Andy Harrison
Good morning,
LMAX Close
USDJPY 120.336 | EURUSD 1.12279 | AUDUSD 0.70384 | NZDUSD 0.63365 | USDCAD 1.32685 | USDCHF 0.96928 | GBPUSD 1.52994 |
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Interbank Ranges as of 6am London time
Highs   Lows
USD/JPYÂ Â Â Â Â Â Â Â Â Â Â Â Â Â 120.70 | 120.31
EUR/USDÂ Â Â Â Â Â Â Â Â Â Â Â 1.12295 | 1.1205
EUR/JPYÂ Â Â Â Â Â Â Â Â Â Â Â Â Â 135.34 | 135.03
AUD/USDÂ Â Â Â Â Â Â Â Â Â Â 0.7063 | 0.7001
NZD/USDÂ Â Â Â Â Â Â Â Â Â Â Â 0.6375 | 0.6341
USD/CADÂ Â Â Â Â Â Â Â Â Â Â Â 1.3276 | 1.3261
EUR/CHFÂ Â Â Â Â Â Â Â Â Â Â Â Â 1.0881 | 1.0872
USD/CHFÂ Â Â Â Â Â Â Â Â Â Â Â 0.97065 | 0.96895
GBP/USDÂ Â Â Â Â Â Â Â Â Â Â Â 1.5315 | 1.5288
EUR/GBPÂ Â Â Â Â Â Â Â Â Â Â Â 0.7337 | 0.7324
For Today
- EUR: A very quiet session with the Euro opening around the 1.1230 areas and testing steadily to below 1.1210 before recovering a little to trade around the 1.1220 levels for the balance of the session into the grey hours. Downside bids into the 1.1180 areas are likely to give way to light stops and then a run to 1.1150 and a return to the pre-PBoC devaluation range with light congestion through the 1.1150 likely to slow the movement but not deter a move back to below the 1.1100 areas with likely better support appearing in the area. Topside offers into the 1.1300 levels, with a clear break through the 1.1330-40 areas likely to see weak stops appearing and the market open for a test to the 1.1360 areas before meeting stronger resistance, from that point it is likely to be mixed initially before the offers reappear towards the 1.1380-1.1400 levels and the need probably for some stronger fundamental news. ECB rate decision is not likely to surprise and one would assume that QE would finish before they move rates so is likely to be dovish in nature.
- GBP: As with the Euro the Cable has been caught for the session in a tight range initially testing to above the 1.5310 levels before drifting down into the 1.5290 and into the grey hours on very lacklustre trading. Downside bids into the 1.5270-50 areas are likely to be reasonably strong and the market took a similar amount of time to trade to its highs as it did to come back away from the 1.5800 levels leaving the 1.5250 likely to be a key area with potential for strong buying to the 1.5200 levels a push through this level will likely see better stops appearing in the market and the market preparing for a move back below the 1.5000 in the medium term however, the focus for the moment will be on the EURGBP with services PMI the only potential fly in the ointment. Topside offers have for the past few days been resilient through the 1.5315-25 areas and a strong push through will likely see the market quickly moving to test into the 1.5400 levels and stronger offers through that level.
- JPY: With limited moving markets the USDJPY was at least the more aggressive pushing from the opening levels around the 120.30 area to test above the 120.60 levels and holding in the area deep into the Asian session, as with yesterday’s movements once the first couple of hours of pushing failed the market retraced to the lows before taking a second run higher and failing again the movement over with the market settled back to the 120.50 areas and spent the run to the grey hours holding the level. Topside offers from the 120.70 levels likely to continue into the 121.00 areas however, with the market dominated by safe haven flows out of the EM areas the USDJPY’s possible rise to previous levels is to be a steady crawl rather than a short squeeze motion, with offers likely to start through the 121.20 level and then in strong patches every 20 pips or so to the 121.80 levels and possibly more than would be expected on a day. Downside bids has we have seen quickly moved out of the way on the moves lower and although the 120.20 level is starting to look firmer a push through the bids and down to the 119.80 levels will again open the market for a further test of the 119.20 levels and the lows from the beginning of the weak.
