Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 99.671 | EURUSD 1.30626 | EURJPY 130.181 | AUDUSD 0.92384 | NZDUSD 0.78059 | USDCAD 1.04966 | EURCHF 1.23492 | USDCHF 0.94531 | GBPUSD 1.5216 | EURGBP 0.85848 |

 

Harry Hindsight

  • EUR: The Euro traded higher over the course of the day however, summer hols are here and the volumes were less than impressive over the day. We opened around the 1.3010-15 area and stayed in that area in the first few hours of trading before with no impact to talk about by a good Tankan out of Japan, a steady set of numbers out of CNY helped the market to start rising and we stayed in a tight channel through Asia touching above the 1.3030 level before trading sideways into the London opening. We dipped slightly before the European data but once it was released and showed a slight improvement the market started to move quickly higher, one still has to wonder why as the number still shows contraction even if it was 0.1 better than expected however, we touched above the 1.3060 for the first time and the market from there went into reverse trading back to the 1.3020 level on very little volume. With the US firm looking to buy a substantial amount of Greek debt the market again improved moving back to above the 1.3065 level and ignoring the US figures which seemed fairly strong we finished the day touching above the 1.3070 level into the close.
  • GBP: With some gyrations around the figure releases the day was pretty flat opening around the 1.5210 area and steadily rising through Asia to the heady heights of 1.5228 before seeing early pre number sellers enter the market however, they picked the wrong side and having triggered some minor stops down to 1.5185 on the way down the shorts were caught and the market moved quickly on the PMI number which came in far better than expected moving the market to above 1.5245, the whole hour was probably over exaggerated by the lack of volume. Having hit the highs the market struggled from that point and the illiquidity showed through with a choppy session in NYK moving back and forth between the high and 1.5215 area before running out in minor positive territory around the 1.5215 level.
  • JPY: The USDJPY opened quietly but started to rise just before the Tokyo market opened as the Tankan triggered some Yen weakening as we moved into the session fully we had already pushed to 99.45 and although we settled back a little into the session once we moved towards Tokyo lunch the market started to pick up and move in a tight channel to above the 99.70 level, from there we paused into the NYK session before beginning another run towards the 100.00 level but again stalled in the face of the 99.90 level and drifted from there into a quiet close around the 99.65 level.
  • AUD: While the Oz rose over the day it seemed to be recovering only the losses from Friday with no real momentum to do anything other than that, Asia opened around the 0.9120-30 level we had dipped to 0.9110 in the pre-market setting a 3yr low eclipsing Friday’s low. We rose throughout the Asian session steadily to peak above the 0.9200 level with a minor setback as early London came in as sellers, the selling was short lived and the market again turned to the topside having pushed to just below 0.9160 and only into the NYK session did we start to see the market moving higher again touching above 0.9250 as IMM players joined the buying and some longer term shorts took profit. The run to the close was a quiet affair and we held around the 0.9240 for a good re-tracement.

Yesterday’s premiership results

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

JPY         Tankan Large Manufacturers Index Q2 A 4 | C 4 | P -8

JPY         Tankan Non-Manufacturing Index Q2 A 12 | C11 | P 6

AUD       TD Securities Inflation M/M Jun A 0.00% | P 0.20%

CNY        Manufacturing PMI Jun A 50.1 | C 50.1 | P 50.8

CNY        HSBC Manufacturing PMI Jun (F) A 48.2 | C 48.3 | P 49.2

CHF        SVME-PMI Jun A 51.9 | C 52.5 | P 52.2

EUR        Eurozone PMI Manufacturing Jun (F) A 48.8 | C 48.7 | P 48.7

GBP       PMI Manufacturing Jun A 52.5 | C 51.3 | P 51.3

GBP       Mortgage Approvals May A 58K | C 56K | P 53.7K

GBP       M4 Money Supply M/M May A -0.10% | C 0.00% | P 0.30%

EUR        Eurozone CPI Estimate Y/Y Jun A 1.60% | C 1.60% | P 1.40%

EUR        Eurozone Unemployment Rate May A 12.10% | C 12.30% | P 12.20% | 12.00%

