Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 102.795 | EURUSD 1.33897 | EURJPY 137.643 | AUDUSD 0.92953 | NZDUSD 0.84922 | USDCAD 1.09056 | EURCHF 1.21688 | USDCHF 0.90882 | GBPUSD 1.68846 | EURGBP 0.7930 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               102.95 | 102.745

EUR/USD             1.3392 | 1.3383

EUR/JPY               137.80 | 137.58

AUD/USD            0.9319 | 0.9285

NZD/USD             0.8512 | 0.8491

USD/CAD             1.0922 | 1.0903

EUR/CHF              1.2169 | 1.2166

USD/CHF             0.9092 | 0.9086

GBP/USD             1.6906 | 1.6867

EUR/GBP             0.7934 | 0.79265

 

For today

  • EUR: The Euro remained around the 1.3390 for the vast part of the session moving in a tight range until late in the session when the market dipped to below the 1.3385 on light selling. Downside see’s bids into the 1.3370 levels with weak stops now likely through the level, light bids continue into the 1.3350 areas before opening up to the 1.3320 areas and better bids likely. Offers into the 1.3400 levels with light offers into the 1.3420 level, the market continues in this manner roughly every 20 pips into the 1.3480 levels were the offers strengthen.
  • GBP: The Cable has continued to weaken during the Asian session slipping from the opening 1.6890 areas and just off the highs to below 1.6870 areas, a combination of the IMF reiteration of old news and the geopolitical situation has set the market back on its heels, really a good thing for the exporters as the market moves away from the 1.7200 areas from last month. Bids into the 1.6850 level is the key level it being the point of the breakout to the topside from June, likely to not be overly strong given its importance, a breech opens up the next big figure with better support not seen until a congested area a big figure lower around 1.6750 into 1.6700. Topside has light offers into the 1.6900 level with better offers around the 1.6940-50 levels and weak stop likely above, a push above 1.6980 opens the topside for further tests. For the moment apart from today’s NFP the European tensions with Russia dominate as the fledgling recovery comes under threat from the sanctions imposed to the exporting industry.
  • JPY: USDJPY continues to struggle with the moves through the 103.00 levels having opened around the 102.80 the market barely managed the move above the 102.90 levels however, saying that the market holds around the levels as we move towards the London opening. Bids from the 102.70 with weak stops through the 102.50 likely, the market opens to 102.20 where the bids strengthen a little before opening for a test through the 101.80 and stronger stops. Topside has good offers 103.00-10 areas with the market remaining offered to 103.20 with less intent a push through those levels is likely to see the market moving quickly to the 103.70 areas before meeting stronger offers.
  • AUD: The Oz remains stuck for the moment around the 93 cent levels with the AUDJPY carry trade also stuck in a narrow range adding to the woes. Any likely move in the Oz is likely to come on the back of NFP if there is any glaring difference to expectations. The market has bids around this level however; the better bids are around the 0.9220-00 areas with likely stronger stops through that area. Topside offers start to thicken through the 0.9360 levels however, the AUDJPY level has some reasonable offers around the 96.00 to add to the mix so a struggle without impetus to move the market, through the levels the market has further offers into the 94 cent levels building to strong offers around the 0.9450-60 areas.

Overnight News

ILS:

Israel and Hamas agree to 72hrs ceasefire from 0600BST

AUD:

Home prices up 1.6% in July

Manufacturing expands for the 1st time in 8months in July rising 1.7 points to 50.7

GBP:

London property may be haven for dirty money FT

JPY:

July final manufacturing PMI 50.5 vs. flash 50.8

BoJ Gov. Kuroda says Japan’s economy moving smoothly toward price target

BoJ Gov. Kuroda says private consumption continues to remain resilient as a trend

CNY:
China house prices fall accelerates in July survey

Manufacturing activity surges in July Govt.

 

Today’s data

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

CNY        Manufacturing PMI Jul A 51.7 | C 51.4 | P 51

AUD       PPI Q/Q Q2 A -0.10% | C 0.70% | P 0.90%

AUD       PPI Y/Y Q2 A 2.30% | P 2.50%

CNY        HSBC Manufacturing PMI Jul (F) A 51.7 | C 52 | P 52

07:45     EUR        Italy Manufacturing PMI Jul C 52.8 | P 52.6

08:00     EUR        Eurozone Manufacturing PMI Jul (F) C 51.9 | P 51.9

08:30     EUR        UK PMI Manufacturing Jul C 57.2 | P 57.5

12:30     USD       Change in Non-farm Payrolls Jul C 230K | P 288K

12:30     USD       Unemployment Rate Jul C 6.10% | P 6.10%

12:30     USD       Personal Income Jun C 0.40% | P 0.40%

12:30     USD       Personal Spending Jun C 0.50% | P 0.20%

12:30     USD       PCE Deflator M/M Jun P 0.20%

12:30     USD       PCE Deflator Y/Y Jun P 1.80%

12:30     USD       PCE Core M/M Jun P 0.20%

12:30     USD       PCE Core Y/Y Jun P 1.50%

13:55     USD       U. of Michigan Confidence Jul (F) C 81.5 | P 81.3

14:00     USD       ISM Manufacturing Jul C 56.1 | P 55.3

14:00     USD       ISM Prices Paid Jul C 58.6 | P 58

14:00     USD       Construction Spending M/M Jun C 0.40% | P 0.10%

 

