Daily FX Market Commentry

Good morning,

 

LMAX Close

USDJPY 110.74 | EURUSD 1.16229 | AUDUSD 0.71994 | NZDUSD 0.65983 | USDCAD 1.31431 | USDCHF 0.9652 | GBPUSD 1.29294 |

 

LMAX Highs and Lows 5.15am GMT

                                High | Low

EURUSD               1.16295 | 1.16143

USDJPY                 110.690 | 110.385

GBPUSD               1.29337 | 1.29192

USDCHF               0.96564 | 0.96495

AUDUSD              0.72010 | 0.71548

USDCAD               1.31662 | 1.31131

NZDUSD               0.65907 | 0.65654

EURCHF                1.12244 | 1.1211

EURGBP               0.89931 | 0.89878

EURJPY                 128.667 | 128.237

 

For today

• GBP: A very quiet session overall with the Cable opening around the 1.2925 areas and dipping to the 1.2920 levels and basing along that level through to the grey hour with a final push to above the 1.2930 areas in late trading, offers into the 1.2950 areas are likely to see some weak stops appearing before the market opens for a fresh test to the 1.3000 level with congestion through the level and likely to continue through to stronger offers on any test to the 1.3050 area, however, even if the market can move through the level it is likely to find stronger offers appearing on any attempt to the 1.3100 level. downside bids light back through the 1.2900 areas however weak stops are likely to be absent until a test through the 1.2850 areas where better bids are likely to be standing just in front a push through though will likely see strong selling again appearing through to the 1.2800 area where the market is likely to find continual congestion all the way through to the 1.2700 area.
• JPY: The USDJPY opened just above the 110.70 level before moving into the Tokyo session and dipping through to the 110.40 level but finally recovering a little and holding quietly above the 110.50 for the move into the grey hour, Congestion in the current levels with those bids likely to extend through to the 110.40 areas with some weak stops in the mix, a push through the level will likely see limited bids through to the 110.20-00 areas where some stronger bids may appear, a test through to the 109.80 areas will likely see the bids limited and stops appearing through the level with the market then open to the 108.60-40 areas with stronger bids through that level. topside offers light through to the 111.00 area with weak stops on a push through the 111.20 however, stops are likely to soaked up by congestive offers on any move higher with those offers increasing as the market moves through the 111.50 area with resistance likely to be particularly strong through the 111.80-112.00 area.
• EUR: A narrow range around the 1.1620 level with the market dipping to the 1.1615 on several occasions but unable to push to far beyond the 1.1625 level with the move into the Tokyo session seeing some light buying taking it too its highs. Topside offers light through the 1.1640-60 areas with congestion then increasing on any move towards the 1.1680-1.1720 level, a push through the 1.1740 level could see some stronger stops appearing and the market opening for a fresh test of the July highs, downside bids into the 1.1600 areas with weak stops on a move through the 1.1580 area however, stronger bids are likely to be seen on any dip through to the 1.1540-60 areas and weak stops through the level opening the chance of a strong test of the 1.1500 level with limited congestion in the area to slow a deeper move.
• AUD: The Oz was the mover for the day with the market opening around the 72 cents level and the move into the Tokyo session seeing AUDJPY selling dominating the early part of the day, having dropped to the 0.7180 levels the market based along the line for several hours before being able to dip through the level to test into the 0.7150 areas before holding again for the move into the grey hour, Downside bids into the 0.7150-40 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

USD/NAFTA:

Trump predicts US will make fair trade deal with Canada

Trump: He believes Canada will end up part of a new NAFTA

JPY:

Earthquake and typhoon expose Japan’s disaster risks

CAD/NAFTA:

Canada govt. official said unlikely to reach deal this week, anonymous official (of course)

USD:

Trump seemed bothered with Japan trade ties in phone call WSJ

Trump hints to WSJ trade fight with Japan could be next CNBC

USD/CNY:

Trump: US will get great deal with China for farmers

CNY/RUB:

Pres. Xi and Russia’s Putin to enhance strategic coordination

Xi and Putin to set direction for bilateral relation to next phase Trade the news

NZD:

NZ’s Robertson names three new members to RBNZ

 

