Daily FX Market Commentary

Good morning,

 

LMAX Close

USDJPY 112.571 | EURUSD 1.1749 | AUDUSD 0.72892 | NZDUSD 0.66827 | USDCAD 1.29147 | USDCHF 0.95846 | GBPUSD 1.30813 |

 

LMAX Ranges 5am GMT

Highs    Lows

EURUSD               1.17529 | 1.17374

USDJPY                 112.636 | 112.498

GBPUSD               1.30885 | 1.3071

AUDUSD              0.72818 | 0.72652

USDCHF               0.95975 | 0.95819

USDCAD               1.29339 | 1.29119

NZDUSD               0.66890 | 0.66685

EURGBP               0.89872 | 0.89757

EURCHF                1.12695 | 1.12555

EURJPY                 132.307 | 132.111

 

For today

• GBP: A very quiet session through the Asian session trading quietly around the 1.3080 areas with an early dip in Tokyo to the 1.3070 to make the low for the day, the market was unable to push beyond the 1.3090 level, bids into the 1.3050 level lightly congested through to the 1.3000 areas and possibly some stronger bids into the level however, weak stops through the level are likely to open a quick move to the possibly stronger 1.2950 area and more Brexit and political manoeuvrings in the UK, topside offers light through the 1.3100 level and likely to see only limited congestion on any test back through to the 1.3200 levels.
• JPY: Opening a little weaker the market filled the gap on the charts from 112.40 areas testing through to the 112.55 before Tokyo moved in, a light dip and then a steady rise through the 112.60 level saw the market holding around the 112.60 level through to the grey hour, topside offers through the 112.90 and likely to continue through to the 113.25 areas before weak stops appear and the market opens to light congestion through to the 113.90 areas before stronger offers through to the 114.00 area and the end of last years range. Downside bids light through to the 111.50 area and then some limited congestion through to the 111.00 areas, a push through the level will likely see a mixture of weak stops and light congestion through to the 110.50 area and slightly stronger bids then too the 110.00 area.
• AUD: The Oz opened weaker around the 0.7270 areas and then ran through to the 0.7280 area and unable to regain the 0.7290 area from Friday, holding the area for a short period the market slipped slowly back to the lows around the 0.7265 area and rising quickly into the grey hour, topside offers through the 73 cents level are likely to continue through to the 0.7320 level before weak stops stronger congestion appears into the 0.7340-60 area and stronger offers thereafter, downside bids light through to the 72 cents area where stronger bids are likely to increase, with any break through likely to see increasing bids as the market moves through the 71 cent area.
• EUR: Very narrow range through the session with the market dipping from the opening to the 1.1740 area and ranging quietly through the session, the move to the grey hours saw the market pushing into the grey hour moving up from the lows. Topside offers into the 1.1800 areas with weak stops likely mixed with offers from the 1.1820 level through to stronger 1.1840-70 offers. Downside bids light through to the 1.1700 area with congestion in that area and likely to continue through to the 1.1680 area where stronger stops are likely and the market opening to the 1.1620 area.

 

Overnight News

CNY:

China beige book says manufacturers stressed even before tariffs

Beijings LNG tariff to shift energy flows as buyers and sellers seek options

JPY:

BoJ fights a war of attrition to reach inflation goal Nikkei

USD:

Should the US try to economically disengage from China Barrons

HKD:

Pro Hong Kong independence party officially banned in unprecedented move

Fitch:

Cuts world growth forecast on US-China trade battle

 

Today’s data

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

08:00     EUR        German IFO Business Climate Sep C 103 | P 103.8

08:00     EUR        German IFO Expectations Sep P 101.2

08:00     EUR        German IFO Current Assessment Sep P 106.4

10:00     GBP       CBI Trends Total Orders Sep P 7

12:30     CAD       Wholesale Trade Sales M/M Jul C 0.40% | P -0.80%

 

Weekend News

GBP:

May’s inner circle begins planning for snap election Times

Majority of cabinet now supports move towards Canada style Brexit deal Tel

May tears into EU and demands respect, says Brexit at impasse BBC

USD:

US to set up agency to counter China in developing world FT

Divergences widening in markets BIS

Low rates, bloated C.Bank balance sheets mean little left to help markets in case of relapse BIS

USD/CNY/AUD:

US vs. China is here and Australia is unbelievably exposed BBG

Markets should brace for lengthy and eventful convalescence, as central bank stimulus removed BIS

USD/CNY:

Tariff deadline nears as US-China trade dialogue breaks down BBG

China is said to cancel trade talks as new US tariffs loom BBG

EUR:

Leaked recording exposes Italian governments bitter budget row Tel

ECB should normalize monetary policy earlier Nowtny

Italy’s Salvini pushes back on Central bank caution plea

German coalition has reached agreement on domestic intelligence chief Maassen Coalition source

