Daily FX Market Commentary

Good morning,

LMAX Close

USDJPY 110.711 | EURUSD 1.14096 | AUDUSD 0.72692 | NZDUSD 0.65725 | USDCAD 1.31339 | USDCHF 0.99322 | GBPUSD 1.27665 |

LMAX Highs and Lows 5.15am GMT

                                High | Low

EURUSD               1.14178 | 1.13952

USDJPY                 110.900 | 110.588

GBPUSD               1.27779 | 1.27497

USDCHF               0.99153 | 0.99437

AUDUSD              0.72829 | 0.72618

USDCAD               1.31362 | 1.31116

NZDUSD               0.66057 | 0.65707

EURCHF                1.13436 | 1.13218

EURGBP               0.89524 | 0.89266

EURJPY                 126.566 | 126.097

For today

• GBP: Reasonably quiet day with a choppy opening period leading to a push to the 1.2776 areas to make the highs after struggling around the 1.2760 level for the early part of Tokyo testing to the 1.2755 level only to return to the opening areas around the 1.2765  area for the grey hour, downside bids into the 1.2720-00 areas likely to be light and more sentimental than anything else, a push through will see some weak stops and the market open through to the 1.2630 areas before meeting stronger bids, any downside pressure is likely to be Euro denominated as European banks are likely to be linked closer to Turkish banks however, tentative nature of Cable longs any push through that level could see stronger congestion over an extend area and particularly strong the closer the market moves into the 1.25 handle. Topside offers light through the 1.2800 areas with possible weak stops the market then open through to the 1.2900 areas before any serious offers are likely.
• EUR: Most of the market has been more focused on the EM areas with Euro doing very little over the course of the session, dipping in early trading to test the 1.1395 level before slowly recovering and post a high just below the 1.1420 level before drifting back off to the opening levels to hold around the 1.1400 level into the grey hour, downside bids into the 1.1360 level possibly mixed beyond with weak stops and congestive bids continuing through to the 1.1340 area, a push to the 1.1300 level will likely see some strong bids appearing and any move through will possibly see strong stops appearing on a push through the 1.1270 level. Topside offers into the 1.1420 areas and the market see’s limited offers on a move back above the 1.1440-60 levels with possibly stronger offers appearing around the 1.1480-1.1500 level however, a push through will see weak stops and the market running higher quickly on limited offers with congestion likely to appear around the 1.1550 to slow any move.
• JPY: A light rise from the opening levels dipping to make the lows on the Tokyo fix before steadily pushing through the session from the 110.60 area to test the 110.90 lightly and move into the grey hour just off that level, Downside bids into the 110.20-00 areas with congestion and light profit taking in the area likely to slow any decent below the level however, the market is congested on any break through the level with weak stops quickly absorbed on any dip to the 109.50 areas and through to 109.30 possibly strong, a breakthrough of these levels opens up the chance of Jun lows being tested. Topside offers through to the 111.20 level with possible weak stops and congestion continuing through to the 111.40 areas before the market opens up for a stronger moving through to the 111.80-112.00 level and better stops beyond.
• AUD: Very limited trading with cross Oz trading moving the market more than anything else, the move into early Tokyo saw AUDJPY selling moving in as some carry trade longs took the opportunity to cut positions and taking the Oz to the low 0.7260 areas before starting a slow steady recovery through the session to push towards the 0.7285 highs and ranging through to the grey hour holding around the 0.7275 level. Downside bids into the 0.7250 level and congestion likely to continue through to the 0.7150 areas however, this puts the market deep into the 2016 ranges and some of the congestion could be patchy on any dips however, it is likely that the patches will be strong and only a push through the 0.7100 area opens the possibility of a deeper move, topside offers weak through the 73 cent level with the market likely to find little resistance until approaching the 0.7400 areas with stronger offers likely to be present however, whether this will see stops appearing remains to be seen but is likely to be the direction of least resistance.

