Daily FX Market Commentary

Good morning,

 

LMAX Close

USDJPY 112.965 | EURUSD 1.17667 | AUDUSD 0.72498 | NZDUSD 0.66505 | USDCAD 1.29529 | USDCHF 0.96505 | GBPUSD 1.31819 |

 

LMAX Highs and Lows 5.15am GMT

                                High | Low

EURUSD               1.17725 | 1.17559

USDJPY                 112.875 | 113.029

GBPUSD               1.31916 | 1.31712

USDCHF               0.96594 | 0.96424

AUDUSD              0.72834 | 0.72459

USDCAD               1.29632 | 1.29448

NZDUSD               0.66876 | 0.66355

EURCHF                1.13578 | 1.13443

EURGBP               0.89357 | 0.89245

EURJPY                 132.972 | 132.748

 

For today

• GBP: A very quiet day again as you would expect for a FOMC day, opening around the 1.3180 level the market drifted to make the lows just above the 1.3170 level and then slowly rose through to the opening areas again for the move into the grey hour, Topside offers light through the 1.3200 areas with weak stops likely just beyond to open up the market to light congestion through to the stronger 1.3300 areas, with the highs from July likely to find some resistance through to those levels, downside bids light through to the 1.3100 area where congestion is likely to appear with the market likely to struggle on a move through the level to the 1.3060 area, any break of the 1.3050 area is likely to see weak stops appearing and a quick run towards the 1.3000 area and further stronger bids.
• JPY: Early buying through into the Tokyo session pushing from the opening around the 112.95 areas and testing too the 113.00 area however, although there was a little spike with weak stops triggered the market drifted back through to the 112.90 level to hold in a tight range through to the grey hour, topside offers into the 113.00 remain but a fairly limited with congestion likely to continue through the level and the market not really opening until through the 113.20-25 area and possible weak stops opening the market to the 113.90 areas and strong offers expected, downside bids light through the sentimental levels with the 111.80 areas likely to hold some stops and the market then opening up a little with limited congestion on a move back to the 111.20-00 areas.
• AUD: A quiet opening then some strong AUDJPY buying into the Tokyo session, rising from the 0.7250 areas to move quickly above the 0.7270 area, the market continued rising to test through to the 0.7280 areas slowly before again running into offers and the market slipping slowly lower to rest around the 0.7270 areas to the grey hour, downside bids light through to the 72 cents level with some congestion around the level and continuing through to the 0.7140 levels likely to provide some stronger bids in the area, topside offers light through to the 73 cents level with stronger offers likely in the area and some limited congestion through the level with stronger offers possibly into 0.7360 areas before weak stops appear.
• EUR: For the most part the market remained in a tight range around the 1.1760-70 areas with one test below the 1.1760 level before returning through to the opening level for the move into the grey hour, limited bids through to the 1.1700 level with some congestion in the area and the market seeing congestion from there through deep into the 1.1600 handle with limited stops. Topside offers through the 1.1800 level with possible weak stops on a push through the 1.1820 area and increasing offers from the 1.1840-60 level with those offers likely to lead into some stronger congestion through to 1.1900.

 

Overnight News

USD:

US all but certain to miss weekend deadline to include Canada in three-way NAFTA deal

Labour measure in US consumer confidence shows optimism

Trump calls China trade imbalance not acceptable in UN

Lighthizer says US won’t wait for Canada on new NAFTA pact

EUR:

Beginning of the end for Angela Merkel as Chancellor defeated in party rebellion

Praet plays down Draghi’s inflation comments, Euro whipsaws

France’s Le Maire (FinMin) slams idea of a positive Brexit deal for UK

5 Star threatens to block Italy budget if no income plan Sky

TRY:

Turkish banks starved of USD turn to savers for cash

IRR/USD:

Bolton warns of terrible consequences for those doing business with Iran

Iran’s Rouhani: Unlawful US sanctions amount to terrorism

CAD:

