Daily FX Market Commentary

Andy Harrison

Good Morning,

LMAX Close

USDJPY 109.622 | EURUSD 1.11291 | AUDUSD 0.6918 | NZDUSD 0.65087 | USDCAD 1.35004 | USDCHF 1.00794 | GBPUSD 1.26081 |

LMAX highs and Lows 05.00 GMT

                                Highs | Lows

EURUSD               1.11403 | 1.11259

USDJPY                 109.623 | 108.95             

GBPUSD               1.26146 | 1.26041

USDCHF               1.00784 | 1.00519

AUDUSD              0.69200 | 0.69017

USDCAD               1.35421 | 1.34937

NZDUSD               0.65139 | 0.65027           

EURCHF                1.12182 | 1.11871

EURGBP               0.88326 | 0.8824

EURJPY                 122.015 | 121.433

For Today

• GBP: A very quiet Asian session for a change, holding around the opening 1.2610 areas through to the grey hour with barely a 10 pip range around the open, , limited congestion through the 1.2700 level and into the 1.2750 area before some sentimental offers appear, a move towards the 1.2800 will likely see some resistance but a mote through the 1.2820 areas is likely to see some weak stops and the market opening through to weak offers around the 1.2850 level and then stronger offers then appearing on any attempt to the 1.2900 areas. Downside bids into the 1.2580 level and congestion likely to continue on any move to the sentimental 1.2550 area, weak stops possibly in the mix on the downside before opening a little on a test to the 1.2500 level and stronger stops likely on a push through the figure level and sentimental levels likely to be the focus for bids.
• JPY: Opening around the 109.60 level and the highs for the session saw the market moving into the Tokyo session testing lower and quickly pushing through the 109.50 area and then drifting a little to test through 109.25 areas through to midsession before dipping a little and holding through to the grey hour, , Downside congestion down to the 109.00 areas, with a break of the 108.80 level likely to trigger weak stops but running into stronger congestion on any dips through to the 108.50 areas and increasing into the 108.00 level. Topside offer into the 110.00 likely to be weak with weak stops possibly opening the market to a quick move through to the 110.50 areas before stronger congestion moves in and increasing into the 111.00 level with strong stops a possibility on a move through.
• AUD: Choppy range even if limited with the market opening around the 0.6910 level and then testing through the 0.6918 to the topside and through towards the 0.6900 repeatedly before settling on the a tight range around the 0.6915 level for the move to the grey hour, Topside offers 0.6940-60 areas and likely increasing through the 0.6980-0.7000 levels, downside bids into the 0.6850 area likely to be more sentimental than anything else, stronger bids into the 0.6800 areas with sentimental values likely to show stronger bids on any push lower.
• EUR: A quiet range basing on the 1.1130 level and pushing for a light test of the 1.1140 level in early Tokyo before slowly returning to the opening level for the move into the grey hour, Downside bids into the 1.1120 level with only a little opening before stronger bids appear through to the 1.1100 areas and likely to continue to the 1.1080 area before weak stops appear and the market opens a little through to the 1.1040 level and better bids reappear for any attempt at the 1.1000 level, topside offers into the 1.1220 area with possibly stronger stops on a push through the level however, above is likely to be congested and any move towards the 1.1300 is likely to be more of a grind through the levels

 

 

Overnight News

USD:

Trump ploughs ahead with USMCA approval plan as democrats waver BBG

Pence says he ahs been in ongoing discussions with house speaker Pelosi and trade Rep Lighthizer RTRs

EUR:

Salvini ready to end coalition unless 5star plays ball BBG

CNY/USD:

China says US needs to address its concerns to reach deal BBG

China has a rare earth plan ready to go if trade war deepens BBG

Former Chinese vice commerce minister Wei Jiangue, initiating trade war with China might be the biggest strategic mistake made by the US since WW II or even its founding

Wei Jianguo: Need to prepare for the trade war to spread to geopolitical areas including S. China sea

Huawei repatriating US workers out of China – FT

USD/MXN:

Trump: US to impose 5% tariff on all goods from Mexico

US to up Mexico tariffs to 25% by Oct 1 if crisis persists

Mexico to substantially stop the illegal inflow of aliens coming through its territory

MXN/USD:

Mexican deputy foreign minister Seade says right thing would be to respond eye for an eye but we want to build an agreement RTR’s

Amlo: Wants peace with Trump amid US tariff threat

Amlo: He doesn’t want confrontation and will travel to Washington tomorrow

Seade: There is no justification for Trump to impose tariffs over issues related to immigration

EUR/USD:

Merkel speech slams Trump, attacks protectionism, trade war walls of ignorance- BLG

CNY:

China fully capable to manage risks of small banks PBoC

China’s debt ratio hits record high as efforts to offset US trade war mean there is not such thing as a free lunch SMP

China May factory activity shrinks more than expected as exports falter – TWT

 

