Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 99.096 | EURUSD 1.31629 | EURJPY 130.425 | AUDUSD 0.92524 | NZDUSD 0.78864 | USDCAD 1.03706 | EURCHF 1.23607 | USDCHF 0.93904 | GBPUSD 1.51576 | EURGBP 0.86834 |

 

Harry Hindsight

  • EUR: From a slow start in Asia the market eventually started to move, opening around the 1.3060 area we traded in a tight range throughout the Asian session with a dip to the 1.3050’s and a rally to 1.3075 areas to make the range, once we moved into the grey hours we saw early players picking up Euro’s before the profusion of data started to hit. We moved into London with some selling appearing as the UK figures made the first impact, dipping back towards the 1.3060 level with steady inflationary news, mixed ZEW but a drop in the trade balance setting the Euro weaker first off taking the market to a new low for the day of 1.3049, before the analysts started to put out there slant. The market started to pick up from the lows and trade quickly through the 1.3100 level triggering some minor stops from weak shorts to stall around the 1.3120 level for several hours, even with the US numbers the market was a little slow in reacting with a balanced inflation the net flows seemed to be the one to upset the apple cart and the Euro again started to rise pushing slowly through each 10 pips in a rising channel to trade above the 1.3170 level for a decent rise on the day. On balance the data from either side of the pond was nothing to write home about but as always the negative for the Eurozone was ignored in favour of the US negatives, which we were already aware of.
  • GBP: Cable was pretty much the same as the Euro during Asia, trading as low as 1.5092 before moving above the 1.5110 level to around 1.5118 as we moved into the grey hours, we saw some light buying from Middle Eastern players taking the market to above the 1.5140 level to make an early high however, the market dipped back once the demand dried up and was sitting around the 1.5120 when the data was released. On the whole no real surprises with the numbers mixed but generally better than expected well when I look at them they are. The market started to sell lower with the headline print of 2.90% for YoY CPI in what could be called a choppy hour or so pushing to the 1.5090 area back to above 1.5120 before dropping quickly to trade below 1.5050 finding a base to recover from. Indifferent European numbers dragged the Cable from this point with EURGBP rising from the 0.8650 area to touch briefly above the 0.8700 level into the NYK session. Cable climbed steadily from this point with some minor gyrations around the US numbers to hit a high of 1.5170 areas before slipping slightly into the close around 1.5155.
  • JPY: Asia struggled to make any headway and to a great extent it was as if there was a holiday, we moved from the 99.90 level to above 100.00 touching the 100.06 level before spending the next few hours struggling against cross selling taking the market to below the 99.70 level from there it was slow going all the way into the London market with a small buying into the opening only for the market to fall foul of GBPJPY selling into the UK numbers. European numbers did nothing to the market however, the market was now trading the USD broadly lower and the USDJPY slipped further to 99.30 before moving for the first time higher during London and into NYK to above the 99.60 with leveraged types seen aggressively buying throughout the move. US data had only minor effects on the market however, USD selling remained in vogue and we saw the market sold off through the 99.00 in a last hour flurry touching 98.90 before bouncing back for a finish just above the 99.10 level.
  • AUD: The Oz was a mirror image of the USDJPY moving from the opening levels around 0.9100 rising quickly on comments out of China who say they can tolerate slower growth and then on the RBA minutes which was a little more dovish with a prevision that they may act on interest rates again if called upon to do. The market moved higher for the second time moving from the 0.9120 level to above 0.9160 quickly. The market never really looked back from that point with USDJPY declining it allowed room for the AUD to move higher without running into profit taking in the AUDJPY which has been a big factor over the past few days limiting its attempts to rise. The rise in the Oz ignored most of the data from everywhere else including the US and was free moving throughout the whole day touching briefly above 0.9260 slipping back into the close just off the highs.

