Daily FX Market Commentary

Andy Harrison

Good Morning,

LMAX Close

USDJPY 107.921 | EURUSD 1.13696 | AUDUSD 0.70222 | NZDUSD 0.67173 | USDCAD 1.30928 | USDCHF 0.97624 | GBPUSD 1.26968 |

LMAX highs and Lows 05.00 GMT

                                Highs | Lows

EURUSD               1.13710 | 1.13481

USDJPY                 108.507 | 108.104

GBPUSD               1.27056 | 1.26882

USDCHF               0.98249 | 0.97895

AUDUSD              0.70304 | 0.69949

USDCAD               1.30997 | 1.30817

NZDUSD               0.67262 | 0.66995

EURCHF                1.11516 | 1.11201

EURGBP               0.89555 | 0.89363

EURJPY                 123.357 | 122.678

For Today

• GBP: Plenty of volume but its not reflected within the range, opening unchanged and trading around the 1.2700 level through into the Tokyo session the market dipped a little through to the 1.2690 area with a little penetration below before recovering through midsession to push to the 1.2705 areas before settling in to push into the grey hour unchanged. strong congestion above the 1.2760 level with possibly weak stops on a test through the 1.2780 areas and a quick push through the sentimental levels and momentum building to a stronger test through to the 1.2900 level and limited congestion in the area likely to slow the rise however, very little technical wise to stop further movement higher other than Brexit news. Downside Strong congestion on any move through the 1.2650 level and building into the 1.2620-00 area, a dip through the level is likely to see some weak stops however, the downside is possibly going to see better buyers moving in on any dips through towards the 1.2500  levels and limited interest from sellers for the time being.
• JPY: Opening higher with a poor Tankan and tensions easing off between the US and China USDJPY moved from around the 108.15 level and running steadily through to the 108.50 into the Tokyo session, Tokyo saw some selling and the market testing back through to the opening levels but could not fill the back with the market slowly pushing away from the level for a push through to the 108.30 level into the grey hour, downside light bids through to the congested 107.40-20 areas and likely to continue until the 106.80 areas break with weak stops likely to dominate the downside through to the 106.50 areas before some bids are likely to reappear, topside offers cleared through to the 108.50 level however, congestion still remains and likely to increase on any test to the 108.80 level with weak stops likely on a push through the 109.00 level and stronger congestion in the 108.40-60 areas likely to limit further gains.
• AUD: With tensions subsiding a little between the US and China the Oz drifted from the high opening even though the market saw a reasonable amount of AUDJPY buying moving through in early trading, the move into the Tokyo session saw the market slowly dip through to the 0.7025 areas from the early 0.7035 level and quickly dip through filling the gap and triggering some weak stops to test to the 0.7010 before pausing briefly and renewing its downward trend to test just below the figure level and bounce weakly above the figure again and trade quietly through to the grey hour holding around the 0.7005 areas. Topside offers from the current levels are a little thin on a move through the 0.7050 and then some stronger offers appearing to slow the market from squeezing higher, Downside bids light through the 69 cents level with limited stops likely to appear before stronger bids start to reappear on a move through the 0.6850 level and increasing the closer to the 68 cents level the market gets.
• EUR: Opening a touch lower the market held through into the Tokyo session filling the small gap and testing the 1.1370 level before dropping away in the Tokyo session with EURJPY selling dominating the early part of the session as the USDJPY rose, the market pushed gradually through the 1.1360 level and eventually continued to lightly break the 1.1350 level before basing along the level through to the grey hour, Congestive offers still remain to the topside with possible weak stops above the 1.1420 level and lighter congestion from there through the usual 1.1440-60 area to build into stronger offers on any push for the 1.1480-1.1500 area, even through this level the market continues to see resistance to the 1.1550 level and the market moving into the ranges from last summer, downside bids light back through to the 1.1350 area with some possible stronger congestion in the area however, through there leaves very little until the approach of the 1.1320-00 area where some older bids could still be holding

Overnight News

NZD:

RBNZ’s Bascand comfortable with easing LVR limits over time

Bascand: Further easing in LVRS is possible if risks decline

GBP:

