Daily FX Market Commentary

Good morning,

 

LMAX Close

USDJPY 113.784 | EURUSD 1.16418 | AUDUSD 0.72066 | NZDUSD 0.66157 | USDCAD 1.30428 | USDCHF 0.97728 | GBPUSD 1.30784 |

 

LMAX Highs and Lows 5.15am GMT

                                High | Low

EURUSD               1.16493 | 1.16331

USDJPY                 113.632 | 113.33

GBPUSD               1.30849 | 1.30726

USDCHF               0.97764 | 0.97643

AUDUSD              0.72173 | 0.72024

USDCAD               1.30477 | 1.30225

NZDUSD               0.66240 | 0.6599

EURCHF                1.13794 | 1.13672

EURGBP               0.89061 | 0.88977

EURJPY                 132.296 | 131.884

 

For today

• GBP: A very quiet session with a tight rising range through the Asian session and Cable pushing to the 1.3085 area and virtually unchanged for the day, Topside offers light through to the 1.3250 areas with light congestion through the level building to stronger offers on any move towards the 1.3300 areas, strong congestion likely to continue through to the 1.3340 area before stops appear, downside bids into the 1.3000 level likely to be stubborn with the market possibly seeing plenty of congestion on any dips, a move through the level could see weak stops however, 1.2950 through to the 1.2900 level is likely to see some strong congestion soaking up any sellers in a normal market.
• JPY: A weak start holding around the 113.40 area opening and then rising in early morning in Tokyo to push through to the 113.65 area to make the high before drifting slowly back to the 113.50 areas and holding into the grey hour, Topside offers a little thin through the sentimental level however, stronger congestion and offers are likely to appear on a move towards the 113.90-114.00 area, with weak stops likely to be competing with strong congestion on a push above the level however, stronger natural offers are not likely to be seen until the market moves towards the 114.50 areas. Downside bids light back through to the 113.00 areas with weak stops likely on a break back through the 112.80 area opening a quick move through to the 112.00 level.
• AUD: A limited day for the Oz with the market rising into the Tokyo session off the early 0.7203 area to test towards 0.7218 holding for a few hours through the session before dipping back to the opening levels again for the move into the grey hour, downside bids lightly congested through the 72 cents level with the market seeing that congestion continuing through to the 0.7150 areas with weak stops likely through the level and the market quickly testing through to the 71 cents area and stronger bids appearing, Topside offers likely to be light through to the 0.7240 areas and the market then free again to test towards the 73 cents area and the stronger offers.
• EUR: Very quiet session with the market drifting a little from the opening and testing to the 1.1635 areas the market moved into the Tokyo session pushing off those lows slowly and pushing through to the 1.1650 areas before moving a little lower as early sellers appeared, downside bids likely into the 1.1600 areas with congestion through the level and likely to be continually light through to the 1.1540 areas with stronger bids likely into the area and the lows for the month, a push through the level is likely to see stronger stops appearing and the market limited to sentimental levels through to the 1.1480 areas with stronger stops a possibility.

 

Overnight News

EUR:

Berlin calling time for Angela Merkel to go Politico

Italy targets deficit at 2.4% of output in win for populists

Italy deficit target is too high, EU official

Tria said he’ll stay as Italian FinMin to avoid chaos Repubblica

WTO:

Cuts trade forecast in warning on risks to growth

AUD:

Australian probe into bank misconduct to release report Friday

JPY:

Japanese bought net 1.5T Yen overseas debt last week

NZD:

Lower NZ farm gate milk price a risk Market talk

NZ consumer confidence remains at 2yr low ANZ

GBP:

Britons would vote 52% vs. 48% to remain in the EU in a new Brexit referendum Natcen

Remain vote rests quiet heavily on those who did not vote in 2016 referendum turning out in a future vote Natcen

Brexit bombshell, Johnson brands May’s plans a humiliation Express

CAD:

BoC Poloz: bank will continue to raise interest rates gradually towards a more neutral level

Poloz: Being uncertain about future does not mean keeping interest rates on hold until inflation momentum begins to build

Poloz: Bank will remain dependent on incoming data and other sources of information to guide its decisions

Poloz: Continues to judge that higher interest rates will be warranted to achieve inflation target

Poloz: If we move to slowly on rates, economy could move above capacity limits and inflation could achieve significant momentum says we certainly want to avoid this outcome

Poloz: In face of uncertainties we cannot operate monetary policy mechanically, rather, policy becomes a matter of risk management

 

Today’s data

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

NZD       Building Permits M/M Aug A .80% | P -10.30% | R -10.80%

GBP       GfK Consumer Confidence Sep A -9 | C -8 | P -7

JPY         Unemployment Rate Aug A 2.40% | C 2.50% | P 2.50%

JPY         Tokyo CPI Core Y/Y Sep A 1.00% | C 0.90% | P 0.90%

JPY         BOJ Summary of Opinions

JPY         Industrial Production M/M Aug (P) A 0.70% | C 1.50% | P -0.10% | R -0.20%