Overnight News

USD:

Trump passes new law to increase scrutiny of foreign deals

OIL:

Oil tumbles as much as 2% as Oklahoma crude piles up

CNY:

China stats: Economic operation steady, with some changes in July

Domestic and external environment more complicated

TRY:

Russell Napier: Turkey will be largest EM default of all time

Turkey is the first big victim of Fed tightening, but it won’t be the last

USD/TRY:

Bolton is said to warn Turkish envoy as market meltdown drags on BBG

Today’s data

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

AUD       NAB Business Conditions Jul A 12 | P 15

AUD       NAB Business Confidence Jul A 7 | P 6

CNY        Unemployment Rate Jul A 5.10% | P 4.80%

CNY        Retail Sales Y/Y Jul A 8.80% | C 9.20% | P 9.00%

CNY        Industrial Production Y/Y Jul A 6.00% | C 6.30% | P 6.00%

CNY        Fixed Assets Ex Rural YTD Y/Y Jul A 5.50% | C 6.00% | P 6.00%

JPY         Industrial Production M/M Jun (F) A -1.80% | C -2.10% | P -2.10%

06:00     EUR        German GDP Q/Q Q2 (P) C 0.40% | P 0.30%

06:00     EUR        German CPI M/M Jul (F) C 0.30% | P 0.30%

06:00     EUR        German CPI Y/Y Jul (F) C 2.00% | P 2.00%

07:15     CHF        Producer & Import Prices M/M Jul C 0.10% | P 0.20%

07:15     CHF        Producer & Import Prices Y/Y Jul C 3.40% | P 3.50%

08:30     GBP       Jobless Claims Change Jul P 7.8K

08:30     GBP       Claimant Count Rate Jul P 2.50%

08:30     GBP       ILO Unemployment Rate 3Mths Jun C 4.20% | P 4.20%

08:30     GBP       Average Weekly Earnings 3M/Y Jun C 2.50% | P 2.50%

08:30     GBP       Weekly Earnings ex Bonus 3M/Y Jun C 2.60% | P 2.70%

09:00     EUR        Eurozone Industrial Production M/M Jun C -0.30% | P 1.30%

09:00     EUR        Eurozone GDP Q/Q Q2 (P) C 0.30% | P 0.30%

09:00     EUR        German ZEW Economic Sentiment Aug C -20.1 | P -24.7

09:00     EUR        German ZEW Current Situation Aug P 72.4

09:00     EUR        Eurozone ZEW Economic Sentiment Aug C -16.4 | P -18.7

12:30     USD       Import Price Index M/M Jul C 0.10% | P -0.40%

 

Harry Hindsight

• GBP: Very limited range for the Cable and a little choppy through to the close, opening around the 1.2750 areas the market filled the gap on the charts from the low opening to test through into the Tokyo session testing the 1.2780 areas before dropping back again after the fun and games in the TRY with very deep concerns of contagion to the European area, the market managed to push below the opening areas into the Tokyo midsession, before ranging around the 1.2760 areas through to the London session, early London saw the market dipping through to the 1.2730 level before quickly recovering to range around the 1.2750 level bouncing to the 1.2770 level, the move into the NYK session saw a reversal of fortunes and the market pushing through to test lightly above the 1.2790 areas and Juncker comments on the damage that Brexit will cause the EU, the first admission of problems to come from the UK leaving, the market drifted from the highs slipping back to range around the 1.2760 areas to the close.
• EUR: Opening around the 1.1370 areas the market lifted through to the Tokyo session filling the gap and once done dropped back steadily to move into the grey hours basing along the 1.1370 level, London were early buyers before dipping back to the low and then ranging through to the NYK session holding around the 1.1385 area, the move into NYK saw the market rising steadily through to the 1.1430 but struggled with the level before drifting back off to hold around the 1.1400 level through to the close.
• JPY: Early TRY movement saw limited liquidity and the market rising in premarket trading to the 7.20 levels however, the official opening saw USD back lower and USDJPY seeing safe haven flows and the USDJPY struggling to recover from the opening 110.50 areas and only partially filling the gap before dropping again to base along the 110.15 level through to the grey hour ranging quietly, the move into the London session saw the market ranging to the 110.35 levels and only breaking above the level into the NYK session quickly running through to the 110.75 on weak stops and then slowly completing the move to test the 110.95 level before running out of steam and drifting back to the 110.70 areas to the close.
• AUD: A very quiet and limited range for the Oz with the market opening around the 0.7270 areas and covering the gap from the low opening into the Tokyo session before again dropping back and basing through the day on the 0.7260 area and ranging to the 0.7290 level through to the weak close pressing the lows for a minor push through the low and then rising back to above 0.7270 for the close.

 

Yesterday’s premiership results

CNY        M2 Money Supply Y/Y Jul A 8.20% | C 8.20% | P 8.00%

CNY        New Loans (CNY) Jul A 1450B | C 1210B | P 1840B

 

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.