Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 111.53 | EURUSD 1.16304 | AUDUSD 0.71933 | NZDUSD 0.65874 | USDCAD 1.31788 | USDCHF 0.97181 | GBPUSD 1.29056 |

LMAX Highs and Lows 5.15am GMT

                                High | Low

EURUSD               1.16599 | 1.16299

USDJPY                 111.516 | 111.171

GBPUSD               1.29276 | 1.29075

USDCHF               0.97150 | 0.96942

AUDUSD              0.72112 | 0.71715

USDCAD               1.31817 | 1.31642

NZDUSD               0.66161 | 0.65866

EURCHF                1.13094 | 1.12881

EURGBP               0.90187 | 0.9008

EURJPY                 129.832 | 129.431

For today

• GBP: Cable remained in a tight range through the Asian session opening around the 1.2905 areas and slowly rising towards the 1.2930 area through the session only to dip late in the session and track for a short run to the grey hours around the 1.2910 areas, Topside offers weak through to the 1.2980 level with the market clearing the levels in the past 24hrs however, the 1.2980-1.3040 level is likely to see some strong congestion on any attempt to push higher with weak stops likely on a break through the 1.3050 area and opening the market to challenge the possibly stronger 1.3100 level, downside bids light through the sentimental 1.2850 areas with weak congestion likely to be forming around the 1.2800-1.2780 levels for the moment, stops likely on a break through the level but with congestion likely to run over the next big figure slowing down any decline.
• JPY: Opening around the 111.50 areas the move into the Tokyo session saw very little movement, Tokyo started selling strongly and the market dropped back over the next few hours to test just below the 111.20 before finding some slow buying moving in and a recovery into the grey hour to the 111.40 level, downside bids light through the 111.00 areas with stronger bids likely into the 110.80 level however, weak stops on a break and newly opened AUDJPY positions could be very weak on a dip through to the congestive 110.50 areas, some bids likely on any push through to the 110.40 area could balance the stops with stronger bids then lurking around the 110.00 area. Topside offers into the 111.80-112.00 with weak stops on a push through the 112.20 level and then congestive offers reappear on any attempt to push through the 112.60-80 areas with increasing offers around the 113.00 likely to slow any move beyond however, a break above the 113.25-30 area will likely see stronger stops appearing and the market opening to a stronger move.
• EUR: A slow move through from the close into the Tokyo session with the market moving quickly from the opening area to test towards the 1.1660 level then dropping back to hold quietly through to midsession in Tokyo around the 1.1650 areas, the run to the grey hour saw fresh sellers appearing and the market back to the opening level, Topside offers light through to the 1.1660 areas with the market likely to strengthen on any move through to the 1.1700 areas and increasing on a move to the 1.1740 area, weak stops through the level could see a quick attempt to push towards the 1.1780 level with stronger offers into the area, downside bids light on any push through the 1.1540 areas with limited bids into the figure levels and stops on a push through the 1.1480 areas and the market open to further declines through to limited bids into 1.1420.
• AUD: A quiet opening before chopping around the 72 cents level testing the 0.7210 areas on a couple of occasions before dipping repeatedly below the figure, the final test higher was quickly squashed as both ANZ and Commonwealth Bank both raised their variable rates for home buyers and the Oz dipping back quickly through to the 0.7170 areas before finding sufficient bids for the moment, the market moved through to the grey hour holding the 0.7180 areas in quiet trading, Downside bids into the 0.7160-40 areas likely to be fairly strong and a move through the level will likely see further congestive bids appearing through to the 71 cent areas and increasing into the sentimental level and opening the market to further declines into the 70 cent level, topside offers light through to the 0.7250 areas light stops possible through the 0.7260 areas and weak congestion likely through to the 73 cents level but congestive above.

Overnight News

EUR:

Italy banks ratings outlook cut by Fitch amid political concerns

EUR/GBP:

Germany, UK said to drop key Brexit ask, easing path to deal

Michel Barnier tells MP’s: Key parts of PM’s Brexit plan dead

Anything could now happen on Brexit as Barnier bluff goes wrong – Tel

USD:

Trump faces internal opposition, anonymous aide warns UKT

JPY:

Strong earthquake cuts power in all of Japan’s Northern island

BoJ’s Kataoka: need to bring down 10yr, longer yields

CNY:

China should improve Yuan rate mechanism in gradual way – Journal

AUD:

ANZ raises variable home loans.

CBA raises variable home loans

CRYPTO’s:

Crypto’s lost 7% on news that the market remains unaccepted by official financial markets

USD/CNY:

US, China trade war is a lose lose situation S&P

TRY:

Turkey begins constructing site for Russian missile system, despite US warnings.

