Daily FX Market Commentary

Andy Harrison

Good morning,

NYK Close Asian open

USDJPY 79.366 | EURUSD 1.23562 | EURJPY 98.066 | AUDUSD 1.05108 | NZDUSD 0.81126 | USDCAD 0.98669 | EURCHF 1.20109 | USDCHF 0.97208 | GBPUSD 1.57326 | EURGBP 0.78542 |

 

Harry Hindsight

·         EUR: A quiet day over all with a steady decline throughout Asia from just above 1.2300 highs down below 1.2260, London did little better Eurozone CPI indifferent left the market feeling flat however, the volumes going through seemed better than we’ve seen in a while, the gains came during the NYK session after a respected think tank speculated that there will be a major intervention to support the Spanish bond market once an official request is made. Euro’s moved smartly higher and over the course of two hours was trading around the 1.2370 mark for the day and we did little into the close.

·         GBP: Steady decline over the Asian session saw the market trade down to 1.5640 area before finding support, a good set of retail sales figures saw the Cable push quickly higher to above the 1.5700 area during the hour after the release, and although the Euro dragged it higher again it was muted by the fact we’d already move 60tics and we moved above 1.5740 before stalling and moving into a quiet close.

·         JPY: After retail Japan had spent the whole of the Asian session quietly buying USDJPY and carry trades we saw some day trade longs taking profit into the London session but the market did very little after that moving between 79.14-35 with a little bit of chop and then settling towards the highs helped by the same comments out of Europe.

·         AUD: The market seems stuck with what to do in the Oz we have carry trade buying continuing, but we are beginning to see longer term sellers enter the market, for the moment the fact that the data is not supporting ill effects from the China GDP drop one could suspect that the carry trades have the better deal, we traded steadily lower throughout Asia moving to the 1.0470 area only for the Oz to get a boost from the GBP movement and move back to the 1.0500 level, late  IMM buying would tend suggest that we had a few options for the NYK cut go through today which lifted us firmly above the 1.0500 level trading to 25 before falling back slightly into the close.

Friday’s premiership results

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

NZD       Business NZ Manufacturing Index Jul A 49.4 | C 50.2 | P 50

AUD       Consumer Inflation Expectation Aug A 2.40% | P 3.30% 

GBP       Retail Sales M/M Jul A 0.00% | C -0.20% | P 0.30% | R 1.10%

GBP       Retail Sales Y/Y Jul A 3.30% | C 1.70% | P 2.20% | R 3.30%

GBP       Retail Sales w/Auto Fuel M/M Jul A 0.30% | C 0.00% | P 0.10% | R 0.80%

GBP       Retail Sales w/Auto Fuel Y/Y Jul A 2.80% | C 1.50% | P 1.60% | R 2.60%

EUR        Eurozone CPI M/M Jul A -0.50% | C -0.60% | P -0.10%    

EUR        Eurozone CPI Y/Y Jul A 2.40% | C 2.40% | P 2.40%             

EUR        Eurozone CPI – Core Y/Y Jul A 1.70% | C 1.90% | P 1.60%

CHF        ZEW Survey (Expectations) Aug A -33.3 | C -42.5               

CAD       International Securities Transactions (CAD) Jun A -7.89B | C 10.67B | P 26.11B    

CAD       Manufacturing Shipments M/M Jun A -0.40% | C 0.30% | P -0.40%          

USD       Initial Jobless Claims A 366K | C 365K | P 361K | R 364K

USD       Housing Starts Jul A 746K | C 753K | P 754K          

USD       Building Permits Jul A 812K | C 765K | P 755K     

USD       Philly Fed Survey Aug A -7.1 | C -4 | P -12.9         

USD       Natural Gas Storage A 20B | C 25B | P 24B

For today

USDJPY:
Topside: 79.40-79.75 good mixed with buy stops towards the end 80.00-80.25 small offers
Downside: 78.85-79.15 light mixed 78.40-78.80 small bids EURUSD:
Topside: 1.2380-1.2415 good buy stops 1.2430-1.2465 small offers
Downside: 1.2320-1.2350 light mixed 1.2280-1.2310 small sell stops

