Daily FX Market Commentary

Andy Harrison

Good Morning,

LMAX Close

USDJPY 106.12 | EURUSD 1.10776 | AUDUSD 0.67335 | NZDUSD 0.63364 | USDCAD 1.33067 | USDCHF 0.98163 | GBPUSD 1.22107 |

LMAX highs and Lows 05.00 GMT

                                Highs | Lows

EURUSD               1.10875 | 1.1078

USDJPY                106.121 | 105.83

GBPUSD              1.22323 | 1.22002

USDCHF               0.98199 | 0.98006

AUDUSD             0.67434 | 0.6724

USDCAD              1.33189 | 1.33056

NZDUSD              0.63409 | 0.6309

EURCHF               1.08810 | 1.08629

EURGBP              0.90846 | 0.90699

EURJPY                117.632 | 117.28

For Today

• GBP: A slow drift from the opening around the 1.2210 having pushed a couple of times above 1.2220, the move into the Tokyo session saw the market slip back to the figure level and base along 1.2200 through to the London session, Topside offers look to be a little stronger into the 1.2300 areas before weak stops appear through the 1.2320 area 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: A light steady push from the opening through to the 106.10 level only to return to the 106.00 quickly into the Tokyo session and continue through to the 105.85 areas and holding deep through the session before starting a return to the 105.90-95 area for the move into the grey hour, 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, month end flows to come 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: JPY buying dominated the Oz with the market initially making headway in a limited fashion pushing through towards the 0.6745 level in early trading before dropping quickly back on AUDJPY selling to test lightly below the 0.6725 level and define the range for the day, with the market then holding in the 0.6725-30 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 slow move through the 1.1085 areas from the opening saw the market failing in the 1.1087 area and dipping back to hold the opening level again and a slow market through to London 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:

Ray Dalio says the current period is just like 1935-45 Zero Hedge

Mnuchin says US doesn’t intend to intervene on USD for now

Navarro: Unlikely anything quick will happen with trade talks

Fed’s Daly biased toward rate policy that promotes job growth DJ

Could a US recession end the trade war? Project Syndicate

GBP:

PM Johnson corners his opponents and pushes Brexit toward showdown BBG

UK car production fell 11% in July, Trade group says – BBG

CNY:

China’s tax revenue on track for first drop since Mao Nikkei

China’s Hefei city adopts new rule to tame land prices BBG

China’s currency is weakening as the trade war drags on – NYT

EUR:

German bank CEO Michael Ruediger, fears decade without positive interest rates BBG

Italy’s Matteo Salvini is more dangerous threat to the EU outside Government – TEL

JPY:

Japanese sold net 911.9B JPY overseas debt last week

USD/IRR:

US military carried out secret cyber strike on Iran to prevent it from interfering with shipping – WPT

NZD:

NZ business confidence slumps to 11yr low ANZ

CNY/USD:

China’s PLA warned US warship yesterday in S. China sea to leave Global Times

China’s big banks feel the bailout pinch Investing.com

Today’s Data

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

JPY         Loans & Discounts Corp (YoY) (JUL) A 2.40% | P 2.73%

NZD       ANZ Activity Outlook (AUG) A -0.5 | P 5

AUD       Private Capital Expenditure (2Q) A -0.5% | C 0.4% | P -1.7%

06:45     EUR        French Gross Domestic Product (YoY) (2Q F) C 1.3% | P 1.3%

07:55     EUR        German Unemployment Change (000’s) (AUG) C 3.5k | P 1.0k

07:55     EUR        German Unemployment Claims Rate s.a. (AUG) C 5.0% | P 5.0%

12:00     EUR        German Consumer Price Index (MoM) (AUG P) C -0.1% | P 0.5%

12:00     EUR        German Consumer Price Index (YoY) (AUG P) C 1.5% | P 1.7%

12:30     USD        Gross Domestic Product Annualized (QoQ) (2Q S) C 2.0% | P 2.1%

