EUROPE FX MARKETS OPEN

PRODUCED BY REUTERS AND IFR MARKETS

THURSDAY, SEPTEMBER 15, 2016

JPY DOWN YESTERDAY, UP TODAY, IN PLAY, AUD TOO
Market Briefs
BOJ to weigh tougher hurdles for easing exit - Nikkei.

US fund investors kept buying bonds ahead of selloff ICI.

MoF flow data week-ended Sept 10 Japanese sell net Y449.3 bln foreign
stocks, Y607.6 bln bonds, buy Y3.4 bln bills; foreign investors sell net
Y479.0 bln Japanese stocks, buy Y1.0652 trln JGBs, Y2.0932 trln bills.
Japan Sept Reuters Tankan mfg index +5, non-mfg +14, Aug +1, +18, Dec eyed
at +9 and +22, Sept non-mfg index lowest since April 13.
Renault sells Y50 bln 0.23% 3-year samurais via MUFG/MS, SMBC Nikko IFR.
HSBC sells Y181.8 bln 3-tranche samurais via HSBC/Mizuho/Nomura/SMBC Nikko.
JAMA cuts FY 16/17 vehicle sales forecast to 4.845 mln units, -1.9% y/y.
Australia Aug employment -3.9k, unemployment 5.6%, participation 64.7%, +15k,
5.7% and 64.9% eyed, full-time employment +11.5k, slack seen persisting.
Australia Sept MI inflation expectations off to +2.1% WM, +3.3% TM.
NZ Q2 GDP +0.9% q/q, +3.6% y/y, +1.1% and +3.7% eyed, avge +2.8%, as eyed.
NZ Aug BNZ/BNZ PMI 55.1, July 55.8.
Looking Ahead - Economic Data (GMT)
07:30 SE Aug unemployment, 6.2% nsa eyed; last 6.3% nsa, 7.0% sa.
08:30 GB Aug retail sales, -0.4% m/m, +5.4% y/y eyed; last +1.4%, +5.9%.
08:30 GB Aug - ex-fuel, -0.6% m/m, +5.0% y/y eyed; last +1.5%, +5.4%.
09:00 EZ Jul trade balance, E25.0 bln surplus eyed; last E29.2 bln surplus.
09:00 EZ Aug inflation final, +0.1% m/m, +0.2% y/y eyed; flash -0.6%, +0.2%.
09:00 EZ Aug ex-food/energy, +0.2% m/m, +0.8% y/y eyed; flash -0.6%, +0.8%.
12:30 US Sep Philly Fed business sentiment index, 1.0 eyed; last 2.0.
12:30 US Sep NY Fed Empire State manufacturing index, -1.0 eyed; last -4.21.
12:30 US Q2 c/a balance, $120.5 bln deficit eyed; last $124.7 bln deficit.
12:30 US w/e initial jobless claims, 265k eyed; last 259k.
12:30 US Aug retail sales/ex-autos, -0.1%, +0.2% m/m eyed; last unch, -0.3%.
12:30 US Aug PPI - final demand, +0.1% m/m and y/y eyed; last -0.4%, -0.2%.
12:30 US Aug ex-food/energy, +0.1% m/m, +1.0% y/y eyed; last -0.3%, +0.7%.
13:15 US Aug industrial output, -0.3% m/m eyed; last +0.7%.
13:15 US Aug capacity utilization, 75.7% eyed; last 75.9%.
14:00 US Jul business inventories, +0.1% m/m eyed; last +0.2%.
Looking Ahead - Events, Auctions (GMT)
N/A India-US Economic Summit in New Delhi (final day).
06:30 SNB policy, no change in -0.25/-0.125% 3-month LIBOR target eyed.
08:30 Spain E3-4 bln 0.75/1.3/1.95% 2021/26/30 Bono auctions.
08:50 France E5-6 bln zero% 2019 and 2021 BTan auctions.
08:50 France E0.75-1.25 bln 0.1% each 2021 and 2025 index-linked BTan auctions.
11:00 BoE MPC policy announcement, 9-0 vote for no change to QQE, bank rate.
See North American Open for a detailed listing of US/NorAm releases, events.
Currency Summaries
JPY
USD/JPY, JPY crosses on back foot today in stark contrast to yesterday.
Doubts over BoJ ease, US ylds off, exporter sales yesterday, repat today.
Also paring down of foreign bond portfolios pre-FY half-end this month.
USD/JPY off, 103.35 to 102.24 yesterday, Asia 102.61 to 101.94.
Bounce since with Japan sell-side flows having abated, option interest.

