Daily FX Market Commentary

Good morning,

 

LMAX Close

USDJPY 113.648 | EURUSD 1.15482 | AUDUSD 0.71882 | NZDUSD 0.65961 | USDCAD 1.28235 | USDCHF 0.98389 | GBPUSD 1.29785 |

 

LMAX Highs and Lows 5.00am GMT

                                High | Low

EURUSD               1.15937 | 1.15359

USDJPY                 113.838 | 113.522

GBPUSD               1.30027 | 1.29712

USDCHF               0.98456 | 0.9834

AUDUSD              0.71970 | 0.71646

USDCAD               1.28310 | 1.28086

NZDUSD               0.65931 | 0.65683

EURCHF                1.14009 | 1.13597

EURGBP               0.89176 | 0.8893

EURJPY                 131.979 | 130.968

 

For today

• GBP: Cable drifted a little from the opening testing the 1.2975 areas before rallying through to test the 1.3000 area a couple of times and then settling for a tight range around the 1.2995 areas for the run to the grey hour, moving on the Italian news and dragged along by the Euro, Downside bids likely through the 1.2950 level and fairly strong and then congested through to any test of the 1.2900 areas with good bids likely in the area similar to the 1.2950 area, a break through the 1.2900 level will likely see stronger stops appearing and the sentimental levels becoming the focal points again but possibly weaker until the 1.2800 areas, topside offers light through the 1.3000 area with weak stops possibly on a strong push through the level and opening the market to limited congestion through the 1.3140 areas through to stronger offers the closer the market moves to the 1.3200 area.
• JPY: USDJPY drifted off through to the 113.55 level testing marginally through the level before moving on the back of the Italian news as with the other markets and quickly pushing through to the 113.80 area to range for a couple of hours before drifting off back to the opening levels for the move into the grey hours, most of the upside work was EURJPY related and quickly sated, Topside offers into and through the 114.00 areas with weak stops likely on a push through the 114.10 area and limited congestion until the market moves into the 114.40-60 levels with the market likely to be a little weaker from that point through the 115.00 level, with limited stops beyond the level and offers beginning to reappear in size.
• AUD: Quiet opening around the 0.7190 areas and then dropping off after the building approvals number to test through to the 0.7160 areas, drag of the Euro move and Italian news saw the Oz dragged back to the opening levels and a minor attempt towards the 72 cents level then saw the market drifting off again on the move to the grey hour, downside bids into the 0.7160-40 areas a likely to be reasonably strong with a break through seeing weak stops and the market dropping quickly through to the 71 cents level where stronger bids are likely to reappear again, any break through that level is possibly going to see continuing congestion through the sentimental levels and slow going to replicate the move higher over the past 2 years, topside offers through to the 73 cents level is likely to be limited but continual and more of a spoiling effect to any rallies with 73 cents likely to be a particularly strong area again.
• EUR: An early quiet part to the session with the market drifting to the 1.1550-40 areas before the news on Italian budget forecasts until 2021 hitting the market, however, while next year’s budget still remains at a deficit of 2.4% future forecasts beyond that are at best sceptical and the rally is possibly limited but rally it did from the 1.1540 level to push through towards the 1.1595 area before slowing and trading slightly lower through to the 1.1575 area into the grey hour, Topside offers light back through the 1.1600 areas with weak stops likely on a push through the 1.1620 areas and the market opening to light congestion through the 1.1640 areas and increasing around the 1.1660 level, weak congestion likely to continue on any move to the stronger 1.1700 level but any push here will likely see stronger buyers appearing for longer move to the 1.1800 level. downside bids through to the 1.1520 levels with possibly strong bids in the area and weak stops quickly appearing on any dip back through the 1.1390 level.

 

Overnight News

GBP:

Boris Johnson humiliated Theresa May and Tory members cheered every word

Theresa May urged to set her departure date by ministers as they say she cannot fight Tel

Arlene Foster (DUP) torpedoes PM May’s Brexit compromise as she warns new regulatory checks in Irish sea are a complete non-starter

USD:

New NAFTA approval not a foregone conclusion, Cornyn says

Cornyn (Rep Leader) Not a forgone conclusion senate will confirm USMCA

Cornyn: Earliest USMCA vote could occur is after Nov elections

Cornyn: USMCA vote could slip until next congress

Powell: FED to act with authority if inflation outlook shifts

API is said to report US crude stocks rose 907K bbl last week

Pres. Trump does not think EU Juncker likes us very much

EU was set to take advantage of the US TTN

EUR:

