 cent level where stronger offers start to make an appearance, and given the views of some in the RBA possible becoming stronger today, a test through will likely see further offers continuing to the 0.8130 areas with stronger offers likely to appear on a move towards the 0.8150 areas, Downside bids light into the 80 cent areas however, so far this level has been fairly supportive over the past week or so, saying that there is a likelihood of weak stops on a push through the level and the market then congestive through to the 0.7940 levels.

 

Overnight News                                                                  

GBP:

Prepare to increase rates, Times shadow monetary policy committee urges – Times

Next round of Brexit talks to begin Sept 25

CAD:

Canada FinMin says convinced quality of our products and the strength of services will allow us to be successful even at this valuation

FinMin Morneau says considers recent strength in C$ as a clear reflection of our economic strengths

FinMin says the economy is showing continued strength even at our current dollar valuation

KRW:

  1. Korea condemned the UN Security Council’s decision to impose tougher sanctions

Reiterated US would suffer the greatest pain it has ever experienced for leading the efforts

  1. Korea vows to hasten nuclear push after UN sanctions
  2. Korea’s Nuclear safety commission says detected xenon-133 isotopes linked to N. Korea’s 6th test
  3. Korea’s safety commission says it was unable to confirm what kind of test N. Korea conducted.

AUD:

RBA’s Harper says growth too slow to justify rate increase

JPY:

Japan seen adopting extra budget despite solid economy – Rtrs

USD/CNY/KRW:

Mnuchin threatens more sanctions on China over N. Korea

USD:

ABC news: Moderate democrats heading to White House for meeting on tax

 

Today’s data

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

JPY         BSI Large Manufacturing Q/Q Q3 A 0.4 | C -2.8 | P -2.9

JPY         Domestic CGPI M/M Aug A 0.00% | C 0.10% | P 0.30%

AUD       Westpac Consumer Confidence Sep A 2.50% | P -1.20%

06:00     EUR        German CPI M/M Aug (F) C 0.10% | P 0.10%

06:00     EUR        German CPI Y/Y Aug (F) C 1.80% | P 1.80%

07:15     CHF        Producer & Import Prices M/M Aug C 0.20% | P 0.00%

07:15     CHF        Producer & Import Prices Y/Y Aug C 0.40% | P -0.10%

08:30     GBP       Jobless Claims Change Aug C 0.6K | P -4.2K

08:30     GBP       Claimant Count Rate Aug P 2.30%

08:30     GBP       ILO Unemployment Rate 3M Jul C 4.40% | P 4.40%

08:30     GBP       Average Weekly Earnings 3M/Y Jul C 2.30% | P 2.10%

09:00     EUR        Eurozone Industrial Production M/M Jul C 0.10% | P -0.60%

07:00     EUR        Eurozone Employment Q/Q Q2 C 0.30% | P 0.40%

12:30     USD       PPI M/M Aug C 0.30% | P -0.10%

12:30     USD       PPI Y/Y Aug C 2.50% | P 1.90%

12:30     USD       PPI Core M/M Aug C 0.20% | P -0.10%

12:30     USD       PPI Core Y/Y Aug C 2.10% | P 1.80%

14:30     USD       Crude Oil Inventories P 4.6M

18:00     USD       Monthly Budget Statement Aug C -124.3B | P -42.9B

 

Harry Hindsight

  • EUR: The Euro moved sedately through to the NYK session with the market initially opening around the 1.1955 areas and then holding a tight 1.1950-65 range through the London session, early Europeans bought quickly to extend the highs through towards the 1.1980 level and holding through to the release of UK data, the release of which saw the GBP rising strongly and EURGBP cross selling seeing the Euro descend through the 1.1950 firmly to test the 1.1930 levels to set the lows of the day into the NYK session, the market tested those lows for a short period before starting a steady recovery as the Euro started to recover to push through towards the 1.1960 levels again and a slow rise and range to the close.
  • GBP: Opening around the 1.3165 areas the market saw a slow rise through to the 1.3180 levels into the grey hours, a slow rise through into the London session with the market hovering around the 1.3200 levels into the higher than expected inflationary data, the market quickly jumped above the 1.3250 levels with weak stops triggered along the way before running into congestion and possible option barriers in front of the 1.3300 levels, the market continued to range through the NYK session holding for the most part above the 1.3250 area testing late in the session to the 1.3290’s before finishing the day just off the highs.
  • JPY: The market drifted a little in the early part of the session dipping to the lows for the day below the 109.30 areas before steadily rising towards the 109.60 area into the Tokyo session, the market returned to the opening levels into the grey hour, before rallying back to the highs, the move into the London session saw the market rising through the highs and holding for a short period around the 109.70 levels NYK saw the market moving off a small dip to push to the 110.00 levels and then trading in a limited range but rising through to the 110.20 levels to finish the day just off those highs
  • AUD: Limited but choppy day for the Oz with the market opening around the 0.8925 areas and dropping back to make the lows in early Tokyo to briefly test the 80 cent level. the move through to the grey hour with limited recovery and holding the 0.8015, early London bought the market and a push through towards the 0.8050 ensued running out of steam as GBPAUD buying moved in to turn the market back to the opening levels, the move through to the close of the session saw the market bouncing around the 0.8015-40 levels with very little to soften the buffeting from cross plays.

 

Yesterday’s premiership results

AUD       NAB Business Confidence Aug A 5 | P 12

GBP       CPI M/M Aug A 0.60% | C 0.50% | P -0.10%

GBP       CPI Y/Y Aug A 2.90% | C 2.80% | P 2.60%

GBP       Core CPI Y/Y Aug A 2.70% | C 2.50% | P 2.40%

GBP       RPI M/M Aug A 0.70% | C 0.60% | P 0.20%

GBP       RPI Y/Y Aug A 3.90% | C 3.80% | P 3.60%

GBP       PPI Input M/M Aug A 1.60% | C 1.30% | P 0.00% | R -0.20%

GBP       PPI Input Y/Y Aug A 7.60% | C 7.30% | P 6.50% | R 6.20%

GBP       PPI Output M/M Aug A 0.40% | C 0.10% | P 0.10%

GBP       PPI Output Y/Y Aug A 3.40% | C 3.10% | P 3.20%

GBP       PPI Output Core M/M Aug A 0.20% | C 0.10% | P 0.10% | R 0.20%

GBP       PPI Output Core Y/Y Aug A 2.50% | C 2.30% | P 2.40% | R 2.50%

GBP       House Price Index Y/Y Jul A 5.10% | C 4.80% | P 4.90%

USD       JOLTS Job Openings Jul A 6.17M | C 5.96M | P 6.16M | R 6.12M

 

 

Good Luck,

Andy

 

 

 

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