Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close Wellington open

USDJPY 97.887 97.75-94 | EURUSD 1.31227 1.3115-20 | EURJPY 128.469 128.50-91 | AUDUSD 0.92198 92.10-25 | NZDUSD 0.77555 0.7732-98 | USDCAD 1.0459 1.0441-64 | EURCHF 1.22634 1.2255-95 | USDCHF 0.93442 0.9320-575 | GBPUSD 1.54201 1.5392-1.5410 | EURGBP 0.85104 0.85065-375 |

 

Weekend News

JPY:

Japan Investment Trust Investors to Receive Clearer Data: Nikkei
Japan’s Ruling LDP Set to Win Tokyo Vote Ahead of National Poll
USD/JPY:

Dish Abandons Battle with SoftBank for Control of Sprint
JPY/THB:

Mitsubishi UFJ Plans to Buy Thailand’s Bank of Ayudhya
CNY:

PBOC Says to Enhance, Improve Liquidity Management
CNY/GBP:

King Signs Pound-Yuan Swap Accord with Zhou to Aid Stability
CNY/EUR:

Beijing Automotive Overseas Acquisition Push to Begin in Europe
USD:

Bullard Says Fed May Boost QE If Inflation Slow Further
KRW/JPY:

Hyundai U.S. Chief Says Nissan Price Cuts Put Industry on Edge
EUR:

ECB’s Asmussen Says Completion of Banking Union Needed Urgently
Greece Needs Another Debt Write down, Merkel Aide Tells Real News
ECB Crisis-Plan for Bonds May Cost Germany Up to EU920B: Sinn
Germany Trims Deficit Plan in Merkel’s Pursuit of Budget Balance
Schaeuble Says ‘Liability Cascade’ Needed in Bank Restructuring
French Wealth Tax Includes Life Insurance Interest, Figaro Says

Harry Hindsight

  • EUR: Euro’s began the day around the 1.3220 level and struggled throughout the day to move higher, although the 1.3240 seemed to be key to the upside once we did break through we did not penetrate as far as some people estimated and we struggled to hold the level once we moved into the London session moving back to the starting level and then dipping as we moved towards the NYK session. With very little data movements were just a carry on from Wednesday and we dipped triggering stops below the 1.3200 level before finding some minor support around the 1.3160 level only to slip through after a couple of hours of holding the area to touch briefly below 1.3100 with real money selling entering the market in the NYK session adding to strong supply. There was a minor bounce just after the London guys left but it was minor and failed to move above the 1.3160 level and we finished the day around 1.3120.
  • GBP: Cable tagged along with the Euro during Asia, holding above the 1.5500 level for the most part and hitting 1.5530 shortly before the London open, as with the Euro though once we moved into the London session we were back below the opening and holding for the session around the 1.5480-90 area with very little interest going through, only the selloff in the Euro affected Cable and we saw the pair drop initially to the 1.5450 area before drifting for the rest of the session to trade to the 1.5370 area as the Euro dropped. EURGBP dipped a little lower in late trading with the cross moving steadily down from above the 0.8550 level to below 0.8510 over the session in patchy trading, leaving the Cable off its lows and trading the 1.5420 level into the close.
  • JPY: USDJPY opened around the 97.30 area and during the pre-Tokyo session struggled to move in any meaningful direction however, once Tokyo opened we immediately saw some supply appear in the market to take the market to its lows of the day around the 96.85 area before a long steady grind to the topside. Once we broke through 97.40 the market triggered weak stops possibly from the early sellers and the market touched above 97.80 the market struggled for a time around the area before putting in another push higher through the 98.00 peaking in the 98.15 area before a reversal of the move to close to the opening levels, as we moved from London into NYK the market drifted with a lack of interest and we settled around the 97.80 area into the close on a lacklustre day for the pair.
  • AUD: The Oz opened around the 0.9180 level and struggled higher moving in a steady climb to above the 0.9250 level before drifting in the run to London. London was very little different, we saw some light EURAUD selling however, the Euro leg seemed to do most of the work and the Oz was unable to move through 0.9260 and remained in a tight range into the NYK session. Only when the Euro started to give more ground did the Oz start to move to the downside drifting back to the opening levels before late futures buying drove the market quickly above the 0.9250 level to set up a close around the 0.9220 areas.

