Daily FX Market Commentary

Andy Harrison

Andy Harrison

Good Morning,

LMAX Close
USDJPY 107.083 | EURUSD 1.09579 | AUDUSD 0.67281 | NZDUSD 0.62969 | USDCAD 1.33253 | USDCHF 0.99307 | GBPUSD 1.22198 |

LMAX highs and Lows 05.00 GMT
Highs | Lows
EURUSD 1.09657 | 1.09523
USDJPY 107.202 | 106.935
GBPUSD 1.22261 | 1.22068
USDCHF 0.99353 | 0.99233
AUDUSD 0.67431 | 0.67231
USDCAD 1.33258 | 1.33134
NZDUSD 0.63155 | 0.62949
EURCHF 1.08932 | 1.08742
EURGBP 0.89780 | 0.89607
EURJPY 117.530 | 117.213
For Today
• GBP: Very quiet session with the high into the Tokyo session around the 1.2225 level before drifting off and holding around the 1.2215 areas, Downside bids into the 1.2200 level with weak stops likely on a break however, congestion is suspected through the 1.21 handle this may be tempered by weakness if Brexit commentary continues in the negative tone we’ve seen over the past few days, a push through to the low 1.2100 level does however, open a deeper move with a mixture of bids and stops appearing through the 1.2085 areas and the 1.2000 level vulnerable. Topside offers light through the 1.2300 areas with some congestion likely on any test of the area and those offers are likely to continue through to the 1.2360 areas before weakness appears and the market opening through to the 1.2400 level with stronger stops likely through the level.
• JPY: Dipping from the opening through into the Tokyo trading through the 107.00 level to test lightly into the 106.94 areas moving off the lows after a short period to put in a push through to the 107.20 area before holding quietly through to the grey hour, 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: Opening around the upper 0.6720’s and pushing slowly through into the mid 0.6730’s before dipping after the confidence number to test through towards the 0.6720 area before rallying and pushing steadily through into the low 0.6740 and running for along time in that area too 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 but limited rise through the session, opening a little weaker and then pushing off the 1.0955 area testing a little above the 1.0960 before holding deeper into Tokyo before rising again through to the 1.0965 areas and holding quietly to the grey hour. 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
NZD:
NZ 2Q house prices fall 0.6%, first decline in 10yrs – BBG
RBNZ Needs to better explain bank review benefits, treasury says – BBG
GBP:
UK PM Johnson facing new cabinet rebellion over no deal Brexit – CNBC
JPY:
Soaring bankruptcies in Japan cloud Nikkei 225’s outlook – BBG
AUD:
Frugal Aussie consumers look set to keep curbing GDP growth – DJC
MXN:
Mexico passes austerity law with stiff revolving door ban – BBG
USD:
Nasdaq may tighten IPO approvals of small Chinese companies – BBG
Trump won’t participate in impeachment inquiry, White House says – BBG
API reports US crude stockpiles rose 4.13m bbl last week – BBG
White House zeroes in on limit to Chinese stocks in pension funds – BBG
TRY:
Turkey says its military will cross Syrian border shortly – BBG
Militia Commander says it will attack Turkish forces if they enter Syria – NYT
CNY/USD:
US imposes visa restrictions on Chinese officials over brutal suppression of Uyhgurs and other Muslims in Xinjiang – SCMP
Chinese embassy says US visa bans violate basic Government norms – BBG
HKD:
As wealthy flee Hong Kong, they bypass US to find other havens – BBG
GBP/EUR:
Johnson tells Merkel deal essentially impossible – BBG
EUR:
EU ill equipped to face China and US, Brussels trade chief warns – FT

Today’s Data
Actual – A | Consensus – C | Previous – P | Revised R | all timings GMT/UTC
AUD: Westpac Consumer Confidence (OCT) -5.5% | P -1.7%
0700 JPY Machine tool orders YoY (SEP P) P -37.0%
1200 MXN CPI YoY (SEP) C 2.99% | P 3.16%
1200 MXN CPI MoM (SEP) C 0.25% | P 0.0%
1200 MXN CPI Core MoM (SEP) C 0.29% | P 0.2%
1200 USD MBA Mortgage Applications (OCT 4) P 8.1%
1530 USD Powell takes part in Fed listens event in Kansas City
1530 USD DOE US Crude Oil Inventories (OCT 4) P 3104k
1900 USD FOMC Meeting Minutes (SEP 18)

Harry Hindsight

• GBP: A slow drift from the opening through to base on the 1.2285 areas through into the Tokyo session before rising slowly to test the 1.2300 level and then holding in a tight range between the 1.2295-1.2300 through to the London session, early sellers sent the market through to the 1.2275 areas, with Germany’s Merkel saying Nein to Johnsons overtures the market steadily pushed lower as the no deal Brexit appears the only way forward pushing through to the NYK session testing the 1.2200 level and basing along that area through to late in the session before finishing the day just below the 1.2220 level.
• JPY: A minor dip from the opening saw the market moving higher from the early lows around the 107.20 area and pushing lightly at the 107.40 level, drifting again before pushing through to the level into the grey hour, early London saw steady GBPJPY selling moving through the market and the JPY became the chosen safe haven, London session in full flow the market pushed through the 107.20 levels and continued to drift through to the 107.10 level and then an accelerated push through triggering light stops on a move through to the 106.80 level before stopping and slowly rising through deep into the NYK session catching some weak shorts on the break back through the 107.00 level and then steadily moving through to the opening areas before Sydney moved in to sell the market swiftly lower bouncing and then drifting through to the close.
• AUD: Moving quietly through the early part of the session the market started rising deep in the Tokyo session moving off the lows around the 0.6730 area and pushing steadily through to the 0.6750 level before pausing for the move through to the grey hour, further buying during the grey hour saw the market set the high of the day just beyond the 0.6755 areas before chopping around into the London opening retesting the level and eventually slipping through to the 0.6740 areas and holding through into the NYK session before renewing the move lower and testing through to the lows in a steady move and basing along the 0.6725 areas through to the close.
• EUR: Opening around the 1.0970 level the market held in a tight range through into the early part of Tokyo dipping a little in midsession through into the mid 1.0960’s before rising through the day pushing the 1.0980 level into London and eventually pushing the 1.0995 areas just before the NYK opening and the high for the day, the news that Johnsons push for a deal was over and the market broke down to test steadily through the 1.0950 level and spiking too the 1.0940 area before holding around the 1.0950’s to the close.

Yesterday’s Premiership results
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 13.04% | P -2.3%
JPY Eco Watchers Survey Current (SEP) A 46.7 | C 43.3 | P 42.8
JPY Eco Watchers Survey outlook SA (SEP) A 36.9 | C 38.7 | P 39.7
CHF Unemployment rate (SEP) A 2.1% | C 2.1% | P 2.1%
CHF Unemployment rate s.a (SEP) A 2.3% | C 2.3% | P 2.3%
EUR German IP nsa and wda YoY (AUG) A -4% | C -4.3% | P -4.2%
CAD Housing Starts (SEP) A 221.2k | C 217.5k | P 226.6k
CAD Building Permits MoM (AUG) A 6.1% | C 1.2% | P 3.0%
USD Powell speaks at NABE Conference in Denver

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