Today’s data

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

AUD       Trade Balance (AUD) Jul A 1.55B | C 1.46B | P 1.87B | R 1.94B

05:45     CHF        GDP Q/Q Q2 C 0.50% | P 0.60%

06:00     EUR        German Factory Orders M/M Jul C 1.60% | P -4.00%

11:30     USD       Challenger Job Cuts Y/Y Aug P -4.20%

12:15     USD       ADP Employment Change Aug C 188K | P 219K

12:30     CAD       Building Permits M/M Jul C 0.70% | P -2.30%

12:30     USD       Initial Jobless Claims (SEP 1) C 214K | P 213K

12:30     USD       Nonfarm Productivity Q2 (F) C 2.90% | P 2.90%

12:30     USD       Unit Labour Costs Q2 (F) C -0.90% | P -0.90%

13:45     USD       Services PMI Aug (F) C 55.2 | P 55.2

14:00     USD       ISM Non-Manufacturing/Services Composite Aug C 56.9 | P 55.7

14:00     USD       Factory Orders Jul C -0.10% | P 0.70%

14:30     USD       Natural Gas Storage P 70B

14:30     USD       Crude Oil Inventories P -2.6M

Harry Hindsight

• GBP: A quiet Asian session saw the market moving around the 1.2860 areas and rising through to the 1.2870 level into mid-session with better AUD GDP numbers seeming to trigger the move, the market kept in touch with the highs in quiet trading through to the grey hour before starting a slow drift lower through the early part of London, the market initially held the 1.2800 level and moved through in a tight range around the 1.2820 level before again dipping quickly to test through the level and too the 1.2790 level before bouncing and moving through to the NYK session holding the 1.2820 levels, agreement between Merkel and May on reducing the details of post Brexit plans saw the market quickly rise and the market tested quickly through to the 1.2960 level holding for a few hours above that level and spiking to the 1.2980 areas, the break back below the 1.2950 level on the run to the London close saw the market drop as quickly as it rose to test to the 1.2880 triggering weak stops from earlier buyers before lifting and ranging around the 1.2900 level through to the close.
• JPY: USDJPY opened quietly with the market ranging in the 111.40-50 areas through to the AUD GDP release, USDJPY was taken higher as cross AUDJPY buying moved in testing to the 111.70 level before then slowly drifting through to the opening level into early London session however, London was reasonably quiet trading slowly through to the 111.60 level before moving into the NYK session where quick buyers saw the market top out around the 111.75 areas a short attempt higher before dropping back to the 111.50 levels to trade quietly through to the close.
• EUR: A quiet range from a dull start rising from the opening around the 1.1585 areas testing through the 1.1600 eventually on a move through in midsession in Tokyo, the market topped around the 1.1605 areas before slowly drifting through to the grey hour, early Europeans sold the market back through to the 1.1545 levels before starting a slow rise back to the opening levels on the move to the NYK session, German, UK agreement on the tone of post Brexit agreements saw the Euro rally quickly to the 1.1640 level before holding quietly around the 1.1625 areas through to the close.
• AUD: A little choppy with the market quiet through into the Tokyo session holding around the 0.7180 opening areas, the release of a better than expected GDP number saw the Oz rise quickly through to the 0.7220 areas before finding sufficient offers to hold the market and then drop back as news of another Oz bank raising interest rates, the move into the grey hour saw the market back to the opening levels and the London session quickly seeing the interest differential between banks and RBA as something that could not be ignored and again the market quickly dipped to the 0.7150 areas dipping through into the 0.7140’s on a spike but bouncing quickly back to the 0.7160 area to start a slow move through to the NYK session pushing to the opening levels, the move through the NYK session saw a slow move through to the 0.7190 areas and the market holding in a long drawn out session ranging around that level.

Yesterday’s premiership results

AUD       AiG Performance of Service Index Aug A 52.2 | P 53.6

NZD       ANZ Commodity Price Aug A -1.10% | P -3.20% | R -3.30%

AUD       GDP Q/Q Q2 A 0.90% | C 0.80% | P 1.00% | R 1.10%

AUD       GDP Y/Y Q2 A 3.40% | C 2.80% | P 3.10%

CNY        China PMI Services Aug A 51.5 | C 52.7 | P 52.8

07:45     EUR        Italy Services PMI Aug A 52.6 | C 53.2 | P 54

EUR        France Services PMI Aug (F) A 55.4 | C 55.7 | P 55.7

EUR        Germany Services PMI Aug (F) A 55 | C 55.2 | P 55.2

EUR        Eurozone Services PMI Aug (F) A 54.4 | C 54.4 | P 54.4

GBP       Services PMI Aug A 54.3 | C 53.9 | P 53.5

EUR        Eurozone Retail Sales M/M Jul A -0.20% | C -0.10% | P 0.30%

CAD       Trade Balance (CAD) Jul A -0.1B | C -0.8B | P -0.6B | R -0.7B

CAD       Labour Productivity Q/Q Q2 A 0.70% | C 0.20% | P -0.30% | R -0.30%

USD       Trade Balance (USD) Jul A -50.1B | C -47.6B | P -46.3B | R -45.7B

CAD       BoC Rate Decision A 1.50% | C 1.50% | P 1.50%

 

 

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