Oppostion MP’s look to block no deal Brexit by stopping government funds

Today’s Data

Actual A | Consensus C | Previous P | Revised R | all timings GMT/UTC

CNY        Composite PMI (JUN) A 53 | P 53.3

CNY        Manufacturing PMI (JUN) A 49.4 | C 49.5 | P 49.4

CNY        Non-manufacturing PMI (JUN) A 54.2 | C 54.2 | P 54.3

AUD       AiG Performance of Manufacturing Index (JUN) A 49.4 | P 52.7

AUD       CBA Australia PMI Mfg (JUN F) A52 | P 51.7

JPY         Tankan Large Manufacturing Index (2Q) A 7 | C 9 | P 12

JPY         Tankan Large Manufacturers Outlook (2Q) A 7 | C 6 | P 8

JPY         Tankan Large Non-Manufacturing Index (2Q) A 23 | C 20 | P 21

JPY         Tankan Non-Manufacturing Outlook (2Q) A 17 | C 19 | P 20

JPY         Tankan Large All Industry Capex (2Q) A 7.4% | C 8.1% | P 1.2%

JPY         Tankan Small Manufacturing Index (2Q) A -1 | C 2 | P 6

JPY         Tankan Small Manufacturing Outlook (2Q) A -5 | C -2 | P -2

JPY         Tankan Small Non-Manufacturing Index (2Q) A 10 | C 10 | P 12

JPY         Tankan Small Non-Manufacturing Outlook (2Q) A 3 | C 6 | P 5

JPY         Nikkei Japan PMI Manufacturing (JUN F) A 49.3 | P 49.5

AUD       TD Securities Inflation (YoY) (JUN) A 1.6% | P 1.7%

CNY        Caixin China PMI Mfg (JUN) A 49.4 | C 50.1 | P 50.2

JPY         Consumer Confidence Index (JUN) A 38.7 | C 39.2 | P 39.4 | R 40.8

06:30                     CHF Retail Sales Real (YoY) (MAY) P -0.7%

06:45                     EUR ECB Vice President Guindos Speaks in Frankfurt

07:00                     CNY PBOC’s Yi speaks in Helsinki

07:30                     CHF PMI Manufacturing (JUN) C 49.0 | P 48.6

07:45                     EUR Markit/ADACI Italy Manufacturing PMI (JUN) C 48.7 | P 49.7

07:50                     EUR Markit France Manufacturing PMI (JUN F) C 52.0 | P 52.0

07:55                     EUR Markit/BME Germany Manufacturing PMI (JUN F) C 45.4 | P 45.4

07:55                     EUR German Unemployment Change (000’s) (JUN) C 0.0k | P 60.0k

07:55                     EUR German Unemployment Claims Rate s.a. (JUN) C 5.0% | P 5.0%

08:00                     EUR Markit Eurozone Manufacturing PMI (JUN F) C 47.8 | P 47.8

08:30                     GBP Net Consumer Credit (MAY) C 0.9b | P 0.9b

08:30                     GBP Consumer Credit (YoY) (MAY) P 5.9%

08:30                     GBP Net Lending Sec. on Dwellings (MAY) C 4.2b | P 4.3b

08:30                     GBP Mortgage Approvals (MAY) Medium C 65.5k | P 66.3k

08:30                     GBP Money Supply M4 (MoM) (MAY) P 0.9%

08:30                     GBP M4 Money Supply (YoY) (MAY) P 3.0%

08:30                     GBP Markit UK PMI Manufacturing s.a. (JUN) C 49.5 | P 49.4

09:00                     EUR Euro-Zone Unemployment Rate (MAY) C 7.6% | P 7.6%

13:45                     USD Markit US Manufacturing PMI (JUN F) C 50.1 | P 50.1

14:00                     USD ISM Manufacturing (JUN) C 51.0 | P 52.1

14:00                     USD ISM Employment (JUN) P 53.7

14:00                     USD Construction Spending (MoM) (MAY) C 0.1% | P 0.0%

22:45                     NZD Building Permits (MoM) (MAY) P -7.9%

23:30                     AUD ANZ Roy Morgan Weekly Consumer Confidence Index (JUN 30) P 114.3

23:50                     JPY Monetary Base (YoY) (JUN) P 3.6%

23:50                     JPY Monetary Base End of period (JUN)  P ¥511.8t

Weekend News

 

USD/CNY:

Huawei lifeline shows trump prefers business deals over cold war BBG

US will not impose any new tariffs

US say negotiations are back on track

Will allow US companies to sell their equipment to Huawei

China will resume purchases of some US farm products

China hasn’t won, but it hasn’t lost either as trade talks with US enter stage South China morning post

New sales to China’s Huawei to cover only widely available goods RTRS

US-China trade talks are back on, but obstacles remain – WSJ

CNY:

China’s Factory outlook dimmed again in June ahead of G20 truce – BBG

USD/KRW:

After surprise Trump-Kim meeting, US and N. Korea to reopen talks RTRS

OIL:

OPEC set for oil cut extension if Iran endorses pact – RTRS

Harry Hindsight

 

