Daily FX Market Commentary

Andy Harrison

Andy Harrison

Good Morning,

LMAX Close

USDJPY 106.946 | EURUSD 1.10343 | AUDUSD 0.68147 | NZDUSD 0.63727 | USDCAD 1.32306 | USDCHF 0.98598 | GBPUSD 1.23306 |

 

LMAX highs and Lows 05.00 GMT

                                Highs | Lows

EURUSD               1.10382 | 1.10299

USDJPY                107.100 | 106.876

GBPUSD              1.23472 | 1.23219

USDCHF               0.98732 | 0.98506

AUDUSD             0.68232 | 0.68076

USDCAD              1.32325 | 1.3209

NZDUSD              0.63904 | 0.63696

EURCHF               1.08922 | 1.0876

EURGBP              0.89549 | 0.89447

EURJPY                118.177 | 117.944

 

For Today

  • GBP: A quiet session but not surprising given the US data later today, opening around the 1.2330 level the market tested to the 1.2340 level to make the high for the day before drifting and holding through the balance of the session around the 1.2325 areas for the grey hour, Topside congestion through the 1.2360 areas with increasing congestion on the approach to the 1.2400 level with stronger offers on a test through the level with limited stops with offers increasing from the 1.2450 area through to the 1.2500 level, light bids through to the 1.2250 area with reforming congestion on any dips through the level and into the 1.2200 level, any push through the level will likely see weakness quickly appearing until closer to the 1.2100 level and the downside if there is strong selling suspect and open through to the recent lows.
  • JPY: UDJPY saw some gyrations around the open before moving off the 106.90 level and slowly rising through to the 107.10 level before dipping back and slowly moving back to the highs to hold quietly for several hours, the move to the grey hour       saw the market drifting back and holding around the figure level, Downside bids starting to light through the 106.00 level but some congestion through to the 105.80 areas before firming 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, Topside offers through to the 107.50 level before stronger congestion appears with limited potential to squeeze to the 108.00 level, a break through the level should see stops appearing and the market able to squeeze 108.40-60 areas before stronger offers appear.
  • AUD: A slow drift from the opening around the 0.6815 level testing to only the 0.6810 level and holding around the 0.6815 areas through to mid-session, the market dipped a little through the lows before starting a steady rally through the balance to the session to push through the 0.6820 level before holding around the level through into the grey hour, downside bids likely to reforming around the 0.6700 areas and increasing through to the 0.6680 level, a break through the level is likely to see weak stops appearing and the market open to a larger move over the long run however, a dip into the 0.6620 area will again see strong bids appearing, Topside offers still remain in the area around the 0.6825 areas with a push through to the 0.6830  level with congestion then appearing through the 0.6840 level but becoming weaker until the stronger offers into the 0.6880 areas and through onto the 69 cents level.
  • EUR: Another quiet session for the Euro with the market drifting to the 1.1030 level before returning to the opening levels around the 1.1035 area for the move to the grey hour, downside bids into the 1.0920 level and likely to continue through to the 1.0880 level however, congestion is then likely to start increasing as the market moves into the mid ranges from 2015-16 with limited bids until 1.0800,Topside offers through the 1.1040-60 area with increasing congestion on a test to the 1.1100 areas, weak stops likely on a break of the 1.1120 level and the market then running to weaker congestion into the 1.1140-60 and increasing on any move to the 1.1180 level.

 

Overnight News

AUD:

ANZ Sees RBA cutting key rate to 0.25% with cuts in Nov, Feb, May

GBP:

UK Labour’s Corbyn discusses Oct 29 election plan with SNP – BBG

UK’s Boris Johnson says he would rather be dead in a ditch than ask for another Brexit delay – BBG

CNY:

The Beijing leadership believes it has taken a bold step; protesters say they will continue their fight – Nikkei

CNY/USD:

China, US must implement top leaders’ consensus in talks – Xinhua

HKD:

Fitch downgrades Hong Kong as doubts over governance rise – BBG

 

Today’s Data

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

AUD       AiG Performance of Construction Index (AUG) A 44.6 | P 39.1

JPY         Overall Household Spending (YoY) (JUL) A 0.8% | C 0.8% | P 2.7%

JPY         Real Cash Earnings (YoY) (JUL) A -0.9% | C -0.7% | P -0.5%

JPY         Labour Cash Earnings (YoY) (JUL) A -0.3% | C 0.1% | P 0.4%

JPY         Leading Index CI (JUL P) A 93.6 | C 93.2 | P 93.3

JPY         Coincident Index (JUL P) A 99.8 | C 100.7 | P 100.4

06:00     EUR        German Industrial Production n.s.a. and w.d.a. (YoY) (JUL) P -5.2%

