Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close Wellington open

USDJPY 101.203 101.15-25 | EURUSD 1.28316 1.2820-30 | EURJPY 129.842 1.29.70-80 | AUDUSD 0.90665 0.9050-60 | NZDUSD 0.77119 0.7705-15 | USDCAD 1.05748 1.0580-90 | EURCHF 1.23656 1.2355-65 | USDCHF 0.9638 0.9635-45 | GBPUSD 1.48875 1.4900-10 | EURGBP 0.86196 0.8600-10 |

 

Weekend News

JPY:

Japan Ruling Bloc Seen Taking Upper House, Yomiuri Poll Finds
JPY/USD:

SoftBank Plan for U.S. Wireless Foothold Advances on FCC Action
EUR:

Portugal’s Portas to Be Vice Premier, Oversee Economic Policy
Greece, Troika Talks Continue Tomorrow, ECB’s Masuch Indicates
EU’s Rehn Sees ‘Reasonable Chance’ of Troika Accord on Greece
Rehn Said ECB Rates Pledge Shows Necessary Divergence With U.S.
Samaras Says Greek Government Determined to Exit From Crisis
Merkel Says Stimulus Programs Not Answer to Euro Area Woes
Italy Passes Finland in EU Most-Taxed Nation Rankings: Corriere
Spanish Regions Oppose Law Unifying Domestic Market, Mundo Says
Deutsche Bank to Reduce Assets as Leverage Requirements Tighten
EUR/USD:

Germany May Stop Giving U.S. Data, Minister Tells Sueddeutsche
AUD:

Australia’s Bowen Says Currency Decline ‘A Good Thing’
Bowen Wants to Return Australia Budget to Surplus, Review Says
KRW/USD:

Asiana Jet Crashes on Landing in San Francisco as Two Killed
KRW:

N. Korea Agrees to Let S. Koreans Retrieve Goods From Gaeseong
CHF/CNY:

Switzerland Will Join Race to Be Trading Hub for China’s Yuan
Switzerland-China FTA May Take Effect Mid-2014, Ammann Tells NZZ
CNY:

China to Resume Trading of Treasury Futures After 18-Year Halt
China Names New CIC Chairman as U.S. Mulls Winding Down Stimulus
Xinhua: Deputy Head of Guangxi CPPCC Under Investigation
GBP:

Former U.K. Trade Minister Plans GBP10b Lloyds Purchase: Sky
NZD/CNY:

New Zealand Meat Exports to China Disrupted a Second Time
NZD:

New Zealand Seeks to Avoid Delays to Christchurch Quake Rebuild

 

Harry Hindsight

  • EUR: As you would expect the market was a little unexciting with the US out for a long weekend, we opened just above the 1.2910 level and steadily dipped below 1.2900 through into the Tokyo session, the market held for the most part around that figure area dipping to just below 1.2890 for the low in Asia. As we moved into the London session the movement lower increased a little but could only push to the 1.2870 level and moved off there after a few attempts over the course of a couple of hours, having seen a total reversal in German factory orders you could have been mistaken for thinking a move lower was on but the 1.2870 level seemed fairly resilient in the face of it. A good NFP result had the market gapping lower, with the market moving from 1.2890 to first print 1.2870 on the number and dropping away to touch below 1.2810 before finding some bids to hold the market, from there it was another quiet part of the session with everything seemingly done in that 30minute period and we remained for the most part around the 1.2830 level with only minor attempts to the downside from long term longs cutting minor positions, we ran out around the 1.2830 level.
  • GBP: The Cable found early sellers in Asia into the Tokyo opening, having opened after NYK around the 1.5080 level we moved quietly until the final few minutes before Tokyo when we saw some GBPJPY cross selling hitting the market to take Cable to below the 1.5030 level before steadying. We held just above the 1.5040 area for most of the Tokyo session and only once the market opened in London did the market again start to move lower. With no real news out of the UK the market was dominated by the Euro and we started to see EURGBP rising from the opening in London moving from the 0.8570 level to touch the 0.8630 level just before what would be the start in NYK, Cable dropped as did everything against the USD moving from the 1.4980 level to touch below 1.4860 with very little in the way of bids to hold it on a thin days trading, once we touched the level we started to see the market rise a little and push back to the 1.4900 area where we held into the close.
  • JPY: USDJPY seems to be moving higher on a combination of things, the dovish interest rate talk in both the UK and Europe compared with the talk of interest rates moving up in the US as tapering of the market support in the US helped to keep the USDJPY ascending. The market slowly moved from the opening levels just above the 100.00 level in pre-Tokyo trading slowly to above the 100.40 level in mid Tokyo and then holding above the 100.20 into London, we dipped a little from this point as the market saw some weak EURJPY selling enter the market however, the market held around the 100.00 level then up until the NFP release when it leapt higher gapping from 100.20 to 100.45 area and continuing to move to above 101.10 before slowing and then trading in a tight channel for a finish above 101.20.
  • AUD: The Oz struggled for the most part, we limped through Asia opening around the 0.9150 area and slowly drifting sideways to touch below the 0.9130 level before starting to rise as we moved closer to London, once London opened we saw the pair starting to rise properly to trade just above the 0.9180 where some offers remained to hold the market into the NFP number. The market dropped quickly from there gapping from just off the highs to trade just below 0.9150 and continue the move to 0.9100, while the market had looked thin the move down was less severe than both the Euro and Cable and held briefly at 0.9100 before continuing its run lower to touch the 0.9050 and finding a base. We traded off that level then all the way into the close with a 20 pip range settling around the 0.9060 level.