12:30     USD        Personal Consumption (2Q S) C 4.3% | P 4.3%

12:30     USD        Gross Domestic Product Price Index (2Q S) C 2.4% | P 2.4%

12:30     USD        Core PCE (QoQ) (2Q S) C 1.8% | P 1.8%

12:30     USD        Advance Goods Trade Balance (JUL) C -$74.6b | P -$74.2b

12:30     USD        Wholesale Inventories (MoM) (JUL P) C 0.2% | P 0.0%

12:30     USD        Initial Jobless Claims (AUG 24) C 215k | P 209k

12:30     USD        Continuing Claims (AUG 17) P 1674k

14:00     USD        Pending Home Sales (YoY) (JUL) C 1.8% | P -0.6%

22:45     NZD       Building Permits (MoM) (JUL) P -3.9%

23:01     GBP        GfK Consumer Confidence (AUG) C -11 | P -11

23:30     JPY         Jobless Rate (JUL) C 2.3% | P 2.3%

23:50     JPY         Retail Trade (YoY) (JUL) C -0.6% | P 0.5%

23:50     JPY         Large Retailers’ Sales (JUL) C -4.5% | P -0.5%

23:50     JPY         Industrial Production (YoY) (JUL P) C -0.5% | P -3.8%

Harry Hindsight

 

• GBP: A steady drift through the Asian session falling back from the q.ww90 level to test the 1.2270 area and holding through the middle of the session in that area, the move towards the London opening saw the market regaining much of its losses, with PM Johnson proroguing Parliament (suspending) from mid-September through to October 14 thus limiting time for any debate over a Brexit the market dropped quickly through to the 1.2155 level bouncing back to the 1.2200 area and ranging around the figure through into the NYK session with just the Queens ascent to wait for the market actually recovered to the 1.2250 level once given before drifting to a close just above the 1.2200 level.
• JPY: Quiet through the Asian session with the market testing through into the mid 105.60’s in early trading before pushing back to the 105.80 level and ranging around the level through to London with attempts to test the 105.90 level thwarted several times, the move through into the London session saw the market holding quietly around the 105.70’s and again tempting the lows before starting a stronger rally through the NYK session pushing the 105.90’s again and eventually grinding through the offers in the area to steadily rise through to the 106.20 highs before dipping for the close.
• AUD: Limited day for the Oz with the market holding the opening levels around the 0.6750 area deep into the Tokyo session before spiking to above the 0.6760 level and then dropping quickly back to the 0.6740 level on the back of weaker construction numbers, the move through into London saw the market running along the 0.6735 area and eventually pushing for a long deep running range into the NYK session holding around the 0.6745 level before slipping slowly back to make the lows into the close.
• EUR: Considering the events in the UK a very quiet day for the Euro, and possibly moved around by the EURGBP more than anything direct with German numbers disappointing the market, opening just above the 1.1090 levels the market drifted through the Asian session testing to the 1.1085 level and holding through to the London session where steady buying threatened the 1.1100 level for a short period before EURGBP buying entered with the Cable leg doing the most work as it dipped lower dragging the Euro back to the lows again, as Cable continued to suffer the Euro managed to range between the 1.1085-95 area before moving into the NYK session and the Euro suddenly under pressure as Cable started to recover and the EURGBP buying looked a bit suspect and the Euro dropping through to 1.1075 and based along that level through to the close in a roughly 10 pip range.

 

Yesterday’s Premiership results

GBP        Nationwide House Px n.s.a. (YoY) (AUG) A -0.4% | C 0.7% | P 0.3%

EUR        German Import Price Index (MoM) (JUL) A -0.2% | C -0.1% | P -1.4%

EUR        German Import Price Index (YoY) (JUL) A -2.1% | C -2.0% | P -2.0%

EUR        German GfK Consumer Confidence (SEP) A 9.7 | C 9.6 | P 9.7

USD        MBA Mortgage Applications (AUG 23) A -6.2% | P -0.9%

USD        DOE U.S. Crude Oil Inventories (AUG 23) A -10027k | C -2941k | P -2732k

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