NAFTA blowup could sink the loonie by 10% BBG

GBP:

UK’s May prefers no deal to the Brexit vision of Rebel Tories

SEK:

Riksbank’s Jansson: Outlook not done deal, depends on inflation

 

Today’s data

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

NZD       Trade Balance (NZD) Aug A -1484M | C -930M | P -143M | R -196M

NZD       ANZ Business Confidence Sep A -383 | P -50.3

08:30     GBP       BBA Mortgage Approvals Aug C 39.7K | P 39.6K

10:00     GBP       CBI Reported Sales Sep C 18 | P 29

14:00     USD       New Home Sales Aug C 630K | P 627K

14:30     USD       Crude Oil Inventories P -2.1M

18:00     USD       FOMC Rate Decision (Upper Bound) C 2.25% | P 2.00%

18:00     USD       FOMC Rate Decision (Lower Bound) C 2.00% | P 1.75%

18:30     USD       FOMC Press Conference

21:00     NZD       RBNZ Official Cash Rate C 1.75% | P 1.75%

 

Harry Hindsight

• GBP: Opening around the 1.3120 level the market eased through into the Tokyo session doing very little and holding tightly around the opening level the move into midsession saw the market drifting a little and moving down to the 1.3105 areas but holding through to the grey hour before rising in early European trading to the 1.3125 areas, Early London dropped the market down through the 1.3100 level but it was short lived and made a quick move back through early morning pushing the 1.3150 level and gradually building a reasonably tight range around the level before moving into the NYK session pushing the 1.3170 area, the market struggled with the area for several hours before lifting late in the session to test towards the 1.3200 level before closing just above the 1.3175 area.
• JPY: Opening slightly lower the market moved from the 112.75 area to push back into the gap, the move into the Tokyo session limited movement around the BoJ minutes and the market lifted eventually moving quickly through the 112.95 level and the high for the day, the market dropped back through to the 112.90 levels and held in a 10 pip range through into the grey hour before again making another move towards the highs again the market couldn’t push through the 113.00 level and the move through to the NYK session saw the market slowly drifting through to the lows again, NYK were slow buyers and the market moved higher steadily to test the 112.98 level to match the early highs and closing just off the highs.
• AUD: Limited range for the Oz with the market opening just above the 0.7250 areas and ranging around that level through the day, early Tokyo saw the market rising a little to push through the 0.7260 areas before slowly slipping from those highs for a move through to below the 0.7240 areas, a quiet move through to the grey hour holding the lows and rising steadily to the opening levels on the move into London, London saw a quick move to the lows before slowly rising again and testing through to the highs for the second time and drifting back to the opening levels for the long run to the close.
• EUR: Some sprightly movements during the day but overall reasonably quiet. Initially running from the opening to test towards the 1.1760 areas in early Tokyo before dropping quickly back to set the lows just above the 1.1730 area, a slow push through to the grey hour and the opening levels again, early buying saw the market pushing through the 1.1760 area before drifting a little and then renewing the push through to 1.1770 area, however, Brexit, Merkel losing a vote saw the Euro back through to the lows quickly and then struggling back to the 1.1760 areas for the move into the NYK session, NYK were quick buyers taking the Euro through to the 1.1790 level and several hours of testing the area for a push through to the 1.1800 area however, the market eventually gave up on the move and it slipped slowly back to hold in the 1.1765-70 area for a long run to the close.

 

Yesterday’s premiership results

JPY         BOJ Minutes

JPY         Corporate Service Price Y/Y Aug A 1.30% | C 1.10% | P 1.10%

USD       House Price Index M/M Jul A 0.20% | C 0.20% | P 0.20% | R 0.30%

USD       S&P/Case-Shiller Composite-20 Y/Y Jul A 5.90% | C 6.20% | P 6.30% | R 6.40%

USD       Consumer Confidence Index Sep A 138.4 | C 130.5 | P 133.4

 

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