Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 99.571 | EURUSD 1.31249 | EURJPY 130.68 | AUDUSD 0.92386 | NZDUSD 0.78927 | USDCAD 1.04068 | EURCHF 1.23522 | USDCHF 0.9411 | GBPUSD 1.52123 | EURGBP 0.8628 |

 

Harry Hindsight

  • EUR: We opened around the 1.3160 and in early trading slowly moved lower after the repercussions from Bernanke’s testimony for the House and Greece facing a short fall of €10B after a German newspaper cited the usual unnamed official. However by the time we moved into the grey hours the market had drifted to below the 1.3130 level with a little help from early Europeans. We moved into the London session with comments from Europe and Greece denying the article and the market started a recovery pushing back to the opening levels early in London. To counter balance the good news Spain it would seem is having its own political spat over a slush fund the current incumbents had/have of course the popular party is the only one with such a thing if they had/have. So several things to mess the market about however from the high we moved steadily lower bought on more by the movement of the GBP for a change with rather decent employment numbers helping the GBP to rise rapidly against all comers of course in this case the EURGBP declined in a rather rapid move from close to 0.8710 to touch 0.8640. Euro pushed down again below the 1.3130 level. Early NYK pushed the Euro again higher with satisfactory numbers but nothing more and Euro moved as real money and leveraged bought from the lower levels only to run into offers around 1.3180, which then saw news articles on no confidence vote against the interior Minister however, the concern that this will in all likelihood effect the whole government. The Euro moved immediately of its highs and dropped quickly through the 1.3100 level and held around the 1.3090 level for a few hours as the market digested the story. Once it was absorbed and what numbers remained had been digested the market again headed back towards the opening levels but running out of steam we then drifted back towards the figure area with a choppy session for NYK putting paid to any further action and we finished the day unable to move back through the 1.3130 level which it struggled penetrating fully on the moves lower in the early parts of the session.
  • GBP: We saw the same slow drift in the Cable through the Asian session moving steadily from the 1.5160 area to below 1.5120 into the grey hours, early players sold in front of the data and probably regretted it as soon as they did as the both the BoE minutes laid out some surprises and the claimant count was again down this time by 21.9 against an expected -8K. BoE minutes showed that there were no votes this time for expanding QE, and a possible change in policy in the short term is now expected, how this manifests itself will remain to be seen however, balancing the struggling economy with inflationary pressures is not a call I’d like to make fresh in the job. Having traded as low as 1.5080 on the selling before the numbers the market moved sharply higher pushing to above 1.5240 in a sudden move before dropping back below 1.5200 and slowly rising again into the NYK session to post highs just short of 1.5270, the same Italian news spooked the market and the pair dropped to 1.5160 before slowly recovering into the close for a finish above the 1.5200 level. As mentioned above in the Euro commentary the EURGBP cross was sold aggressively on the numbers and never recovered and slowly made its way to the mid 0.8620’s into the close.
  • JPY: USDJPY had a tidy day with early buying seen through into the Tokyo session from the opening 99.10 level, the market saw speculator buying as rumours of a decent amount for the fix appeared in the market only for those that bought discover there was not, the market however, only continued to rise after the fix so no harm done and we started to see the lucky taking profit from above 99.50 taking it back to 99.30 which remained the base line into London. London market were good buyers from the opening with another rise in USDJPY to push slowly to above 99.80 triggering some minor stops, the release of the UK data had GBP rising and USDJPY was put in check for a few hours as the market moved on GBP strength rather than USD weakness. The Italian news hit the market and USDJPY was quickly lower as EURJPY selling dominated the JPY for an hour once the Euro stabilized the USDJPY returned to the topside in the same fashion it had dropped and from the 99.10 level we soon posted a new high for the day just short of the 100.00, the market failed to pass the level and we again started to drift towards the close with what looks to be a thin market remaining, we eventually settled around the 99.60 level giving back half of the day’s gains but it remained healthy for the pair nonetheless.
  • AUD: The Oz was buffeted by the other currencies, having begun a slow decent as the USDJPY rose higher we moved quietly for the most part through the Asian session to hit below 0.9200 into the London open, the market held this area several times through the day with only minor breaches of the level through the day, and with the by play in Europe we saw the pair rally quickly to above 0.9290 before dropping back to the 0.9200 level again however, some of the day was undone as the market started to rise again in late NYK pushing to the 0.9230-40 where we ranged and finally moved a tad higher for the close.

