Daily FX Market Commentary

Good morning,

 

LMAX Close

USDJPY 113.933 | EURUSD 1.15784 | AUDUSD 0.72232 | NZDUSD 0.66186 | USDCAD 1.28141 | USDCHF 0.98381 | GBPUSD 1.30405 |

 

LMAX Highs and Lows 5.15am GMT

                                High | Low

EURUSD               1.15801 | 1.15688

USDJPY                 114.013 | 113.823

GBPUSD               1.30484 | 1.30341

USDCHF               0.98439 | 0.98353

AUDUSD              0.72384 | 0.72223

USDCAD               1.28156 | 1.27998

NZDUSD               0.66121 | 0.65965

EURCHF                1.13924 | 1.1385

EURGBP               0.88774 | 0.88718

EURJPY                 131.993 | 131.774

 

For today

• GBP: A very quiet session for Cable with a tight range opening around the 1.3040 level and moving into the Tokyo session just above the level and making one brief push towards the 1.3050 level before settling back and testing the 1.3035 level and holding quietly through to the grey hour along that level. downside bids into the 1.3000 level likely with congestion through to the 1.2950 areas and possible stronger bits from there through to the 1.2900 areas, weak stops through the level with some limited congestion through that level. Topside offers light through to the 1.3100 areas weak stops on a move through the 1.3120 and limited congestion on a run to the 1.3150 areas and increasing into the 1.3200 level.
• JPY: Pushing from the opening level the market tested the 114.00 areas through deep into the Tokyo session with very little success before dipping quickly back on light selling to test to the 113.80 levels before slowly recovering for the move into the grey hour around the 113.85 area. No real change from yesterday Topside strong offers remain through the 114.00 areas with weak stops and increasing congestion through to the 114.50-60 areas before limited stops on a move through with limited offers into the 115.00 areas with stronger offers likely to be building through to the 115.50 areas. Downside bids light through to the 112.00-111.80 areas with stops likely through the area and the market congested but open to the 110.50 areas.
• AUD: Drifting a little from the opening the market slowly lifted off the 0.7220 lows and traded quietly through to the 0.7235 level, the move to the RBA announcement saw the market ranging around the 0.7230 level and quickly rising to the 0.7238 highs and dropping back to 0.7230 once the full commentary to the no change was released, very little in the statement with only a couple of minor changes leaves the market moving to the grey hour just off the highs of the day, bids into the 72 cents level with possible weak stops on a break through the 0.7180 areas and stronger bids likely into the 0.7150 level and increasing on any attempt at the 0.7100 area. Topside congestion through to the 0.7260 areas and then stronger offers starting to appear on any run at the 73 cents level, possible weak stops through 0.7320 area however, congestion is likely to increase on any move above the 0.7340 levels and continuing through to the 0.7360 area, and stronger offers then from there into 74 cents.
• EUR: A slow drift from the opening with the market slipping through the 1.1570 areas several times but unable to break any lower and unable to move off the level to run to the grey hour holding quietly, congestion through the downside with stronger bids into the 1.1560-40 areas with congestion lessening but continuing through to the stronger 1.1520-00 areas with weak stops through the level and an old trend line around the 1.1480 areas possibly causing minor interference before stronger bids appear on any dip towards the 1.1400 areas. Topside offers light through to the 1.1680-1.1700 levels, light stops on a move through the 1.1720 area before running into stronger offers through the 1.1740-60 and increasing on any push through the 1.1780 area, weak stops on a strong break through the 1.1820 area will open up a stronger run through to the 1.1880 areas.

 

Overnight News

EUR:

Italy’s budget suggests the EU’s fiscal framework is broken or for those that remember 1 size does not fit all

Euro chiefs dismayed by Italy’s budget as Juncker evokes Greece

IMF:

Lagarde signals IMF may be about to cut growth forecasts

ZAR:

1. Africa may need IMF help if debt keeps growing NPC

CNY:

China’s at peak steel right now Top iron ore shipper

China Defence ministry says resolutely opposed to US freedom of navigation operation in S. China sea

China Defence Ministry says sent Naval ship to warn US vessel to leave

China will continue to take necessary measures to defend its sovereignty Trade the news

NZD:

NZ business confidence falls to nine year low NZIER

NZIER: Deteriorating earnings a key concern for NZ firms

USD:

Feds Rosengren says damage to China’s economy likely to spill into other Countries DJ

Pentagon says Chinese ship harassed a US vessel

GBP:

We would work with Boris Johnson, says DUP Leader as she praises positive Brexit vision if he became PM

OIL:

Oil surges to highest since 2014 as global supply concerns mount

AUD:

Under fire banks drag ASX lower

Fears Royal commission fallout could turbocharge property falls

Australia’s top commodity exports to fall US$10b by 2020

RBA: Unchanged policy consistent with sustainable economic growth

RBA: Unchanged policy with meeting CPI target over time

RBA: Credit conditions tighter than they’ve been for some time

RBA: Progress in jobless, CPI expected; likely to be gradual

RBA: Unchanged policy consistent with sustainable economic growth

RBA: Unchanged policy consistent with meeting CPI target over time

RBA: Inflation seen higher in 2019/20 than currently

 

