Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 99.281 | EURUSD 1.32776 | EURJPY 131.827 | AUDUSD 0.92441 | NZDUSD 0.8057 | USDCAD 1.0280 | EURCHF 1.23456 | USDCHF 0.9298 | GBPUSD 1.53888 | EURGBP 0.86279 |

 

Harry Hindsight

  • EUR: The Euro opened just below the 1.3200 level and based around the 1.3190 in early trading before starting a steady rise over the course of the Asian session, this seemed to be more a balancing act as the JPY strengthened across the board. By the time we moved into the grey hours the market had traded up to the 1.3220 area and struggled for the two hours into the London opening holding a 10 pip range between 1.3210-20 as the usual Early Europeans seemed to sit back waiting for the numbers before committing themselves, the release of the IFO numbers had the market jumping to just below 1.3240 before people analysed the numbers, with expectations showing a decline the movement was cancelled and a drop in money supply suggests a possible tightening bias in the market. The equities had already begun to decline before the FX market and led the market lower as a follow on to Asian declines. The Euro traded down to below the 1.3170 levels before showing sign of some recovery with a few leveraged types seen buying above the 1.3180 level, from that point it was a steady rise higher as the USD came under pressure. A WSJ story late in the afternoon chased the market higher again with the story that bond buying program would most likely be continuing for the near future. And the Euro broke to above the 1.3295 area before dipping a little into the close around the 1.3275 area into the close.
  • GBP: Cable moved quietly in early Asia before starting a steady rise to above the 1.5380 into the early part of London, the release of the GDP number while the number came out in line with expectations it would seem that the market was looking for a bigger figure, which is surprising as the consensus in relation to the past number of releases was a high call in my opinion and if repeated will beat expectations by the end of the year however, what do I know, as the Cable dropped quickly trading instantly to 1.5320 and then declined even further in a more orderly manner to below the 1.5270 level before starting a steady climb higher over the remainder of the session as the US numbers influenced the market more than the markets expectations. The market moved to above the 1.5430 level in the late session and stayed in line to some extent with the rise in the Euro with the EURGBP moving only slightly higher to just above the 0.8620 level, the market drifted from the high and settled the day around the low 1.5380’s
  • JPY: USDJPY declined steadily over the day remaining in a tight channel having opened around the 100.20 area it briefly tried the topside into fixing demand to above 100.45 however, we saw plenty of interest as profit taking from retail Japan and some other leveraged types kicked in, by the time we moved to the London session the movement had taken the market to just below the 99.80 level before struggling to move in either direction for several hours. As we moved into the NYK session the market started to attempt the downside further and we saw some light stops triggered as the market dropped through the 99.80 level and once the market moved into the later stages the selloff increased through the 99.40 level tipping to a low below 99.00 before recovering a little into the close.
  • AUD: The Oz started on the weak side of things moving slowly to below 0.9130 from the opening 0.9170 level after some cross JPY selling triggered stops tumbling into others including the AUDJPY, as the USDJPY market continued to decline the Oz started to hold its levels and attempted to move higher into the London market however, it never quiet broke above the highs until we moved into NYK where a general weakness in the USD took over the market. Oz started a more sharply rise into the session and by the late in the session had recaptured pretty much all the previous day’s losses to touch above the 0.9280 level before dipping back to a still respectable rise just below 0.9250. Macro buyers were more noticeable in the market on the move up during the NYK session, the selling from 0.9280 seemed to be profit taking from those buyers.

Yesterday’s premiership results

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

NZD       RBNZ Rate Decision A 2.50% | C 2.50% | P 2.50%

JPY         Corporate Service Price Y/Y Jun A 0.40% | C 0.60% | P 0.30%

EUR        German IFO – Business Climate Jul A 106.2 | C 106.1 | P 105.9

EUR        German IFO – Current Assessment Jul A 110.1 | C 109.7 | P 109.4

EUR        German IFO – Expectations Jul A 102.4 | C 102.5 | P 102.5

EUR        Eurozone M3 Y/Y Jun A 2.30% | C 3.00% | P 2.90%

GBP       GDP Q/Q Q2 (A) A 0.60% | C 0.60% | P 0.30%

GBP       GDP Y/Y Q2 (A) A 1.4% | C 1.4% | P 0.3%

GBP       Index of Services M/M May A 0.80% | C 0.20% | P 0.20%

USD       Initial Jobless Claims (JUL 19) A 343K | C 340K | P 334K

USD       Durable Goods Orders Jun A 4.20% | C 1.10% | P 3.60%

USD       Durables Ex Transportation Jun A 0.00% | C 0.50% | P 0.70%

 

