Daily FX Market Commentary

Good morning,

 

LMAX Close

USDJPY 112.726 | EURUSD 1.17401 | AUDUSD 0.72573 | NZDUSD 0.66674 | USDCAD 1.30203 | USDCHF 0.96596 | GBPUSD 1.31676 |

 

LMAX Highs and Lows 5.15am GMT

                                High | Low

EURUSD               1.17571 | 1.17111

USDJPY                 112.902 | 112.629

GBPUSD               1.31888 | 131328

USDCHF               0.96674 | 0.9649

AUDUSD              0.72681 | 0.72438

USDCAD               1.30468 | 1.30074

NZDUSD               0.66768 | 0.66426

EURCHF                1.13502 | 1.13358

EURGBP               0.89367 | 0.89095

EURJPY                 132.678 | 132.096

 

For today

• GBP: Cable saw early buyers from the opening taking the market through to the 1.3180 areas before dropping quickly back on the news of diminishing support for no deal exit testing through to the low 1.3140 area before recovering a little into the 1.3150 for the move into the grey hour, Topside offers light through the 1.3200 areas with weak stops likely to be cleared out and the market open to light congestion through to the stronger 1.3300 areas, with the highs from July likely to find some resistance through to those levels to the 1.3350 area, 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: USDJPY managed a rise through early trading in Tokyo taking the market off the 112.65 lows and pushing through to the 112.90 before running out of steam and slowly drifting back through to the lows again, the move into the grey hour saw the market rising through the 112.70’s but a very quiet session overall. , 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 very slow day for the Oz with most of the news in the NZD, a quiet range around the 0.7260 areas with a light dip through to the 0.7245 areas before rising back and making one light attempt at the 0.7270 areas before holding the opening levels through 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: Limited range just for a change with the market opening around the 1.1742 area and rising slowly through to the 1.1755 areas before drifting back to make the lows and returning to the 1.1750 areas, 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

NZD:

NZ posts first negative read on farm confidence since 2016

NZ to go ahead with international visitor levy

RBNZ: To keep rates at expansionary level for considerable period

RBNZ: Early signs of core inflation rising

RBNZ: Inflation to move towards 2% over time

RBNZ: Lower NZD to support demand for exports

RBNZ: Trade tensions remain in some major economies

RBNZ: Domestic spending on investment to support growth

CNY:

China restricts coal imports to boost local miners

GBP:

May losing support for no deal Brexit if EU talks fail Times

USD:

Trump: we have evidence of China election meddling

Trump: I’m a low interest rate person

Trump: False charges against me impact view of Kavanaugh now

Trump: I don’t like what’s been happening in Cuba

Trump: Not happy FED raised interest rates

Trump: China tariffs have had no impact on US economy

Trump: We’ll see what happens with Canada on trade

Trump: I’m sure we’ll make a very good deal with Japan

EUR:

Italy’s 5 Star seeks agreement with League on 2.4% deficit

Italian Govt. may postpone meeting over 2019 budget plan Corriere

JPY:

Abe: Japan supports the Iran nuclear deal

Abe: will deal with Iran so as not to damage Japanese companies

 

