Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 120.461 | EURUSD 1.11892 | AUDUSD 0.70852 | NZDUSD 0.65088 | USDCAD 1.30897 | USDCHF 0.97553 | GBPUSD 1.5146 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               120.575 | 120.40

EUR/USD             1.11975 | 1.11725

EUR/JPY               134.89 | 134.66

AUD/USD            0.7135 | 0.7068

NZD/USD             0.6516 | 0.6479

USD/CAD             1.3096 | 1.3066

EUR/CHF              1.09225 | 1.0910

USD/CHF             0.9768 | 0.97515

GBP/USD             1.5168 | 1.5141

EUR/GBP             0.73905 | 0.7370

For Today

• EUR: The market in general was quiet through to the RBA announcement and even then the Euro was least affected by the movements. Moving from the 1.1190 areas the market then tested towards the 1.1200 areas before again drifting lower and testing into the 1.1170’s however, the range was contained in a very narrow range through to the grey hours. Topside offers light into the 1.1200 with better strength above the 1.1250 areas and through into the 1.1280-1.1300 levels. Downside bids around the current lows before opening up a little to the stronger bids into the 1.1120 levels extending further to possibly the 1.1080 areas, a break here will likely see stops through the 1.1070 areas and then a similar pattern therein.
• GBP: Cable made minor headways with EURGBP selling for the most part doing most of the work and forcing the Cable off its lows of 1.5140 and back through the opening levels to test into the mid 1.5160’s and held for several hours into the grey hours. Light offers into the 1.5200 levels before opening to the 1.5250 areas, the limited offers there could see the market test quickly to the 1.5300 levels and then the possibility of further gains and limited short covering. Downside bids into the 1.5100 areas are likely to be fairly strong and with little UK data the market is likely to struggle if testing the level however, a breakthrough could see selling increase before hitting the 1.5000 areas and possibly option plays dominating the levels.
• JPY: Very little movement in the USDJPY with the market continuing to mark time around the 120.50 levels with expectations of further easing by the BoJ to come however, whether that is likely remains to be seen and by the looks of the market there remains a little nervousness in the market and it is currently unable to gain traction after last Friday’s NFP result. With the lows of 120.40 and highs just below 120.60 the market seems to be back to the tight ranges similar to those last year, with low interest rates causing a lack of volatility. Topside offers continue to the 121.00 level and increase through to the 121.20 areas even through this level the offers are likely to continue to the 122.00 areas before any chance of a break to the topside and the early ranges of last month. Downside bids light through the 120.00 level and continuing into the 119.80 levels however, the bids are likely to quickly reappear below the 119.40 areas and likely increase into the 119.20 areas.
• AUD: The Oz opened quietly and traded into the Tokyo session holding the 0.7080-90 before dipping quickly to the 0.7070 levels as weak longs off loaded positions with poor trade balance numbers, a few hours later and the market had returned to above the 0.7080 areas and the RBA release came in unchanged and the communique evenly stated, the market moved quickly to the 0.7120 levels before slowly grinding a little higher and through the 0.7130 levels into the grey hours. Topside offers are likely to continue through to the 0.7160 areas and then a possibly slight weakness until closer to the 72 cent level and then increased offers likely to the 0.7250 areas. Downside bids are likely to be light through to the 0.7050 areas and possibly stronger from then on, any push through the 0.7000 levels is likely to draw out short term buyers and the lower into the 69 cent handle you go the stronger those bids.

Overnight News

JPY/CNY:

Abe Says China Joining TPP Would Help Regional Stability

JPY:

Japan’s Aso Says He has No Intention to Interfere in BOJ Policy

Japan to Boost State Rice Reserves to Support Local Prices

AUD:

RBA’s Stevens Holds Benchmark Interest Rate at 2% (Full Text)

TPP Accord a ‘Very Big Win’ for Australia, Turnbull Says

Australia August Trade Deficit A$3.1b Est. A$2.4b Deficit

Australia ANZ Weekly Consumer Sentiment Falls 0.5% to 110

AUD/INR:

Australia’s Exports to India Jump Most in Seven Years in August

USD:

Lew to Urge Nations to Use Policies to Boost Growth: Official

CNY:

China Says TPP Is Important Trade Pact for Asia-Pacific Region

EUR:

ECB’s Coeure Says Euro Attractiveness ‘Not in Any Way Reduced’

European Bank CEOs Argue Against Tougher ECB Rules: FT

NZD:

