Daily FX Market Commentary

Andy Harrison

Andy Harrison

Good Morning,

LMAX Close
USDJPY 107.749 | EURUSD 1.09342 | AUDUSD 0.67036 | NZDUSD 0.6244 | USDCAD 1.32242 | USDCHF 0.9933 | GBPUSD 1.23052 |

LMAX highs and Lows 05.00 GMT
Highs | Lows
EURUSD 1.09416 | 109.286
USDJPY 107.885 | 107.648
GBPUSD 1.23050 | 1.22797
USDCHF 0.99358 | 0.99212
AUDUSD 0.67184 | 0.6700
USDCAD 1.32254 | 1.32066
NZDUSD 0.62539 | 0.62388
EURCHF 1.08655 | 1.08513
EURGBP 0.89053 | 0.88834
EURJPY 117.983 | 117.724
For Today
• GBP: Very limited movement and volume for the session opening just below the 1.2300 areas and struggling through the early part to move into the Tokyo session holding around the 1.2290 level before Tokyo made the highs around the figure level again before drifting through to the grey hour testing lightly through the 1.2280 area. Downside bids cleared a little through to the 1.2210 area with strong bids likely to remain in play before weak stops likely on a push through the 1.2200 areas and opening up a deep move through to the 1.2100 area before support is likely to reappear, topside offers cleared through to the 1.2340 areas with resistance through the sentimental 1.2350 areas with weakness likely to continue through to the 1.2380-1.2400 areas where stronger offers likely.
• JPY: Drifting off the opening around the 107.75 areas and testing into the 107.65 levels and holding deep into the session before starting a steady rise through to the 107.90 levels in quiet trading, Topside offers light through to the 108.50 areas with limited resistance through the level but increasing on any move towards the 108.80-109.00 area with weak stops limited above the 109.20 areas. Downside bids into the current lows and then some limited congestion through to the 107.40 areas before the support starts to increase through to the 107.00 level, weak stops on a move through is likely to find congestive bids through out the 106 handle and certainly difficult to move through.
• AUD: Very quiet rise from the opening just above the 0.6700 level and pushing slowly towards the 0.6720 through the session before wilting a little on the approach to the grey hour, Downside bids through to the 0.6680 level with weak stops likely on a dip through the 0.6670 level with congestive bids then likely to be patchy but centred around the sentimental 50/00 areas, topside offers light through to the 68 cents level before stronger selling is likely to appear even a push through the 0.6820 area and weak stops are likely to find sellers willing to move in on the moves.
• EUR: After a very dull start and holding the 10930 area through to the Tokyo session the market started to slowly rise and push through to the 1.0940 level for the highs of the session before drifting through to the grey hour falling back to the 1.0930 opening areas. Topside offers likely to be weak on any move through to the 1.1000 areas with congestion around the 1.1020 level and weak stops just beyond the level and opening the market through to the 1.1040-60 areas where congestion is likely, stronger offers then appear on any push through the 1.1080-1.1100 levels. Downside bids through the yesterday’s lows and then increasing as the market moves towards the 1.0890-70 areas, with stops likely on any dip through the 1.0880 areas and opening a longer-term downside move with some congestion around the 1.0860-40 areas and then increasing on any move to the 1.0820-00 areas.

Overnight News
KRW:
N. Korea may have fired submarine-based missile says S Korea -BBG
AUD:
Why Lowe will have to keep pushing on the monetary pedal – AFR
RBA set to knock on door of unconventional policy – DJ
GBP/EUR:
Can Boris Johnson secure a last-minute Brexit deal – Spiegel
Irish Minister: UK Brexit proposal as reported is unacceptable – BBG
EU Diplomat: UK PM Johnsons plan for Irish border is a kamikaze move – UKT
GBP:
Government hints at legal challenge against surrender – UKT
Cost of no deal Brexit pales in comparison to political damage of not leaving – TWT
Boris Johnson has rolled the diplomatic dice, but the rules of the EU game are stacked against him – TEL
Johnson’s Brexit plan includes 2 borders for 4 years leaving N. Ireland in a special relationship – BBG
JPY:
GPIF tweaks bond investment rules –
USD:
API Reports US crude stockpiles fell 5.92m BBL last week – BBG

Today’s Data
Actual – A | Consensus – C | Previous – P | Revised R | all timings GMT/UTC
JPY Monetary Base End of period (SEP) A ¥520.4t | P ¥515.9t
0600 JPY Consumer Confidence Index (SEP) P 37.1
0730 CHF CPI Core YoY (SEP) C 0.4% | P 0.4%
0730 CHF CPI EU harmonized YoY (SEP) P 0.5%
0730 CHF CPI YoY (SEP) C 0.3% | P 0.3%
0930 GBP Markit/CIPS UK Construction PMI (SEP) C 45.0 | P 45.0
1200 USD MBA Mortgage applications P -10.1%
1315 USD ADP Employment Change (SEP) C 140k | P 195k
1530 USD DOE US Crude Oil Inventories (SEP 27) P 2412k
2330 AUD AiG Performance of Service Index (SEP) P 51.4

