Daily FX Market Commentary

Andy Harrison

Good morning,

NYK Close

USDJPY 79.549 | EURUSD 1.27052 | EURJPY 101.075 | AUDUSD 1.01948 | NZDUSD 0.79473 | USDCAD 1.01842 | EURCHF 1.20112 | USDCHF 0.94536 | GBPUSD 1.57174 | EURGBP 0.8084 |

 

Harry Hindsight

·         EUR: A less than convincing day although the Greeks have decided to form a government where they couldn’t in May the problems still remain even if they’ve finally made a decision. G20 added their two pennies worth, and the French are going around saying the deals done, while Merkel say’s Germany is not up for it. Whichever way there’s more mouths than hands to feed them. Euro’s moved lower during Asia but only through lack of interest moving from the 1.2690 area down to around 1.2665 level and holding that range until London walk in moving it steadily higher on mixed PPI data from Germany, by NYK time we’d moved above 1.2700 and stalled at the usual 20 level FOMC comments that the Labour market had slowed replaced the previous months statement, crushing equities and Euro’s followed hitting 1.2638 very quickly only to see misleading Merkel comments trigger an immediate rally straight back up and through 1.2720 topping just above the 1.2740 level before moving back to the figure and finally moving lower as the market released that something of Markel’s comments had been lost in translation, after a choppy few hours we finished the day around the 1.2700 area.

·         GBP: You thought Euro’s was whippy, the market throughout the Asian session had been subdued (very unusual that) however, dovish comments from the BoE during the early part of the session sent the Cable in particular tumbling to 1.5650 quickly only to be bought back in the same fashion back into the 1.5720/40 range we’d been running with, it took the market a few hours to work it out but once they started to put 2 and 3 together they came up with M&A support to buy GBP and they started to buy into the NYK opening setting the high just short of 1.5780, NYK opened and no follow through there so the market again drifted to the 1.5740 area into the FOMC with neither moving their rates and adverse comments from the FED the same spike lower and then higher as the Euro appeared in the market, and we finished the day just above the 1.5700 level.

·         JPY: A dull day throughout Asia and London but comments and non-comments in the NYK session had USDJPY buying going through a widening trade deficit helped with US investors finding some reason to buy moving it from Asian low of 78.80 area up to 79.70 area before easing into the close for a 79.50 finish.

·         AUD: After a steady day in Asia Oz seemed to be unaffected during London and the early part of NYK by the European bits and pieces only coming alive with the FOMC and Merkel comments mentioned above. Asia moved the AUD lower down to 1.0170 area in early trading only for it to slowly climb up to its starting levels, London moved in and took it higher probing above the 1.0200 level before failing a couple of times and settling between 1.0180/1.0200 then the comments hit and we had a prints below 1.0140 and above 1.0220 in a short period and the same pattern we see in Cable and the Euro.

Yesterday’s premiership results

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

22:45     NZD       Current Account Balance Q1 A -1.31B | C -1.145B | P -2.763B | R -2.833B

23:50     JPY         Trade Balance (JPY) May A -0.66T | C -0.36T | P -0.48T | R -0.51T

00:00     AUD       Conference Board Leading Index Apr A -1.40% | C 0.20% | P -0.20%

00:30     AUD       Westpac Leading Index M/M Apr A 0.50% | C 0.40% | P 0.50%

04:30     JPY         All Industry Activity Index M/M Apr A 0.10% | C 0.10% | P -0.30%             

06:00     EUR        German PPI M/M May A -0.30% | C -0.20% | P 0.20%     

06:00     EUR        German PPI Y/Y May A 2.10% | C 2.20% | P 2.40%            

08:30     GBP       Bank of England Minutes A 0—0—9 | C 0—0—9 | P 0—0—9            

08:30     GBP       Claimant Count Change May A 8.1K | C -3.0K | P -13.7K 

08:30     GBP       Claimant Count Rate May A 4.90% | C 4.90% | P 4.90%   

08:30     GBP       ILO Unemployment Rate 3M Apr A 8.20% | C 8.20% | P 8.20%    

09:00     CHF        ZEW Survey (Expectations) Jun A -43.4 | P -4      

14:30     USD       Crude Oil Inventories A 2.9M | C -1.0M | P -0.2M             

16:30     USD       FOMC Rate Decision A 0.25% | C 0.25% | P 0.25%             

 

For today

USDJPY
Topside: 79.80-79.90 (medium buy stops) 80.00-80.30 (decent offers)  80.50-80.80 (light buy stops)
Downside: 79.00-79.30 (medium sell stops) 78.50-78.80 (medium bids) 78.00-78.30 (medium bids)

EURUSD
Topside: 1.2730-1.2760 (medium buy stops) 1.2770-1.2800 (light offers) 1.2830-1.2860 (decent buy stops)
Downside: 1.2640-1.2660 (medium bids)  1.2600-1.2630 (light bids) 1.2560-1.2590 (decent sell stops) 

EURJPY
Topside: 101.30-101.60 (light offers) 101.70-102.00 (medium offers)
Downside: 100.20-100.50 (medium sell stops) 99.30-99.60 (light bids) AUDUSD
Topside: 1.0220-1.0250 (medium offers) 1.0260-1.0290 (medium buy stops)
Downside: 1.0120-1.0150 (light bids) 1.0070-1.0100 (light bids) 

 

