Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 101.48 | EURUSD 1.34639 | EURJPY 136.633 | AUDUSD 0.94566 | NZDUSD 0.86875 | USDCAD 1.07285 | EURCHF 1.21468 | USDCHF 0.90217 | GBPUSD 1.70442 | EURGBP 0.78993 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               101.60 | 101.45

EUR/USD             1.3464 | 1.34545

EUR/JPY               136.74 | 136.55

AUD/USD            0.9480 | 0.9435

NZD/USD             0.8690 | 0.8582

USD/CAD             1.0743 | 1.0722

EUR/CHF              1.21495 | 1.21445

USD/CHF             0.9029 | 0.9021

GBP/USD             1.7042 | 1.7032

EUR/GBP             0.7903 | 0.78985

 

For today

  • EUR: Euro’s remained in a quiet tight range holding around the 1.3460 levels with barely 8 pips in it. The market has been more focused on regional markets. Light bids into the 1.3420 levels are likely to be followed by close weak stops opening up larger downside potential. With a mix of bids through the next big figure congestion only really starts to build towards the 1.3300 handle. Topside offer light from the 1.3480 level with likely profit taking from the light longs we’ve seen on the move lower, 1.3500 holds reasonable offers one suspects with stops through the 1.3520/30.
  • GBP: Cable was little different to the Euro moving around the 1.7035 levels with the same narrow range, with EURGBP slightly stronger. Has the Cable seen the top, quiet possibly with the Euro declining and pulling the Cable lower over the past week or so only more good numbers would turn it higher, the move through the 1.7050 level opens up the next level and ultimately the 1.6950 support levels which is the key reversal point. Topside has light offers through the 1.7100 levels a move through would see weak stops only to run into a congested area to the 1.7150 levels.
  • JPY: As with the rest of the market the USDJPY has been little different holding around the 101.54 level for a great period of time before slipping lower and through 101.50 as we move to London on light EURJPY selling. For the moment offers above the 101.60 level are not particularly strong until the market moves towards the 101.80 level onwards, a move through that level and above 102.10 will see light stops before stronger offers appear into the 102.30 areas. Downside bids remain in place from 101.20 levels and down through until 100.80 with likely mixture below that level.
  • AUD: The Oz opened with a slight gap lower from the 0.9455 closing area as the RBNZ hiked rates by 0.25% as expected however, however after 4 straight hikes the RBNZ indicated that there may now be a pause in further action until into the Q1 of 2015, this produced the effect of dropping the NZD lower and while the AUDNZD went bid the gap on the NZD was sufficient to drag the Oz down to the 0.9440 levels. The market traded around the 0.9440 area into the Tokyo session before the release of better PMI numbers, with the market driven lower so quickly on the open the move up was no different with very little of a market formulated over the short period between the two events so the move back was another gap with nothing trading until the market went through the 0.9460 level trading to above the 0.9470 levels.  Having hit the highs the market slipped back slightly to trade just above the 0.9450 levels. Offers on the topside from the highs into the 95 cent levels with barriers removed already the market is open to a move through the level to test a weak 96 cent levels. 0.9430 holds limited support on the way down the 94 cent now showing stronger support however, with the current rates in seems inevitable that the RBA and Ministers will be actively trying to talk the market down in the coming weeks.

Overnight News

CNY:

China July HSBC flash PMI rises to 18-month high of 52.0

China’s industry ministry says economy faces downward pressures – RTRS

JPY:

Japan Exports Fall 2.0% On Year in June as Monthly Trade Deficits Hit 2-Year Mark

BOJ’s Shirai Says Japan Showing Signs of Moving Out of Deflation

Japan July flash manufacturing PMI falls to 50.8 from final 51.5 in June

Abe: FY15 Budget for Ending Deflation, Expanding Positive Cycle

KRW/CNY:

S. Korea, China Agree to Set Up Defence Ministry Hotline: Edaily

NZD:

New Zealand central bank raises rates, but pauses for breather

N.Z. Annual Exports Rise 12% on China Demand for Dairy

RBNZ Says Low-Deposit Home Loans Rise to Highest Since October

 

