Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 99.445 | EURUSD 1.32246 | EURJPY 131.528 | AUDUSD 0.92961 | NZDUSD 0.80018 | USDCAD 1.0287 | EURCHF 1.23619 | USDCHF 0.93481 | GBPUSD 1.53724 | EURGBP 0.86034 |

 

Harry Hindsight

  • EUR: With only consumer confidence for the day volumes were much reduced and the range was limited at best for most of the session. We opened around the 1.3185 area and traded slowly up from the opening trading into the mid-Tokyo session to a high of 1.3207 before slipping back below the 1.3200 level as we moved to London. Early Europeans sold the market down to the opening levels, while the market recovered to the highs into the London official open it was short lived and the market started to drift lower trading to 1.3165 area before finding some small comfort from the odd platitude from Europe on the subject of Portugal and Greece. We moved quietly into the NYK, the market jumped higher on a better than expected Consumer confidence number however, one has to wonder what the difference between -18.3 and -17 is other than 1.3. The Euro hit above 1.3230 before consolidating for the next few hours in the 1.3210-20 area and making another move to the topside not quiet reaching 1.3240 before moving into a close in the 1.3220 area.
  • GBP: The Cable limped along in the wake of the Euro for most of the day moving from the opening levels around the 1.5360 area before moving high from mid-session in Asia to above the 1.5370 level where it consolidated into the grey hours, the market dropped pre-London with the Euro recovering to hit slightly above the 1.5380 before the market again moved lower this time setting new lows for the session testing below 1.5330. The market held for several hours in slow trading between the low and 1.5355 before beginning a rally around the NYK option cut, this tends to signify a play in the options occurring however, due to the low volumes it was unclear which currency pair were involved however, the Cable moved from the 1.5350 to 1.5375 quickly before falling back and bouncing straight back to top out above the 1.5390 before closing around that 1.5375.
  • JPY: USDJPY struggled during Asia opening around the 99.65 area and trading slowly in pre-Tokyo before dropping quickly on the opening of Tokyo initially to below 99.30 and then taking another run lower during fixing supply to below 99.20. Volumes while decent seemed to disappear as the market moved on and slowly moved back to the opening levels. We moved through the Asian session holding 99.40-60 area for the remainder of the session moving quietly into London. With the drop in the Euro USDJPY moved quickly higher and we saw some weak stops and leveraged buying moving into the market taking USDJPY to above the 100 level and extending to just short of 100.20. Into the late session the market reversed after the consumer confidence numbers in the Eurozone and the rot set in, we saw light profit taking with a break back through 100 and we dropped to just above the opening levels to consolidate for a few hours before dropping again to just beyond 99.40 where the market held into the close.
  • AUD: The Oz was a little more resilient to the moves in both JPY and Euro’s, moving steadily higher from the opening 0.9250 trading during Asia above 0.9280 on the movement of USDJPY, the move into London was less dramatic sticking to the range in Asia until the move in USD’s moved the Oz down to make the lows just above 0.9220, as with everything else against the USD the Oz consolidated around the 0.9240 before steadily rising through the NYK session to top out just shy of 0.9300 where we held out until the close several hours later.

Yesterday’s premiership results

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

GBP       BBA Mortgage Approvals Jun A 37.3K | C 38.5K | P 36.1K

CAD       Retail Sales M/M May A 1.90% | C 0.30% | P 0.10%

CAD       Retail Sales Less Autos M/M May A 1.20% | C 0.30% | P -0.30%

USD       House Price Index M/M May A 0.70% | C 0.80% | P 0.70%

EUR        Eurozone Consumer Confidence Jul (A) A -17 | C -18.3 | P -18.8

 

For today

USDJPY:
Topside: 99.90-100.00 light offers 100.00-100.20 light stops 100.20-100.50 medium offers
Downside: 99.00-99.30 light bids 98.60-99.00 light mix

EURUSD:
Topside: 1.3240-1.3270 light mix 1.3270-1.3300 light offers 1.3300-1.3330 light mix
Downside: 1.3160-1.3200 medium bids 1.3160-1.3150 light stop offers 1.3140-1.3120 light bids

EURJPY:
Topside: 132.20-132.50 light offers
Downside: Nothing of note

AUDUSD:
Topside: 0.9310-0.9340 light mixed bag 0.9340-0.9370 light buy stops 0.9400-0.9420 medium offers
Downside: 0.9200-0.9230 light sell stops 0.9180-0.9200 medium bids

 

NZD:

Surplus better than expected, imports weaker than previous helping the balance.

CNY:

NDRC researcher states China Q4 GDP may be below 7% – Chinese press (opposite of yesterdays)

Above comment retracted and replaced with does not refer to a specific GDP number.

