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Andy Harrison

Good morning,

For Today

• GBP: Overall a slight drift through the day with the market opening around the 1.2475 dipping through to the 1.2415 through to the Tokyo opening, a slow rise through to the 1.2430 area for the high of the session, the peak over and little to drive the market the Cable slipped back to the lows and late into the session pushing through the 1.2410 area for the grey hour, strong congestion likely on a move to the 1.2550 area with weaker offers through the level on a push for the 1.2600 level before congestion reappears around the 1.2630 level, downside bids light through to the 1.2400 level and possible weak stops on a dip through the level before increasing bids into the 1.2350 areas, congestion on any move through the level to the 1.2300 areas before opening the downside 1.2250 area for a test and possibly the key level for the short term.
• JPY: A steady rise over the course of the session before stalling, opening around the 107.05 with light liquidity seeing stabs low to create lows of the day below 107.00 before pushing through to 107.15 area for the move into the Tokyo session and a steady range around the opening levels, another test to the 107.15 area failed, the third attempt after a couple of hours of holding the 107.10 area before rushing 107.25 level at a stretch and continued to test the level for the move into the grey hour, Downside bids into the 106.20 area through to 105.80 possible weak stops through here 105.50 has primarily been a tough level in the dips in 2018 and 2019 so strong congestion likely to appear and continue through to the 104.80 levels. Topside offers increasing through the 107.80 area and likely to continue through to the 108.10-20 area before weak stops appear and limited offers through to the 108.50 area where steady offers are likely to appear through to the 109.00 levels.
• AUD: A slow drift through the early part of the session into the Tokyo’s first hour opening around the 0.6870 area to test into the 0.6850 area and forming a small base for the market, pushing the first time through to the 0.6875 area before again testing the level with the recoveries getting weaker through to the grey hour holding around the 0.6860 area. Topside offers likely to be light through the 0.7000 area and stiffen on any move through to the 0.7050-0.7100 area, once through the 0.7120 area the possibility of a small squeeze however, Downside bids light through to the 0.6800 area and continuing on any push through to the 0.6780 level is likely to see stronger stops appearing and the downside opening to a deeper move. With limited bids through to the 0.6700-0.6680 before stronger bids appear.
• EUR: Slowly drifting through the Asian session opening around the 1.1255 with a dip into the Tokyo session ranging quietly around the 1.1250 level, a slight push to make the highs around the 1.1260 level and then starting a deep drift through to the 1.1240 level for the move through to the grey hour, back to the beginning of the week, downside congestion through to the 1.1200 level with weak stops likely on a strong move through the 1.1170 area opening up a quick test through the 1.1150 level before hitting stronger congestion through to the 1.1100 level from the beginning of the month and vulnerable to a stronger move through to 1.1050 before the market starts thickening for the sentimental 1.1000, Topside congestions through the 1.1350 level with increasing offers likely through to the 1.1400 level with strong stops likely on a move through the 1.1420 area to open up a quick move through to the 1.1450 area before slowing as the market moves to the sentimental 1.1480-1.1520 area and possibly a bid tone.

Overnight News

USD/EUR:
US Targets $3.1b OF EU imports from France, Germany, Spain and UK – BBG
CAD:
Fitch remove AAA rating on virus linked deficit – BBG
USD:
Talk of draw out US elections in November the cause of USD strength
USD/CNY:
Trump’s National Security adviser takes aim at China – APW
China and America are heading towards divorce – NYT
IMF:
Projects deeper global recession on growing virus threat – BBG
EUR/GBP:
Barnier: October is moment of truth for UK deal – BBG
Barnier: Aim to get UK deal on key issues, rest after 2020 – BBG
Barnier: EU and UK must compromise to get a deal – BBG
Barnier: Can’t see how UK extension is feasible after June – BBG
Barnier: Want to put draft UK deal to EU leaders at Oct summit – BBG
Barnier: Real moment of truth for UK deal is in October – BBG
Barnier: Deal with UK is still possible – BBG
Barnier: Won’t sacrifice EU economic interests for UK deal – BBG
Barnier: Doing everything to get agreement with the UK – BBG
Barnier: Covid response more important to EU than Brexit – BBG
TRY/ARS:
Argentina and Turkey risk losing MSCI emerging markets status – BBG
CNY:
Xi takes China back 40 years with India scuffle – Nikkei

Harry Hindsight

• GBP: All change, opening around the 1.2515 area with the market holding the opening level through into the Tokyo session to test 1.2540 area for the high of the day before drifting through the session testing through into the grey hour holding just above the 1.2500 level, reasonably quiet London session for the Cable with the market dipping in midmorning falling back to the 1.2470 areas before recovering to the highs for the move through to the NYK session, talk of a drawn out US election prospect gave the market some jitters or so it was reported however, I would be more inclined to suspect the fall back of Cable, Euro are likely to be connected to the threatened tariff introductions and the move into the NYK session saw the market dropping from the 1.2535 level in a tight channelled move through to the 1.2415 area recovering only marginally to the 1.2450 areas before slipping again and finishing just off the lows.
• JPY: A quiet day through to NYK with the market opening around the 106.50 level and holding quietly around the level testing through the 106.40 level and above the 106.60 level through Asia and then pushing into the London session pushing the 106.65 before dipping and holding quietly through to NYK, NYK forced the market higher through 106.80 paused before taking another step towards the 107.00 level easing through for the close.
• AUD: Early rise through from the opening just above the 0.6925 and rising through to the high of the day into the Tokyo session to test just above the 0.6940 level before drifting through into the London session and steady selling through to the 0.6900 area for a long tight range through to London close before dipping away to the 0.6880 level and finding a base for the close.
• EUR: Initially a quiet session with the Euro market pushing from the opening around the 1.1310 level to test through to the 1.1325 area however, the move into the grey hour started to see early sellers through into the London opening and the market sagging through the 1.1300 level and revised German numbers showing that expectations and assessments are fluid a month after they were taken, the move through to NYK saw the market pushing back above the 1.1300 level again but NYK were steady sellers through the session with the market again testing through to the 1.1250 level. For the run to the close.

Yesterday’s Premiership Results
NZD RBNZ Interest Rate Decision A 0.25% | C 0.25% | P 0.25%
NZD RBNZ Rate Statement
NZD RBNZ Press Conference
EUR German Business expectations A 91.4 | C 87.0 | P 80.1 | R 80.5
EUR German Current Assessment A 81.3 | C 84.0 | P 78.9
EUR German Ifo Business Climate A 86.2 | C 85.0 | P 79.5 | R 79.7
USD Crude Oil Inventories A 1.442m | C 0.299m | P 1.215m
USD FOMC Member Bullard Speaks

Best Regards
Andy

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