Daily FX Market Commentary

Andy Harrison

Good Morning,

LMAX Close

USDJPY 105.408 | EURUSD 1.11412 | AUDUSD 0.67518 | NZDUSD 0.6396 | USDCAD 1.32861| USDCHF 0.97489 | GBPUSD 1.22898 |

LMAX highs and Lows 05.00 GMT

                                Highs | Lows

EURUSD              1.11642 | 1.11321

USDJPY                105.800 | 104.449

GBPUSD              1.22865 | 1.22589

USDCHF               0.97755 | 0.97152

AUDUSD             0.67498 | 0.67182

USDCAD              1.33200 | 1.32908

NZDUSD              0.63968 | 0.63426

EURCHF               1.08826 | 1.08402

EURGBP              0.90981 | 0.90724

EURJPY                117.767 | 116.594

For Today

  • GBP: Opening a little lower after the weekend of miscommunications with Trump, clarifications and then implementations as China imposes tariffs and the US increase even greater tariffs, GBPJPY seemed to be the premarket seller and the open around the 1.2270 area before filling the gap and then drifting back to the open and trading quietly between the 1.2260-75 areas before rising slowly to trade around the 1.2275-80 area through to the grey hour, Topside offers look to be light through the 1.2300 areas before weak stops appear and the market likely to find limited offers until the 1.2350 areas where stronger offers are likely to appear, downside bids congested back through the 1.2200 levels with particular strength on any dips to the 1.2140 level onwards and through to stronger bids below 1.2100 areas.
  • JPY: Premarket saw the USDJPY pushing to around the 104.80 level before opening around the 105.00 area however, the squeeze lower saw the market trading through the 104.50 area before slowly starting a recovery through the Tokyo session, seeing weak stops triggered through the 105.20 level and a quick move to the 105.80 in an illiquid market before holding quietly through to the grey hour around the 105.80 area. Downside bids and stops cleared through to the 104.40 area with strong bids likely to appear on any move to the 104.00 areas weak stops through the 103.80 however, congestion likely to appear from here on, maybe not enough in the medium term but further losses could possibly find stronger bids through the next 2 big figures, topside offers possibly light through the 106.00 area and stronger stops on a move beyond the 106.20 areas opening the slight chance of a short squeeze through to the 107 before offers start to increase again.
  • AUD: AUDJPY selling the name of the game for the early part of the session with the Oz dipping quickly through to the 0.6690 level, which was not helped by the weaker trade deficit in NZ before starting a slow and steady climb through to the closing area on Friday around the 0.6750 level, Downside bids likely to reappear around the 0.6700 level and then increasing as the market moves towards the 0.6680 area with possible strong stops through the  level opening a deeper move with limited congestion around the sentimental areas however, for the moment cross JPY has been dominating and the carry trade has all but disappeared, topside offers light through to the 0.6820-30 areas before weak stops appear and limited congestion for a move to the 69 cents level and stronger offers.
  • EUR: Trading contrary to the rest with less JPY crosses being done saw the Euro opening around the closing level and slowly pushing through to the 1.1165 area before drifting through the session testing initially to the 1.1135 area and ranging around the 1.1140 area before making the low late in the session and returning from the low 1.1130 level to the same 1.1140 level for the move into the London session. Downside congestion around the 1.1050 level with stronger bids on a push to the 1.1020-00 areas before limited bids appear through to the 109.80 and stronger stops appearing and minor support through the 1.09 handle, Topside offers into the 1.1180 level and likely to increase through to the 1.1220 level with congestion likely to continue through to the 1.1250 areas with weak stops in the mix, with further offers increasing into the 1.1280 areas.

 

Overnight News

USD/CNY:

Trump says he is raising tariffs on China after its retaliation from 25% to 30% – BBG

US beginning to lose China says Global times BBG

Trump: He’s had second thoughts on China trade war moves BBG

Trump clarifies on trade regrets: Tariffs should be higher BBG

Trump hereby orders US business out of China, Can he do that WPT

Trump aides say he has power to force companies from China – BBG

CNY/USD:

China to levy 5-10% on $75b of US goods BBG

China Vice Premier Liu says China is willing to resolve trade dispute with US via calm negotiations Chinese newspaper

Liu: China resolutely opposes escalation of trade war, which is not beneficial for US or China

HKD/CNY:

Tear gas, barricades return in violent protest BBG

Water cannons and a gun shot: Hong Kong protest violence intensifies WSJ

USD/JPY:

US-Japan trade negotiations, no significant impact likely on Japanese economy

Trump and Abe n likely will conclude at end of September

GBP:

Boris Johnson challenges critics of do or die Brexit strategy – TEL

Johnson: Can easily cope with a no deal scenario TEL

Johnson acknowledges touch and go prospects for Brexit deal – APW

JPY:

Premarket breaches flash crash low as trade war escalates BBG

EUR:

Bundesbank’s Weidmann warns against panic amid economic slowdown BBG

CNY:

China’s companies have unseen foreign debt that’s maturing fast BBG

NZD:

NZ trade deficit widens as imports rise to 8 months high

USD/KRW:

Trump criticized S. Korea, Moon at G7 meeting – BBG

 

