Daily FX Market Commentary

Andy Harrison

Good morning,

NYK Close and Asian Open

USDJPY 79.68 79.51-79.73 | EURUSD 1.2288 1.2263-1.2270 | EURJPY 97.899 97.50-97.83 | AUDUSD 1.02109 1.0182-1.0190 | NZDUSD 0.79778 0.7936-0.8004 | USDCAD 1.01932 1.0175-1.0199 | EURCHF 1.20109 1.2011-1.20129 | USDCHF 0.97738 0.9765-0.9805 | GBPUSD 1.5487 1.5476-1.5520 | EURGBP 0.79329 0.7921-0.7943 |

 

Weekend News 

EUR:

ECB Sees No Need for More Non-Standard Policy Now, Coeure Says
Rajoy Calls on EU to Deliver Debt Purchases as Spain Yields Rise
ECB’s Asmussen Opposes Banking License for ESM, La Stampa Says
Kouvelis Says Coalition Government to Fight for Greece in Euro
Venizelos Says Steps For Further Greek Debt Reduction Needed
S&P Says Rising Euro Recession Risk Requires Government Action
CNY:

China Premier Wen Says Property-Price Rebound Must Be Prevented
China Will ’Never Seek Hegemony,’ AFP Cites Xi Jinping as Saying
China Rejects Clinton’s Criticism Over Syria
CNY/JPY:

Noda Says Japan May Buy Disputed Senkaku Islands, Kyodo Reports
China Says Disputed Diaoyu Islands Can’t Be ‘Bought Or Sold’
TWD/JPY:

Taiwan Opposes Japan’s Plan to Buy Disputed Islands, NHK Says
JPY:

Ozawa Says Not Targeting No-Confidence Vote Against Government
Noda Confidants Told LDP Election to Come This Year, Kyodo Says
IMF’s Lagarde: Japan Economy Is Vulnerable to Risks
JPY/INR:

Confident of making Reliance Life India’s top insurer: Nippon
GBP:

U.K. Cuts Spending by Additional 6.7 Billion Pounds, PA Reports
CHF:

Swiss Review of Bank Liquidity May Start Next Month, FuW Reports
Banks:

Basel Group Seeks Tougher Rules for Non-Centrally Cleared Swaps
AUD:

Australia’s Carbon Price to Mean ‘Modest’ Inflation, Swan Says  

Harry Hindsight

·         EUR: Again throughout Asia and the greater part of the London market we ended up stuck in a tight market between 1.2368-1.2400 with a blip on London open making the range, NYK opened just as quietly with a less than expected NFP but a revision which counterbalanced the shortfall almost the market it took it well and risk was off and the Euro dropped 50 ticks before finding some support however, that was short lived and we continued to decline over the remainder of the session trading to 1.2260 before bouncing and that was not impressive limping to the close just above the 1.2280 level.

·         GBP: While the GBP has been performing better than the Euro it is still directly linked to their fortunes (or misfortunes) we held for the greater part of the sessions moving sideways during Asia holding pretty much above the 1.5520 level on the opening it dipped as the market perceived the risks of CPI and PPI being to the topside, when the data came out the fact was bought and it moved above 1.5540 from the lows of 1.5510 it remained up there until the NFP data kicked in and Cable was dragged lower with the Euro hitting just above 1.5460 before finding some support to move into the close for the day.

·         JPY: As with the rest of the market we stayed steady during the Asian markets holding around the 79.90 level into the US NFP numbers when the Euro went lower JPY strengthened moving USDJPY from above 79.90 to bottom out around the 79.50 moving to close around the 79.60 area in slow trading.

·         AUD: The Oz was on a steady decline throughout the Asian session recovering into the London opening somewhat but failing to reach those 1.0290 levels, once the NFP hit the market was dragged lower as USD buying kicked in and the Oz moved down to touch the 1.0180 level before finding support and moving back above 1.0200 into the close.

Yesterday’s premiership results

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

JPY         Leading Index May (P) A 95.9 | C 95 | P 95.6       

CHF        Foreign Currency Reserves Jun A 364.9B | C 303.8B | P 305.9B

CHF        CPI M/M Jun A -0.30% | C -0.20% | P 0.00%        

CHF        CPI Y/Y Jun A -1.10% | C -1.00% | P -1.00%           

GBP       PPI Input M/M Jun A -2.20% | C -2.10% | P -2.50% | R -2.60%

GBP       PPI Input Y/Y Jun A -2.30% | C -2.20% | P 0.10% | R 0.00%

GBP       PPI Output M/M Jun A -0.40% | C -0.20% | P -0.20%       

GBP       PPI Output Y/Y Jun A 2.30% | C 2.40% | P 2.80% | R 2.90%

GBP       PPI Output Core Y/Y Jun               A 2.00% | C 2.00% | P 2.10% | R 2.30%