Today’s data

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

JPY         Monetary Base Y/Y Sep A 5.90% | C 5.40% | P 6.90%

AUD       RBA Rate Decision A 1.50% | C 1.50% | P 1.50%

JPY         Consumer Confidence Index Sep A | C 43.4 | P 43.3

08:30     GBP       Construction PMI Sep C 52.6 | P 52.9

09:00     EUR        Eurozone PPI M/M Aug C 0.00% | P 0.40%

09:00     EUR        Eurozone PPI Y/Y Aug C 3.90% | P 4.00%

 

Harry Hindsight

• GBP: A quiet move through the session in Asia with the market moving around the opening 1.3035 level, pushing a little higher into the early part of Tokyo to test the 1.3045 level to make the early highs before drifting through to the London opening testing lightly through the 1.3025 areas, London were light buyers and the market steadily rose through to the 1.3060 area before again starting to drift and a quick drop into the NYK session to extend the lows to the 1.3015 level, more talk of the day after Brexit with some media running stories of tax cuts and other fiscal measures to make the UK look attractive and the Cable rallied quickly through to spike above the 1.3100 levels triggering some light stops on a test towards the 1.3120 before dropping quickly back again but holding above the 1.3050 level through to the London close to fall back below the level before holding quietly around the 1.3040 level for a long run to the close.
• JPY: USDJPY opened around the 113.75 area filled a small gap to make the low for the day before starting a slow steady rise through to the 113.90 level struggling with the topside through to the London session, the market kept pushing the level slowly grinding through the offers on a move through to the 114.05 area but again struggled and remained mired around the 113.95-114.05 areas for the whole of London/NYK in a long run to the close.
• AUD: A very narrow range for the whole of the day, opening around the 0.7225 areas and topping through the 0.7230 areas before slowly dipping through the session to test to the 0.7205 areas into the London session, London were slow buyers rising back through to the NYK session to the opening level and then holding just below that level through to late in the session pushing just above the open and closing almost unchanged on the day.
• EUR: A quiet session for the Euro overall drifting from the opening levels around the 1.1615 area and testing through to the London session through to the 1.1575 area before starting a steady return through to the NYK session, a little bit of movement from the NYK traders saw the market trading either side of the 1.1600 level and testing through the 1.1620 level to make the highs for the day, the move to the close of London saw the early day traders cutting there longs to make the lows through the 1.1570 levels and finishing quietly to the 1.15808 area.

 

Yesterday’s premiership results

AUD       AiG Performance of Manufacturing Index Sep A 59 | P 56.7

JPY         Tankan Large Manufacturing Index Q3 A 19 | C 22 | P 21

JPY         Tankan Large Manufacturers Outlook Q3 A 19 | C 19 | P 21

JPY         Tankan Large Non-Manufacturing Index Q3 A 22 | C 22 | P 24

JPY         Tankan Non-Manufacturing Outlook Q3 A 22 | C 20 | P 21

JPY         Tankan Large All Industry Capex Q3 A 13.40% | C 14.20% | P 13.60%

JPY         Tankan Small Manufacturing Index Q3 A 14 | C 13 | P 14

JPY         Tankan Small Manufacturing Outlook Q3 A 11 | C 12 | P 12

JPY         Tankan Small Non-Manufacturing Index Q3 A 10 | C 6 | P 8

JPY         Tankan Small Non-Manufacturing Outlook Q3 A 5 | C 4 | P 5

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

AUD       TD Securities Inflation M/M Sep A 0.30% | P 0.10%

CHF        Retail Sales Real Y/Y Aug A 0.40% | C 0.40% | P -0.30%

CHF        PMI Manufacturing Sep A 59.7 | C 60.8 | P 64.8

EUR        Italy Manufacturing PMI Sep A 50 | C 51.1 | P 50.1

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

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

EUR        Eurozone Manufacturing PMI Sep (F) A 53.2 | C 53.3 | P 53.3

GBP       Mortgage Approvals Aug A 66K | C 65K | P 65K

GBP       Money Supply M4 M/M Aug A 0.20% | C 0.60% | P 0.90%

GBP       PMI Manufacturing Sep A 53.8 | C 53.8 | P 52.8 | R 53

EUR        Eurozone Unemployment Rate Aug A 8.10% | C 8.20% | P 8.20%

CAD       Manufacturing PMI Sep A 54.8 | C 56.6 | P 56.8

USD       Manufacturing PMI Sep (F) A 55.6 | C 55.4 | P 55.6

USD       Construction Spending M/M Aug A 0.10% | C 0.40% | P 0.10% | R 0.20%

USD       ISM Manufacturing Sep A 59.8 | C 60 | P 61.3

USD       ISM Employment Sep A 58.8 | P 58.5

USD       ISM Prices Paid Sep A 66.9 | C 70.8 | P 72.1

 

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