Daily FX Market Commentary

Good morning,

 

LMAX Close

USDJPY 111.927 | EURUSD 1.16901 | AUDUSD 0.71955 | NZDUSD 0.65723 | USDCAD 1.29982 | USDCHF 0.96548 | GBPUSD 1.3108 |

 

LMAX Highs and Lows 5.15am GMT

                                High | Low

EURUSD               1.16976 | 1.16877

USDJPY                 112.078 | 111.788

GBPUSD               1.31226 | 1.31069

USDCHF               0.96640 | 0.6467

AUDUSD              0.71963 | 0.71772

USDCAD               1.30058 | 1.29911

NZDUSD               0.65899 | 0.65734

EURCHF                1.12949 | 1.1281

EURGBP               0.89204 | 0.89107

EURJPY                 131.038 | 130.718

 

For today

• GBP: Very quiet for a Friday with the market again testing above the 1.3120 levels but with very little impact and struggling through to the grey areas holding in a tight 1.3110-20 area on light volumes, Topside offers congested through to the 1.3180-1.3200 level where better offers are suspected, a push through the 1.3210 level could see stronger stops appearing and the market opening to the 1.3250 area with light congestive orders increasing in size to the level, downside bids light back through the 1.3100 with stronger bids likely to appear into the 1.3050 area however, one would suspect that those bids are still forming and uncertain and the market could quickly find itself back to the 1.3000 before finding some stronger bids, a break through the 1.3000 level will likely see weak stops appearing and the market running through to the 1.2950 areas before bids reappear and congestion from there into the 1.2900.
• JPY: From the opening around the 111.90 areas the early buyers quickly appeared into the Tokyo session and a steady grind up through the 112.00 level however, the market then struggled with offers into the 112.10 area and eventually dropped back through to the 111.80 area on the failure of the rally to push further, offers 112.10-20 areas may see weak stops and the market opening to a quick move through to the 112.50 level where congestion is likely to increase on any further move towards the 113.00 areas and strong offers in that area, downside bids light through to the 111.50 area with congestive bids likely through to the stronger 111.00 levels with stops likely on a push through the level however, the congestion is likely to continue and yield buying possibly moving in again through to the 110.50 areas.
• AUD: A very light session for the Oz with the market moving through to test lightly through the 0.7180 level before recovering back to the 0.7190-95 opening levels for the move into the grey hour, topside offers through to the 0.7260 areas before the market sees any weakness however it is likely to be short lived with 0.7280 likely to see stronger offers beginning through to the 0.7310 areas, weak stops possible through the 0.7320 area however, they are likely to be light with stronger congestion likely to be around the 0.7340-60 levels and increasing from there to the 0.7380-0.7400 level, downside bids light through to the 0.7100 areas with possibly strong bids willing to step in on any dip through the level with congestion appearing on any run through the 0.7070 areas, even through the level the chances are buyers will be willing to fade the market picking up longs on any further dips.
• EUR: A very light session with the market struggling for momentum in any direction, with the market so close to the 1.1700 level the Euro has held in a very tight 1.1690-95 range for the most part with no real attempt to push the figure level, topside offers into the 1.1700 area, with congestive offers likely to continue through to the 1.1740 areas what stops there are, are likely to be just behind the level however, the congestion from there is likely to increase on any move to push through to the July highs and increasing into the 1.1800 area. Downside bids light through to the 1.1640 area with congestion then appearing for any move to the 1.1600 level, possible weak stops on a move through but one suspects that the congestion is likely to continue through the level and 1.1540 and the months lows are likely to see bids appearing.

 

Overnight News

USD/CNY:

Trump swaggers before China talks, saying he feels no pressure

GBP:

BoE chief sends chilling no deal warning to UK government

Carney is said to warn bad Brexit may be as bad as 2008 Guardian

AUD:

SMSF (self-managed super funds) property leverage a ticking time bomb ABC

JPY:

More Japanese funds buying foreign corporate bonds State street

BoJ is said to have chosen forward guidance for global markets BBG

TRY:

Turkey takes bitter medicine as emerging market crisis spreads TEL

Germany strikes antimigrant deal with Italy as new government crisis brews WSJ

USD:

FED member sees more interest rates hikes AP

EUR:

Draghi ups warnings on high debt amid Italian fiscal tensions

 

Today’s data

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

NZD       BusinessNZ Manufacturing PMI Aug A 52 | P 51.2

CNY        Retail Sales Y/Y Aug A 9.00% | C 8.80% | P 8.80%

CNY        Industrial Production Y/Y Aug A 6.10% | C 6.20% | P 6.00%

CNY        Fixed Assets Ex Rural YTD Y/Y Aug A 5.30% | C 5.70% | P 5.50%

JPY         Industrial Production M/M Jul (F) A -0.20% | C -0.10% | P -0.10%

09:00     EUR        Eurozone Trade Balance (EUR) Jul C 16.3B | P 16.7B

12:30     USD       Retail Sales Advance M/M Aug C 0.40% | P 0.50%

12:30     USD       Retail Sales Ex Auto M/M Aug C 0.50% | P 0.60%

12:30     USD       Import Price Index M/M Aug C -0.20% | P 0.00%

13:15     USD       Industrial Production M/M Aug C 0.30% | P 0.10%

13:15     USD       Capacity Utilization Aug C 78.40% | P 78.10%

14:00     USD       Business Inventories Jul C 0.50% | P 0.10%

14:00     USD       U. of Mich. Sentiment Sep (P) C 96.9 | P 96.2

 