EUR        German Industrial Production M/M May A 1.60% | C 0.10% | P -2.20% | R -2.10%

CAD       Net Change in Employment Jun A 7.3K | C 5.0K | P 7.7K

CAD       Unemployment Rate Jun A 7.20% | C 7.30% | P 7.30%   

CAD       Building Permits M/M May A 7.40% | C -1.00% | P -5.20%            

USD       Change in Non-farm Payrolls Jun A 80K | C 90K | P 69K | R 77k

USD       Unemployment Rate Jun A 8.20% | C 8.20% | P 8.20%   

CAD       Ivey PMI Jun A 49 | C 57 | P 60.5              

USD       Natural Gas Storage A 39B | C 44B | P 57B                            

For today

USDJPY:
Topside: 80.00-80.30 light scaled buy stops 80.35-80.60 small offers
Downside: 79.20-79.50 small bids 78.85-79.20 good scaled bids     

                                             
EURUSD:
Topside: 1.2305-1.2335 light 2-way interest 1.2335-1.2365 small buy stops
Downside: 1.2180-1.2210 decent bids         

                                               
EURJPY:
Topside: 98.40-98.80 small buy stops
Downside: 97.00-97.30 light mix   

                                              
AUDUSD:
Topside: 1.0270-1.0305 decent buy stops
Downside: 1.0135-1.0165 light bids 1.0100-1.0130 small scaled bids

 

23:50     JPY         Machine Orders M/M May A -14.80% | C -2.60% | P 5.70%          

23:50     JPY         Current Account (JPY) May A 0.28T | C 0.42T | P                0.29T    

1:30        CNY        CPI Y/Y Jun A 2.20% | C 2.30% | P 3.00%

1:30        CNY        PPI Y/Y Jun A -2.10% | C -2.00% | P -1.40%           

5:00        JPY         Eco Watchers Survey: Current Jun A 43.8 | C 47.5 | P 47.2

CNY:

China June inflation cools to 2.2% vs. year ago

USD:

After June job data, Fed’s Rosengren sees QE3 possible

Global uncertainty to weigh on US growth -Fed official

EUR:

Greek Government Wins Confidence Vote 179 in Favor, 121 Against

Spain’s Valencia Region Faces Default Without Aid From Central Government – Report

JPY:

BOJ May Recalibrate Funding Operations to Prevent Bidding Shortfalls -Nikkei

Japan May core machinery orders -14.8% MoM

Japan May current account surplus falls 62.6% YoY

Japan June bank loans rise 0.7% vs. year ago

Japan Seeks to Shield Tokyo Interbank Rate from Fraud -Nikkei

JPY/KRW:

Japan’s biggest banks target Korean conglomerates for growth

AUD:

Australia job advertisements fall 1.2%  in June

Australia’s Queensland to join mining tax challenge

GBP:

European commissioner to take action over Libor scandal-FT (why is that not a surprise)

 

·         EUR: The markets opened lower but then proceeded to head higher to fill in the gap on the charts there was really no meaningful demand going through but a steady session of buying of risk across the board, moving Euro’s up to the 1.2295 market before stalling.

·         GBP: A tight range but choppy moving 5-10 points up and down over the session but heading generally higher over the course of the day, having opened lower than the close we filled in the gap over the session with buying particularly against the Euro seen at the start of the session.

·         JPY: We opened slightly higher before settling back to fill in the gap having moved steadily to 79.72 we saw supply for fixing start to turn the market, we dropped down to 79.43 area before the fixing supply finished and from there it was a steady climb back towards those opening levels.

·         AUD: With CPI and PPI diverging so much we had a choppy day opening higher than Friday we initially dropped lower filling the gap on the charts we then reversed the losses and moved up to 1.0212 from the 1.0180 level, Oz job adds data was down 1.2% tipping Oz lower again and we seemed to move from that to CNY number in what became a choppy day even though the market was caught in a tight band of around 30 tics.

·         Overall: USD opened higher for the most part from there we had a tight but choppy session but while the flows were better than last week again it failed to sparkle.

 

Today’s data

Consensus = C  Previous = P Timings GMT

5:45        CHF        Unemployment Rate Jun C 3.20% | P 3.20%        

6:00        EUR        German Trade Balance (EUR) May C 15.9B | P 16.1B        

8:30        EUR        Eurozone Sentix Investor Confidence Jul              A -25.8 | P -28.9 

 

Ranges as of 6am London time

                                Highs   Lows

USD/JPY             79.78 | 79.425

EUR/USD             1.22963 | 1.2225

EUR/JPY             98.014 | 97.48

AUD/USD             1.0213 | 1.0175

NZD/USD             0.7979 | 0.7955

USD/CAD             1.0212 | 1.0184

EUR/CHF             1.2014 | 1.201

USD/CHF             0.9825 | 0.9768

GBP/USD            1.5495 | 1.547

EUR/GBP            0.79365 | 0.7906

 

Good luck

Andy