Today’s Data

Actual A | Consensus C | Previous P | Revised R | all timings GMT/UTC

NZD       Trade Balance (JUL) A -685m | C -254m | P 365m

NZD       Trade Balance 12 Mth YTD (JUL) A -5463 | C -5012m | P -4937m

EUR        Group of Seven Summit in Biarritz, France (Day 3)

JPY         Leading Index CI (JUN F) A 93.3 | P 93.3

JPY         Coincident Index (JUN F) A 100.4 | P 100.4

08:00     EUR        German IFO Business Climate (AUG) C 95.0 | P 95.7

08:00     EUR        German IFO Expectations (AUG) C 91.8 | P 92.2

08:00     EUR        German IFO Current Assessment (AUG) C 98.8 | P 99.4

12:30     USD        Durable Goods Orders (JUL P) C 1.0% | P 1.9%

12:30     USD        Durables Ex Transportation (JUL P) C 0.0% | P 1.0%

23:30     AUD       ANZ Roy Morgan Weekly Consumer Confidence Index (AUG 25)  P 112.8

23:50     JPY         Corporate Service Price (YoY) (JUL) C 0.6% | P 0.7%

 

Harry Hindsight

 

  • GBP: A slow slide through the first half of the day with the opening around the 1.2250 seeing early gains towards the 1.2260 level before Tokyo moved in to push the market slowly through to the 1.2225 area before holding through into the London session, early London saw the market pushing through the 1.2200 level with the market generally holding around the 1.2195 areas before slowly rising to the 1.2220 areas for the move into the NYK session and the market quickly pushing towards the 1.2240 area, Brexit news was overtaken by Trump tweets and the Cable gradually pushed back through the 1.2250 level and a quick push higher through to the 1.2280 level before dipping and then taking a more leisurely move through to the 1.2290 areas to the close.
  • JPY: The day started calmly and the USDJPY slowly rose from the 106.40 opening to test through to the 106.60 area in early morning in Tokyo, the market generally continued to rise through the day and only into the NYK session did the market drop from the highs around the 106.70 area, opening in NYK dipped to below the 106.50 area and held through to the Trump tweets and fell quickly back to the 105.50 level as increase in tensions between US and China saw safe haven flows to the JPY. The market slowly drifted through to the 105.30 area and then held quietly to the close unable to retake the 105.50 level.
  • AUD: The Oz traded reasonably quiet through the day with the market holding around the opening 0.6760 areas for much of the session with one minor dip in Tokyo through the 0.6750 area before returning and holding through to the NYK session in the 0.6750-60 area, early NYK saw minor selling in the Oz and a dip through into the 0.6730’s before the tweets hit and the market rallied for a short period testing through to the 0.6775 areas before dipping back and holding around the 0.6750 area into the close.
  • EUR: Quiet trading through Asia with the Euro dipping away from the early highs around the 1.1085 level and slipping through to the 1.1060 areas before finding a base and holding through into the London session around the 1.1070 areas with the market slipping slowly through to just above the 1.1050 areas, early NYK started a slow recovery with the Euro pushing through to the Trump tweets pushing the 1.1085 level and a quick move through to the 1.1150 level before holding around the area through to the close.

 

Yesterday’s Premiership results

NZD       Retail Sales Ex Inflation (QoQ) (2Q) A 0.2% | C 0.2% | P 0.7%

JPY         National Consumer Price Index (YoY) (JUL) A 0.5% | C 0.5% | P 0.7%

JPY         National Consumer Price Index Ex-Fresh Food (YoY) (JUL) A 0.6% | C 0.6% | P 0.6%

JPY         Natl CPI Ex Fresh Food, Energy (YoY) (JUL) A 0.6% | C 0.5% | P 0.5%

USD        Annual Federal Reserve Policy Symposium in Jackson Hole (Day 2)

MXN      Economic Activity IGAE (YoY) (JUN) C -0.58% | P -0.43%

CAD       Retail Sales (MoM) (JUN) C -0.3% | P -0.1%

USD        Fed Chair Powell Speaks at Jackson Hole

USD        New Home Sales (MoM) (JUL) -0.2% | P 7.0%

USD        Baker Hughes U.S. Rig Count (AUG 23) P 935

 

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LMAX Exchange Market Commentary   Andy Harrison  

Any opinions, news, research, analyses, prices or other information ("information") contained on this Blog, constitutes marketing communication and it has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Further, the information contained within this Blog does not contain (and should not be construed as containing) investment advice or an investment recommendation, or an offer of, or solicitation for, a transaction in any financial instrument. LMAX Group has not verified the accuracy or basis-in-fact of any claim or statement made by any third parties as comments for every Blog entry.

LMAX Group will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. No representation or warranty is given as to the accuracy or completeness of the above information. While the produced information was obtained from sources deemed to be reliable, LMAX Group does not provide any guarantees about the reliability of such sources. Consequently any person acting on it does so entirely at his or her own risk. It is not a place to slander, use unacceptable language or to promote LMAX Group or any other FX and CFD provider and any such postings, excessive or unjust comments and attacks will not be allowed and will be removed from the site immediately.