- AUD: The Oz drifted through the session testing to the 0.7060 on a spike before trading in the 0.7040-50 area to the poor retail sales numbers and the market swiftly dropped back to just above the 70 cent area only to hold and slowly hedge higher to trade around the 0.7020 levels. Oz is a hard one to see with the strong bids and buying on dips through the 0.70 cent level however, one suspects a strong push through the 0.6960 levels will open the possibility of a deeper move with 0.6900-20 areas likely to provide some limited support unless option gamma plays infringe on the move. Topside offers into the 0.7050-60 areas continue and even through the immediate resistance the market is likely to continue to be offered all the way to the 71 cent levels with congestion from a push through that level into the 0.7160-70 areas and likely to continue in that vein for a distance with only the 0.7250 areas of note for a break to above 73 cents. However, those weak retail sales numbers may weight on the market during the London session.
Overnight News
JPY:
Japanese Investors Buy Most Overseas Assets in 14 Months
BOJ Kiuchi: Side Effects Have Been Rising as QQE Continues
JPY/RUB:
Japan Needs Currency Swap Arrangements With Russia Banks: JBIC
AUD:
Australia Aug. Services Index Rises 1.5 Pts M/m to 55.6
NZD:
New Zealand Construction Work Increased 1.6% in Second Quarter
CNY:
China Defence Spending to Almost Double by 2020, IHS Says
China to Show DF-21D Anti-Ship Missile at Parade: China News
Today’s data
Actual = A | Consensus = C | Previous = P | Revised = R All timings GMT
AUDÂ Â Â Â Â Â Trade Balance (AUD) Jul A -2.46B | C -3.10B | P -2.93B | R -3.05B
AUDÂ Â Â Â Â Â Retail Sales M/M Jul A -0.10% | C 0.40% | P 0.70% | R 0.60%
07:45Â Â Â Â EURÂ Â Â Â Â Â Â Italy Services PMI Aug C 53 | P 52
07:50Â Â Â Â EURÂ Â Â Â Â Â Â France Services PMI Aug (F) C 51.8 | P 51.8
07:55Â Â Â Â EURÂ Â Â Â Â Â Â Germany Services PMI Aug (F) C 53.6 | P 53.6
08:00Â Â Â Â EURÂ Â Â Â Â Â Â Eurozone Services PMI Aug (F) C 54.3 | P 54.3
08:30Â Â Â Â GBPÂ Â Â Â Â Â Services PMI Aug C 57.6 | P 57.4
09:00Â Â Â Â EURÂ Â Â Â Â Â Â Eurozone Retail Sales M/M Jul C 0.60% | P -0.60%
11:30Â Â Â Â USDÂ Â Â Â Â Â Challenger Job Cuts Y/Y Aug P 125.40%
11:45Â Â Â Â EURÂ Â Â Â Â Â Â ECB Rate Decision C 0.05% | P 0.05%
12:30Â Â Â Â EURÂ Â Â Â Â Â Â ECB Press Conference
12:30Â Â Â Â CADÂ Â Â Â Â Â International Merchandise Trade (CAD) Jul C -1.40B | P -0.48B
12:30Â Â Â Â USDÂ Â Â Â Â Â Initial Jobless Claims (AUG 29) C 273K | P 271K
12:30Â Â Â Â USDÂ Â Â Â Â Â Trade Balance Jul C -$44.50B | P -$43.84B
14:00Â Â Â USDÂ Â Â Â Â Â ISM Non-Manufacturing Composite Aug C 58.3 | P 60.3
Harry Hindsight             Â
- EUR: Mixed equities through the session saw the majority ending the day higher and so the USD steadily recovered, Euro’s opened in Asia around the 1.1320 levels and drifted to the 1.1300 levels into the Tokyo session, the market continued to drift and the Tokyo fixing added to the USD buying and the market moved lower for the Euro testing to the 1.1260 levels before finding limited support, the move to the grey hours saw the market trading around the 1.1280 areas, London were quick sellers from the level and the market traded quickly to the 1.1240’s before the release of Eurozone PPI numbers pretty much unchanged saw the market back to the 1.1280 levels however, the market was unable to push through the levels and again started to drift lower through to the NYK session and pushing eventually down through the lows to trade into the 1.1220’s and the usual support levels. Late into the session the market took another run to the downside pushing briefly through the 1.1220 level before running out of time and into the close.