TPP to Benefit N.Z. Dairy Exporters as Tariffs Cut: Fonterra

NZD: N.Z. Business Confidence Falls to 4 1/2 Year Low: NZIER Says

Today’s data

Actual = A | Consensus = C | Previous = P | Revised = R All timings GMT

NZD       NZIER Business Opinion Survey Q3 A -14 | P 5

AUD       Trade Balance (AUD) Aug A -3.10B | C -2.36B | P -2.46B | R -2.79B

AUD       RBA Rate Decision A 2.00% | C 2.00% | P 2.00%

06:00     EUR        German Factory Orders M/M Aug C 0.50% | P -1.40%

07:15     CHF        CPI M/M Sep C 0.10% | P -0.20%

07:15     CHF        CPI Y/Y Sep C -1.40% | P -1.40%

08:10     EUR        Eurozone Retail PMI Sep P 51.4

12:30     CAD       International Merchandise Trade (CAD) Aug C -0.3B | P -0.59b

12:30     USD       Trade Balance Aug C -$41.65b | P -$41.86b

14:00    CAD       Ivey PMI Sep P 58

Harry Hindsight              

• EUR: A steady rise through the Asian session saw the market edge close to the 1.1250 levels before drifting into the London session holding the 1.1230 levels, European PMI numbers did little to help the market however, the market had already started to rise before the numbers with the market following through from Fridays NFP and the market made limited headway and pushed to the 1.1290 areas before the release of a better than expected retail sales and a revision as well however, the drag of the GBP was sufficient to turn the market lower and the limited rally was over, the rest of the London session saw the market slowly but surely retrace its steps and only briefly stalled around the opening 1.1210 levels eventually triggering some weak stops and a drop to the 1.1180 levels before holding the level to the close.
• GBP: From a slightly better opening the market dipped to fill the gap before rallying into the Tokyo session and steadily pushing to the 1.5220 areas having opening around the 1.5190 level, the move into the grey hours saw expectations of the usual high PMI services number and the market pushed to the 1.5240 areas before the release and of course it disappointed, the market quickly found itself falling back through the opening level to test the 1.5170 levels and while there was a brief bounce the markets move into the NYK session saw the market continuing to fall back to the 1.5170 level, the end of the London session saw what bids there were disappear and the market dropped to the 1.5140 level to the close.
• JPY: USDJPY saw the market moving quietly through the Asian market holding around the 120.00 levels where the market opened, the move into the London session saw the market gradually move higher pushing to the 120.30 levels for the move into the NYK session and then completing the USD’s rally as the market moved towards the London close and then nothing, the market stopped around the 120.50 levels and was unable to move beyond the area with trading slowing to the close.
• AUD: The Oz saw limited gains over the session with the market opening around the 0.7050 levels and moving into the Tokyo session testing steadily higher pushing to the 0.7080 levels before drifting into the London session, with the USDJPY the Oz was pulled higher as the AUDJPY carry trade came into focus and the Oz made its way to above the 71 cent level but unable to gain traction before the NYK session began, with the rate decision to come in the following session the market was sold through early NYK however, it was never able to push to the opening levels and after a brief dalliance with the downside recovered to trade quietly into the 0.7080 levels to the close.

Yesterday’s premiership results

Actual = A | Consensus = C | Previous = P | Revised = R All timings GMT

AUD       TD Securities Inflation M/M Sep A 0.30% | P 0.10%

JPY         Real Cash Earnings Y/Y Aug A 0.50% | C 0.70% | P 0.30% | R 0.90%

EUR        Italy Services PMI Sep A 53.3 | C 54.8 | P 54.6

EUR        Eurozone Services PMI Sep (F) A 53.7 | C 54 | P 54

EUR        Eurozone Sentix Investor Confidence Oct A 11.7 | C 12.2 | P 13.6

GBP       Services PMI Sep A 53.3 | C 56.4 | P 55.6

EUR        Eurozone Retail Sales M/M Aug A 0.00% | C -0.10% | P 0.40% | R 0.60%

USD       ISM Non-Manufacturing Composite Sep A 56.9 | C 58 | P 59

USD       Labour Market Conditions Index Change Sep A 0 | P 2.1 | R 1.2

Good Luck,

Andy

Any opinions, news, research, analyses, prices or other information contained on this Blog, whether by LMAX, its employees, partners or contributors, does not constitute investment advice nor has it been prepared in accordance with legal requirements designed to promote the independence of investment research. Further, the material contained within this Blog does not contain (and should not be construed as containing) investment advice or an investment recommendation, or an offer of, or solicitation for, a transaction in any financial instrument. Whilst information provided on this Blog may help with your investment research you must consider carefully whether you should make (or refrain from making) investment or other decisions based on what you see without doing further research on the investments you are interested in. Participating in this Blog cannot be a substitute for obtaining advice from an appropriate expert independent adviser who takes into account your circumstances and specific investment needs in selected investments that are appropriate for you. LMAX has not verified the accuracy or basis-in-fact of any claim or statement made by any third parties as comments for every Blog entry.

LMAX will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. No representation or warranty is given as to the accuracy or completeness of the above information. While the material produced in this Blog was obtained from sources deemed to be reliable, LMAX does not provide any guarantees about the reliability of such sources.

Consequently any person acting on it does so entirely at his or her own risk.

If you currently hold an account with LMAX for the purposes of trading FX and CFD’s, you are encouraged to use a different Username and Password to access the Blog or any other online systems. The Blog is a place to learn, discuss and share information and ideas with Blog followers. It is not a place to slander, use unacceptable language or to promote LMAX or any other FX, Spread Betting and CFD provider and any such postings, excessive or unjust comments and attacks will not be allowed and will be removed from the site immediately.