Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 97.30 | EURUSD 1.32193 | EURJPY 128.628 | AUDUSD 0.91968 | NZDUSD 0.77207 | USDCAD 1.03876 | EURCHF 1.22616 | USDCHF 0.92738 | GBPUSD 1.55085 | EURGBP 0.85239 |

 

Harry Hindsight

  • EUR: Euro’s opened around the 1.3295 area and apart from a couple of attempts to break through the 1.3300 level was on the back foot all through the session with good amounts changing hands even though the range was limited, the market peaked just above the 1.3300 level before steadily declining to the 1.3250 area  into the grey hours, once London opened the early market was dominated by the European releases with German inflationary data again decreasing in a worrying cycle, and although the PMI data across the board seemed to be better than expected we remain below the 50 expansion level which continued to set a weak tone for the Euro. A selloff after the first round of data saw the market move to the 1.3210 level where we saw some reasonable bids with short term guys taking profit however, the second lot of releases allowed the Euro to push through the 1.3200 level to just above the 1.3180 area these levels being rather congested from the top of previous ranges the market broadly held the 1.3180-1.3220 level until late in the session when US figures came out mixed with a good Philly number helping the USD to rise a little and setting the low for the Euro down towards 1.3160. we bounced from the level as a mixture of profit taking and rereading of the numbers allowed the market to rise to the 1.3240 level we drifted from this level and as the market comes to a close hold around the 1.3225-30 level.
  • GBP: Cable was a little more resilient today after yesterday’s FOMC and the travails of European data the market opened around the 1.5485 level and drifted lower with the Euro throughout the Asian session dropping to the 1.5430 level during the grey hours before London in line with the Euro selling, we had a brief move lower as the Euro fell after its data and Cable moved to its lows below 1.5420 however, from this point GBP uncoupled from the Euro and we saw large selling appear in the EURGBP cross as people offloaded their short term trades from early in the weak and the pair moved off the 0.8585-90 area to a more comfortable 0.8530, Cable continued to rise slowly over the remainder of the session gradually rising to push through 1.5500 and triggering some weak stops from medium term investors into the later part of the session, with a large rise in retail sales underpinning the market from its early release. The market holds above the 1.5500 as we move to the close retaining almost all its gains.
  • JPY: The USDJPY continues to rise as USD bulls remain in the market, the market opened around the 96.40 area and apart from a brief dip to the 96.20 area and into close term support the market rose continually. Asia remained fairly buoyant with the Euro dropping investors spent much of the time buying straight USDJPY ignoring the crosses for the most part. We moved above the 97.00 area towards the end of the Asian session and into the grey hours failing initially around the 97.20 levels. London moved into the session and the market moved aggressively higher as Euro’s dropped back and the complex rebalanced with JPY weakening broadly speaking across the board trading to the 98.25 area before running out of steam and then trading in a 40 point range for the most part around the 98.00, late into the session we saw IMM buyers of the Yen taking profit and forcing the spot market lower from the 98.00 to the 97.40 area, the whole day was markedly toned by the poor figures out of CNY undermining the regional currencies however, as can be seen the major moves occurred on the weakening of the Euro rather than strengthening USD. The market remains close to the initial breakout above 97.20 where we stalled in Asia.
  • AUD: With the Oz trading lower into the close after the NZ GDP number the market initially rallied as AUDNZD cross was aggressively bought however, this all changed once the Flash PMI for China hit and the Oz again resumed its movement lower, we opened around the 0.9280 area topping out just above the 0.9310 level in early trading however once the selling reappeared we dropped quickly to the 0.9240 area and seemed to hang on to those levels into the grey hours. London renewed the selling add to which the Euro drop and the Oz again faced another round of selling taking the market to below the 0.9170 level and within the 0.8800-0.9200 band the RBA had talked about 24hrs earlier. Although the market attempted to break lower several times we found the same support around the 0.9160-70 level to hold the market each time and we could only manage moves to the 0.9230 area below the breakdown pivot of 0.9240 we’d noticed in the past 24hrs, having attempted the move lower for a third time the market started to move sideways and finished the day just short of 0.9200.

