Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 96.713| EURUSD 1.33805 | EURJPY 129.413 | AUDUSD 0.9102 | NZDUSD 0.8027 | USDCAD 1.03273 | EURCHF 1.23123 | USDCHF 0.92021 | GBPUSD 1.55362 | EURGBP 0.86116 |

 

Harry Hindsight

  • EUR: The market in Asia remained quiet opening around the 1.3335 area and trading initially to above 1.3340 before spending much of the session falling steadily to below 1.3330 with light volumes. Even the grey hours saw little of the pre-London movement we are so accustomed to and it moved only steadily higher into the opening and continued that way until the release of the German Trade balance which as with previous numbers came in above expectations and the market moved quickly to above the 1.3365 level before falling back to the base of the channel lines, once we moved into the NYK session the market started to rally strongly as investors still remain sceptical of when the tapering will start to take effect. USD was aggressively sold from the early part of the session with pleasant comments from Draghi helped the Euro move sharply towards the 1.3400 level before running into some tougher resistance in the 1.3390-95 area. The market eventually touched through the level and seemed reminiscent of a weak option barrier play being removed as the market once through dropped back to trade in the 1.3380’s for the remainder of the day.
  • GBP: As with the Euro Cable was slow and steady through the Asian session opening around the 1.5490 and holding around that area for most of the session gradually rising as we moved towards the grey hours to 1.5500, early buyers appeared taking the market to the 1.5520 level into the opening in London. Just after the opening we again dropped to the lows just below 1.5490 only to start rallying again as all the papers in the UK ran similar stories of Carney’s commitment to guidance. The market then held during the best part of London around the 1.5510 area and we only started to really move once NYK opened and a general weakness in the USD fed through to a higher Cable trading to above the 1.5570 level before starting a steady drift lower as interest in the markets waned. The Market held on to finish the day above the 1.5530 level.
  • JPY: USDJPY saw early buyers from the start in Asia taking the market from the 96.40 level to above 96.90 into the Tokyo fixing demand for end of week USD’s however, from there it struggled a little and once the Eco watchers numbers were released the market dropped back quickly to the 96.20 level and held around that level throughout a quiet London session. Early NYK saw USD sellers across the board and the USDJPY moved to a low just above the 95.80 level with talk of very good bids in the area to hold the market. Once the lows had been tested we started a strong rally in USDJPY in a tight channel to trade just above the 96.70 level holding into the close around the area.
  • AUD: The Oz was the biggest mover in the Asian market opening around the 0.9000 level and holding steady into Tokyo before pushing ahead with some AUDJPY buying from real money types to take the Oz to above the 0.9030 level, the Oz employment numbers caused a little bit of a flurry with the Oz dropping quickly to below the 0.8980 level before again starting to rally higher in front of expectations, the CNY numbers didn’t disappoint and while the headline trade balance number suggests otherwise it was all in the detail with imports of Coal and Iron giving rise to ideas that the GDP is possibly stabilizing. The Oz jumped to above the 0.9070 level with much of the raw materials going to China coming from Australia. The Market eventually topped in Asia around the 0.9090 level holding for a couple of hours into the London market. We saw some light profit taking from some of the less adventurous longs before the market moved to the 0.9050 area. As with most currencies the afternoon session was dominated by USD weakness and the Oz ground higher to above the 0.9130 level before slowly slipping into a close around the 0.9100 level.

Yesterday’s premiership results

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

CNY        Trade Balance Jul A $17.82B | C $25.90B | P $27.12B

JPY         Current Account (JPY) Jun A 0.646T | C 0.73T | P 0.62T

JPY         Trade balance BOP basis (Yen) Jun A -139.2B | C -128.7B | P -906.7B

AUD       Employment Change Jul A -10.2K | C 6.0K | P 10.3K | R 9.3K

AUD       Unemployment Rate Jul A 5.70% | C 5.80% | P 5.70%

JPY         Eco Watchers Survey: Current Jul A 52.3 | C 53.5 | P 53

CHF        Unemployment Rate Jul A 3.20% | C 3.20% | P 3.20%

EUR        German Trade Balance (EUR) Jun A 15.7B | C 15.2B | P 14.1B

CAD       New Housing Price Index M/M Jun A 0.20% | C 0.30% | P 0.10%

USD       Initial Jobless Claims (AUG 3) A 333K | C 335K | P 326K

 

For today

USDJPY:
Topside: 97.00-97.20 light offers 97.60-80 light offers 98.00-98.20 medium stops