Friday’s premiership results

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

EUR        Eurozone Current Account (EUR) Apr A 19.5B | C 15.1B | P 25.9B

GBP       Public Sector Net Borrowing (GBP) May A 10.5B | C 13.5B | P 8.0B | R 6.6B

CAD       CPI M/M May A 0.20% | C 0.40% | P -0.20%

CAD       CPI Y/Y May A 0.70% | C 0.90% | P 0.40%

CAD       BoC CPI Core M/M May A 0.20% | C 0.20% | P 0.10%

CAD       BoC CPI Core Y/Y May A 1.10% | C 1.10% | P 1.10%

CAD       Retail Sales M/M Apr A 0.10% | C 0.20% | P 0.00%

CAD       Retail Sales Less Autos M/M Apr A -0.30% | C 0.00% | P -0.20%

 

For today

USDJPY
Topside: 98.70-99.00 light offers 99.00-99.30 medium offers
Downside: 97.70-98.00 medium bids 97.30-97.60 light bids 97.00-97.30 light bids

EURUSD
Topside: 1.3130-1.3150 light offers 1.3160-1.3190 light buy stops
Downside: 1.3070-1.3090 light sell stops 1.3030-1.3060 light mix

EURJPY
Topside: 129.30-129.60 light offers 129.70-130.00 light offers
Downside: Nothing of note
AUDUSD
Topside: 0.9250-0.9270 light buy stops 0.9270-0.9300 light offer
Downside: nothing of note

 

JPY:

Japan ruling bloc sweeps Tokyo poll, on track for upper house win

Japan Cabinet Approval Rating At 66% as Support For Abenomics Wanes -Nikkei

CNY:

China PBOC: Banks Must Strengthen Liquidity Management

China CB says overall liquidity “reasonable”

China Crunch Negative to Small, Mid-Size Banks: Moody’s

AUD:

Gillard Says Aussie Drop Would Be ‘Very Good Thing’ for Economy

 

 

  • EUR: With one of the most untidiest openings I can remember the market opened around the closing levels and then staggered around like a drunken sailor with prices wide and stagnant for the first hour or so, once the market moved into the official Sydney open the Euro started to move slowly show signs of waking and like Thurs/Fri there was plenty of volume going through but little movement in the market trading in the 1.3110-20 area for the first 5hrs before dropping below 1.3100, for the moment we hold just below the level in a quiet market dominated by movement in USDJPY.
  • GBP: Cable did very little volume or range wise, moving in line with the Euro for the most part having opened around the 1.5400 level we struggled for liquidity in a very messy start to the session with market makers either asleep or not bothering to turn up. We held the 1.5390 area for the bulk of the session however, the market started to drift lower in the mid-session in Tokyo dropping to just above the 1.5370 and holding now around the 1.5380 as we head to London.
  • JPY: USDJPY continues to climb having opened at the 97.90 level the market quickly moved higher pre Tokyo and once the Japanese moved into the market USDJPY had already touched the 98.50 level. In Tokyo early Japanese retail was seen taking some profit however, not really the volume to turn the market and resting offers kept a lid for a short period before the market renewed its moves high this time stopping around the 98.70 this cleared out the bulk of offers and although we ran out of steam the market has not moved to far away from the highs and remains around the 98.40-45 levels.
  • AUD: The Oz opened in line with Fridays close and traded higher in early trading as we saw the carry trade been picked up from the start and into the beginning of the Tokyo session, only with the move lower in Euro did the Oz begin to stall having risen above the 0.9250 level, at a guess I would have to say that although we saw the carry trade being bought from the opening once we moved into Tokyo there was a succession of offers in the cross putting a lid on its rise as the JPY weakened the Oz was forced lower triggering weak stops trough the opening levels and touching below 0.9195 towards Tokyo lunch, as we now move towards London the market is holding around the 0.9200 area.

 

Today’s data

Actual = A Consensus = C  Previous = P Timings GMT

08:00     EUR        German IFO – Business Climate Jun C 105.9 | P 105.7

08:00     EUR        German IFO – Current Assessment Jun C 109.6 | P 110

08:00     EUR        German IFO – Expectations Jun C 102 | P 101.6

 

Ranges as of 6am London time including Sydney open

Highs    Lows

USD/JPY               98.72 | 97.86

EUR/USD             1.3118 | 1.3086

EUR/JPY               129.20 | 128.58

AUD/USD            0.9252 | 0.9190

NZD/USD             0.7771 | 0.7732

USD/CAD             1.0499 | 1.0462

EUR/CHF              1.22795 | 1.2255

USD/CHF             0.9380 | 0.935

GBP/USD             1.5410 | 1.5365

EUR/GBP             0.8526 | 0.85055

 

Stay lucky

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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