Friday’s premiership results

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

JPY         Leading Index May (P) A 110.5 | C 96.3 | P 99 | R 107.7

CHF        Foreign Currency Reserves Jun A 434.9B | C 441.4B | P 441.1B

CHF        CPI M/M Jun A 0.10% | C -0.10% | P 0.10%

CHF        CPI Y/Y Jun A -0.10% | C -0.30% | P -0.50%

EUR        German Factory Orders M/M May A -1.30% | C 1.30% | P -2.30% | R -2.20%

USD       Change in Non-farm Payrolls Jun A 195K | C 162K | P 175K | R 195K

USD       Unemployment Rate Jun A 7.60% | C 7.50% | P 7.60%

CAD       Net Change in Employment Jun A -0.4K | C -12.3K | P 95.0K

CAD       Unemployment Rate Jun A 7.10% | C 7.10% | P 7.10%

CAD       Ivey PMI Jun A 55.3 | C 59.6 | P 63.1

 

For today

USDJPY
Topside: 101.50-101.80 medium offers 101.80-102.10 medium buy stops 102.20-102.50 light offers
Downside: 100.70-101.00 light bids 100.50-70 medium bids 100.30-100.60 medium sell stops 100.20-40 light mix

EURUSD
Topside: 1.2840-1.2870 light offers 1.2870-1.2900 medium offers
Downside: 1.2800-1.2810 medium sell stops 1.2760-1.2790 large bids

AUDUSD
Topside: 0.9200-0.9230 good stops

Downside: 0.9030-0.9040 light sell stops 0.9000-0.9030 medium sell stops

 

JPY:

Japan May Current Acct Surplus Y540.7B; Expected Surplus Y595B

Japan bank lending hits 4-yr high as BOJ pumps money

Softbank Credit Rating Cut to Junk by S&P

Japan Mergers Fall to Nine-Year Low as Yen Volatility Surges

Japan service sector sentiment dips in June

Japan nuclear operators file for plant safety checks, but early restarts unlikely

JPY/USD:

Japan Sold Record U.S. Treasuries in May during Global Bond Rout

CNY:

China Ex-Railway Minister Gets Suspended Death Sentence – Xinhua

GBP/CNY:

China Insurer Buys London’s Lloyds Building for $388 Million

AUD:

Australia job advertisements fall for 4th month in June

NZD:

New Zealand house prices fall in June – REINZ

 

  • EUR: The market opened slightly off from the close on Friday around the 1.2815 area before moving back up to fill in the gap on the charts however, that is about all it did and from there we have traded quietly in that range for the most part and currently hold just above the lows as we move towards London after a very quiet session which is still missing the US liquidity somewhat.
  • GBP: Pre market opened in line with Fridays close however, the market moved lower matching the opening in the Euro somewhat however, the market was trading around the 1.4885 area when we opened and continued to drift lower dipping to below 1.4860 into the first hour of Tokyo trading before recovering sharply after the Tokyo fix to move back above 1.4880, we currently hold just below the area in what has been a slow day for most of the pairs.
  • JPY: The market opened around the 101.20 area in line with Friday’s close and immediately started to rise from the Sydney opening pushing to above the 101.40 area and triggering some weak stops, we traded quietly from there into the Tokyo opening with some fix demand for crosses against the Yen however, once the demand was over with the market started to drift back to the starting areas and pushed to a low of 101.10 in a somewhat quiet session, we currently hold around the mid 101.20’s as we move to the London session.
  • AUD: A reasonable quiet session for the Oz with the market opening around the 0.9050 area and moving to just below the 0.9070 level in early trading pre-Tokyo before slipping back just before and into the opening, the market with USD buyers trading more however while the Oz dipped back in early trading to the 0.9042 area we’ve remained in that range for the most part throughout the session unable to move in any particular direction with much conviction, for the moment we are holding around the 0.9050 opening area as we move to London.

 

Today’s data

Actual = A Consensus = C  Previous = P Timings GMT

JPY         Current Account (JPY) May A 0.62T | C 0.62T | P 0.85T

JPY         Eco Watchers Survey: Current Jun A 53 | C 55.5 | P 55.7

05:45     CHF        Unemployment Rate Jun C 3.20% | P 3.20%

06:00     EUR        German Trade Balance (EUR) May C 17.4B | P 17.7B

08:30     EUR        Eurozone Sentix Investor Confidence Jul C -11.7 | P -11.6

10:00     EUR        German Industrial Production M/M May C -0.50% | P 1.80%

12:30     CAD       Building Permits M/M May C 2.60% | P 10.50%

 

Ranges as of 6am London time including Sydney open

Highs    Lows

USD/JPY               101.54 | 100.855

EUR/USD             1.2850 | 1.2807

EUR/JPY               130.215 | 129.3

AUD/USD            0.9067 | 0.9042

NZD/USD             0.7729 | 0.7685

USD/CAD             1.0586 | 1.0572

EUR/CHF              1.2390 | 1.2367

USD/CHF             0.9666 | 0.9643

GBP/USD             1.4910 | 1.4859

EUR/GBP             0.8624 | 0.86125

 

Stay lucky

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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