Daily FX Market Commentary

Good morning,

 

LMAX Close

USDJPY 111.038 | EURUSD 1.15534 | AUDUSD 0.7105 | NZDUSD 0.65328| USDCAD 1.31669 | USDCHF 0.96933 | GBPUSD 1.29196 |

 

LMAX Ranges 5am GMT

Highs    Lows

EURUSD               1.15643 | 1.1540

USDJPY                 111.079 | 110.851

GBPUSD               1.29321 | 1.29081

AUDUSD              0.71177 | 0.71008

USDCHF               0.97006 | 0.96873

USDCAD               1.31864 | 1.31715

NZDUSD               0.65360 | 0.65129

EURGBP               0.89436 | 0.89353

EURCHF                1.12048 | 1.11954

EURJPY                 128.388 | 128.068

 

For today

• GBP: A quiet range through to the grey hour with the market opening around the 1.2920 areas and slowly rising through the 1.2930 before slipping back to push to the Friday close, limited congestion through the 1.2900 areas with stronger bids on a move through the 1.2850 areas and into the 1.2800 area, strong congestion below that level and likely to continue deep through the 1.2700 area, topside offers light through the 1.2950 level and again increasing into the 1.3000 level with strong offers above the level and into the 1.3050 area a break through the level will likely see stops appearing and the market then running into congestion continuing through to the 1.3200 level.
• JPY: Topside offers light congestion through the 111.50 with the offers then increasing on any move towards the 111.90-112.00 level a push through the level could see strong stops appearing and a quick move through to the 112.50 area where congestive offers are likely to impede any further rise, downside bids light through to the 110.50 level with some limited congestion on a dip through the level and increasing on any test to the 110.00 level with weak stops on a break through to the 109.80 areas and the market then open to a quick test to the 109.50 areas and possible yield players moving in to the market,
• EUR: As with the rest of the market that is apart from SEK Euro saw limited movement lifting slowly off the opening lows around the 1.1550 area and rising slowly through to the 1.1565 area into midsession and then slowly drifting through the balance of the session to test into the mid 1.1540’s for the move through to the grey hours, downside bids could possibly be fairly strong through to the 1.1500 level with weak stops likely to appear into the 1.1480 area and the market then open to a test through to the 1.1420-00 with strong bids into the level and congestion likely through the level. Topside offers through the 1.1600 level are likely to be light with increasing offers into the 1.1650 areas and congestion likely to increase on any test towards the 1.1680-1.1700 areas, limited stops through the level and not until a strong break through the 1.1740 level will the market see stops appearing.
• AUD: Very quiet for the Oz with the market edging a little higher through into the early part of Tokyo to test to the 0.7120 areas before drifting back to the opening levels on a move through to the grey hour, Topside offers light through the 0.7150 area with weak stops on a push through the level and limited congestion on a run to the 0.7200 area with stronger offers likely in the area, downside bids into the 71 cents level still remain with congestion through to the 0.6980 area with possible strong stops on a move through the level and strong bids then appearing into the 0.6940-60 level but the market confirming a deeper move lower.

 

Overnight News

SEK:

Sweden headed for political gridlock after inconclusive election

Moderates say alliance clearly bigger than government

Moderate say its time for the government to step down Swedish moderates leader Kristersson comments at election event

Moderates leader says PM Lofven now needs to step down

EUR:

EU preparing new instructions to help close Brexit deal FT

USD:

Boston Fed president backs quarterly rate increases WSJ

 

Today’s data

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

NZD       Manufacturing Activity Q2 A 1.80% | P 0.60% | R 0.70%

JPY         GDP Q/Q Q2 (F) A 0.70% | C 0.70% | P    0.50%

JPY         GDP Deflator Y/Y Q2 (F) A 0.10% | C 0.10% | P 0.10%

JPY         Current Account (JPY) Jul A 1.48T | C 1.56T | P 1.76T

CNY        CPI Y/Y Aug A 2.20% | C 2.10% | P 2.10%

CNY        PPI Y/Y Aug A 4.10% | C 4.10% | P 4.60%

08:30     EUR        Eurozone Sentix Investor Confidence Sep C 13.8 | P 14.7

08:30     GBP       Visible Trade Balance (GBP) Jul C -11.7B | P -11.4B

08:30     GBP       Industrial Production M/M Jul C 0.40% | P 0.40%

08:30     GBP       Industrial Production Y/Y Jul C 1.00% | P 1.10%

08:30     GBP       Manufacturing Production M/M Jul C 0.30% | P 0.40%

08:30     GBP       Manufacturing Production Y/Y Jul P 1.50%

08:30     GBP       Construction Output M/M Jul C -0.40% | P 1.40%

08:30     GBP       GDP M/M Jul C 0.20% | P 0.10%

08:30     GBP       Monthly GDP 3M/3M Change Jul C 0.60% | P 0.40%

08:30     GBP       Index of Services 3M/3M Jul C 0.50% | P 0.50%

23:50     JPY         Japan Money Stock M2+CD Y/Y Aug C 3.00% | P 3.00%

 