Today’s data

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

NZD       RBNZ Rate Decision A 3.50% | C 3.50% | P 3.25%

NZD       Trade Balance (NZD) Jun A 247M | C 155M | P 285M

JPY         Trade Balance (JPY) Jun A -1.08T | C -1.11T | P -0.86T

JPY         Manufacturing PMI Jul (P) A 50.8 | C 51.9 | P 51.5

CNY        HSBC China Manufacturing PMI Jul (P) A 52 | C 51.2 | P 50.7

07:00     EUR        France Manufacturing PMI Jul (P) C 48.5 | P 48.2

07:00     EUR        France Services PMI Jul (P) C 48.9 | P 48.2

07:30     EUR        Germany Manufacturing PMI Jul (P) C 52.2 | P 52

07:30     EUR        Germany Services PMI Jul (P) C 54.7 | P 54.6

08:00     EUR        Eurozone Manufacturing PMI Jul (P) C 52 | P 51.8

08:00     EUR        Eurozone Services PMI Jul (P) C 52.7 | P 52.8

08:30     GBP       Retail Sales M/M Jun C 0.20% | P -0.50%

12:30     USD       Initial Jobless Claims (JUL 19) C 310K | P 302K

14:00     USD       New Home Sales Jun C 478K | P 504K

 

Harry Hindsight

  • EUR: A quiet day overall in the Euro with the market pinned between the 1.3450-75 areas having made new lows for the year the market was unable to find the impetus to break lower and the offers to the topside kept a lid on the market breaking back above for a chance above 1.3500. The Euro was helped by a stronger EURGBP moving off its 0.7875 lows and back to the 0.7900 levels as Cable struggled.
  • GBP: Cable was quietly bid in the Asian session moving from the opening 1.7065 levels to above the 1.7075 before dipping in the grey hours to the lows of the 1.7060 levels. London opening saw a steady rise to the 1.7090 and awaiting offer peaking at 1.7095 into the actual numbers. With the market focusing on wage pressures rather than the recent CPI print the market in Cable dropped back quickly with the BoE minutes showing no votes for a hike dropping from the highs down to the 1.7065 level before dropping a second time through the level to below 1.7050 support. The market held the supportive areas for a couple of hours before dropping through to 1.7025 as the EURGBP rose pressuring the GBP lower. The move into the NYK session saw light buying and profit taking from the lows and the market held in the 1.7030-50 levels into a slow close.
  • JPY: The USDJPY initially moved slightly higher from the opening 101.48 areas to above the 101.54 top before slipping quickly towards the 101.40 as the AUD rose as inflation came in only slightly lower and the pressure remains for the next movement to be a rise. With a strong AUD the USDJPY was forced lower as the AUDJPY offers pressured that leg lower, forcing the pair to the 101.40 levels where the market held into the London session. The market moved into London with the 95.70 level holding through Asia in the AUDJPY, the move through on the carry trade was gradual as was the move lower in USDJPY dipping to 101.32 and a quiet move into NYK. After such a quiet day the market squeezed higher as the market in AUDJPY pushed to the 96.00 levels. USDJPY having returned to the previous early Asian range ran out of steam and remained in a quiet range around the 101.50 levels.
  • AUD: Having opened around the 0.9395 areas the market slowly drifted into the Tokyo session drifting to the 0.9380 area before starting to rally into the numbers, a light change in the CPI numbers was really not what the market was looking for and the Oz jumped quickly to above the 0.9330 level and through the previous holding area, AUDJPY selling capped the move for the period into the London session before the buying broke through to the 0.9450 on steady buying in the London session. NYK added very little to the story with some light selling from profit taking disappearing as the market remained reasonably bid through the session to finish around the 0.9460 levels and just off the highs.

Yesterday’s premiership results

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

AUD       CPI Q/Q Q2 A 0.50% | C 0.60% | P 0.60%

AUD       CPI Y/Y Q2 A 3.00% | C 3.10% | P 2.90%

AUD       CPI RBA Trimmed Mean Q/Q Q2 A 0.80% | C 0.60% | P 0.50%

AUD       CPI RBA Trimmed Mean Y/Y Q2 A 2.90% | C 2.70% | P 2.60%

AUD       CPI RBA Weighted Median Q/Q Q2 A 0.60% | P 0.60%

AUD       CPI RBA Weighted Median Y/Y Q2 A 2.70% | P 2.70%

GBP       BoE Minutes A 0—0—9 | C 0–0—9 | P 0–0–9

GBP       BBA Mortgage Approvals Jun A 43.3K | C 43.4K | P 41.8K

GBP       CBI Reported Sales Jul A 21 | C 18 | P 4

CAD       Retail Sales M/M May A 0.70% | C 0.60% | P 1.10%

CAD       Retail Sales Less Autos M/M May A 0.10% | C 0.30% | P 0.70%

EUR        Eurozone Consumer Confidence Jul (A) A -8 | C -6 | P -7.5

USD       Crude Oil Inventories A -4.0M | C -2.1M | P -7.5M

 

Good Luck,

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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