Today’s data

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

AUD       AiG Performance of Construction Index Aug A 51.8 | P 52

JPY         Overall Household Spending Y/Y Jul A 0.10% | C -0.80% | P -1.20%

JPY         Labour Cash Earnings Y/Y Jul A 1.50% | C 2.40% | P 3.60% | R 3.30%

AUD       Home Loans M/M Jul A 0.40% | C -0.10% | P -1.10% | R -0.80%

05:00     JPY         Leading Index CI (JUL P) C 103.50% | P 104.70%

05:45     CHF        Unemployment Rate Aug C 2.60% | P 2.60%

06:00     EUR        German Trade Balance (EUR) Jul C 19.1B | P 19.3B

06:00     EUR        German Industrial Production M/M Jul C 0.20% | P -0.90%

07:00     CHF        Foreign Currency Reserves (CHF) Aug P 750B

07:30     GBP       Halifax House Prices M/M Aug C 0.50% | P 1.40%

09:00     EUR        Eurozone GDP Q/Q Q2 (F) C 0.40% | P 0.40%

12:30     CAD       Net Change in Employment Aug C 5.1K | P 54.1K

12:30     CAD       Unemployment Rate Aug C 5.90% | P 5.80%

12:30     USD       Change in Non-farm Payrolls Aug C 194K | P 157K

12:30     USD       Unemployment Rate Aug C 3.90% | P 3.90%

12:30     USD       Average Hourly Earnings M/M Aug C 0.30% | P 0.30%

14:00     CAD       Ivey PMI Aug C 62.3 | P 61.8

 

Harry Hindsight

• GBP: Opening just above the 1.2900 market the market struggled through into the Tokyo session with very little direction before moving up above the 1.2920 areas, the market ranged for a good proportion of the Tokyo session above the level but was unable to push to the 1.2930 areas, Tokyo lunch time saw the market dropping back quickly to test the opening levels and then drift into the grey hour pushing through to the low of the day just beyond the 1.2900 level, London when it officially opened saw the market starting a steady drive pushing with difficulty through the 1.2930 area and then ranging around the 1.2920-40 level through to the NYK session, with the market focusing more now on less rumour and demands and more on the fact that no deal is the most likely scenario with no ties to the EU meaning the UK can just get on with its own destiny to some extent the market saw early buyers move through to test the 1.2960 level and then chopping around through to the close with early ranges wide and narrowing down to settle back to the 1.2930 areas.
• JPY: One disaster after another has seen some JPY buying moving through the market however, USDJPY has held up quiet well considering and the opening saw the market moving quietly into the Tokyo session before slipping steadily lower as the news of the Earthquake impacted the market, falling from the opening just above the 111.50 level the market slipped through to the 111.15 areas before recovering in slow trading through to the London session holding quietly through to the NYK session ranging in a tight range through the 111.40-30 level, NYK were sellers from the opening but met support on the early lows and again through the 111.00 level with the market moving low in steps through the 110.80 level until finally running out of steam and moving off the 110.70 area, and looking for a short period to reclaim much of the lost ground however, Trumps comments to WSJ saw the market drop quickly through to the 110.50 level before the close and while it recovered a little was now open to the downside.
• EUR: Opening around the 1.1635 areas the market saw a quick climb through to the 1.1660 areas on the earthquake in Japan before holding quietly through to late in the session, the market eventually moving into the grey hour holding the opening level, early Europeans sold the market back to the early part of London and ranging around the 1.1620 areas with brief flirtations to the 1.1640 levels with German factory orders showing a further dip below expectations, the market continued to base off the 1.1615-20 areas through to the NYK session with the market moving into the fresh session pushing quickly above the 1.1650 levels however, with Trump voicing his opinions the Euro market saw strong selling into the close of London and making the lows around the 1.1605 areas before rising a little for the move into the close holding just above the 1.1620 level.
• AUD: Pushing into the Tokyo session off the opening 0.7190 areas and testing to the 0.7210 levels on a better trade balance and then ranging around the 0.7200 level deep into the session, the market made a second attempt to test the 0.7220 level before dropping off quickly as news that ANZ and CBA raised variable interest rates to home loans borrowers, the market tested to the 0.7180 level and then slowly moved through into the grey hour testing to the 0.7170 levels before holding quietly into the London session, early morning in London saw the Oz recovering a little and moving back through to the opening levels to hold quietly into the NYK session, and another couple of attempts to the topside before settling into a quiet range around the opening levels to the close.

 

Yesterday’s premiership results

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

CHF        GDP Q/Q Q2 A 0.70% | C 0.50% | P 0.60% | R 1.00%

EUR        German Factory Orders M/M Jul A -0.90% | C 1.60% | P -4.00% | R -3.90%

USD       Challenger Job Cuts Y/Y Aug A 13.70% | P -4.20%

USD       ADP Employment Change Aug A 163K | C 188K | P 219K | R 217K

CAD       Building Permits M/M Jul A -0.10% | C 0.70% | P -2.30% | R -1.30%

USD       Initial Jobless Claims (SEP 1) A 203K | C 214K | P 213K

USD       Nonfarm Productivity Q2 (F) A 2.90% | C 2.90% | P 2.90%

USD       Unit Labour Costs Q2 (F) A -1.00% | C -0.90% | P -0.90%

USD       Services PMI Aug (F) A 54.8 | C 55.2 | P 55.2

USD       ISM Non-Manufacturing/Services Composite Aug A 58.5 | C 56.9 | P 55.7

USD       Factory Orders Jul A -0.80%| C -0.50% | P 0.70%

USD       Natural Gas Storage A 63B | C 60B | P 70B

USD       Crude Oil Inventories A -4.3M | C -2.2M | P -2.6M

 

 

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