22:45     NZD       GDP Q/Q Q1 A 1.10% | C 0.40% | P 0.30% | R 0.40%

2:30        CNY        HSBC Flash China Manufacturing PMI Jun A 48.1 | C 48.7 | P 48.4

JPY:

Japan Ruling, Opposition Parties Eye Friday Vote On Sales Tax Hike

Japan extends parliament as vote on tax bill looms

Japan corporate mood dips on Europe woes, rebound expected -Reuters Tankan

Japan DPJ Senior Lawmaker: Many Lawmakers Say BOJ’s Easing So Far Insufficient

BOJ Ishida: to pursue powerful easing for inflation goal

BOJ Ishida: Expect Japan Econ to Be on Track Unless Europe Enters Double-Dip Recession

Noda’s Nominees Approved for BOJ Policy Board by Japan’s Diet

CNY:

HSBC China June PMI Falls to 48.1, Eighth Straight Month of Decline

China looking at letting QFIIs own 30 pct in companies

China’s New Yuan Loans Seen at CNY1 Trillion in June -Report

Govt adviser urges China to maintain housing curbs – Xinhua

Greece May Be Cut to Emerging-Market Status MSCI

EUR:

ECB’s Coeure’: Interest-Rate Cut May Be Discussed July 5 – FT

AUD: Australia industry struggling outside mining boom survey

Australian RBA Sold A$589M in Forex Market in May

NZD:

NZ 1Q Adjusted GDP +1.1% Vs 4Q; Market Expected +0.5%

CAD:

Canada to Tighten Mortgage Financing Rules

 

·         EUR: The lack of comments from the FOMC about further QE gave USD more of an edge during the Asian session from the end of NYK the market has been in a steady decline moving from the 1.2705 area slowly down to touch 1.2660 before finding some support however, with a heavy day of data the market was always going to be reasonably quiet with no excitement involved.

·         GBP: Was a little better supported early on in the Asian session holding for the first few hours above 1.5700 but like the Euro finally broke lower and moved down to the 1.5670 level over the balance of the session big numbers expected on the retail sales side of things so any surprises will illicit mealy comments from the opposition party but unlikely to do much else given that eyes are still on the European scene and the buying of Boots Chemist likely to underpin GBP.

·         JPY:  After NYK’s rally USDJPY tried to cling to the gains above 79.40 however, exporters were willing to sell smalls steadily over the session and fixing demand proved it to be a little premature as the market moved higher by a further 20 tics to trade above 79.60 and holding around the area for the rest of the session in quiet trading.

·         AUD: As with the Euro add to which another fall in the Chinese PMI number 8^th straight months however, this time we seem to inured to the effect somewhat and Oz moved steadily lower from above the 1.0200 level to push just through 1.0150 on the session in dull trading. It was noted that some of the AUDNZD buying we saw yesterday turned after a good GDP figure for the Kiwi’s.

 

 

 

 

Today’s data

Consensus = C  Previous = P Timings GMT

6:00        CHF        Trade Balance (CHF) May C 1.97B | P 1.33B          

7:00        EUR        French PMI Manufacturing Jun (P) C 44.5 | P 44.7            

7:00        EUR        French PMI Services Jun (P) C 45.1 | P 45.1          

7:15        CHF        Industrial Production Q/Q Q1 C -8.10% | P 7.90%             

7:30        EUR        German PMI Manufacturing Jun (A) C 45.2 | P 45.2         

7:30        EUR        German PMI Services Jun (A) C 51.5 | P 51.8       

8:00        EUR        Eurozone PMI Manufacturing Jun (A) C 44.8 | 45.1          

8:00        EUR        Eurozone PMI Services Jun (A) C 46.4 | P 46.7    

8:30        GBP       Retail Sales M/M May C 0.90% | P -1.00%            

8:30        GBP       Retail Sales Y/Y May C 2.70% | P -0.30%

8:30        GBP       Retail Sales w/Auto Fuel M/M May C 1.20% | P -2.30%  

8:30        GBP       Retail Sales w/Auto Fuel Y/Y May C 2.10% | P -1.10%      

10:00     GBP       CBI Trends Total Orders Jun C -20 | P -17              

12:30     CAD       Leading Indicators M/M May P 0.30%    

12:30     CAD       Retail Sales M/M Apr C 0.30% | P 0.40%               

12:30     CAD       Retail Sales Less Autos M/M Apr C 0.20% | P 0.10%         

12:30     USD       Initial Jobless Claims C 385K | P 386K      

14:00     EUR        Eurozone Consumer Confidence Jun (A) C -20 | P -19.3 

14:00     USD       Philly Fed Survey Jun C 0 | P -5.8              

14:00     USD       Existing Home Sales May C 4.56M | P 4.62M       

14:00     USD       House Price Index M/M Apr C 0.40% | P 1.80%  

14:00     USD       Leading Indicators May C 0.10% | P -0.10%          

14:30     USD       Natural Gas Storage C 64B | P 67B           

 

Ranges as of 6am London time

                                Highs   Lows

USD/JPY               79.67 | 79.384

EUR/USD             1.2708 | 1.266

EUR/JPY               101.00 | 100.545

AUD/USD            1.0205 | 1.0149

NZD/USD             0.8017 | 0.7948

USD/CAD             1.0222 | 1.0187

EUR/CHF              1.2014 | 1.201

USD/CHF             0.94866 | 0.94535

GBP/USD             1.5715 | 1.5674

EUR/GBP             0.8083 | 0.807

 

Good luck

Andy