EUROPE FX MARKETS OPEN

Most expiries today below USD1.2 bln 100.00, 1.9 bln 100.05-111.00.
Also USD518 mln 101.15-20, 658 at 102.20-25 and 652 mln above at 103.00.
101.93 daily Ichi kijun good tech support, more at 101.20 9/7 recent low.
EUR/JPY off too, 116.09 to 115.00 yesterday, Asia today 115.40 to 114.65.
Reports of E27 bln in BTP redemptions/coupons due today, Japan repat.
GBP/JPY hugging 134.68 base of daily Ichi cloud, Asia 135.13-136.13.
Daily tenkan 136.49 above, kijun below at 134.03.
AUD/JPY 76.77 to 75.95 in Asia, weak jobs data helped.
NZD/JPY off too, 74.72 to 74.09, support pre-74.00, 74.06 low Tuesday.
EUR
EUR/USD Asia open 1.1248, nudged higher yesterday on broad USD weakness.
Barely any movement in Asia, extremely quiet, range 1.1240-50.
Large option maturities hemmed in price action.
E2.5 bln 1.1100-1.1200, 3.23 bln 1.1260-1.1300, 2.67 blhn 1.1310-1.1400.
More range trading eyed into next week.
GBP
Cable better bid in Asia between 1.3232-79, holding under Ichi tenkan.
Good support seen yesterday at base of daily cloud, 1.3160 today.
Some nearby option expirations today - @GBP500 mln 1.3295-1.3300.
EUR/GBP touch heavy as GBP outperforming, Asia 0.8498 to 0.8467.
Support around 100-HMA at 0.8472, daily Ichi cloud top 0.8473.
CHF
USD/CHF steady between 0.9725-36 in Asia, below 0.9737 Ichi cloud base.
Daily kijun 0.9711, 100-DMA 0.9751, 0.9765 cloud top, 200-DMA 0.9808.
EUR/CHF steady, Asia 1.0939-48, above 1.0932 200-HMA.
Daily tenkan 1.0934, 200-DMA 1.0929, 100-DMA 1.0926, kijun 1.0912 too.
AUD
AUD/USD Asia open virtually unchanged at 0.7466 after quiet US session.
Bid early, up to 0.7485 pre-Aussie jobs data, plunge post-jobs to 0.7446.
Heavy AUD/JPY helped push AUD/USD lower.
Both bounce later, support at Tuesdays 0.7443 low validated.
Resistance now at 0.7495-0.7500 but talk of stops above 0.7510.
Sentiment bearish on view volatility to prevail into year-end.
NZD
NZD/USD Asia open 0.7283, off from early 0.7301 high to 0.7258.
Somewhat weaker mfg PMI shrugged off but slight GDP miss weighed.
AUD/NZD 1.0250 to 1.0293 profit-taking, AUD/USD sales weighed too.
NZD/JPY also sold with JPY bid across the board.
Support at 0.7235-40 then ahead of 0.7200, heavy above 0.7300.
Equities, Other Asset Markets
Nikkei off on USD/JPY pull-back, 16, gap down open, 16,528 to 16,359.
At 16,412, index off 201 points or 1.2% on day.
AXJ mixed - Shanghai -0.7%, STI -0.45%, TWI -0.4%, NZX50 -0.15%.
ASX holding around par but Hang Seng +0.6% and KOSPI +0.4%.
US Treasuries bounce touch from lows, indicated at @1.707%, 2s @0.768%.
Bunds 2s @-0.653%, 10s @+0.028%.

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EUROPE FX MARKETS OPEN

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