 

Yesterday’s premiership results

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

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 A 0—0—9 | C 0–0—9 | P 0–0–9

08:30     GBP       Claimant Count Change Jun A -21.2K | C -8.0K | P -8.6K

08:30     GBP       Claimant Count Rate Jun A 4.40% | C 4.50% | P 4.50%

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

09:00     CHF        ZEW Survey (Expectations) Jul A 4.8 | P 2.2

12:30     CAD       International Securities Transactions (CAD) May A 6.74B | C 10.23B | P 14.91B

12:30     USD       Housing Starts Jun A 836K | C 950K | P 914K

12:30     USD       Building Permits Jun A 911K | C 1000K | P 974K

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

14:30     USD       Crude Oil Inventories A -6.9M | C -1.9M | P -9.9M

 

For today

USDJPY
Topside: 100.15-100.30 light mix 100.30-100.60 light offers 100.60-100.80 light stops 101.00-101.20 medium offers
Downside: 99.00-99.30 medium bids 98.70-99.00 light mix 98.40-98.70 medium bids

EURUSD
Topside: 1.3130-1.3160 light buy stops  1.3170-1.3200 medium offers 1.3220-60 light offers
Downside: 1.3060-80 light bids  1.3040-1.3070 medium sell stops 1.3000-1.3030 medium bids

AUDUSD
Topside: 0.9250-0.9275 light offers 0.9290-0.9320 light mix  0.9340-0.9360 medium stop bids
Downside: 0.9170-0.9200 medium sell stops 0.9130-0.9160 light bids 0.9100-0.9120 light bids

 

JPY:

Japan corporate mood worsens amid China worries – Reuters Tankan

Japan Should Cut Levy on Corporate Profit, Tax Panel Member Says

CNY:

China May Delay Nationwide Property Tax Trial Plan: Sec. Daily

China May Add Credit Support For Exporters: Securities Journal

China CBRC’s Yan Urges Prudent Monetary Policy in 2H: Fin. News

China June m/m home price rises slow

AUD:

Australia Business Confidence, Conditions Fall – NAB Survey

AUD/CNY:

Rudd May Reduce Investment Hurdle in China FTA Talks: Australian

EUR:

ECB’s Asmussen Sees Bank Supervision in 3Q 2014 -Report

NZD:

New Zealand job ads flat in June – ANZ survey

 

 

  • EUR: The Euro opened in the mid 1.3120’s and slowly declined in pre Tokyo trading as concerns over Greece, Portugal and Italy continue to do the rounds, with Schaeuble on his way to Greece today to bolster confidence in the plans moving forward. We recovered the losses during the fixing demand for EURJPY but from that point on struggled to hold the opening levels and again started a long steady drift lower triggering some minor stops through the 1.3110 area before holding around the 1.3095 area as we move to London. 
  • GBP: Cable held up for most of the session remaining between the 1.5210-20 area until deep into the session when Euro’s started to lose ground dragging the GBP with it as EURGBP barely moved from the 0.8625 areas, while the move was less exciting than the Euro we managed to break below the 1.5180 area and currently hold in that area with the market very quiet overall.
  • JPY: The USDJPY went from strength to strength rising steadily throughout the session from the opening levels around the 99.60 level, there was a brief period early in the when supply in USDJPY in the fix was large than the demand in EURJPY and USDJPY dropped to make the low around the 99.47 level from there it was all one way traffic and we rose steadily to 99.80 before triggering some weak stops and holding for a short period before again moving higher with some fund buying doing the damage and taking the market through 100.00 level to just short of 100.20 we currently hold just off the highs as the market has quietened and looks to be drifting to the London market.
  • AUD: The Oz opened around the 0.9245-50 area and struggled from the opening, the market took the numbers on board and we saw early sellers taking the market to the 0.9230 level. Tokyo opened and we saw some light buying of the AUDJPY carry however; the market is talking of 0.9200 call strikes expiring today and we saw heavy Japanese selling from the highs onwards taking the market firmly through the level and down to the 0.9170 level where we hold now being just off its lows.

 

Today’s data

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

AUD       Conference Board Leading Index May A 0.00% | P 0.30%

AUD       NAB Business Confidence Q2 A -1 | P 2

06:00     CHF        Trade Balance (CHF) Jun  C 2.41B | P 2.22B

08:00     EUR        Eurozone Current Account (EUR) May C 21.3B | P 19.5B

08:30     GBP       Retail Sales M/M Jun C 0.40% | P 2.10%

12:30     CAD       Wholesale Sales M/M May C 0.40% | P 0.20%

12:30     USD       Initial Jobless Claims (JUL 12) C 349K | P 360K

14:00     USD       Fed’s Bernanke Testifies to Senate

14:00     USD       Philly Fed Survey C 6.8 | P 12.5

14:00     USD       Leading Indicators Jun C 0.003 | P 0.001

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               100.19 | 99.47

EUR/USD             1.31275 | 1.3091

EUR/JPY               131.15 | 130.57

AUD/USD            0.9242 | 0.9163

NZD/USD             0.7913 | 0.7859

USD/CAD             1.0433 | 1.0401

EUR/CHF              1.2353 | 1.2345

USD/CHF             0.9437 | 0.9407

GBP/USD             1.5222 | 1.5174

EUR/GBP             0.8629 | 0.8620

 

Good luck

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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