USD:

Larry Summers now seen as front runner to replace Bernanke

Detroit will start a wave of municipal bankruptcies – FT

US financial regulators looking to ease mortgage norms WSJ

GBP:

US, Japanese companies lead foreign investment in Britain

Australia join the band of countries telling Britain not to forsake the EU

EUR:

Berlin delays decision on next aid for Greece to Monday

 

  • EUR: In another quiet session the movement in the market was dominated by the Oz, Euro’s opened around the mid 1.3220’s and holding a 6 or 7 pip range into Tokyo, on the Data announcements the market started with a quick drop to 1.3200 as EURAUD selling kicked in, while the Oz gyrated the damage had been done to the Euro market in a slow day otherwise and it has struggled to recover as the session moved on only hitting 1.3210 area as we move towards the grey hours.
  • GBP: Cable opened slightly up from the NYK close around the 1.5379 area and as with the Euro limped along into the Tokyo session dropping quickly on the Oz data to below 1.5355 before a slow recovery moving towards London at the mid 1.5360’s. FT reports of the attack on BoE by Vince Cable calling them the financial Taliban for making Banks hold sufficient funds to balance risk. All I have now is a picture of Mr Cable with a bicycle pump running around trying to re-inflate the credit bubble, property bubble and any child’s bubble that has just burst.
  • JPY: A steady rally higher for the USDJPY moving from the 99.43 area and taking advantage of the up and downs of the Oz market to trade to a high above the 99.80 level in light volumes as the focus shifted to the Oz.
  • AUD: With Fund and system names playing the market it has been a busier day than normal in the Oz, we moved from the opening 0.9295 area to trade 10 pips lower into the Tokyo opening and pushing back to the start ranging in that 10 pip areas until the numbers were released. The initial move from the data was lower with a mixed reading on the CPI numbers algo’s gave the market quickly to 0.9245 before the market revised the reading as being unlikely to warrant a rate cut with the soft job market and the inflation reading while slightly weaker are not worth worrying overly about, and we bounced to above the 0.9315 level over 30mins then to return southwards as mixed reaction in the market caught people by surprise we again dropped down through 0.9250 before finding some support and holding the level, since the hectic hour the market has remained in a very tight range holding a 7 pip range between 0.9259-66 as we move towards London we are just off the lows still.

Today’s data

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

NZD       Trade Balance (NZD) Jun A 414M | C 105M | P 71M

JPY         Trade Balance (JPY) Jun A -0.60T | C -0.58T | P -0.82T

AUD       CPI Q/Q Q2 A 0.40% | C 0.50% | P 0.40%

AUD       CPI Y/Y Q2 A 2.40% | C 2.50% | P 2.50%

AUD       CPI RBA Trimmed Mean Q/Q Q2 A 0.50% | C 0.50% | P 0.30%

AUD       CPI RBA Trimmed Mean Y/Y Q2 A 2.20% | C 2.10% | P 2.20%

AUD       CPI RBA Weighted Median Q/Q Q2 A 0.70% | C 0.50% | P 0.50%

AUD       CPI RBA Weighted Median Y/Y Q2 A 2.60% | C 2.40% | P 2.60%

CNY        HSBC Flash Manufacturing PMI Jul A 47.7 | C 48.5 | P 48.2

07:00     EUR        French PMI Manufacturing Jul (P) C 48.8 | P 48.4

07:00     EUR        French PMI Services Jul (P) C 47.5 | P 47.2

07:30     EUR        German PMI Manufacturing Jul (A) C 49.2 | P 48.6

07:30     EUR        German PMI Services Jul (A) C 50.7 | P 50.4

08:00     EUR        Eurozone PMI Manufacturing Jul (A) C 49.1 | P 48.8

08:00     EUR        Eurozone PMI Services Jul (A) C 48.7 | P 48.3

10:00     GBP       CBI Trends Total Orders Jul C -13 | P -18

14:00     USD       New Home Sales Jun C 484K | P 476K

14:30     USD       Crude Oil Inventories P -6.9M

 

Interbank Ranges as of 6am London time

Highs    Lows

EURUSD               1.32265 | 1.31985

USDJPY                 99.80 | 99.385

GBPUSD               1.5379 | 1.5352

USDCHF               0.93645 | 0.9338

NZDUSD               0.8014 | 0.7950

AUDUSD              0.9320 | 0.9241

USDCAD               1.0313 | 1.0289

EURCHF                1.23645 | 1.2357

EURGBP               0.86005 | 0.85965

EURJPY                 131.80 | 131.41

 

Good luck

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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