For today

USDJPY:
Topside: 99.45-99.65 light mix 99.50-99.80 light offers 100.20-80 light buy stops
Downside: 98.40-98.70 medium bids

EURUSD:
Topside: 1.3290-1.3320 light mix 1.3320-1.3360 light offers 1.3380-1.3400 medium offers
Downside: 1.3220-1.3250 light sell stops 1.3165-1.3220 light mix

AUDUSD:
Topside: 0.9300-0.9320 light offers 0.9320-0.9330 light buy stops 0.9340-0.9350 light offers 0.9360-0.9380 light buy stops

Downside: 0.9140-0.9200 light bids spread.

 

AUD:

Australia at risk from high USD and low Yen OECD

CNY:

Zhou says China has a big economic downward pressure

Fitch China money market funds seeing major outflows

EUR/IMF:

Euro region at a high risk of stagnation

IMF supports Greece’s VAT tax cut on restaurants

EUR:

Germany may file complaint against EU banks plan – newspaper

USD:

Opposition mounts to Summers as possible Fed Chief

US lawmakers want sanctions on any country taking in Snowden

 

  • EUR: The market struggled along with some reasonable volumes going through for the week, moving steadily higher into the Tokyo opening from an opening in the mid 1.3270’s before drifting off once the market moved into the Tokyo market to touch the 1.3270, a continuing fall in the USD as a consequence of the Hilsenrath comments. The Euro’s pushed to just below the 1.3290’s setting a tight range, we currently hold around the opening levels as we head to London.
  • GBP: While Cable was a little more resilient to early selling moving from the opening 1.5385 to dip to below 1.5375 before rising after again to trade above the 1.5405 level and we currently hold just above the opening in what has been a quiet period for the GBP.
  • JPY: USDJPY held steady in pre Tokyo trading moving choppily from the 99.30 area to above 99.40 and down to 99.10, some light fixing demand continued to hold the market up but once we moved through that and with little difference in the CPI numbers the market started to tumble with retail Japan seen selling USDJPY longs to touch the 98.70 level were the market has some light bids spread around so for the moment decent interest. We hold at the moment around the 98.90 level having recovered a little however decent volume through the first half of the session disappeared as we move close to London.
  • AUD: As with previous declines in the USDJPY, Oz has managed to rise in line with the USD weakness however, today it has struggled to the topside with some offers around the 0.9300 holding the market as the market see’s sellers in both USDJPY and AUDJPY carry, the market opened around the 0.9250 and traded weakly into Tokyo holding the 0.9230 level before a steady gain started to kick in rising to above 0.9270 and how holding in the 0.9260 level. Retail Japan have been the main sellers throughout the session.

 

 

Today’s data

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

JPY         National CPI Core Y/Y Jun A 0.40% | C 0.30% | P 0.00%

JPY         Tokyo CPI Core Y/Y Jul A 0.30% | C 0.30% | P 0.20%

13:55     USD       U. of Michigan Confidence Jul (F) C 84 | P 83.9

 

Interbank Ranges as of 6am London time

Highs    Lows

EURUSD               1.32895 | 1.3269

GBPUSD               1.5405 | 1.5373

USDJPY                 99.40 | 98.68

USDCHF               0.93045 | 0.9285

AUDUSD              0.9275 | 0.9230

NZDUSD               0.8097 | 0.8055

USDCAD               1.0288 | 1.0272

EURCHF                1.2349 | 1.2337

EURGBP               0.86325 | 0.86245

EURJPY                 131.89 | 131.10

 

Good luck

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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