Today’s data

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

NZD       RBNZ Official Cash Rate A 1.75% | C 1.75% | P 1.75%

06:00     EUR        German GfK Consumer Confidence Oct C 10.6 | P 10.5

08:00     EUR        Eurozone M3 Money Supply Y/Y Aug C 3.80% | P 4.00%

08:00     EUR        ECB Economic Bulletin

09:00     EUR        Eurozone Business Climate Indicator Sep C 1.39 | P 1.22

09:00     EUR        Eurozone Economic Confidence Sep C 111.5 | P 111.6

09:00     EUR        Eurozone Industrial Confidence Sep C 5.2 | P 5.5

09:00     EUR        Eurozone Services Confidence Sep C 15.3 | P 14.7

09:00     EUR        Eurozone Consumer Confidence Sep (F) C -2.5 | P -2.9

12:00     EUR        German CPI M/M Sep (P) C 0.20% | P 0.10%

12:00     EUR        German CPI Y/Y Sep (P) C 2.00% | P 2.00%

12:30     USD       Advance Goods Trade Balance (USD) Aug C -70.6B | P -72.0B

12:30     USD       Wholesale Inventories M/M Aug (P) C 0.30% | P 0.60%

12:30     USD       GDP Annualized Q2 (T) C 4.20% | P 4.20%

12:30     USD       GDP Price Index Q2 (T) C 3.00% | P 3.00%

12:30     USD       Durable Goods Orders Aug (P) C 1.50% | P -1.70%

12:30     USD       Durables Ex Transportation Aug (P) C 0.30% | P 0.10%

12:30     USD       Initial Jobless Claims (SEP 22) C 208K | P 201K

14:00     USD       Pending Home Sales M/M Aug C -0.20% | P -0.70%

14:30     USD       Natural Gas Storage C 64B | P 86B

 

Harry Hindsight

• GBP: A steady decline through the first half of the day with volumes low as you’d expect on an FOMC day, opening around the 1.3175 areas and trading around that level through the Tokyo session with limited dips below the 1.3170 areas but unable to really push to far beyond the 1.3180 area, early London were light sellers through into the opening testing towards the 1.3150 areas but although the market increased range wise the market remained focused above the 1.3150 level through to the latter part of the session and the run to the FOMC pushing slowly through to the 1.3200 areas, the rise in interest rates everyone expected saw the Cable quickly push towards the 1.3220 level triggering a few weak stops on the move however, the market dropped back to the 1.3185 just as quick and then settling into to range to the close just below the opening levels.
• JPY: USDJPY drifted through the Asian session, initially testing towards the 113.00 level before slowly dropping back to hold the 112.90 area through to the London opening, where early sellers moved into the market and the USDJPY slipped to its early lowers holding around the 112.75 areas for an hour or so before starting a slow rise through to the NYK session, the market held around the 113.00 areas testing towards the 113.10 areas before drifting a little on the move to the FOMC, whippy movement but limited in range testing down to the 112.80 level and then through to the 113.15 area and back again in quick movements and eventually continuing the downside through to the 112.60’s before finding some support for the close.
• AUD: Opening around the 0.7250 areas the market eventually saw some light buying move through the market and the Oz testing to the 0.7280 areas with some cross AUDJPY moving through the market, having made the highs the market drifted through to the London session testing through to the opening areas and holding quietly through the London session into NYK and dipping from the opening to the 0.7240 area to make the low of the day, the market returned to the opening levels for the FOMC and the release saw the usual kneejerk reaction to quickly test through the 73 cents level making a high around the 0.7315 area before droppi9ng quickly back to the opening level and a couple of hours of choppy movement before settling into the 0.7260 area to the close.
• EUR: A very quiet session through Asia with the market moving between the 1.1760-70 areas for the most part into the London session, the market tested eventually through to the 1.1775 areas before drifting through into the NYK session to the 1.1725 areas before finding sufficient support to move back to the opening levels for the release of the FOMC, a quick spike through towards the 1.1800 level was quickly returned lower and testing back to the lows and slowly rising to finish the day around the 1.1740 area.

 

Yesterday’s premiership results

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

NZD       ANZ Business Confidence Sep A -38.3 | P -50.3

GBP       BBA Mortgage Approvals Aug A 39.4K | C 39.7K | P 39.6K

GBP       CBI Reported Sales Sep A 23 | C 18 | P 29

USD       New Home Sales Aug A 629K | C 630K | P 627K | R 608K

USD       Crude Oil Inventories A 1.9M | C -0.7M | P -2.1M

USD       FOMC Rate Decision (Upper Bound) A 2.25% | C 2.25% | P 2.00%

USD       FOMC Rate Decision (Lower Bound) A 2.00% | C 2.00% | P 1.75%

USD       FOMC Press Conference

NZD       RBNZ Official Cash Rate A 1.75% | C 1.75% | P 1.75%

 

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