JPY         Retail Trade Y/Y Aug A 2.70% | C 2.20% | P 1.50%

CNY        Caixin PMI Manufacturing Sep A | C 50.5 | P 50.6

JPY         Housing Starts Y/Y Aug A 1.60% | C 0.40% | P -0.70%

07:00     CHF        KOF Leading Indicator Sep C 100.1 | P 100.3

07:55     EUR        German Unemployment Change Sep C -9K | P -8K

07:55     EUR        German Unemployment Claims Rate Sep P 5.20%

08:30     GBP       Current Account Balance (GBP) Q2 C -19.4B | P -17.7B

08:30     GBP       GDP Q/Q Q2 (F) C 0.40% | P 0.40%

09:00     EUR        Eurozone CPI Estimate Y/Y Sep C 2.10% | P 2.00%

09:00     EUR        Eurozone CPI Core Y/Y Sep (A) C 1.10% | P 1.00%

12:30     CAD       Industrial Product Price M/M Aug C 0.60% | P -0.20%

12:30     CAD       Raw Materials Price Index M/M Aug C 0.80% | P 0.70%

12:30     CAD       GDP M/M Jul C 0.10% | P 0.00%

12:30     USD       Personal Income Aug C 0.40% | P 0.30%

12:30     USD       Personal Spending Aug C 0.40% | P 0.40%

12:30     USD       PCE Deflator M/M Aug C 0.20% | P 0.10%

12:30     USD       PCE Deflator Y/Y Aug C 2.30% | P 2.30%

12:30     USD       PCE Core M/M Aug C 0.20% | P 0.20%

12:30     USD       PCE Core Y/Y Aug C 2.00% | P 2.00%

13:45     USD       Chicago PMI Sep C 63.8 | P 63.6

14:00     USD       U. of Mich. Sentiment Sep (F) C 96 | P 100.8

 

Harry Hindsight

• GBP: A steady decline through the day with Brexit talk heating up with opposition party talking to Barnier, remain media running polls suggesting the vote would be the other way and several talking about the cost to both the UK and EU being fairly devastating economically wise however, the upshot is that the UK is not likely to give up N. Ireland and some compromise will have to be found if no deal is not the result, opening around the 1.3170 areas the market held the levels and pushed only to just above that level before the selling appeared in Tokyo and drifting through the 1.3150 areas before holding through to the grey hour, early sellers saw some more selling moving in and the market pushing to the 1.3110 level before holding again and slowly returning to above the 1.3150 level for the move into the NYK session and a renewal of the selling or should I say steady USD buying and the Cable dipping through to the 1.3100 level and holding through the London close, the run to the close saw a slow drift through to the 1.3075 areas.
• JPY: USDJPY saw some early buying through into the Tokyo session to test the 112.90 level before drifting through to the London session testing into early London to the days lows around the 112.55 area before starting a long rally pushing steadily through to the NYK session recovering the highs and NYK steepening the rise to push easily through the 113.00 areas and triggering weak stops just above the 113.10, the market increased its rate of incline to test through to the 113.40 level before running into some congestion and then holding a tight range around the level through to the close.
• AUD: The Oz held quietly into the Tokyo session dipping a little in early morning too the 0.7245 level before recovering steadily to the 0.7260 and extending the high for the day testing towards the 0.7270 level, the move into the grey hour saw strong sellers appearing and the Oz dropping back to the test the 0.7230 level to range quietly through London around that level, NYK were slow sellers more a consequence of USD buying through the session and the market drifted to the 0.7205 area for the close.
• EUR: Opening quietly and moving through the Asian session ranging around the 1.1750 areas before running into the grey hour and strong sellers quickly chasing the market down to the 1.1700 level to range around the level for early London and then basing along that line through to the NYK session, NYK selling saw the market drop again through to the 1.1675 areas and then a slow drift through to the close with Italian causing EUR uncertainties and weaker confidence numbers and stronger GDP numbers for the US and the EUR finishing the day on its lows around the 1.1640 areas.

 

Yesterday’s premiership results

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

EUR        German GfK Consumer Confidence Oct A 10.6 | C 10.6 | P 10.5

EUR        Eurozone M3 Money Supply Y/Y Aug A 3.50% | C 3.80% | P 4.00%

EUR        ECB Economic Bulletin

EUR        Eurozone Business Climate Indicator Sep A 1.21 | C 1.39 | P 1.22 | R 1.21

EUR        Eurozone Economic Confidence Sep A 110.9 | C 111.5 | P 111.6

EUR        Eurozone Industrial Confidence Sep A 4.7 | C 5.2 | P 5.5 | R 5.6

EUR        Eurozone Services Confidence Sep A 14.6 | C 15.3 | P 14.7 | R 14.4

EUR        Eurozone Consumer Confidence Sep (F) A -2.9 | C -2.5 | P -2.9 | R -1.9

EUR        German CPI M/M Sep (P) A 0.40% | C 0.20% | P 0.10%

EUR        German CPI Y/Y Sep (P) A 2.30% | C 2.00% | P 2.00%

USD       Advance Goods Trade Balance (USD) Aug A -75.83B | C -70.6B | P -72.0B

USD       Wholesale Inventories M/M Aug (P) A 0.80% | C 0.30% | P 0.60%

USD       GDP Annualized Q2 (T) A 4.20% | C 4.20% | P 4.20%

USD       GDP Price Index Q2 (T) A 3.30% | C 3.00% | P 3.00%

USD       Durable Goods Orders Aug (P) A 4.50% | C 1.50% | P -1.70% | R -1.20%

USD       Durables Ex Transportation Aug (P) A 0.10% | C 0.30% | P 0.10% | R 0.20%

USD       Initial Jobless Claims (SEP 22) A 214K | C 208K | P 201K | R 202K

USD       Pending Home Sales M/M Aug A -1.80% | C -0.20% | P -0.70% | R -0.80%

USD       Natural Gas Storage A 46B | C 64B | P 86B

 

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