Yesterday’s premiership results

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

NZD       CPI Q/Q Q2 A 0.20% | C 0.30% | P 0.40%

GBP       PPI Input M/M Jun A 0.20% | C -0.20% | P -0.30%

GBP       PPI Input Y/Y Jun A 4.20% | C 4.20% | P 2.20%

GBP       PPI Output M/M Jun A 0.10% | C 0.10% | P 0.00%

GBP       PPI Output Y/Y Jun A 2.00% | C 1.90% | P 1.20%

GBP       PPI Output Core M/M Jun A 0.00% | C 0.10% | P 0.10%

GBP       PPI Output Core Y/Y Jun A 1.00% | C 1.10% | P 0.80%

GBP       DCLG UK House Prices Y/Y May A 2.90% | C 2.80% | P 2.60%

GBP       CPI M/M Jun A -0.20% | C -0.10% | P 0.20%

GBP       CPI Y/Y Jun A 2.90% | C 3.00% | P 2.70%

GBP       Core CPI Y/Y Jun A 2.30% | C 2.30% | P 2.20%

GBP       RPI M/M Jun A -0.10% | C 0.00% | P 0.20%

GBP       RPI Y/Y Jun A 3.30% | C 3.40% | P 3.10%

EUR        Eurozone CPI M/M Jun A 0.10% | C 0.10% | P 0.10%

EUR        Eurozone CPI Y/Y Jun (F) A 1.60% | C 1.60% | P 1.60%

EUR        Eurozone CPI – Core Y/Y Jun (F) A 1.20% | C 1.20% | P 1.20%

EUR        Eurozone Trade Balance (EUR) May A 14.6B | C 16.2B | P 16.1B

EUR        German ZEW Survey (Economic Sentiment) Jul A 36.3 | C 40 | P 38.5

EUR        German ZEW Survey (Current Situation) Jul A 10.6 | C 9 | P 8.6

EUR        Eurozone ZEW Survey (Economic Sentiment) Jul A 32.8 | C 31.8 | P 30.6

CAD       Manufacturing Shipments M/M May A 0.70% | C 1.00% | P -2.40%

USD       CPI M/M Jun A 0.50% | C 0.30% | P 0.10%

USD       CPI Y/Y Jun A 1.80% | C 1.60% | P 1.40%

USD       CPI Core M/M Jun A 0.20% | C 0.20% | P 0.20%

USD       CPI Core Y/Y Jun A 1.60% | C 1.60% | P 1.70%

USD       Net Long-term TIC Flows May A -27.2B | C 14.3B | P -37.3B

USD       Industrial Production Jun A 0.30% | C 0.30% | P 0.00%

USD       Capacity Utilization Jun A 77.80% | C 77.90% | P 77.60%

USD       NAHB Housing Market Index Jul A 57 | C 51 | P 52

 

For today

USDJPY:
Topside: 99.90-100.20 medium offers 100.60-100.80 medium offers
Downside: 98.70-99.00 light sell stops 98.40-98.70 light bids

EURUSD:
Topside: 1.3180-1.3200 light offers 1.3200-1.3230 light offers 1.3230-1.3260 medium offers 1.3260-1.3290 light offers 1.3300-1.3310 light offers.
Downside: 1.3090-1.3120 light mix

AUDUSD:
Topside: 0.9270-0.9300 light buy stops 0.9300-0.9330 light mix 0.9360-0.9380 medium buy stops
Downside: 0.9180-9200 light bids

 

JPY:

Polls Show Japan LDP Still On Course For Election Victory

BOJ June minutes: some members sought steps to calm bond markets

Suga Says He Wonders Why Ex-Japan PM Kan Waited 2 Yrs to Sue Abe

CNY:

China June Foreign Direct Investment +20.12% on Year at $14.4 Bln

China to Release Measures to Support Export, Import Cos.: MOFCOM

China’s Domestic Consumption to Keep Rising in 2H -Commerce Ministry

G20:

Canada Official: G-20 to Address Sources of Recent Market Volatility

AUD:

Australia building activity boosted by upward revisions

 

 

  • EUR: Another quiet day in Asia before Bernanke’s testimony before the House. With the Euro slipping back from the close in NYK on rumours that Greece face a €10B funding gap with a German paper citing an unnamed European Commission official. This cost the Euro 10 pips straight away and we’ve been on the slide ever since drifting down to hold in the mid 1.3130’s for the moment with some light bids spread around the market. We are holding at the 1.3140 level as we move to the London session. Volumes much reduced from yesterday.
  • GBP: While the Euro has slipped back from the opening it would seem that Cable is doing worse, opening around the 1.5155 level we’ve drifted with the Euro and found natural stops of its on to slightly exceed the Euro movement leaving the EURGBP slightly higher above the 0.8690 level. Cable held around the 1.5110 level and has since traded in a narrow range around the 1.5115-20 level and looks to running to London in this region.
  • JPY: USDJPY moved steadily higher after a late selloff triggering some minor stops below the 99.00 area and clawing its way back to the 99.10 area for the opening, we’ve climbed steadily since that point moving into the Tokyo session trading in the mid 99.20’s before seeing small supply for the fix, we moved back from the opening levels again and in a more concerted rally moved to above the 99.50 level before drifting a little in light volumes we currently hold around the 99.40 level as we start the run to London.
  • AUD: The Oz has been quiet all day moving from the opening levels around 0.9260 to drift lower slowly over the course of the day to a low just through 0.9220 and now holding around the 0.9230 area in a very lacklustre session for the Oz.


Today’s data

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

AUD       Westpac Leading Index M/M May A 0.20% | P 0.60%

CNY        Conference Board Leading Index June A 1.00% | P 0.30%

08:30     GBP       BoE Minutes C 0–0—9 | P 0–0–9

08:30     GBP       Claimant Count Change Jun C -8.0K | P -8.6K

08:30     GBP       Claimant Count Rate Jun C 4.50% | P 4.50%

08:30     GBP       ILO Unemployment Rate (3M) May C 7.80% | P 7.80%

09:00     CHF        ZEW Survey (Expectations) Jul P 2.2

12:30     CAD       International Securities Transactions (CAD) May C 10.23B | P 14.91B

12:30     USD       Housing Starts Jun C 950K | P 914K

12:30     USD       Building Permits Jun C 1000K | P 974K

14:00     CAD       BoC Rate Decision C 1.00% | P 1.00%

14:00     USD       Fed’s Bernanke Testifies to House

14:30     USD       Crude Oil Inventories P -9.9M

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               99.55 | 99.09

EUR/USD             1.3160 | 1.3136

EUR/JPY               130.76 | 130.29

AUD/USD            0.9251 | 0.9218

NZD/USD             0.7902 | 0.7870

USD/CAD             1.0392 | 1.0371

EUR/CHF              1.23765 | 1.2357

USD/CHF             0.9421 | 0.9396

GBP/USD             1.5146 | 1.5109

EUR/GBP             0.86955 | 0.86865

 

Good luck

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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