Downside: 96.00-96.40 light mix 95.70-96.00 light bids 95.40-70 medium bids 95.20-95.00 weak stops

EURUSD:
Topside: 1.3400-1.3430 medium buy stops 1.3430-1.3470 light buy stops 1.3470-1.3500 medium offers
Downside: 1.3330-1.3360 light bids 1.3300-1.3330 medium bids 1.3300-1.3280 medium sell stops

EURJPY:
Topside: Nothing of note
Downside: 128.20-128.50 light bids

AUDUSD:
Topside: 0.9130-0.9150 medium offers 0.9150-0.9170 medium buy stops 0.9280-0.9300 medium offers
Downside: 0.9080-0.9060 weak stops 0.9030-0.9050 light bids

 

EUR:
Merkel’s challenger Peer Steinbrueck vows to rein in banks and raise tax against the wealthy

Revival in German industry bodes well for bumper Q2 growth

EUR/GBP:

Europe missing out on fracking boom PM Cameron warned.

AUD:

RBA scaled back its near-term forecasts for economic growth with 2013 expected 2.25% against 2.50%

CNY:

China data in focus after trade bounce raises recovery hopes

 

  • EUR: Extremely quiet on the Euro front with the market holding around the 1.3380 level 5 or 6 pips either way defining the range, light fixing supply in EURJPY moved the markets to the lows and once that was past we moved back to make the highs before the market settled in to hold the opening rate around the 1.3382 level
  • GBP: The range was a little more defined however the volumes were less than stunning shall we say, we opened around the 1.5536 area and have held in the area for most of the session, with a move to the lows early in the session just short of 1.5528 and rebounded to just above 1.5545, with the market reacting more to AUD moves than anything else. We currently hold just above the opening as we move towards the grey hours.
  • JPY: USDJPY started the day continuing the rise that started in mid NYK moving from the opening levels of 96.70 into the Tokyo session to touch above the 96.95 before drifting from the level down to where the bulk of bids are showing just above the 96.30 level, while volumes have been reasonable not a patch on yesterday and the market has only managed to move to the 96.45 level from the lows. With some local markets closed for the day affecting the market.
  • AUD: The Oz again has a better range opening just above the 0.9105 area and drifting into the Tokyo session with only a minor dip below the figure area before AUDJPY buying from real money types again impacts the market to move it above the 0.9115 level, once the buying had finished the market dropped back on lack of interest to make the lows below 0.9090 before rising on CNY numbers which low in line to with expectations for the moment. The market again rallied moving this time to just short of 0.9130 and currently holds just in positive territory above 0.9110.

 

Today’s data

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

JPY         Japan Money Stock M2+CD Y/Y Jul A 3.70% | C 3.80% | P 3.80%

JPY         Tertiary Industry Index M/M Jun A -0.30% | C -0.40% | P 1.20%

CNY        CPI Y/Y Jul A 2.70% | C 2.80% | P 2.70%

CNY        PPI Y/Y Jul A -2.30% | C -2.10% | P -2.70%

JPY         Consumer Confidence Index Jul A 43.6 | C 45 | P 44.3

05:30     CNY        Industrial Production Y/Y Jul C 8.80% | P 8.90%

05:30     CNY        Retail Sales Y/Y Jul C 13.40% | P 13.30%

08:30     GBP       Visible Trade Balance (GBP) Jun C -8.4B | P -8.5B

12:15     CAD       Housing Starts Jul C 191.0K | P 199.6K

12:30     CAD       Unemployment Rate Jul C 7.10% | P 7.10%

12:30     CAD       Net Change in Employment Jul C 6.0K | P -0.4K

14:00     USD       Wholesale Inventories Jun C 0.40% | P -0.50%

 

Interbank Ranges as of 6am London time

Highs    Lows

EURUSD               1.3387 | 1.3375

JPYUSD                 96.98 | 96.33

GBPUSD               1.5546 | 1.5527
USDCHF               0.9206 | 0.91955
AUDUSD              0.9130 | 0.9087
NZDUSD               0.8010 | 0.7984
USDCAD               1.0332 | 1.0323
EURCHF                1.2315 | 1.2307
EURGBP               0.8614 | 0.8610
EURJPY                 129.71 | 128.925

It’s that time of year again where I sojourn to the leafy glades of rural England in search of the fish that will make my fame and fortune for 5 minutes in the Angling magazines. See you all in two weeks’ time having failed miserably as usual.

 

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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