Today’s Data

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

GBP       GfK Consumer Confidence May A -10 | C -12 | P -13        

JPY         Unemployment Rate Apr A 2.40% | C 2.40% | P 2.50%    

JPY         Tokyo CPI Core Y/Y May A 1.1% | C 1.20% | P 1.30%        

JPY         Industrial Production M/M Apr (P) A 0.60% | C 0.20% | P -0.60%

JPY         Retail Trade Y/Y Apr A 0.50% | C 1.00% | P 1.00%             

CNY        Manufacturing PMI May A 49.4 | C 49.9 | P 50.1

CNY        Non-manufacturing PMI May A 54.3 | C 54.3 | P 54.3      

AUD       Private Sector Credit M/M Apr A 0.20% | C 0.30% | P 0.30%         

JPY         Consumer Confidence Index May A 39.4 | C 40.6 | P 40.4              

JPY         Housing Starts Y/Y Apr A -5.70% | C -0.80% | P 10.00%   

06:00     EUR        German Retail Sales M/M Apr C 0.40% | P -0.20%             

06:30     CHF        Retail Sales Real Y/Y Apr C -0.80% | P -0.70%       

08:30     GBP       Mortgage Approvals Apr C 64K | P 62K   

08:30     GBP       Money Supply M4 M/M Apr C 0.40% | P -0.50%

12:00     EUR        German CPI M/M May (P) C 0.30% | P 1.00%       

12:00     EUR        German CPI Y/Y May (P) C 1.60% | P 2.00%          

12:30     CAD       GDP M/M Mar C 0.30% | P -0.10%           

12:30     CAD       GDP Y/Y Mar C 1.20% | P 1.10%

12:30     CAD       Industrial Product Price M/M Apr P 1.30%            

12:30     CAD       Raw Materials Price Index M/M Apr P 2.80%       

12:30     USD       Personal Income Apr C 0.30% | P 0.10% 

12:30     USD       Personal Spending Apr C 0.20% | P 0.90%             

12:30     USD       PCE Deflator M/M Apr C 0.30% | P 0.20%             

12:30     USD       PCE Deflator Y/Y Apr C 1.60% | P 1.50% 

12:30     USD       PCE Core M/M Apr C 0.20% | P 0.00%    

12:30     USD       PCE Core Y/Y Apr C 1.60% | P 1.60%        

13:45     USD       Chicago PMI May C 54 | P 52.6  

14:00     USD       U. of Mich. Sentiment May (F) C 101 | P 102.4

 

Harry Hindsight

 

• GBP: A quiet range through the most of the day with the market opening around the 1.2630 level and holding quietly through the Asian session around that level the move into the grey hour saw the market testing through to the 1.2610 area before bouncing and returning to the previous range around the 1.2630 level and struggling on each push to the 1.2640 areas before drifting through into NYK, NYK were steady sellers and the market picked up speed on a break through the 1.2600 level testing to the 1.2580 level before bouncing and pushing to the 1.2615 level for the London close and ranging around the level to the close.
• JPY: A slow start to the Asian session opening around the 109.55 level, the move into the Tokyo session testing the 109.50 level and holding for a couple of hours before slowly rising through into the London session testing the 109.80 area before stalling and slowly drifting through to the NYK session holding around the 109.65-70 areas, NYK saw early buying pushing for the high of the day testing through to the 109.90 level before drifting off from the highs for a long run through to the opening levels and the close.
• AUD: A limited range through the day with the Asian session slowly rising, opening around the 0.6915 level the market slowly pushed through to the 0.6935 level and ranged above the 0.6930 level through deep into the London session before starting a slow a steady drift lower pausing at the 0.6915 level and then renewing the run to test lightly through the 69 cents level a little and bouncing once the NYK option cut was over and then holding quietly through to the close around the 0.6910 level.
• EUR: Limited choppy session through the day opening around the 1.1135 level and rising lightly to the highs of the day just short of the 1.1145 level and ranging through to the grey hour holding the opening level, the move into the London session saw the market dipping through to the 1.1125 level bouncing off the area and back to the opening level and again pushing through to the highs again and slowly drifting to NYK, NYK selling saw the market dropping quickly through to test through the 1.1120 level this time before holding quietly for a short period then rising back to the opening levels and ranging in the 1.1130-40 area for several hours before drifting to the close to hold around the 1.1130 area just short of the opening level.

 

Yesterday’s Premiership results

NZD       Building Permits M/M Apr A -7.90% | P -6.90% | R -7.40%

AUD       Private Capital Expenditure Q1 A -1.70% | C 0.50% | P 2.00% | R 1.30%

AUD       Building Approvals M/M Apr A -4.70% | C 0.00% | P -15.50% | R -13.40%

CAD       Current Account Balance Q1 A -17.35B | C -17.9B | P -15.5B | R 16.6B

USD       GDP Annualized Q/Q Q1 (S) A 3.10% | C 3.10% | P 3.20%

USD       GDP Price Index Q1 (S) A 0.80% | C 0.90% | P 0.90%

USD       Initial Jobless Claims (MAY 25) A 215K | C 214K | P 211K

USD       Advance Goods Trade Balance Apr A -72.1B | C -72.0B | P -71.4B | R -71.9B

USD       Wholesale Inventories M/M Apr (P) A 0.70% | C 0.10% | P -0.10%

USD       Pending Home Sales M/M Apr A -1.50% | C 0.50% | P 3.80% | R 3.90%

USD       Natural Gas Storage A 114B | C 98B | P 100B

USD       Crude Oil Inventories A -0.3M | C -0.9M | P 4.7M

 

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