Daily FX Market Compentary

Andy Harrison

Good Morning,

LMAX Close

USDJPY 106.119 | EURUSD 1.10996 | AUDUSD 0.67758 | NZDUSD 0.63838 | USDCAD 1.32549 | USDCHF 0.97897 | GBPUSD 1.22182 |

LMAX highs and Lows 05.00 GMT

                                Highs | Lows

EURUSD               1.11074 | 1.1098

USDJPY                106.148 | 105658

GBPUSD              1.22307 | 1.22089

USDCHF               0.97975 | 0.97828

AUDUSD             0.67773 | 0.67545

USDCAD              1.32576 | 1.32354

NZDUSD              0.64050 | 0.63654

EURCHF               1.08737 | 1.08628

EURGBP              0.90922 | 0.90813

EURJPY                117.840 | 117.286

For Today

• GBP: A slow drift from the opening around the 1.2225 area falling slowly back to the 1.2210 area for the move into the London session with very little volume moving through, , 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: Opening around the 106.10 level the market was unable to capitalize on yesterdays rally from the lows and once into the Tokyo session drifted lower back through the figure to push to the 106.70 areas for the move through to the grey hour and ultimately London opening, Downside bids starting to firm up around the 105.00 areas and increasing on any move to the 104.50 level with stops likely to not appear until through the 104.00 level and the likelihood of buyers willing to buy into any dips, whether or not the BoJ has interest or not and politically not the right idea for the time being, topside offers congested through the 106.40-60 areas with stronger offers likely to reappear on any move to the 106.80 areas before weak stops opens the market through to the 107.50 areas.
• AUD: A slow drift from the opening highs towards the 0.6780 level before slipping steadily through to hold the 0.6770 for the bulk of the session, commentary from Debelle saw the market slipping further and testing through the 0.6760 areas before holding just above the level through to the London session, 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: A very quiet Euro, opening around the 1.1100 area and continuing in that area through the session with a brief flirtation all the way to the 1.1105 area before heading into the grey hour again on the figure level, 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:

US Business equipment shipments slump most since 2016 BBG

Trump’s tweet speed market, facts take back seat to hope BBG

USD/CNY:

Get used to trade war stalemate WSJ

Senators demand US pension fund reject China investment BBG

Trump states highest level calls with China, while China states nothing to do with us.

CNY/USD:

US shouldn’t misjudge China will to retaliate People’s Daily

JPY:

Currency not been talked about in US-Japan trade talks

Aso: Will keep close watch on currency moves

Aso: Currency being stable is important

Aso: Won’t comment on current currency level

CNY:

China Jan-July industrial profits -1.7% YoY

China July industrial profits 2.6% higher YoY

China Statistics Bureau: Downward economic pressures still relatively big despite positive industrial profit growth in July

CSB: Needs to work harder on promoting stability of corporate profits

AUD:

RBA Deputy Debelle: Floor for rates here likely around zero-0.5%

Debelle: Have looked closely at minimum rates in other developed countries

Debelle: Hope we never have to get down to those levels

Debelle: Housing market showing signs of stabilization

Debelle: Housing market doesn’t seem to be off to the races right now

Debelle: Would like to see more investment in infrastructure

Debelle: AUD has come down some, may well go down further

Debelle: Further drop in AUD would be helpful for economy

Today’s Data

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

AUD       ANZ Weekly Consumer Confidence Index (AUG 25) A 114.1 | P 112.8

JPY         Corporate Service Price (YoY) (JUL) A 0.5% | C 0.6% | P 0.7%

06:00     EUR        German Gross Domestic Product n.s.a. (YoY) (2Q F) C 0.0% | P 0.0%

06:00     EUR        German Gross Domestic Product w.d.a. (YoY) (2Q F) C 0.4% | P 0.4%

08:30     GBP        BBA Loans for House Purchase (JUL) C 42854 | P 42653

13:00     USD        House Price Purchase Index (QoQ) (2Q) C 0.2% | P 1.1%

13:00     USD        House Price Index (MoM) (JUN) C 0.2% | P 0.1%

13:00     USD        S&P CoreLogic CS 20-City (MoM) SA (JUN) C 0.1% | P 0.14%

13:00     USD        S&P/Case-Shiller Composite-20 (YoY) (JUN) C 2.4% | P 2.39%

13:00     USD        S&P/Case-Shiller US Home Price Index (YoY) (JUN) C 3.3% | P 3.43%

14:00     USD        Consumer Confidence Index (AUG) C 129 | P 135.7

14:00     USD        Conf. Board Present Situation (AUG) P 170.9

Harry Hindsight

 

• GBP: Opening weaker on JPY buying against all currencies saw the Cable opening around the 1.2265-70 area and eventually moving into Tokyo filling the gap before falling back again and basing in the 1.2260 area through to the London session, more Brexit he said she said stuff pushed the Cable back through the 1.2250 level and steadily holding around the 1.2235 area into the NYK session before stronger selling towards the NYK Option cut saw the low made just below the 1.2210 areas, once that was out of the way the market recovered to the 1.2235 level but the run to the close saw a slow drift and the market finishing just off the lows.
• JPY: Premarket jostling saw the USDJPY trading below the 105.00 level however, when the market opened fully the market again pushed from the 105.00 level through to a dip below the 104.50 level before bouncing and slowly pushing back to the 105.00 area through the Tokyo opening and rising through to fill the gap on the charts and triggering some weak stops on the break through the 105.30 area to set an early high just below the 105.80 level and a recovery of sorts on its way, the market drifted from the early high to slip slowly back to the 105.20 level before London bought strongly and quickly pushed for the 106.00 level failing initially the market held in the area and slowly pushed through into the NYK session triggering some weak stops on a move to the 106.40 area to make the high of the day, the market held around the 106.00 level through to the end of London before rising a little and a quiet move through to the close.
• AUD: Strong AUDJPY selling at the start of the session saw the market opening around the 0.6740 level and then dropping on the move into the Tokyo session to test through the 0.6700 area to touch the 0.6690 level before rising steadily through the session to push through and fill the gap on the charts before Tokyo lunch, a slow drift into the London session saw the market lifting from the 0.6725 area and a slow climb to the 0.6750 level again with the market slowly pushing through to the end of London testing to the 0.6770 area and jumping as NYK took it too the 0.6785 areas before a drift through to the close.
• EUR: One can only assume that EURJPY was a none event and most traders were flat on the pairing as the opening in Euro was in line with the close on Friday and the Euro slowly edged higher through into early Tokyo testing the 1.1165 level before drifting back to the opening level and ranging around the 1.1145 level through to the London session, quick selling from the London opening saw the market chased down to the 1.1115 areas and a slow range through to NYK before finally dipping to the figure level for the run to the close once London were out of the way.

 

Yesterday’s Premiership results

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

EUR        German IFO Business Climate (AUG) A 94.3 | C 95.0 | P 95.7 | R 95.8

EUR        German IFO Expectations (AUG) A 91.3 | C 91.8 | P 92.2 | 92.1

EUR        German IFO Current Assessment (AUG) A 97.3 | C 98.8 | P 99.4

USD        Durable Goods Orders (JUL P) A 2.1% | C 1.0% | P 1.9% | R 1.8%

USD        Durables Ex Transportation (JUL P) A -0.4% | C 0.0% | P 1.0% | R 0.9%

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