 

Weekend News

USD:

Trump ready to launch new round of China tariffs FT

Trump shows he’s ready to go all in against China on Tariffs

Pence rejects accusations of White House disarray

Trump tells Apple to make products in US to avoid China tariffs

Trump says he’s preparing tariffs on further $267B in Chinese imports

Wage growth in US climbs at fastest pace since 2009

Trump trade plans tempered by Cohn and Mnuchin, Woodward BBG

China trade outlook darkens as Trump threatens total tariffs

US says Syria plans Gas attack in rebel stronghold

SEK:

Early exit polls show 20% voting for far right, later revised and look to be heading for 3^rd place with no majority

Centre right alliance winning 40.1% of votes

Anti-immigration Sweden democrats winning 17.8%

KRW:

1. Korean military parade features floats and flowers and no missiles

TRY:

Erdogan warns of “lake of blood” as Putin rejects Syria deal

AUD:

Arrogant RBA admires rear vision mirror as Warwick McKibbin warns on future

NZD:

NZ economists lower forecast for growth and wages

JPY:

Kuroda says BoJ needs to keep easing for a while

 

Harry Hindsight

• GBP: A quiet move through the Asian session with Cable trading in the 1.2920-35 area with the range increasing as we moved through into the grey hour, grey hour buying saw the market rising a little to test the 1.2950 levels before holding quietly just above the 1.2935 area, a quick move higher on Brexit rumours and the market testing to the 1.2975 level and then repeating the quick move on the way towards NYK and pushing quickly to the 1.3025 levels before dropping back quietly for the mot to the NYK opening, the market did attempt another move higher but again it was quickly repressed and the market dropped back to the 1.2950 level and ranging in a 40 pip range through to the London close, London close saw the market slowly drifting off and settling back to the 1.2910 level with early Brexit chatter on European leaders starting to dictate to the Commissions then denying any such split, the run to the close was a quiet affair and the market finishing just below where it started.
• JPY: USDJPY saw a light dip from the opening after the Typhoon and Earthquake during the week, however, the test to the 110.40 levels saw the market then move back to hold around the 110.40 level to the grey hour where the market started a slow rise through to the NYK session testing to the 110.90 areas in a tight channel. NYK were quick buyers from the opening with concerns about earning numbers rising and the chance of interest rates increasing, with the USDJPY popping through the 111.00 holding the 111.10 level initially before running slowly through to post the high around the 111.25 area, London close saw strong selling through to the 110.75 areas bouncing off the level after London had disappeared and holding quietly through to the close holding around the figure level.
• EUR: Euro’s move through the Asian session holding quietly around the 1.1620 areas with minor attempts at the 1.1630 area the move into the grey hour saw the market dip initially but quickly rising off the 1.1615 lows and triggering weak stops on a test to the 1.1640 level, a slow rise through London morning to test to the 1.1650 level before early NYK sellers took advantage of the highs and the Euro quickly dipped to the 1.1600 level for the move into the NYK session and breaking the level to trigger some minor stops on a dip through to the 1.1565 area, US numbers didn’t help the Euro and the market after a couple of hours headed into the London close been sold off again and a steady move through to base around the 1.1550 level to the close.
• AUD: A slowly declining Oz through the session moving off the 72 cents level and drifting through the Asian session to the 0.7155 level before finding some support through to the grey hour, grey hour selling could only take the market through to the 0.7150 areas with minor stops triggered on a push towards the 0.7140 area before again holding through deeper into London, the market moved slowly through to the 0.7170 areas into the NYK session before early NYK sold the market back off to the 0.7125 areas again holding and ranging back through the 0.7150 level, the end of the London session saw quick selling and the market testing to the 0.7100 areas and basing along that level through to the close with only minor dips below the level.

 

Yesterday’s premiership results

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%

JPY         Leading Index CI (JUL P) A 103.50% | C 103.50% | P 104.70%

CHF        Unemployment Rate Aug A 2.60% | C 2.60% | P 2.60%

EUR        German Trade Balance (EUR) Jul A 15.8B | C 19.1B | P 19.3B

EUR        German Industrial Production M/M Jul A -1.10% | C 0.20% | P -0.90%

CHF        Foreign Currency Reserves (CHF) Aug A 731B | P 750B

GBP       Halifax House Prices M/M Aug A 0.10% | C 0.50% | P 1.40%

EUR        Eurozone GDP Q/Q Q2 (F) A 0.40% | C 0.40% | P 0.40%

CAD       Net Change in Employment Aug A -51.6K | C 5.1K | P 54.1K

CAD       Unemployment Rate Aug A 6.00% | C 5.90% | P 5.80%

USD       Change in Non-farm Payrolls Aug A 201K | C 194K | P 157K | R 147K

USD       Unemployment Rate Aug A 3.90% | C 3.90% | P 3.90%

USD       Average Hourly Earnings M/M Aug A 0.40% | C 0.30% | P 0.30%

CAD       Ivey PMI Aug A 61.9 | C 62.3 | P 61.8

 

Stay lucky

Andy

 

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