Daily FX Market Commentary

Andy Harrison

Andy Harrison

Good Morning,

LMAX Close
USDJPY 107.252 | EURUSD 1.09708 | AUDUSD 0.67324 | NZDUSD 0.62969 | USDCAD 1.33096 | USDCHF 0.99479 | GBPUSD 1.22903 |

LMAX highs and Lows 05.00 GMT
Highs | Lows
EURUSD 1.09783 | 1.09647
USDJPY 107.411 | 107.208
GBPUSD 1.23001 | 1.22841
USDCHF 0.99583 | 0.99454
AUDUSD 0.67492 | 0.6729
USDCAD 1.33140 | 1.32938
NZDUSD 0.63178 | 0.62859
EURCHF 1.09260 | 1.0908
EURGBP 0.89310 | 0.8924
EURJPY 117.860 | 117.632
For Today
• GBP: A slow rise from yesterdays lows pushing the market through to lightly test the 1.2300 level from the 1.2285 area but limited volume held the market in place for a move through to the grey hour, 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: A slow drift through from the opening testing towards the 107.20 areas before slowly rising in the Tokyo session to push lightly through to the 107.40 area before dipping away and running for a second time with limited reaction on pushing through the level repeatedly and holding through to the London session, Topside offers light through the 107.80-108.00 areas and continuing with limited congestion 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 106.50 areas with strength likely to be in that area with congestion likely on any push through towards the 106.00 areas and possible stronger stops on a push through the 105.80 areas and a concern then for the BoJ.
• AUD: A slow range through the early part of the session with a rise in Business conditions helping the market rise from the 0.6730 level and testing through to the 0.6750 area before holding just below the level through to the grey hour, Downside bids through to the 0.6680-0.6700 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: A slow move through the early part of the session with a quick dip through to the 1.0965 areas before rising again and pushing through the opening levels and testing through to just below the 1.0980 level before drifting into the grey hour and holding quietly around the 1.0975 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
USD/CNY:
Hopes for deal dim as US-China trade talks get underway in tense atmosphere – RTRS
Can the US and China make a deal – PS
Trump: Calls for humane solution in Hong Kong
Trump: Suggests Xi should meet with leaders in Hong Kong
Trump: There is a good possibility of trade deal with China
Trump: He thinks there is a chance of doing something very substantial in China trade talks
Trump: He thinks China is coming to make a deal, US will see if a deal can be made
Trump: If anything, bad happened in Hong Kong, he thinks it would be bad for US-China talks
Trump: US does not prefer a partial trade deal with China
Trump: His inclination is to get a big deal with China
Tariff increases scheduled to go into effect on Oct 15 on $250b Chinese goods
AUD:
Australia is rich, dumb and getting dumber – AFR
Business still struggling to gain traction from rate cuts and tax refunds – AUB
Australian business conditions improved from 1 to 2
NZD:
Protein technology to collapse animal farming within 10 years – NZH
HKD:
Hong Kong protesters, police and even reporters are losing their humanity during this crisis – SCMP
Hong Kong could be at tipping point as warning flag unfurled at Chinese Military barracks – CNN
Lam says Chinese military could step in if uprising gets bad – ABC
TRY:
Turkey says Syria Military operation preparation completed – SKY
GBP:
Boost for Johnson as court rules in his favour – BBG
EUR/USD:
EU turns screw on big Tech with chip maker order – FTI
USD:
US mulling aid to Nokia, Ericsson in Huawei fight – FT