Harry Hindsight

  • EUR: A light flirtation with the 1.3400 levels however, the offers in Asia held the areas for the session before dropping off towards the grey hours to below the 1.3395 in quiet trading. Grey hour selling saw the market fall back to the 1.3385 areas before reversing as the early E.Europeans failed to break the downside. London opens with a reversal and a concerted effort to breech the 1.3400 levels only to fail over the course of an hour. German unemployment numbers remained in line with expectations doing little for the market however, the release of the CPI figures chased the Euro lower, chasing the market back to the previous day’s lows around the 1.3370 levels before bouncing back towards the 1.3400 levels as the Chicago PMI failed to inspire, the market then drifted from that point holding in the 1.3390 levels for a quiet end to the day only slightly lower from the previous close.
  • GBP: Asia was reasonably quiet with the Cable rising slowly higher to just below the 1.6930 levels from the opening 1.6915 areas. Early selling took the Cable lower pushing steadily into the 1.6900 level into the London opening before strongly breaking through the downside and triggering stops along the way holding the 1.6880 levels for a period before again dropping as US numbers seemed to add to the woes, the market in EURGBP saw the Euro gaining ground, Broadbent’s comments that the GBP is possibly overvalued weakened the market the holding around the 1.6880 was attributed to a UK major bank doing month end buying however, given the 100DMA was in that area it’s unlikely on the last day of the month to be the case. Having pushed to the 1.6860 levels the market moved back in the same fashion as the Euro’s with little in the way of news to help the GBP the market moved back to trade in a tight 1.6880-90 levels over the course of the remainder of the markets day.
  • JPY: USDJPY remained in a tight range throughout the session with bids moving into buy below the 102.80 level on each dip and the market struggling to push above the 103.00, Having opened around the 102.80 areas the market initially gave ground into Tokyo slipping back from near 102.90 into the mid 70’s, London started to buy weakly to take the market back up but was less focused on the pair into the official session and remained trading quietly. US releases did little for the market however; it did spark the final attempt of the day to trade just above the 103.00 levels and setting the high. The market then slipped back to the 102.80 areas and held in a quiet session around the levels.
  • AUD: The Oz did very little during the Asian session, slipping back on the Oz numbers before correcting from the move to below the 0.9310 levels and moving back to the opening area of 0.9330. As the market moved towards the grey hours it again started to drift as the market’s perception of what comes next starts to lean towards the nervous anticipation of the next commentary from the RBA. The market slipped back as London came in to push the market through 93 cents and held the 0.9290 levels for a good proportion of the day hovering around the levels and settling not far from the lows.

Yesterday’s premiership results

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

GBP       GfK Consumer Sentiment Jul A -2 | C 2 | P 1

AUD       Import Price Index Q/Q Q2 A -3.00% | C -1.40% | P 3.20%

AUD       Building Approvals M/M Jun A -5.00% | C 0.20% | P 9.90%

JPY         Labour Cash Earnings Y/Y Jun A 0.40% | C 0.70% | P 0.80%

JPY         Housing Starts Y/Y Jun A -9.5% | C -11.20% | P -15.00%

EUR        German Unemployment Change Jul A -12K | C -5K | P 9K

EUR        German Unemployment Rate Jul 6.70% | C 6.70% | P 6.70%

EUR        Eurozone Unemployment Rate Jun A 11.50% | C 11.60% | P 11.60%

EUR        Eurozone CPI Estimate Y/Y Jul A 0.40% | C 0.50% | P 0.50%

EUR        Eurozone CPI – Core Y/Y (JUL A) A 0.80% | C 0.80% | P 0.80%

USD       Challenger Job Cuts Y/Y Jul A 24.40% | P -20.20%

CAD       GDP M/M May A 0.40% | C 0.30% | P 0.10%

USD       Employment Cost Index Q2 A 0.70% | C 0.50% | P 0.30%

USD       Initial Jobless Claims (JUL 26) A 302K | C 306K | P 284K | R 279K

USD       Chicago PMI Jul A 52.6 | C 63.2 | P 62.6

 

It’s that time of year where I go for a couple of weeks to entertain the family and scare the fish, I will return with fresh vigour on the 18th August.

 

Good Luck,

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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