• Japan Tertiary Activity rises 0.3% in August.
  • BOJ Minutes of the Sept 16-17th meeting – Need for credit steps waning.
  • China acts to curb industrial overcapacity.
  • RBA remains focussed on inflation, says Australia’s terms of trade remain at very high levels.
  • AUDUSD starts to recover early morning losses after RBA comments.
  • Bernanke – Financial crisis highlights needs for policy reforms.
  • Asian bourses mainly lower, Shanghai composite bucks trend, up 1%.
  • Gold last at 1052.00
  • Oil 7c lower from NY settlement at $78.46.

A choppy day with Asia taking its usual bearish stance on a Monday morning, mostly driven by Yen cross selling. The selling was seen as soon as Tokyo opened. GBPJPY, which has made considerable ground since last Thursday was sold off, seeing it lower over a big figure within the first hour.

There was notible buying in EURGBP in very early Sydney trade but a sell off in EURUSD soon after saw EURGBP reverse those gains. EURGBP managed to trade up to 9150 before giving up gains to trade back below 9100.

EURUSD was sold off down thru the 1.4840-50 bids, tripping stops beneath, before stopping at 1.4828. EURJPY followed, trading back below 134.90 and tripping stops there as well. But with no follow thru onYen cross selling seen after mid-morning, shorts in both EUR and EURJPY scrambling to cover. EURJPY ran back up to 135.20 as EUR recovered back above 1.4880.

USDJPY was not in focus today, trading up above 91.10 before lower into the afternoon after USD bulls gave up intraday gains.

AUDUSD saw a volatile Asian session, trading down below 9120 before a good old fashion short squeeze saw it trade back up towards 92c. Early AUDJPY selling saw AUDUSD trade back below 9120, filling buy orders in the process. But afternoon upbeat comments from the RBA’s assistant governor, Philip Lowe saw AUDUSD rebound, with many shorts covering back above the 9160 level for a run to 9190.

Ranges:

EURUSD 1.4827 – 1.4919

GBPUSD 1.6279 – 1.6370

USDJPY 90.77 – 91.12

EURJPY 134.72 – 135.91

AUDUSD 9111 – 9188

Goodluck,

Sam