Daily FX Market Commentary

Andy Harrison

Good morning,

NYK Close

USDJPY 79.566 | EURUSD 1.2313 | EURJPY 97.974 | AUDUSD 1.02061 | NZDUSD 0.79618 | USDCAD 1.01937 | EURCHF 1.20097 | USDCHF 0.97534 | GBPUSD 1.55279 | EURGBP 0.7930 |

 

Harry Hindsight

·         EUR: Asia took the Euro higher over the course of the session slowly moving it from the lows  of 1.2256 to 1.2295, London walked in and put it above 1.2300 and while Spanish yields continued to worry the market forcing the market to retrace back towards 1.2270 the rally continued throughout the day moving to trade above 1.2320 a couple of times and finished close to the mark. While Draghi made some comments there was very little in them we didn’t know already which at best is sketchy.

·         GBP: A day of consolidation very little data to stir Cable up however, while Euro recovered against the USD it remained subdued against the GBP with a 30 tic range in the EURGBP holding pretty much to 0.7920/40 for the whole session, Cable managed to move from the lows of 1.5470 area to finish around the 1.5530 level.

·         JPY: USDJPY was pretty much unchanged on the day with the range being made in the Asian session falling on the Machine orders to around the 79.42 area before recovering over the balance of the session to top out just before the London open at above 79.76 from there we moved back into mid-range before sticking to a 12 tic movement over the NYK session.

·         AUD: Oz trade to the top end of its range for the most part in Asia during some choppy movements but within a fairly tight range, London walked in selling as cross AUD selling materialised although one suspects the forthcoming FOMC will keep it in a tight range for the moment, from the low below 1.0160 the market seemed to become attached to the hip of the Euro as it moved high and the market went out on those Asian highs above the 1.0200 level.

Yesterday’s premiership results

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

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

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

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

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

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

CHF        Unemployment Rate Jun A 2.90% | C 3.20% | P 3.20%   

EUR        German Trade Balance (EUR) May A 15.0B | C 15.9B | P 16.1B | R 16.2B

EUR        Eurozone Sentix Investor Confidence Jul A -29.6 | C -25.8 | P -28.9                          

For today

JPY
Topside: 79.70-79.85 Light offering interest 79.90-80.10 Large-medium stop buyers 80.15-80.35 Light stop buyers
Downside: 79.25-79.45 Light-medium bids 78.75-78.95 Light bids 78.40-78.60 A few light stop sellers

EUR
Topside: 1.2325-1.2345 Two-way interests (light) 1.2355-1.2375 Medium stop buy zone
Downside: 1.2260-1.2290 Light two-way interest 1.2190-1.2230 Light two-way

EURJPY
Topside: 98.20-98.50 light-medium stop buyers 98.70-98.90 Light two-way interest

Downside: 97.00-97.20 Light bidding interest 96.10-96.30 Light-medium bids AUD
Topside: 1.0215-1.0235Stop buyers, light 1.0245-1.0265 Light offers

Downside: 1.0145-1.0165 Light bids 1.0080-1.0100 Light bids

 

GBP       BRC Sales Like-For-Like Y/Y Jun A 1.40% | C 2.00% | P 1.30%        

GBP       RICS House Price Balance Jun A -22.00% | C -16.00% | P -16.00% | R -17.00%

JPY         Japan Money Stock M2+CD Y/Y Jun A 2.20% | C 2.10% | P 2.10% | R 2.20%

AUD       NAB Business Confidence Jun A -3 | P -2              

CNY        Trade Balance (USD) Jun A 31.70B | C 24.00B | P 18.70B 

JPY         Consumer Confidence Household Jun A   | C 40.7 | P 40.7            

EUR:

Schaeuble says countries remain liable in cases of bank aid.

Technical discussions on ESM direct bank recapitalisation to start in September, glad to see they’re rushing it through

Rehn will have to cut deficit, macro imbalances

French FinMin says France favours making all of ESM aid to Spain retroactively directly to banks

CNY:

Debt crisis to continue to weigh on China trade

Could achieve goal of 10% trade growth if EU debt crisis doesn’t worsen further

Exports to US grew by 13.6% YoY in H1 while exports to Europe fell by 0.8% YoY H1

·         EUR: Started steadily trying to move through the 1.2320 level but although it pushed over the first 2 or 3 hours it failed to break out before the comments appeared, Schaeuble’s comments that each country remains liable in cases of bank aid kind of argues against the ESM agreement the market went into a steady decline moving initially down below the 1.2300 level before taking a breather for another move to the 1.2285 level.

·         GBP: Cable held up after the numbers moving above the 1.5533 level before getting pulled down with the Euro, moving steadily down to 1.5500 where the market held during the latter part of the session.

·         JPY: More sideways trading in a lacklustre day we moved from the opening highs around 79.60 area moving down on the fix to below 79.48 before finding some support but dull range.

·         AUD: Moved slowly down over the period of the day moving from the 1.0210 area slowly into the NAB number then dropping away to hit the 1.0160 area where we found similar support as yesterday.

·         Overall: A quiet first off picking up as the session went on with comments from Europeans and the odd small numbers making some action.

 

Today’s data

Consensus = C  Previous = P Timings GMT

8:30        GBP       Industrial Production M/M May                C -0.20% | P 0.00%          

8:30        GBP       Industrial Production Y/Y May C -2.10% | P -1.00%           

8:30        GBP       Manufacturing Production M/M May C 0.00% | P -0.70%              

8:30        GBP       Manufacturing Production Y/Y May C -1.90% | P -0.30%

8:30        GBP       Visible Trade Balance (GBP) May C -9.0B | P -10.1B          

12:15     CAD       Housing Starts Jun C 200.0K | P 211.4K   

14:00     GBP       NIESR GDP Estimate Jun               P 0.10%

 

Ranges as of 6am London time

                                Highs   Lows

EUR/USD             1.23220 | 1.22820

USD/JPY               79.592 | 79.470

EUR/JPY               98.050 | 97.640

USD/CHF             0.97780 | 0.97471

GBP/USD             1.5535 | 1.5500

AUD/USD            1.0212 | 1.0161

NZD/USD             0.7969 | 0.793

USD/CAD             1.0212 | 1.0191

EUR/CHF              1.20106 | 1.20091

EUR/GBP             0.7934   0.7925

 

Good luck

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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