Yesterday’s premiership results

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

NZD       GDP Q/Q Q1 A 0.30% | C 0.50% | P 1.50%

CNY        HSBC Flash Manufacturing PMI Jun A 48.3 | C 49.4 | P 49.2

CHF        Trade Balance (CHF) May A 2.22B | C 2.40B | P 1.73B

EUR        German PPI M/M May A -0.30% | C -0.10% | P -0.20%

EUR        German PPI Y/Y May A 0.20% | C 0.30% | P 0.10%

EUR        French PMI Manufacturing Jun (P) A 48.3 | C 47 | P 46.4

EUR        French PMI Services Jun (P) A 46.5 | C 44.8 | P 44.3

CHF        SNB Rate Decision A 0.00% | C 0.00% | P 0.00%

EUR        German PMI Manufacturing Jun (A) A 48.7 | C 49.9 | P 49.4

EUR        German PMI Services Jun (A) A 51.3 | C 50 | P 49.7

EUR        Eurozone PMI Manufacturing Jun (A) A 48.7 | C 48.6 | P 48.3

EUR        Eurozone PMI Services Jun (A) A 48.6 | C 47.5 | P 47.2

GBP       Retail Sales M/M May A 2.10% | C 0.80% | P -1.30%

GBP       CBI Trends Total Orders Jun A -18 | C -14 | P -20

USD       Initial Jobless Claims (JUN 15) A 354K | C 340K | P 334K

EUR        Eurozone Consumer Confidence Jun (A) A -19 | C -21.5 | P -21.9

USD       Philly Fed Survey Jun A 12.5 | C -1 | P -5.2

USD       Existing Home Sales May A 5.18M | C 5.00M | P 4.97M

USD       Leading Indicators May A 0.10% | C 0.20% | P 0.60%

 

For today

USDJPY:
Topside: 97.60-98.00 light buy stops 98.00-98.40 light buy stops
Downside: 96.80-96.90 light sell stops 96.50-96.80 light bids

EURUSD:
Topside: 1.3260-1.3310 light offers 1.3340-1.3370 light buy stops
Downside: 1.3160-1.3190 light mix 1.3130-1.3160 light mix

AUDUSD:
Topside: 0.9260-0.9290 light mixed bag
Downside: Nothing of note

JPY:

Japan vice FinMin: JGB yields not high from long-term perspective

Japan Govt: Corporate tax cut an option to revive economy

Japan’s Amari: Japan should cut corp tax to be competitive

FinMin Aso: Expect Japan Econ To Continue Growing in 2nd Half

Weaker Yen Hampers Cost-Cutting Plans of Toyota Supplier KYB

SoftBank’s Son Pushing Sprint Deal for Global No. 1 Ambition

JPY/BRL:

Japan Govt Suga: Brazil President Has Postponed Planned Trip

CNY:

China sovereign fund buys ETFs as stock market slides

NZD:

NZ consumer confidence edges up in June – ANZ survey

 

  • EUR: Euro’s opened around the 1.3220 level and struggled slightly higher into the Tokyo opening with little impetus, on the opening it was another matter and we saw aggressive buying from Japanese retail and leveraged accounts eager to take some profit of an attempt to pick the bottom is more likely. Initially the market struggled to break through the 1.3245 level which was a sticking point yesterday on the way down and is a congested area (or was) however, having failed we moved back to the 1.3220 area and then the market dropped sharply lower as the buyers were quickly ejected from the market and stops were triggered to the 1.3200 area, with a small bounce the market again started to move quickly to the topside again breaking through the 1.3245 level this time with little problem and this time topping out above 1.3250, one suspects the stops that had been above 1.3240 were moved as the market moved down so negating the second move higher and leaving the market adrift from the highs and pulling back to below 1.3230 as we move towards London.
  • GBP: A quiet day on the Cable with most of the day contained in a 20 point range, we initially moved a little higher to press the 1.5520 level as the Euro moved higher before drifting back below the 1.5500 level, the second move up was a little more steady but again the market really had no impetus and was moving only on the Euro move, for the moment we remain close to the opening levels just above 1.5500 as we move into the grey hours.
  • JPY: USDJPY struggled today after the rises over the last few days and it being Friday there was only limited playing by retail Japan, we opened around the 97.30 level and dropped into the Tokyo opening on some profit taking to the 96.90 area before recovering to the opening levels. We currently hold around the opening level with the market unsure of which way to jump with no data or real commentary in the market.
  • AUD: The Oz has remained fairly quiet for the session struggling from the opening just below 0.9200 to the 0.9220 area where we spent an hour or so pushing against some light offers, eventually the market gave way and we continued to the 0.9250 area with again some offers capping the move, we struggled around 0.9240 area for several hours before beginning to back away and drifting to the 0.9220 area where we saw some weak stops being triggered and we currently hold around the opening levels as we head into the next session.

Today’s data

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

08:00     EUR        Eurozone Current Account (EUR) Apr C 15.1B | P 25.9B

08:30     GBP       Public Sector Net Borrowing (GBP) May C 13.5B | P 8.0B

12:30     CAD       CPI M/M May C 0.40% | P -0.20%

12:30     CAD       CPI Y/Y May C 0.90% | P 0.40%

12:30     CAD       BoC CPI Core M/M May C 0.20% | P 0.10%

12:30     CAD       BoC CPI Core Y/Y May C 1.10% | P 1.10%

12:30     CAD       Retail Sales M/M Apr C 0.20% | P 0.00%

12:30     CAD       Retail Sales Less Autos M/M Apr C 0.00% | P -0.20%

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               97.71 | 96.86

EUR/USD             1.3255 | 1.31985

EUR/JPY               129.22 | 128.23

AUD/USD            0.9253 | 0.9189

NZD/USD             0.7807 | 0.7754

USD/CAD             1.0390 | 1.0365

EUR/CHF              1.2267 | 1.2243

USD/CHF             0.9279 | 0.9242

GBP/USD             1.5523 | 1.5491

EUR/GBP             0.8536 | 0.8519

 

Good luck

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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