Harry Hindsight

• GBP: A quiet Asian session saw the Cable drifting through the session moving lower from the opening to test the 1.3040 levels before holding quietly around the 1.3050 levels and through into the grey hour, the market saw early selling with the talk of PM May under imminent threat however the market started a slow steady rise through into the London session pushing back above the opening levels to test to the 1.3070 level, some movement around the BoE announcement however, with no rise and vote seeing no descension the move into the NYK session quickly moved off the lows and moved quickly higher as Brexit chatter again kicked in with UK saying one thing and the EU saying another however, to some extent the talking is almost to an end with the likelihood of no deal being the outcome and the EU having pushed to hard walking away with nothing and the consequences for the future are what the UK makes of it. NYK took the market quickly to the highs triggering some weak stops on the move through the 1.3100 level to test to the 1.3125 areas before running out of steam and into congestive offers, the market was unable to challenge the highs however kept in contact with the area with a long run to the close holding around the 1.3110 levels.
• JPY: USDJPY eased into the Tokyo session quietly and lifted from the Tokyo fix to test to the 111.40 levels before slowly rising through to the grey hours testing the 111.50 area, London was little different overall with the range holding for the most part around the 111.50 level and testing to the 111.65 areas with some light GBPJPY buying before dropping off a little into the NYK session and starting another run higher from the 111.40 levels, pushing through the 111.85 areas the market struggled with the area testing late into the session to the 112.00 area and finishing just off the level.
• AUD: A quiet slowly rising market for the Oz with early buying around the numbers to test through to the 72 cents level before drifting through into London and never really slipping back to the opening level around 0.7175, London held the range quietly around the 0.7185 areas before buying into the NYK session with a mixed view of the CPI numbers seeing some USD selling move through before reversing the highs around the 0.7230 level and back to hold quietly through to the close around the 0.7190 areas.
• EUR: Euro’s managed a slow move higher through the Asian session pushing from the 1.1625 area and testing light through to the 1.1640 level into the midsession of the Tokyo session, however the move through to the grey hour saw the market drifting and the push into early Europe saw the market dropping back to the 1.1615 areas and finally making the 1.1610 lows in early London, the move through to the NYK and US numbers was quiet and once the numbers were released the Euro quickly moved higher to test quickly to the 1.1700 area before finding strong offers holding the level, and although the market did dip away on the failure slowly regained its composure to range quietly around the 1.1690 areas to the close.

 

Yesterday’s premiership results

GBP       RICS House Price Balance Aug A 2% | C 2% | P 4%

JPY         Domestic CGPI Y/Y Aug A 3.00% | C 3.10% | P 3.10% | R 3.00%

JPY         Machine Orders M/M Jul A 11.00% | C 5.80% | P -8.80%

AUD       Consumer Inflation Expectation Sep A 4.00% | P 4.00%

AUD       Employment Change Aug A 44.0K | C 18.4K | P -3.9K | R -4.3K

AUD       Unemployment Rate Aug A 5.30% | C 5.30% | P 5.30%

EUR        German CPI M/M Aug (F) A 0.10% | C 0.10% | P 0.10%

EUR        German CPI Y/Y Aug (F) A 2.00% | C 2.00% | P 2.00%

CHF        Producer & Import Prices M/M Aug A 0.00% | C 0.10% | P 0.10%

CHF        Producer & Import Prices Y/Y Aug A 3.40% | C 3.40% | P 3.60%

GBP       BoE Bank Rate A 0.75% | C 0.75% | P 0.75%

GBP       BoE Asset Purchase Target Sep A 435B | C 435B | P 435B

GBP       MPC Official Bank Rate Votes A 00—9 | C 00—9 | P 009

GBP       MPC Asset Purchase Facility Votes A 00—9 | C 00—9 | P 009

EUR        ECB Rate Decision A 0.00% | C 0.00% | P 0.00%

EUR        ECB Press Conference

CAD       New Housing Price Index M/M Jul A 0.10% | C 0.10% | P 0.10%

USD       CPI M/M Aug A 0.20% | C 0.10% | P 0.20%

USD       CPI Y/Y Aug A 2.70% | C 2.70% | P 2.90%

USD       CPI Core M/M Aug A 0.10% | C 0.20% | P 0.20%

USD       CPI Core Y/Y Aug A 2.20% | C 2.40% | P 2.40%

USD       Initial Jobless Claims (SEP 8) A 204K | C 210K | P 203K | R 205K

USD       Natural Gas Storage A 69B | C 65B | P 63B

USD       Monthly Budget Statement Aug A -214.1B | C -183.0B | P -76.9B

 

 

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