08:30     GBP        BoE/TNS Inflation Next 12 Mths (AUG) P 3.1%

09:00     EUR        Euro-Zone Government Expenditure (QoQ) (2Q) C 0.3% | P 0.1%

09:00     EUR        Euro-Zone Gross Domestic Product s.a. (QoQ) (2Q F) C 0.2% | P 0.2%

09:00     EUR        Euro-Zone Gross Domestic Product s.a. (YoY) (2Q F) C 1.1% | P 1.1%

12:30     CAD       Full Time Employment Change (AUG) C 17.5 | P -11.6

12:30     CAD       Net Change in Employment (AUG) C 20.0k | P -24.2k

12:30     CAD       Hourly Wage Rate Permanent Employees (YoY) (AUG) C 4.5% | P 4.5%

12:30     CAD       Unemployment Rate (AUG) C 5.7% | P 5.7%

12:30     USD        Change in Non-farm Payrolls (AUG) C 160k | P 164k

12:30     USD        Change in Private Payrolls (AUG) C 150k | P 148k

12:30     USD        Unemployment Rate (AUG) C 3.7% | P 3.7%

12:30     USD Average Hourly Earnings (YoY) (AUG) C 3.0% | P 3.2%

12:30     USD        Average Weekly Hours All Employees (AUG) C 34.4 | P 34.3

17:00     USD        Baker Hughes U.S. Rig Count (SEP 6) C 898 | P 904

 

Harry Hindsight

 

  • GBP: Drifting from the opening around the 1.2250 areas and testing through to the low 1.2230 areas before steadying and moving through to the London session on a steady attempt to recapture the 1.2250 area, early sellers into the grey hour saw the market make the lows for the day into the London opening, holding for a brief period the market started a steady climb with nothing really new from either the Government or opposing MP’s to trade through to the 1.2280 level, a brief pause before renewing the rally and a push through the 1.2300 level triggering weak stops an a push through to the 1.2350 area and the high for the day before moving into NYK and slipping a little lower and maintaining a range around the 1.2330 level through to the close.
  • JPY: A quiet move through the early part of the Tokyo session, quickly rising in mid-session saw the opening levels and lows around 106.35 areas, and testing to the 106.75 level before drifting back steadily through to the London session, a slow start in London saw the USDJPY slowly moving higher and for the move into the NYK session and a quick move higher through to the 106.90 level on the opening, the market held around the level for a short period with slightly better US numbers and running quickly through to the 107.20 level before dropping back and holding to the close around the 107.00 area.
  • AUD: A slow rise from the 0.6795 area opening saw the market testing into the 0.6805 level better GDP numbers saw the market rising quickly through to the 0.6825 levels and the highs for Asia with a slow drift to the 0.6815 level for the move into the grey hour with further selling through the 0.6810 areas holding quietly through to midmorning in London before again testing towards those highs quietly, the move into the NYK session saw a limited sell off and then a quick rise to spike through to the 0.6830 and failing to push through to the 0.6840 the market dropped quickly back through to the 0.6810 level and while there was some improvement the market held around the 0.6815 through to the close in tight trading.
  • EUR: Euro’s did very little through the Asian session opening around the 1.1030 areas before moving quietly through into the Tokyo session, midsession saw light selling moving in and the market drifting through into the grey hour making the lows just before London around the 1.1020 areas before starting a steady rally, one assumes that the market believes that no deal Brexit is drifting away, the market pushed through to the opening in NYK testing just above the 1.1060 level and after a brief pause rallied through to push lightly through the 1.1080 before dropping quickly back to the 1.1050 and then a steady drift through to the close of the day holding in the mid 1.1035 level.

 

Yesterday’s Premiership results

AUD       Trade Balance (JUL) A A$7268m | C A$7000m | P A$7977m

CHF        Gross Domestic Product (QoQ) (2Q) A 0.3% | C 0.2% | P 0.6%

CHF        Gross Domestic Product (YoY) (2Q) A 0.2% | C 0.9% | P 1.7% | R 1.0%

EUR        German Factory Orders n.s.a. (YoY) (JUL) A -5.6% | C -4.2% | P -3.6% | R -3.5%

EUR        Markit Germany Construction PMI (AUG) A 46.3 | P 49.5

MXN      Consumer Confidence Index (AUG) A 43.4 | C 103.6 | P 105.1

USD        ADP Employment Change (AUG) A 195k | C 149k | P 156k | R 142k

USD        Initial Jobless Claims (AUG 31) A 217k | C 215k | P 215k | R 216k

USD        Continuing Claims (AUG 24) A 1662k | C 1688k | P 1698k | R 1701k

USD        Factory Orders (JUL) A 1.4% | C 1.0% | P 0.6%

USD        Durable Goods Orders (JUL F) A 2.0% | C 2.1% | P 2.1%

USD        ISM Non-Manufacturing/Services Composite (AUG) A 56.4 | C 54.0 | P 53.7

USD        DOE U.S. Crude Oil Inventories (AUG 30) A -4771k | C -2680k | P -10027k

 

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