Party leaders in coalition have agreed domestic intelligence chief will work in interior ministry Horst

Horst: German interior minister says he will be responsible for European and international affairs

Horst: Maassen will not get pay rise in new role

German SPD leader Nahles: Coalition has reached agreement on domestic intelligence chief

Nahles: now edxpects the coalition partners to focus on implementing the coalition treaty

Deutsche bank Commmerzbank Union is said

 

Harry Hindsight

• GBP: The move through the Asian session holding in a tight range and only once the market moved into the London session did the reaction to the EU rejection of May’s plan undermine the GBP, opening around the 1.3270 level the market held tightly around that level, the move into the grey hour saw the market drifting lower and the London session continued through to the 1.3220 areas meeting some light support before dipping slowly again after a few hours, the move to the NYK session holding just below the 1.3200 level and quickly dropped as the first rumours of the rejection hit taking the market to 1.3150 and then dropping quickly through the 1.3100 levels before starting to see some support moving in and the market drifted to the lows just below the 1.3060 level before stabilizing and rising to test the 1.3100 with some short term take profits moving in, the run to the close saw the market moving around the 1.3080 areas and holding through to the close.
• JPY: USDJPY opened quietly and moved into the Tokyo session testing to the lows for the day and holding the 112.45 level and slowly rising through to the 112.55 areas and holding for a couple of hours before breaking higher through to the London session pressuring the 112.80 area, London took it too the highs but was unable to push through the 112.90 area dipping from the high saw the market quickly dip through to the 112.70 area and a long push through into the NYK session holding around those levels, dipping eventually to the 112.50 level before recovering and holding through to the close in London around the 112.60, the run to the close saw the market in the 112.50-60 areas in slow training.
• AUD: Reasonably tight range overall given the market movement in GBP in particular, Asian trading saw a tight range around the opening 0.7290 level and struggled to the topside until the grey hour with a light push through 0.7300 before dropping back through to the 0.7290 level again and trading into the London session dipping away in late London to 0.7280 level and eventually pushing through into the fresh NYK session making the days lows into the low 0.7260’s before rebounding a little and then holding for the run to the close around the 0.7280 areas and a slight recovery to close around the opening levels.
• EUR: Euro was quiet through the Asian session rising a little from the 1.1780 areas to push through to the high just off 1.1790 and barely able to press below the 1.1780 area, the move into the London session saw the early buyers move in and the market testing lightly through the 1.1800 areas before dropping quickly back to the 1.1770 areas ranging a little wider through to midmorning before the market started dipping lower to press through into the NYK session setting the low for the day around the 1.1735 areas after the rejection of the UK Brexit plan, the move to the London close saw the market again testing the lows before settling into a steady rise to the close.

 

Yesterday’s premiership results

JPY         National CPI Core Y/Y Aug A 0.90% | C 0.90% | P 0.80%

JPY         PMI Manufacturing Sep (P) A 52.9 | C 53.1 | P 52.5

JPY         All Industry Activity Index M/M Jul A 0.00% | C 0.20% | P -0.80% | R -0.90%

EUR        French GDP Q/Q Q2 (F) A 0.20% | C 0.20% | P 0.20%

EUR        France Manufacturing PMI Sep (P) A 52.5 | C 53.3 | P 53.5

EUR        France Services PMI Sep (P) A 54.3 | C 55.4 | P 55.4

EUR        Germany Manufacturing PMI Sep (P) A 53.7 | C 55.8 | P 55.9

EUR        Germany Services PMI Sep (P) A 56.5 | C 55.1 | P 55

EUR        Eurozone Manufacturing PMI Sep (P) A 53.3 | C 54.4 | P 54.4

EUR        Eurozone Services PMI Sep (P) A 54.7 | C 54.5 | P 54.5

GBP       Public Sector Net Borrowing (GBP) Aug A 5.9B | C 3.0B | P -2.9B | R -3.9B

CAD       Retail Sales M/M Jul A 0.30% | C 0.30% | P -0.20% | R -0.10%

CAD       Retail Sales Ex Auto M/M Jul A 0.90% | C 0.60% | P -0.10%

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

CAD       CPI Y/Y Aug A 2.80% | C 2.80% | P 3.00%

CAD       CPI Core Common Y/Y Aug A 2.00% | P 1.90%

CAD       CPI Core Median Y/Y Aug A 2.10% | P 2.00%

CAD       CPI Core Trim Y/Y Aug A 2.20% | P 2.10%

USD       US Manufacturing PMI Sep (P) A 55.6 | P 55.1 | R 54.7

USD       US Services PMI Sep (P) A 52.9 | C 54.9 | P 54.8

 

Stay lucky

Andy

 

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