Daily FX Market Commentary

Andy Harrison

Good Morning,

LMAX Close

USDJPY 107.967 | EURUSD 1.1005 | AUDUSD 0.67612 | NZDUSD 0.63251 | USDCAD 1.32921 | USDCHF 0.9968 | GBPUSD 1.2442 |

LMAX highs and Lows 05.00 GMT

                                Highs | Lows

EURUSD               1.10178 | 1.10042

USDJPY                108.135 | 107.852

GBPUSD              1.24580 | 1.24247

USDCHF               0.99751 | 0.99584

AUDUSD             0.67818 | 0.67543

USDCAD              1.32994 | 1.32860

NZDUSD              0.63293 | 0.63176

EURCHF               1.09883 | 1.09653

EURGBP              0.88584 | 0.8845

EURJPY                119.006 | 118.742

For Today

• GBP: A slight rise into early Asia pushing towards the 1.2450 level before drifting off to the lows in Tokyo testing through the 1.2430 areas and then holding around the 1.2440 level through to the grey hour, Topside congestion through to the 1.2500 level with strong offers likely into the area before weak stops appear on a move through to above the 1.2520 level and further congestion building to strong offers through the 1.2560 level and increasing to 1.2600, Downside bids light through to the 1.2360 with congestive bids possible but unlikely on a push through the level and weak stops likely to be in the area and opening a quick push through to the 1.2300 level and limited bids and nothing to stops the market moving to the 1.2200 level and strong bids appearing in the short period until the gaps start to fill in.
• JPY: Limited day for the USDJPY ranging around the 107.90 level through to deep into the Tokyo session before popping higher to the 108.10 areas before drifting through to the grey hour to sub 108.00 level, , Topside offers cleared through 108.00  areas and possible weak stops on a break above the 108.20-30 level with limited congestion to the 108.50 areas and the market opening with limited resistance through the to increasing offers on a 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 slight melting of negotiations in Washington between the US and China eventually fed through to a stronger Oz however, the market moved into the Tokyo session testing into the low 0.6750’s before the rally started and the market slowly rose through until late in the session refusing to push through 0.6780 areas and dipping back into the 0.6775 area. 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: Opening around the 1.1005 areas the market struggled through the early part of the session and only once into the Tokyo session did the market rise a little testing the 1.1015 area dipping then running again and pushing through to the 1.1015 area and unable to push the 1.1020 area drifting slightly on the move through to the grey hour, . Topside offers likely to continue 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 to be stronger, some weak patches but increasing resistance into the 1.1080-1.1100 levels. Downside bids through the 1.0940-60 area with likely weak stops on any dip possibly sweeping those aside and then increasing as the market moves towards the 1.0900-1.0870 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:

Kashkari repeats he’s not sure how much further Fed should cut BBG

White House reviewing PCAOB dispute over access to China audits BBG

White house say review is separate from ongoing trade talks BBG

China’s resistance to a US investor safeguard riles team Trump – BBG

JPY:

TSE heads Kiyota says Japans Foreign investment rule idiotic FT

USD/CNY:

FX Pact possibility spurs $650m of hedging on Yuan rally BBG

Trumps meeting with China’s Liu set for 1445 EST today BBG

US-China trade conflict the most systemic risk for global economy – AFR

GBP:

Boris Johnson cannot get a majority unless he delivers Brexit on Oct 31 Tory conference poll – TEL

Early news Items 10/10/19:

UK Proposes pared down free trade agreement SKY

NZD:

NZ Manufacturing may have suffered mild recession BBG

EUR:

Germany versus the ECB – PS

Today’s Data

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

NZD       BusinessNZ Manufacturing PMI (SEP) A 48.4 | P 48.4

EUR        Germany Sovereign debt to be rated by S&P

0700       EUR        German Consumer Price Index YoY (SEP F) C 1.2% | P 1.2%

0700       EUR        German Consumer Price Index EU Harmonized YoY (SEP F) C 0.9% | P 0.9%

1200       MXN      Industrial Production NSA YoY (AUG) C -1.9% | P -1.7%

1330       CAD       Net Change in Employment (SEP) C 7.5K | P 81.1k

1330       CAD       Unemployment Rate (SEP) C 5.7%B | P 5.7%

1330       CAD       Full Time Employment Change (SEP) C 20.8k | 23.8k

1330       CAD       Hourly Wage Rate Permanent Employees YoY (SEP) C 3.8% | P 3.8%

1330       USD       Export Price Index YoY (SEP) P -1.4%

1330       USD       Import Price Index ex Petroleum MoM (SEP) C -0.1% | P 0.0%

1500       USD       U. of Michigan Sentiment (OCT P) C 92 | P 93.2

1800       USD       Baker Hughes US Rig Count (OCT11) C 847 | P 855

Harry Hindsight

 