Today’s Data
Actual – A | Consensus – C | Previous – P | Revised R | all timings GMT/UTC
JPY: Labour cash earnings YoY (AUG) A -0.2% | C -0.2% | P -1.0%
JPY Overall Household Spending YoY (AUG) A 1.0% | C 1.0% | P 0.8%
JPY Real Cash Earnings YoY (AUG) A -0.6% | C -0.6% | P -1.7%
JPY Trade Balance – BOP Basis (YEN) (AUG) A ¥50.9b | C ¥36.4b | P ¥-74.5b
NZD Government 12 Month Financial statements
NZD NAB Business Confidence A 0 | P 1
CNY Caixin China PMI Composite A 51.9 | P 51.6
CNY Caixin China PMI Services A 51.3 | C 52 | 52.1
GBP BoE’s Carney speaks on Climate change in Tokyo
JPY Japanese Bankruptcies YoY (SEP) A | P -2.3%
JPY Eco Watchers Survey Current (SEP) A | C 43.3 | P 42.8
JPY Eco Watchers Survey outlook SA (SEP) A | C 38.7 | P 39.7
0645 CHF Unemployment rate (SEP) C 2.1% | P 2.1%
0645 CHF Unemployment rate s.a (SEP) C 2.3% | P 2.3%
0700 EUR German IP nsa and wda YoY (AUG) C -4.3% | P -4.2%
0930 GBP Unit Labour Costs YoY (2Q) P 2.1%
USD Monthly Budget statement C $89.0B | P $119.1B
1315 CAD Housing Starts (SEP) C 217.5k | P 226.6k
1330 CAD Building Permits MoM (AUG) C 1.2% | P 3.0%
1850 USD Powell speaks at NABE Conference in Denver

Harry Hindsight

• GBP: A reasonably choppy day if somewhat limited in range, opening some 20 pips lower from Friday the market rose on the Tokyo opening to fill the gap on the charts and holding around the 1.2335 area deep into the Tokyo session before slowly weakening through to the grey hour holding the 1.2320 areas, early selling in London saw the market test lower in a choppy motion to push through to the 1.2290 levels before reversing and heading higher in the same manner, the run higher was not quiet as strong and the market managed only minor pushes through the 1.2330 level before ranging around the 1.2320 level through into the NYK session before starting a slow but steady drift through to the close testing below the 1.2300 level to the close.
• JPY: Opening on its lows around the 106.70 area the market dipped just slightly to make the lows of the day just above the 106.65 level then started a slow rise through into Tokyo to test the 106.85 area, Tokyo were limited in reaction and the market again started to slip towards the lows taking several hours before recovering to the 106.85 area again and ranging through into London and ultimately the NYK session unable to truly push through the 106.90, the move into the NYK session saw the market slow gaining and pushed through to the 107.10 level by the end of the London session, with a quick rise late into the session saw the market testing through to the 107.45 areas before drifting back through the session to finish just above the 107.25 level.
• AUD: Stepping lower through the day the market opened a little lower and was unable to fully close the gap made, testing to the 0.6765 areas the market saw the highs for the day before starting a slow drift through to the London session holding around the 0.6750 areas for a couple of hours before dipping again through to the 0.6735 areas and ranging through to the NYK session and a slow rise back to the 0.6750 areas, the move to the London close saw further selling taking the market through to the previous lows and after a brief spike higher the market dipped through to base along the 0.6730 through to the close.
• EUR: A slow rise from the open just above Fridays close saw the market running from the 1.0980 areas through to test lightly too the 1.0990 area and then a steady reverse back through to the opening in London and a quick dip through to the 1.0965 level bouncing then moving again to lightly test through into the low 1.0960’s, the market eventually started a steady rise through to the NYK opening before the official opening saw the market rising through to the 1.0995 area and then holding for several hours with only one minor breach of the 1.1000 level, the end of London saw the market reversing all its gains and some more testing eventually through to the 109.70 level for a quiet close on a reasonably quiet day for FX.

Yesterday’s Premiership results
AUD AiG performance of Construction Index A 42.6 | P 44.6
NZD Treasury publishes Monthly Economic Indicators
JPY Coincident Index (AUG P) A 99.3 | C 99.4 | P 99.7
JPY Leading Index A 91.7 | C 91.7 | P 93.7
EUR German Factory Orders YoY (AUG) A -6.7% | C -6.6% | P -5.6%
USD Consumer Credit (AUG) A $17.901b | $C $15.00b | P $23.294b

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