EURJPY:
Topside: 98.20-98.50 small offers 98.60-98.90 good offers
Downside: 97.55-97.85 light bids 97.10-97.45 decent sell stops AUDUSD:
Topside: 1.0530-1.0560 mixed overall buy stops 1.0560-1.0590 good scaled buy stops
Downside: 1.0470-1.0500 marginal bids 1.0435-1.0465 light staggered bids

22:45     NZD       PPI – Inputs Q/Q Q2 A 0.60% | C -0.20% | P 0.30%             

22:45     NZD       PPI – Outputs Q/Q Q2 A 0.30% | C -0.20% | P -0.10%        

USD:

Fed’s Kocherlakota says rates should rise sooner than late 2014

CNY:

China to Rely on Government Infrastructure Investment to Stabilize Growth – Report

AUD:

Australia Treasury Says Sovereign Wealth Fund Wouldn’t Offset High A$

Australian Treasury Says A$ Intervention Wouldn’t Work

JPY/KRW:

Japan Considers Shrinking Of Swap Deal With S Korea -Nikkei

Azumi: Need to Consider Every Option on S Korea Swap Agreement

Japan finance chief postpones Seoul visit over spat

JPY:

Japan economy to grow 1.7 pct in FY2013/14 – govt estimate

Japan Govt: Expect GDP Deflator To Be +0.2% In Next FY

Japan caps spending, borrowing, targets growth in 2013/14 budget

Japan Finance Minister Confirms Senior MOF Posts

EUR:

Finland Prepares for Euro-Zone Break Up: Foreign Minister – Daily Telegraph

SGD:

Singapore July exports up slightly y/y

·         EUR: A quiet session and while volumes seem to be better there seemed to be a two way battle on the direction of the Euro for several hours with the high set just above the 1.2360 level not far from yesterday’s failure point however, as time crept on the Euro started to give ground slowly with cross Euro selling predominating moving it to just above the 1.2340 level as we head towards London.

·         GBP: A steady decline over the session speeding up towards the London open having stopped above 1.5725 for an hour or so it collapsed down to 1.5700 over the course of 20mins as the fall in the Euro dragged.

·         JPY: We drifted in the early part of the session but after a quiet fixing found some legs and moved back to the resistance area 79.40 and barely stepped away for the remainder.

·         AUD: Another quiet session with early sellers running out of steam having touched the mid 1.0470’s we moved steadily back up to test 1.0520 area and remain close to that level moving into London.

 

Today’s data

Consensus = C  Previous = P Timings GMT

6:00        EUR        German PPI M/M Jul C 0.30% | P -0.40%              

6:00        EUR        German PPI Y/Y Jul C 1.20% | P 1.60%    

8:00        EUR        Eurozone Current Account (EUR) Jun C 7.8B | P 10.9B    

9:00        EUR        Eurozone Trade Balance (EUR) Jun C 5.4B | P 6.3B            

12:30     CAD       CPI M/M Jul C 0.30% | P -0.40%

12:30     CAD       CPI Y/Y Jul C 1.60% | P 1.50%      

12:30     CAD       BoC CPI Core M/M Jul C 0.20% | P -0.40%            

12:30     CAD       BoC CPI Core Y/Y Jul C 2.00% | P 2.00%  

13:55     USD       U. of Michigan Confidence Aug (P) C 72 | P 72.3

14:00     USD       Leading Indicators Jul C0.20% | P -0.30%          

 

Ranges as of 6am London time

                                Highs   Lows

USD/JPY               79.402 | 79.237

EUR/USD             1.23624 | 1.2338

EUR/JPY               98.12 | 97.88

AUD/USD            1.0529 | 1.0464

NZD/USD             0.8125 | 0.8091

USD/CAD             0.9875 | 0.9863

EUR/CHF              1.2012 | 1.20101

USD/CHF             0.9733 | 0.9716

GBP/USD             1.5739 | 1.57

EUR/GBP             0.7863 | 0.78495

Have a good day, I’m off for a couple of weeks of sun and sneaky carp

Andy

LMAX Exchange Market Commentary   Andy Harrison  

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