• GBP: Opening around the 1.2210 areas and rising steadily through the Asian session all the way to the 1.2220 areas by midsession, the next part did see a little more movement and the move into the London session saw the market holding close to the 1.2230 areas before dipping into the early pre market London, London slowly rose to test the 1.2250 areas, by mid-morning in London the market had pushed lightly through towards the 1.2265 area before spending the next few hours drifting back to test the 1.2220 levels again and holding just off the opening areas, then came the news that Varadkar, Johnson agreed could see pathway to possible deal, this saw the Cable jump to the 1.2300 area and pausing and then the following, Varadkar in consult with EU task force and UK Brexit Secretary will meet Michel Barnier tomorrow morning, and another run higher pushing through the old 1.2365 trend line with a little pause as the London session ended however, the rally continued at a somewhat altered state pushing gradually through the 1.2450 area and spiking on stops through to the 1.2470 level before ranging around the 1.2450 area again through to the close.
• JPY: Early sellers of USDJPY as talks between China and US seemed to have broken down with the market quickly dropping away from the 107.50 opening area and then testing to the 107.05 areas into the Tokyo opening, Tokyo then started a slower recovery with the comments about Chinese delegates leaving the US turned out to be false and a further meeting for the day were kept, holding for a short period around the 107.35 areas and then a quick rise through to the 107.75 areas before falling back after the small squeeze and trading around the opening levels through into the London session, trading through early London saw the market drift off a little then centre around the 107.40 level all the way through into the NYK session before starting a slow but steady rise as fresh talks started with talk of a small deal a possibility at least and testing through to just short of the 108.00 levels before holding in a tight range with a light spike late in the session through the 108.00 level before holding quietly through to the close.
• AUD: A minor dip from the opening testing back to the 0.6710 areas before slowly edging back to the 0.6720 areas, a mixed commentary from the negotiating teams in Washington saw the Oz react and push quickly through to just below the 0.6760 areas before dipping back and holding quietly just below the 0.6750 areas through to deep in the London session, eventually the O pushing through the 0.6750 area again and weak shorts were squeezed out on a test towards the 0.6770 level and the move into the NYK saw a slow drift through to the 0.6750 areas but generally ranged between the 50-70 level with a weak push through to make the highs just short of the 0.6775 level and a drift to the close.
• EUR: From the opening the Euro seemed the choice currency pushing from a slightly higher opening around the 1.0975 area and taking the market through to the 1.0990 area and then ranged through to the London session probing to just above the higher and holding 1.0980, the market rallied with East European buying moving in and the market tested quickly through to the 1.1010 area before slowing but continuing the rise through to the 1.1020 level initially and pausing then breaking through to the 1.1030 area for a quiet range into the NYK session, the market from there drifted back to the 1.1020 levels and dipped a little on a push through towards the 1.1000 area, GBP buying saw the market push a little further higher but never managed to recapture the highs and then drifted to just below the 1.1010 area and the close.

 

 

Yesterday’s Premiership results

GBP       Rics House Price balance (SEP) A -2.0% | C -7.0% | P -4.0%

JPY         Bank Lending Ex-Trusts YoY (SEP) A 2.2% | P 2.2%

JPY         Bank Lending incl Trusts YoY A 2.0% | P 2.1%

JPY         Machine Orders YoY (AUG) A -14.5% | C -8.4% | P 0.3%

AUD       Home Loans MoM (AUG) A 0.7% | C 2.3% | P 4.2%

AUD       Consumer Inflation Expectation (OCT) A 3.6% | P 3.1%

EUR        German Trade Balance (AUG) A 16.2b | C 18.6b | P 21.4b

GBP       Construction Output YoY (AUG) A 2.4% | C -0.2% | P 0.3% | R 1.9%

GBP       Industrial Production YoY (AUG) A -1.8% | C -0.8% | P -0.9% | R -1.1%

GBP       Manufacturing Production YoY (AUG) A -1.7% | C -0.4% | P -0.6% | R -0.9%

GBP       Monthly GDP 3m/3m (AUG) A 0.3% | C 0.1% | P 0.0% | R 0.1%

GBP       Monthly GDP MoM (AUG) A -0.1% | C 0.0% | P 0.3% | R 0.4%

GBP       Trade Balance Non-EU GBP/Mn (AUG) A -2206m | C -2800m | P -1932m | R -2540m

GBP       Visible Trade Balance (AUG) A -£9810m | C -£10000m | P -£9144m | R -£9620m

EUR        ECB Accounts of September Policy Meeting (SEP)

CAD       New Housing Price Index MoM (AUG) A -0.3% | C -0.4% | P -0.4%

USD       Consumer Price Index YoY (SEP) A 1.7% | C 1.8% | P 1.7%

USD       Consumer Price Index ex food and energy YoY (SEP) A 2.4% | C 2.4% | P 2.4%

USD       Consumer Price Index MoM (SEP) A 0.0% | C 0.1% | P 0.1%

USD       Continuing Claims (SEP28) A 1684k | C 1651k | P 1651k | R 1655k

USD       Initial Jobless Claims (OCT5) A 210k | C 218k | P 219k | R 220k

USD       Real Avg. Hourly Earning YoY (SEP) A 1.2% | P 1.5%

USD       Real Avg. Weekly Earnings YoY (SEP) A 0.9% | P 1.2%

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