- GBP: A slow day for the Cable as the market consolidates around the 1.5200 areas throughout the session, opening around the 1.5300 levels and pushing briefly to the downside and the 1.5290’s before steadily rising to 1.5320, once the market moved into the London session the selling of the cross saw the Euro originally dragging the Cable with it, weak building PMI’s didn’t help. however, the push by Cable to the 1.5270 levels the levels held through early London around that 70 level and the push into the NYK session again saw the EURGBP selling trading lower as the Cable began to recover with the cross moving off the opening levels around the 0.7380’s to push down to 0.7340 as the market in the Cable recovered to the opening levels and eventually pushed to the 1.5320 levels before drifting to the close around 1.5300 and unchanged for the day.
- JPY: USDJPY opened on its lows just below the 119.30 levels and rose steadily through into Tokyo to push into the 119.60 levels, the rise continued however, once the market moved to the fixing USDJPY broke quickly through the 119.80 areas to push quickly through the 120.00 level and test to the 120.40 areas, the market was unable to push ahead and stalled for a couple of hours repeatedly testing the topside before gradually giving ground and triggering selling back to the 120.00 levels and into the opening in London, EURJPY selling moved in with a weakening Euro and the market tested to the 119.70 levels before recovering as fresh buying in USDJPY took the market back above 120.00, the remainder of the session broadly held the 120.00 levels and although the market moved to the close just short of the highs was lacklustre at best through the evenings trading.
- AUD: The Oz remains trapped for the moment with plenty of buyers willing to move in on each dip through the 70 cent levels either for speculation or as a hedging tool for the future however, saying that the market cannot find the impetus to break higher and stalled throughout the session, the day opened around the 0.7020 levels and dropped to the 70 cent levels for the first time and recovered steadily through to the 0.7030 levels, a poor GDP reading sent the market back lower this time testing through the 0.6990 levels before again bouncing higher and testing into the grey hours through to the 0.7050 areas, London sold the move and the market again saw the lows revisited for the second time and the market soaked up the pressure and again moved back above the 70 cent level. The market eventually pushed to the close testing towards the 0.7050 levels again with a market likely to be unsure of the next move.
Yesterday’s premiership results
Actual = A | Consensus = C | Previous = P | Revised = R All timings GMT
JPYÂ Â Â Â Â Â Â Â Monetary Base Y/Y Aug A 33.30% | C 33.20% | P 32.80%
AUDÂ Â Â Â Â Â GDP Q/Q Q2 A 0.20% | C 0.40% | P 0.90%
GBPÂ Â Â Â Â Â Construction PMI Aug A 57.3 | C 57.5 | P 57.1
EURÂ Â Â Â Â Â Â Eurozone PPI M/M Jul A -0.10% | C -0.10% | P -0.10%
EURÂ Â Â Â Â Â Â Eurozone PPI Y/Y Jul A -2.10% | C -2.10% | P -2.20%
USDÂ Â Â Â Â Â ADP Employment Change Aug A 190K | C 200K | P 185K | R 177K
USDÂ Â Â Â Â Â Non-Farm Productivity Q2 (F) A 3.30% | C 2.50% | P 1.30%
USDÂ Â Â Â Â Â Unit Labour Costs Q2 (F) A -1.40% | C -0.70% | P 0.50%
USDÂ Â Â Â Â Â Factory Orders Jul A 0.40% | C 0.70% | P 1.80% | R 2.20%
USDÂ Â Â Â Â Â Crude Oil Inventories A 4.7M | C -0.7M | R -5.5M
Good Luck,
Andy
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