Di Maio confirms 2.4% Italy deficit after ministers meeting

Di Maio: Confirms main outlines of 2019 budget, reiterates it will include €10B for citizens income

Di Maio: Some further details of Govt. economic plan to be defined on Wednesday morning

Rehn Chimes (Finland) chimes in on ECB rate debate as officials map slow lift off

Italy budget plan seeks to cut deficit to 2% in 2021

NZD:

NZ hours price inflation slows to 11 months low

NZ Jobs ads point to softer employment growth ANZ

Whole milk powder average price falls to NZ$ 2,753 a ton

AUD:

Australia Aug building approvals fall 9.4% MoM est. -2.5%

 

 

Today’s data

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

AUD       AiG Performance of Service Index Sep A 52.5 | P 52.2

GBP       BRC Shop Price Index Y/Y Sep A 0.20% | P 0.10%

AUD       Building Approvals M/M Aug A -9.40% | C -2.50% | P -5.20% | -4.60%

07:45     EUR        Italy Services PMI Sep C 52.4 | P 52.6

07:50     EUR        France Services PMI Sep (F) C 54.3 | P 54.3

07:55     EUR        Germany Services PMI Sep (F) C 55.3 | P 55.3

08:00     EUR        Eurozone Services PMI Sep (F) C 54.7 | P 54.7

08:30     GBP       Services PMI Sep C 53.9 | P 54.3

09:00     EUR        Eurozone Retail Sales M/M Aug C 0.20% | P -0.20%

12:15     USD       ADP Employment Change Sep C 185K | P 163K

13:45     USD       US Services PMI Sep (F) C 53.6 | P 52.6

14:00     USD       ISM Non-Manufacturing/Services Composite Sep C 58.3 | P 58.5

14:30     USD       Crude Oil Inventories P 1.9M

 

 

Harry Hindsight

• GBP: A quiet session through Asia testing towards the 1.3050 level in mid-session before dropping back again to hold around the opening 1.3035 areas, the move into the grey hours saw the market dropping back steadily through to early morning in London to test to the 1.3000 areas holding for an hour or so around the level before dropping again and falling through to the 1.2950 levels with a slight dip into the 1.2940 areas before finding its feet and rolling slowly through to the London close pushing back to the 1.2990 areas and finishing the day very quietly holding around the 1.2980 areas.
• JPY: A very limited range through the day with the market pushing from the opening to continual push at the 114.00 level before moving into early Tokyo morning falling off through to the 113.80 areas and recovering through to the grey hour, Early London saw the market dropping on day traders setting the tone and the market continued through the 113.80 lows with minor stops helping the market to the 113.60 level holding the first time and having recovered to the 113.90 for the move into the NYK session again tested to the downside and through into the 113.55 areas, limited recovery and then holding around the 113.60 areas to the close.
• AUD: Opening around the 0.7225 areas dipping slightly before moving through into the Tokyo session pushing through the 0.7235 level and ranging around the 0.7230 level, RBA announcement was a quiet affair, dipping only slightly on a more or less unchanged media release, the move into the grey hour saw the market make the highs just short of the 0.7240 level before the market quickly dropped back as early London sellers forced the market through to the official open in London testing to the 0.7200 levels, after a brief period the market again broke lower to the 0.7190 level and another little tussle before dropping through to the 0.7160’s to make the lows for the day and start a slow recovery back to the 72 cents area however, it couldn’t hold the level and the market settled into a long run to the close around the 0.7190 area.
• EUR: A slow drift slightly lower through to the grey hour, early London saw strong selling on the back of the Italian budget deficit for next year and Euro’s quickly dipped through to the London opening testing through the 1.1540 area eventually triggering some weak stops on the follow through to test to the 1.1505 areas before holding through to NYK, early NYK saw buyers taking advantage and running back to the 1.1540 level and pushing further in the run to the close of London testing towards the 1.1570 level and running to the close around the 1.1550 areas.

 

Yesterday’s premiership results

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 43.4 | C 43.4 | P 43.3

GBP       Construction PMI Sep A 52.1 | C 52.6 | P 52.9

EUR        Eurozone PPI M/M Aug A 0.30% | C 0.00% | P 0.40% | R 0.70%

EUR        Eurozone PPI Y/Y Aug A 4.20% | C 3.90% | P 4.00% | R 4.30%

 

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