Daily FX Market Commentary

Good morning,

 

LMAX Close

USDJPY 112.821 | EURUSD 1.14652 | AUDUSD 0.70819 | NZDUSD 0.65547 | USDCAD 1.31016 | USDCHF 0.99609 | GBPUSD 1.29665 |

 

LMAX Highs and Lows 5.00am GMT

                                High | Low

EURUSD               1.14676 | 1.14522

USDJPY                 112.839 | 112.485

GBPUSD               1.29706 | 1.29555

USDCHF               0.99683 | 0.99589

AUDUSD              0.70803 | 0.70586

USDCAD               1.31074 | 1.30884

NZDUSD               0.65576 | 0.65364

EURCHF                1.14265 | 1.14124

EURGBP               0.88430 | 0.88349

EURJPY                 129.372 | 128.843

 

For today

• GBP: Another quiet session for the Cable with the market in Asia on hold and unwilling to get involved with a market that could go either way while they sleep on the whim of Barnier or May, downside congestion through to the 1.2900 areas with stronger bids into the level, weak stops are likely to appear through the level however, the congestion then runs to the 1.2860 levels and likely to absorb any normal flow and we would need some serious Brexit news to upset the status quo we’ve seen for the past month or so, a break of the 1.2860 level would likely open the downside to the 1.2750 areas with sentimental levels holding bids. topside offers weak through to the 1.3100 level with possibly stronger offers appearing around that level and then increasing on any push through to the 1.3160 areas and the 1.3200.
• JPY: USDJPY saw yesterday’s gains removed in quick selling by the Tokyo market testing from the opening just above the 112.80 level to the 112.65 fix pausing and the dropping back to the 112.50 level over the course of the next few hours before holding the level through to the grey hour, topside offers through the 113.00 level and a little congestion through to the 113.25 areas and then weak stops appear and the market able to move through to the 113.60 areas before hitting any meaningful offers and stronger offers on any push for the 114.00 level, downside bids lightly congested through to the 112.00 areas with stronger bids likely through to the 111.80-60 areas, with possible stronger stops on a move through the area but running quickly into congestive levels from the summer, a move to the 111.00 level will possibly see yield buyers reappearing and the market possibly strongly bid from there to the 110.50 area.
• AUD: A slow quiet drift through into the Tokyo session moving from the 0.7085 areas and quickly dropping with the USDJPY weakness and possible supply in AUDJPY for the fix, holding the 0.7065 areas and then ranging narrowly through to the grey hour, downside bids into the 0.7050 level with the weak stops through the level and the market supported by sentimental levels through overall with 70 cents likely to be a strong point, with stops likely through the level and the 68 cent level becoming exposed. Topside offers through the 71 cents level and likely congested through to the stronger 0.7140 area where the past few weeks the market has stalled, poor news for the current coalition still undercutting the Oz with economics ticking along nicely as a side issue makes a dull market, a push through the 0.7150 areas will likely see weak stops taking the market towards the 72 cents levels before stronger offers reappear.
• EUR: A slow drift through the session holding around the 1.1465 level through into the Tokyo session and dipping through the 1.1460 level late in the session to hold the 1.1455 level and the lows of yesterday into the grey hour, downside bids into the 1.1440 level and likely weak stops through the level for a run at the 1.1400 level and further strong bids, a push through the 1.1380 could see weak stops opening up a deeper move however, congestion on any move towards that 1.1300 level is likely to be strong with the market likely to remain that way until the 112.75 level is breached and this then opens up the potential for a larger fall over time.

 

Overnight News

EUR:

Euro area banks facing funding cliff look to ECB for help

Italy seeks dialogue on necessary breach of deficit rules BBG

Italian business cast doubt on governments 2019 growth target BBG

Italy may force the EU to issue an unprecedented budget rebuke BBG

GBP:

This is Theresa May’s Brexit and she’s squeezed all the vision out of it Telegraph

UK PM May fires back at mutinous party over Brexit

CNY:

China introduces bond financing tools for private companies

China to increase relending to some financial institutions Govt.

AUD:

The Australian: News poll exclusive, Polling analysis shows a collapse for the coalition in every mainland state and the loss of 25 seats including 8 held by current front benchers

One million Ozzies are in mortgage stress

USD:

Republicans outpacing democrats early voting in key states NBC

 

Today’s data

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

06:00     EUR        German PPI M/M Sep C 0.20% | P 0.30%

06:00     EUR        German PPI Y/Y Sep C 2.90% | P 3.10%

10:00     GBP       CBI Trends Total Orders Oct C -1 | P -1

14:00     EUR        Eurozone Consumer Confidence Oct (A) C -3 | P -3

                               

Harry Hindsight

• GBP: A quiet Asian session with the market moving through into the Tokyo session then drifting through to the 1.3055 areas before recovering on the run to the grey hour, early buying saw the market top at the 1.3090 level before London opened and the market dropped steadily back as the Brexit noise left the GBP weak and the market tested to the 1.3025 level, a brief pause before the market moved into the NYK session and the selling restarted and the market tested to the 1.2955 level and the market then ranged through the session around the 1.2975 level and narrowed down into the close to settle just below that level.
• JPY: Opening slightly higher around the 112.60 level saw the market dropping back through into early Tokyo to hold the 112.35 areas the low for the day, having traded the low the market remained in a tight channel moving steadily higher through to early morning in London to push to the 112.90 areas before the top held and the market ranged from that high into the 112.65 areas through to the close with the final hours holding around the 112.80 area.
• AUD: USD returned to the fore for the start of the week and the Oz drifted from the opening around the 0.7125 level and into the Tokyo open dropping from the fix back to the 0.7090 areas before finding some support and rising back through to the 0.7115 level, the move into the grey hour saw the market holding closely to that are, London saw the market dropping back to just above the 71 cents level and eventually limped into the NYK session pushing that level and the market once through carried on drifting through to the 0.7075 levels to make the lows and holding quietly through to the close just off that level.
• EUR: Opening around the 1.1515 level the Asian session saw a slow drift to the 1.1500 areas before moving to the grey hour testing back to the opening levels, grey hour buying saw the market pushing quickly through to test to the 1.1550 level through the London opening this despite the Italian news and probably more EURGBP buying derived however, with the Brexit noise in the background it wasn’t long before the Euro started to push lower dipping back to the 1.1515 level before moving into a slower decline through into the NYK session testing through the 1.1500 area and weak stops on a push through the 1.1490 level to test into the 1.1450 areas before finding some limited buying and the market holding around the 1.1465 area to the close.

 

Yesterday’s premiership results

JPY         All Industry Activity Index M/M Aug A 0.50% | C 0.40% | P 0.00% | R -0.20%

CAD       Wholesale Trade Sales M/M Aug A -0.10% | C 0.10% | P 1.50% | R 1.10%

 

               

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