Daily FX Market Commentary

Andy Harrison

Good morning,

NYK Close

USDJPY 79.113 | EURUSD 1.25741 | EURJPY 99.483| AUDUSD 1.01226 | NZDUSD 0.79177 | USDCAD 1.02431 | EURCHF 1.20099 | USDCHF 0.95508 | GBPUSD 1.56663 | EURGBP 0.80255 |

 

Harry Hindsight

·         EUR: After the opening and a quick spike up it was always going to fill the gap as it sunk in that what we had was the same situation we had in May so having peaked above 1.2740 the market slowly traded lower to test below 1.2700 before the mid-point in Asia, once London started to wake up east Europeans bought aggressively on the opening only to see the market absorb the demand and sell it back below 1.2700, then Spanish yields ticked through the magic 7% and the Euro gave back the gains from the opening gap and the market settled down to a slow drift lower to the 1.2570 area where it found support and people willing to buy the rumour.

·         GBP: A subdued day for the Cable with problems in Europe leading the way, highs made during that opening phase but then Asia stayed pretty much in the 1.5700/20 range, Euro’s led the way and apart from the fact GBP traded quietly and not so deep as the Euro it pretty much mirrored the movements EUR/GBP selling helped keep GBP supported while the Euro took a tumble as safe haven flows were seen moving the pair from above 0.8100 down to trade into the 0.8020 levels. Cable settled into a 1.5640/80 range for the NYK session with ever decreasing moves in both directions.

·         JPY: With the initial movement USDJPY saw some action as the EURJPY cross seemed to be the one to buy for the retail Japanese, necessitating the use of USDJPY and EURUSD leg buying, USDJPY moved up to the 79.30 level where some exporter offers were seeing selling into the buying, but as the EUR fortunes changed so did the direction for USDJPY as safe haven JPY buying moved in taking the USDJPY back below 79.00 bottoming out around the 78.85 level, late IMM buying kicked in to spur the pair higher for a NYK finish above the 79.00 level in a tight days session.

·         AUD: Mixed fortunes over the session while the market opened higher it was less marked than the EUR and most of the work had been done over the previous week, once the initial flurry was over unlike the EUR it seemed to hold onto its gains trading in a 1.0100/20 range for the most part in Asia, London changed its direction and sold on the back of EUR selling taking it down to the 1.0070 level but while NYK had more to do on the opening, IMM types were keen to buy it back to the opening range late in the session for it to finish around the 1.0120 level where it started.

 

Yesterday’s premiership results

Actual = A | Consensus = C | Previous = P | Revised = R 

GBP       Rightmove House Prices M/M Jun A 1.00% | P 0.00%     

CAD       International Securities Transactions (CAD) Apr A 10.2B | C 3.41B | P -2.08B         

USD       NAHB Housing Market Index Jun A 29 | C 28 | P                 29

 

For today

JPY
Topside: 79.40-79.70 (light offers) 79.80-80.00 (2-way interests) 80.30-80.60 (light offers)
Downside: 78.65-78.85 (light bids) 78.20-78.50 (light bids) 77.70-78.00 (medium bids)

EUR
Topside: 1.2610-1.2630(medium-light stops) 1.2635-1.2665 (light offers) 1.2670-1.2700 (2-way interest)
Downside: 1.2530-1.2550 (light-medium stops) 1.2490-1.2520 (2-way interest) 1.2460-1.2480    (2-way interest)

EURJPY
Topside: 99.80-100.00 (medium-light stop buyers) 100.80-101.10 (light offers)
Downside: 98.90-99.10 (light-medium stop sellers) 98.30-98.50 (light stops) AUD
Topside: 1.0160-1.0180 (light-medium stop buyers) 1.0200-1.0220 (light offers)
Downside: 1.0055-1.0085 (light bids) 1.0020-1.0040 (light bids)

 

·         EUR: Steady demand for the Euro over the session but it seems to be more rumour buying than anything concrete with very little being leaked from the G20 meeting so far, and the full communique not expected until well into the Asian session tomorrow, we moved from the 1.2575 level to peak above the 1.2610 area before settling into a sideways pattern for the run into London.

·         GBP: Cable tagged along for a gentle rise up moving from the 1.5664 bottom to 1.5690 on very quiet trading as we all wait for something concrete out of the G20 or Greece.

·         JPY: With the Euro rising the USDJPY reverses yesterday’s gains in very quiet trading most of the move down from the 79.12 level was during the Tokyo fix as exporter supply dominated to move it below 79.00, the market eventually bottomed out at 78.93 on a lacklustre day.

·         AUD: A quiet day with very little news to push the Oz around moving from an early low of 1.0099 to just above the 1.0130 area, the RBA minutes did stir it up slightly with an admission that they were tempted to leave rates where they were on the last meeting, but were persuaded by deteriorating conditions in Europe and China.

·         Overall: A very quiet day with expectations of news from both G20 and Greece expected, several papers are running European doom and gloom stories of one sort or the other but generally just sensationalising

 

G20:

says vigilant on oil, ready to take measures

ready to offer stimulus, US to avoid fiscal cliff draft

CNY/IMF:

China confirms $43 billion for IMF crisis war chest

EUR:

EU Banking Union Details Emerge at G20

G20: G-20: India Agrees to Extra $10 Billion for IMF Firewall

CNY:

China net FX purchases in May at $3.7 bln -CB

China PBOC Survey Finds More Dissatisfaction With Price Levels

China net FX purchases in May at $3.7 bln -CB

China to let insurers manage offshore yuan funds -paper

AUD:

Australia’s RBA Says Decision To Cut Rates In June Finely Balanced

JPY:

Japan finance minister says yen’s rise a risk to economy

BOJ Shirakawa: Central banks working closely to protect banking system

Japan MOF Official: Forex Markets Unstable, Must Watch Closely

JPY/G20:

G20 should counter trade protectionism-Japan PM

NZD:

NZ central bank defends inflation targeting tool

 

Today’s data

Consensus = C  Previous = P

08:30     GBP       CPI M/M May C 0.10% | P 0.60%              

08:30     GBP       CPI Y/Y May C 3.00% | P 3.00%  

08:30     GBP       Core CPI Y/Y May C 2.20% | P 2.10%       

08:30     GBP       RPI M/M May C 0.20% | P 0.70%              

08:30     GBP       RPI Y/Y May C 3.30% | P 3.50%  

09:00     EUR        German ZEW Survey (Economic Sentiment) Jun C 2.5 | P 10.8    

09:00     EUR        German ZEW Survey (Current Situation) Jun C 39 | P 44.1             

09:00     EUR        Eurozone ZEW Survey (Economic Sentiment) Jun C -5.7 | P -2.4 

12:30     CAD       Wholesale Sales M/M Apr C 0.60% | P 0.40%      

12:30     USD       Housing Starts May C 720K | P 717K        

12:30     USD       Building Permits May C 730K | P 715K    

 

Ranges as of 6am London time

                                Highs   Lows

USD/JPY               79.132 | 78.93

EUR/USD             1.2617 | 1.2575

EUR/JPY               99.67 | 99.389

AUD/USD            1.0140 | 1.0105

NZD/USD             0.7940 | 0.7914

USD/CAD             1.0234 | 1.0220

EUR/CHF              1.2011 | 1.20092

USD/CHF             0.9551 | 0.9521

GBP/USD             1.5692 | 1.5670

EUR/GBP             0.8041 | 0.8027

 

Good luck

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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