Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 97.952 | EURUSD 1.32629 | EURJPY 129.912 | AUDUSD 0.92059 | NZDUSD 0.80284 | USDCAD 1.02661 | EURCHF 1.2348 | USDCHF 0.93106 | GBPUSD 1.53402 | EURGBP 0.86467 |

 

Harry Hindsight

  • EUR: A slow start in Asia with light buying taking the market from the opening 1.3280 to just below the 1.3295 into early Tokyo, the market then stayed around the 1.3285-90 area for the most part until well into the session before the market started to drift off dropping down through the grey hours to hit below 1.3265 into the London opening. London started to rise over the next few hours with little to go on except for news that German finance minister Schaeuble has ruled out another debt write down for Greece. NYK sold more or less from the word go and the market extended the lows to below 1.3240 in light volume into the middle of the session before the market held and moved back to the 1.3265 areas.
  • GBP: The Cable moved from the 1.5380 to above the 1.5400 level before holding and starting to drift with the Euro, moving to below the 1.5370 area before moving higher with the Euro topping this time above the 1.5410. There seems to be a lack of interest in the Cable possibly on the grounds the market is waiting for minutes of the last meeting. In the meantime although we’ve been previously told on several occasions the market again decided that any movement in the interest rate is still likely to be next year. This chatter undermined the market and we dropped into the NYK opening from the highs and continued lower to hit 1.5330 into mid NYK. There was little movement from that point and we ended the day only just off the lows.
  • JPY: A pretty quiet day overall for the USDJPY moving from the opening 98.05 areas, we topped above 98.35 in early quick trading with very little volume. Once the market touched there it moved just as quickly back to the opening levels and after a brief pause continued to run lower to below 97.80, volume at this point was brisk as we saw Japanese retail entering the market to cut long positions, the market held the level and moved quickly back to the 98.20 level giving Retail Japan another period to sell and the market started a larger drop this time to below the 97.70 level. This sort of pattern ran through the out the day with movements off the 97.70 level back above 98.10 and always finding the market willing to sell into those rallies, the markets volume dropped off from the Asian session though with the market gradually grinding into a tighter range around the 97.95 level.
  • AUD: A steady decline throughout the day moving from the 0.9260 area slightly higher into the Tokyo opening hitting above the 0.9280, before heading back down again. We hit the highs again later in the session however; this was the last time we saw the Oz above the 0.9280 level as we started to slide lower, moving into the London market below 0.9240. We held the levels into the NYK session before the slide began again and we dropped to 0.9200 where we held the level into the close.

Yesterday’s premiership results

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

JPY         Retail Trade Y/Y Jun A 1.60% | C 2.10% | P 0.80%

GBP       Mortgage Approvals Jun A 57.7K | C 59.7K | P 58.2K

GBP       M4 Money Supply M/M Jun A 0.10% | C 0.20% | P -0.10%

GBP       M4 Money Supply Y/Y Jun A 1.50% | P -0.10%

GBP       CBI Reported Sales Jul A 17 | C 10 | P 1

USD       Pending Home Sales M/M Jun A -0.40% | C -1.00% | P 6.70%

 

For today

USDJPY
Topside: 98.50-98.80 medium offers 98.80-99.00 light offers 99.00-99.30 light offers
Downside: 97.50-97.80 medium sell stops 97.20-97.50 medium bids 96.90-97.20 medium sell stops

EURUSD
Topside: 1.3270-1.3300 medium mix  1.3300-1.3320 light buy stops 1.3320-1.3340 medium stops 1.3340-1.3350 light offers
Downside: 1.3220-1.3250 medium bids 1.3190-1.3220 light mix

AUDUSD
Topside: 0.9220-0.9240 light offers 0.9280-0.9300 light buy stops 0.9300-0.9320 medium offers
Downside: all cleared out and not seeing much.

 

AUD:

Australia still has room to cut rates – central bank governor

Australian Home Building Approvals Fell 6.9% in June

JPY:

Japan Pension Fund May Invest in Foreign Infrastructure: Nikkei

Amari: PM May Soon Instruct Creation of Panel on Sales Tax Estimate

Fin Min Aso: Important to Push Ahead With Fiscal Reform as Well as Econ Revitalization

Japan Jun Indus Output -3.3% on Mo; Mkt Expected -1.7%

Japan’s Jun Jobless Rate 3.9%, Lowest Since Oct 2008

Japan June household spending falls 0.4% vs. yr. ago

Japan’s Auto Exports Down 4.5% on Year in June

Japan July 1-10 Trade Deficit Y590.37 Bln; Up 59.2% on yr.