USD       Construction Spending M/M May A 0.50% | C 0.60% | P 0.40%

USD       ISM Manufacturing Jun A 50.9 | C 50.6 | P 49

USD       ISM Prices Paid Jun A 52.5 | C 50.5 | P 49.5

For today

USDJPY:
Topside: 99.80-100.10 light offers 100.10-100.40 medium offers 100.40-100.70 light mix
Downside: 99.00-99.30 light bids 98.70-99.00 light bids 98.40-98.70 light mix

EURUSD:
Topside: 1.3090-1.3120 light offers 1.3120-.3150 light mix
Downside: 1.3010-1.3040 light bids 1.2970-1.3010 light sell stops 1.2940-1.2970 light bids

EURJPY:
Topside: 130.40-130.70 light mix
Downside: 129.30-129.70 light bids

AUDUSD:
Topside: 0.9250-0.9300 light mix 0.9350-0.9380 light stops
Downside: 0.9180-0.9210 light bids 0.9100-0.9140 scattered bids

 

AUD:

Australia CB holds rates, talks down A$

JPY/CAD/USD:

Japan, Canada investors to buy U.S. power plant for $2 bln-Nikkei

JPY:

Abe reforms take aim at Japan’s $1 trillion pension fund

Japan’s Amari: Public funds need to strive for safety, profitability

Japan Govt Demands Return Of Y102B In Reconstruction Funds -Kyodo

Japan June monetary base hits record on BOJ’s bold stimulus

Japan May wage growth flat, Abenomics yet to boost income

Japanese Men’s Allowance at 1982 Low as They Await Abenomics

NZD:

Key Says Government Prefers RBNZ Uses Macro-Prudential Tools

NZ commodity prices fall in June – ANZ survey

N.Z. Employers More Optimistic About Economy, Hays Survey Shows

 

 

  • EUR: Another quiet session with some light USD buying for the long weekend in the US, taking the market from the opening 1.3065 area down to 1.3050 after a brief flirtation with the 1.3070 level close to yesterday’s high for the moment we hold around the 1.3060 with practically little change on the day which is very quiet.
  • GBP: Cable moved lower from the opening but was contained within a 15 pip range for the most part drifting from the opening 1.5220 areas to just above the 1.5200 level in very quiet trading.
  • JPY: As with the other Majors the market was fairly quiet until the last few minutes, we opened around the 99.60 area and most of the trading was contained within a 20 pip range moving to above the 99.70 area just before the Tokyo opening and then drifting lower with some light AUDJPY selling coming to market from the opening to touch below 99.52 before holding a range into the 0600hr period where we saw the market pick up and touch 99.75 to make the high of the day on RBA news.
  • AUD: The Oz has drifted for a good portion of the day moving from the opening 0.9240 area to touch the 0.9250 before slipping further back as RBA comments moved into the market, while typing this up these comments included “possible exchange rate may depreciate further” which set the sellers on edge and we saw the Oz drop from the 0.9240 area to below 0.9170 where we currently hold into the grey hours before London. With no change to overshadow the market one would have expected a little more action towards the topside.

 

Today’s data

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

JPY         Monetary Base Y/Y Jun A 36.00% | C 41.20% | P 31.60%

JPY         Labour Cash Earnings Y/Y May A 0.00% | C 0.60% | P 0.30%

AUD       RBA Rate Decision A 2.75% | C 2.75% | P 2.75%

08:30     GBP       PMI Construction Jun C 51.3 | P 50.8

09:00     EUR        Eurozone PPI M/M May C -0.20% | P -0.60%

09:00     EUR        Eurozone PPI Y/Y May C -0.30% | P -0.20%

14:00     USD       Factory Orders May C 2.10% | P 1.00%

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               99.75 | 99.51

EUR/USD             1.3072 | 1.3050

EUR/JPY               130.26 | 129.93

AUD/USD            0.9250 | 0.9165

NZD/USD             0.7830 | 0.7765

USD/CAD             1.0523 | 1.0496

EUR/CHF              1.2362 | 1.2343

USD/CHF             0.9465 | 0.9446

GBP/USD             1.5219 | 1.5194

EUR/GBP             0.85945 | 0.8583

 

 

Good luck

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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