• GBP: A quiet start to the day with the Cable running around the opening levels through to deep into London before ranging a little better, opening around the 1.2670 level the market saw a couple of tests towards the 1.2680 level but was unable to find the momentum to push through the level and returned to the opening area each time, grey hour selling managed minor dips through the opening level before London took the market through the topside with the help of ambivalent set of numbers and pushing to the high 1.2680’s before dipping back to the opening levels and then starting a steady rise through deep into the NYK session to push above the 1.2730 level before finding sufficient offers to turn the market and slipping to a London close testing back to the 1.2710 areas, the market eventually settled into a limited range around the 1.2700 figure levels for the fun to the close in quiet trading.
• JPY: A very quiet range for the USDJJPY with the market trading around the 107.80 opening levels, early trading saw the market slip to its low slowly through Tokyo testing a little above the 107.55 level before moving through to the grey hour regaining its losses, early London did very little and the market only extended its highs on the move through to the NYK session and then only through to the 107.90 into late trading before finishing the day almost unchanged.
• AUD: A drift through to the Tokyo session with the market dipping to the 70 cents levels into the first few hours of Tokyo before steadily rising through to the London session to test to the 0.7015 levels, trading through London saw the market returning to the opening levels around the 0.7005 area and moving slowly around that level through into the NYK session in quiet trading, the run to the close saw the market again rising to threaten the 0.7020 levels into the final hour but with very little conviction.
• EUR: Overall a flat day with the market opening around the 1.1370 level and trading for several hours through Tokyo around that level, a slow drift in the run to the London session saw the market testing towards the 1.1360 level before early Europeans moved in to take the market through to the highs in a steady run to just above the 1.1390 level, the market continued to press the level for several hours, before running out of impetus and drifting through to the NYK opening back to the opening levels and a fresh start, NYK managed the same highs and the end of London saw a sharp sell off through to make 1.1350 lows before bouncing and recovering to finish the day unchanged.

Yesterday’s Premiership results

NZD       ANZ Consumer Confidence (MoM) (JUN) A 2.8% | P -3.2%

NZD       ANZ Consumer Confidence Index (JUN) A 122.6 | P 119.3

GBP        GfK Consumer Confidence (JUN) A -13 | C -11 | P -10

GBP        Lloyds Business Barometer (JUN) A 13 | P 10

JPY         Jobless Rate (MAY) A 2.4% | C 2.4% | P 2.4%

JPY         Job-To-Applicant Ratio (MAY) A 1.62 | C 1.63 | P 1.63

JPY         Tokyo Consumer Price Index (YoY) (JUN) A1.1% | C 1.0% | P 1.1%

JPY         Tokyo Consumer Price Index Ex-Fresh Food (YoY) (JUN) A 0.9% | C 1.0% | P 1.1%

JPY         Tokyo CPI Ex-Fresh Food, Energy (YoY) (JUN) A 0.8% | C 0.8% | P 0.8%

JPY         BOJ Summary of Opinions

JPY         Industrial Production (MoM) (MAY P) A 2.3% | C 0.7% | P 0.6%

JPY         Industrial Production (YoY) (MAY P) A -1.8% | C -3.0% | P -1.1%

JPY         First Day of G20 Summit in Osaka, Japan

AUD       Private Sector Credit (MoM) (MAY) A 0.2% | C 0.2% | P 0.2%

JPY         Housing Starts (YoY) (MAY) A -8.7% | C -4.2% | P -5.7%

EUR        German Import Price Index (MoM) (MAY) A -0.1% | C -0.2% | P 0.3%

EUR        German Import Price Index (YoY) (MAY) A -0.2% | C -0.2% | P 1.4%

CHF        KOF Leading Indicator (JUN) A 93.6 | C 94.9 | P 94.4 | R 93.8

GBP        GDP (QoQ) (1Q F) A 0.5% | C 0.5% | P 0.5%

GBP        GDP (YoY) (1Q F) A 1.8% | C 1.8% | P 1.8%

GBP        Current Account Balance (1Q) A -30B | C -32.0b | P -23.7b

EUR        Euro-Zone CPI Core (YoY) (JUN A) A 1.1% | C 0.9% | P 0.8%

EUR        Euro-Zone Consumer Price Index Estimate (YoY) (JUN) A 1.2% | C 1.2% | P 1.2%

CAD       GDP (MoM) (APR) A 0.3% | C 0.2% | P 0.5%

CAD       GDP (YoY) (APR) A 1.5% | C 1.5% | P 1.4%

CAD       Industrial Product Price (MoM) (MAY) A 0.1% | C 0.0% | P 0.8%

USD        Personal Income (MAY) A 0.5% | C 0.3% | P 0.5%

USD        Personal Spending (MAY) A 0.4% | C 0.5% | P 0.3% | R 0.2%

USD        Real Personal Spending (MAY) A 0.2% | C 0.4% | P 0.0%  | R 0.2%

USD        PCE Deflator (MoM) (MAY) A 0.2% | C 0.2% | P 0.3%

USD        PCE Deflator (YoY) (MAY) A 1.5% | C 1.5% | P 1.5% | R 1.6%

USD        PCE Core (MoM) (MAY) A 0.2% | C 0.2% | P 0.2%

USD        PCE Core (YoY) (MAY) A 1.6% | C 1.6% | P 1.6%

USD        Chicago Purchasing Manager (JUN) A 49.7 | C 54 | P 54.2

USD        U. of Mich. Sentiment (JUN F) A 98.2 | C 97.9 | P 97.9

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