CNY/JPY:

China rules out Sino-Japanese summit – China Daily

CNY:

China State Council Approves PBOC Interest Rate Plan- Report

PBOC injects 17 bln yuan reverse repos, first open market intervention since June

USD:

Explosions Rock Gas Plant in Florida -Sky News

CHF:

UBS to repurchase stabilisation fund assets from SNB

NZD:

New Zealand new housing consents fall in June

 

 

  • EUR: With volumes unchanged from yesterday the market drifted from the opening levels around 1.3265, moving to below 1.3260 into the Tokyo opening before continuing the decent as USDJPY moved higher, we moved to the 1.3250 area before the market began to find some support.
  • GBP: The Euro moved sideways into the Tokyo session holding above the 1.5340 as the Euro drifted lower, fixing supply in GBPJPY started the move lower touching 1.5330 before bouncing to the open and then dropping with the Euro to just above the 1.5315 level with little in the way of a bounce and currently holds just above the 1.5325, on a pretty lacklustre day.
  • JPY: USDJPY opened up in a pattern opposite to yesterday drifting to 97.85 from the opening only to hold into the Tokyo opening and find fresh buying pressure as demand for the fix kicked in, while the market dipped after the initial buying but only as far as 98.05 area, we held around the 98.10 level before the market reacted to news that the consumption tax will go ahead. USDJPY rallied moving from the 98.10 to above the 98.45 area triggering weak stops, obviously if this tax does eventually pass through then interest rates will probably higher if not hitting the 2% target however, it is a bit of a fudge and what happens next year?
  • AUD: Having opened around the 0.9210 level the market moved steadily lower in front of the building approval numbers, Tokyo rallied to above the 0.9200 level then the numbers were released with a massive drop off causing the market to stumble and drop quickly to the 0.9160 level where we saw some light bids. The bids ran there course and the move reappeared and we dropped this time more aggressively with high volume going through as stops were triggered in both the Oz and crosses before holding the line around the 0.9080 level having touched below 0.9070 level.

Today’s data

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

NZD       Building Permits M/M Jun A -4.00% | P 1.30%

JPY         Household Spending Y/Y Jun A -0.40% | C 1.30% | P -1.60%

JPY         Unemployment Rate Jun A 3.90% | C 4.00% | P 4.10%

JPY         Industrial Production M/M Jul (P) A -3.30% | C -1.50% | P 1.90%

AUD       Building Approvals M/M Jun A -6.90% | C 2.00% | P -1.10%

06:00     EUR        German GfK Consumer Sentiment Aug C 6.9 | P 6.8

07:00     EUR        Spanish GDP Q/Q Q2 (A) C -0.10% | P -0.50%

09:00     EUR        Eurozone Economic Confidence Jul C 92.5 | P 91.3

09:00     EUR        Eurozone Industrial Confidence Jul C -10.2 | P -11.2

09:00     EUR        Eurozone Consumer Confidence Jul (F) C -17.4 | P -17.4

09:00     EUR        Eurozone Services Confidence Jul C -8.9 | P -9.5

12:00     EUR        German CPI M/M Jul (P) C 0.30% | P 0.10%

12:00     EUR        German CPI Y/Y Jul (P) C 1.70% | P 1.80%

12:30     CAD       Industrial Product Price M/M Jun C 0.10% | P 0.00%

12:30     CAD       Raw Materials Price Index M/M Jun C 0.30% | P 0.20%

13:00     USD       S&P/Case-Shiller Composite-20 Y/Y May C 12.40% | P 12.10%

14:00     USD       Consumer Confidence Jul C 81 | P 81.4

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               98.47 | 97.85

EUR/USD             1.32655 | 1.3247

EUR/JPY               130.52 | 129.84

AUD/USD            0.9206 | 0.9064

NZD/USD             0.8037 | 0.7981

USD/CAD             1.0283 | 1.0258

EUR/CHF              1.2354 | 1.23455

USD/CHF             0.93245 | 0.93075

GBP/USD             1.5344 | 1.5315

EUR/GBP             0.8650 | 0.8642

 

Good luck

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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