Harry Hindsight

• GBP: A quiet session through Asia drifting from the 1.2295 area through to hold just above the 1.2280 area before rising steadily back into the London session, grey hour dip through to the 1.2275 level before recovering in London to trade around the 1.2300 level that is until the numbers saw a dip through to the 1.2260 level before a choppy period and regaining the highs through to the NYK session testing towards the 1.2315 levels, USD buyers moved in and the Cable drifted off through to test to the 1.2205 in a deep steady move before finding support and nervously heading back to the 1.2250 area and the rumour of a deal done was quickly squashed by the EU and a quick stab to the 1.2340 level dipping quickly back as the early reports proved to be speculative at best but at least holding limited gains through to the close.
• JPY: Opening around the 108.10 level the market eventually started a steady rise through the Asian session to push into the London area pushing the 108.30 level and holding through into early morning before pushing through to the 108.45 area to make the highs before drifting into the NYK session, NYK tested the highs again but poor ISM numbers in the US saw the USD dropping quickly through to the 107.95 level and then a slow test through to the 107.65 areas before running out quietly to the close.
• AUD: A quiet run through to the early part of Tokyo having opened around the 0.6750 level the market slowly rose to the early high around the 0.6760 areas before drifting with little volume to the 0.6735 level and recovering into the RBA announcement, a spike higher on the expected 25bp cut took the market to the 0.6775 areas before dropping just as quickly through to the lows and then drifting steadily through into the London session testing the 0.6700 area, the market then held through to the NYK session moving in a narrow band around the 67 cents level before drifting off from the opening to the 0.6670 level and started to push off the level steadily to return to the figure level for the extended run to the close.
• EUR: Very limited movement through the early part of the Asian session holding around the 1.0900 level deep into the Tokyo session before drifting through to the 1.0890 areas and then holding through to the London session, early sellers took the market to the lows with a tentative step through the 1.0880 level before starting a slow rise through to NYK pushing to just above the 1.0900 areas before sagging back through the 1.0890 level, weak ISM numbers saw the Euro jump quickly added too by rumours of a Brexit deal saw the Euro quickly test to the 1.0920 areas and then a slower and steady rise through to test above the 1.0940 level to make the highs and then trade in a narrow band through to the close.

Yesterday’s Premiership results
NZD NZIER Business Opinion Survey A 92.4%
AUD AiG Performance of Manufacturing index (SEP) A 54.7 | P 53.1
JPY Jobless rate (AUG) 2.2% | C 2.3% | P 2.2%
JPY Tankan Large all industry Capex A 6.6% | C 7.0% | P 7.4%
JPY Tankan Large Manufacturers outlook (3Q) A 2 | C 0 | P 7
JPY Tankan Large Manufacturing Index (3Q) A 5 | C 1 | P 7
JPY Tankan Large Non-Manufacturing Index A 21 | C 20 | P 23
JPY Tankan Small Non-Manufacturing Outlook A 1 | C 1 | P 3
AUD Building Approvals YoY A -21.5% | C -20.0% | P -28.2%
AUD RBA Cash rate Target (OCT 1) A 0.75% | C 0.75% | P 1.00%
GBP Nationwide House Price YoY (SEP) A 0.2% | C 0.50% | P 0.60%
CHF Retail Sales Real YoY (AUG) A -1.4% | P 1.4%
CHF PMI Manufacturing (SEP) A 44.6 | C 46.5 | P 47.2
GBP Markit UK PMI Manufacturing A 48.3 | C 47.0 | P 47.4
EUR Eurozone CPI Core YoY (SEP A) A 1.0% | C 1.0% | P 0.9%
EUR Eurozone CPI Estimate YoY (SEP) A 0.9% | C 1.0% | P 1.0%
AUD RBA Lowe speaks in Melbourne
CAD Gross Domestic Product MoM (JUL) A 1.3% | C 1.4% | P 1.5%
CAD GDP MoM (JUL) A 0.0% | C 0.1% | P 0.2%
CAD RBC Canadian Manufacturing PMI (SEP) A 51 | P 49.1
USD ISM Employment (SEP) A 46.3 | P 47.4
USD ISM Manufacturing (SEP) A 47.8 | C 50.2 | P 49.1
USD Construction spending MoM (AUG) A 0.1% | C 0.4% | P 0.1%
USD ISM Prices Paid 49.7 | C 50.5 | P 46.0
MXN Markit Mexico PMI Manufacturing (SEP) A 49.1 | P 49.0

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