Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close Wellington open

USDJPY 124.142 124.015-124.15 | EURUSD 1.0993 1.0976-90 | AUDUSD 0.76448 0.7640-48 | NZDUSD 0.71074 0.7090-0.71119 | USDCAD 1.24499 1.2427-40 | USDCHF 0.94022 0.93755-0.94485 | GBPUSD 1.52917 1.5245-97 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               124.345 | 123.94

EUR/USD             1.0990 | 1.0930

EUR/JPY               136.34 | 135.83

AUD/USD            0.7664 | 0.7629

NZD/USD             0.7112 | 0.7072

USD/CAD             1.2473 | 1.2440

EUR/CHF              1.0331 | 1.0310

USD/CHF             0.9430 | 0.9407

GBP/USD             1.5305 | 1.5262

EUR/GBP             0.71805 | 0.71605

For today

• EUR: A quiet and wide opening with several news items over the weekend, with optimistic talks between the Euro group and Greece grinding to the usual stalemate with a lot of mudslinging from the Greeks, with pressure from within the Greek government they do seem to be between a rock and a hard place, add to which comments from SNB’s Jordan on intervention on the EURCHF, whether this could be fact or fiction remains to be seen as one imagines the SNB is not large enough to contain any Euro weakness attached to continuing QE. Euro’s opened more or less unchanged but with wider spreads than normal especially in the CHF and the market dropped steadily lower over the course of the session dropping from the 1.0990 levels to trade down through the Tokyo opening and touching into the low 1.0930’s before finding sufficient buyers to push the market higher and into the 1.0950’s, trading around the level for several hours before catching a small short squeeze to above the 1.0960’s. Topside offers into the 1.1000 areas and through the level with possible stops through the 1.1030 levels opening the topside to the offers into the 1.1100 areas. Downside bids light into the 1.0930 areas building to the 1.0900 levels and only a break through the 1.0870 is likely to see limited weak stops opening the 1.0800 areas for a retest.
• GBP: Cable opened wide with the rest of the market almost unchanged the market drifted a little lower into the Tokyo session before dropping back as the Euro continued to trade lower, Cable touched to the 1.5260 levels before finding sufficient support and reversing the move to test steadily higher and pushing to just above the 1.5300 levels. Topside offers building steadily into the 1.5350 levels with stronger offers from 1.5340 onwards, a push through the levels will likely see weak stops before further offers into 1.5380 and a similar pattern over the next big figure. Downside bids into the 1.5240 areas once the downside pushes through the 1.5200 levels opening up a fresh test of the 1.5100 levels.
• JPY: The market does very little until I leave for the week and then it breaks out and heads into the 124.00 levels. Now that the market has moved into the 124 handle the market struggles to push through the 124.40 levels with the market likely to see offers all the way higher to the 125.00 levels, a possible mixture of stops above the 124.50 levels however, those are likely to be swamped by the offers, a clear break through the level opens up further upside potential into the 126.00 areas. A strong break down through the 123.60 levels opens the downside for a test through 123.00 and into light support into the 122.80.
• AUD: A very quiet range for the Oz opening wide in line with the Fridays close before trading into the Tokyo session holding the 0.7640 levels before seen a light swing on the China numbers to set the low around the 0.7630 level and bouncing to test the 0.7660 areas and then trading quietly between there and 0.7650. The market is fairly calm with RBA announcement tomorrow expected to be no change, offers into the 0.7680-0.7700 levels likely to be light building to better offers around the 0.7750 areas and likely stops through 0.7770, Downside bids strong down to the 76 cent level and through to the years lows around the 0.7550 levels, with potential large stops placed well through the low.

Overnight News

EUR:

Greece misses the front pages with EU determined to seal a deal

Greek government faces internal opposition over the choice of IMF representative Elena Panaritis

AUD:

Manufacturing activity expanded in May

OPEC:

Prices likely to come under pressure as expectations of continuing high output

Today’s data

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

JPY         Capital Spending Q1 A 7.30% | C -0.10% | P 2.80%

AUD       TD Securities Inflation M/M May A 0.30% | P 0.30%

CNY        Manufacturing PMI May A 50.2 | C 50.2 | P 50.1

CNY        Non-manufacturing PMI May A 53.2 | P 53.4

AUD       Building Approvals M/M Apr A -4.40% | C -1.70% | P 2.80% | R 2.90%

CNY        HSBC Manufacturing PMI May (F) A 49.2 | C 49.3 | P 49.1

07:30     CHF        SVME-PMI May C 48.4 | P 47.9

07:45     EUR        Italy Manufacturing PMI May C 53.1 | P 53.8

08:00     EUR        Eurozone Manufacturing PMI May (F) C 52.3 | P 52.3

08:30     GBP       PMI Manufacturing May C 52.5 | P 51.9

12:00     EUR        German CPI M/M May (P) C 0.10% | P 0.00%

12:00     EUR        German CPI Y/Y May (P) C 0.70% | P 0.50%

12:30     USD       Personal Income Apr C 0.30% | P 0.00%

12:30     USD       Personal Spending Apr C 0.10% | P 0.40%

12:30     USD       PCE Deflator M/M Apr C 0.10% | P 0.20%

12:30     USD       PCE Deflator Y/Y Apr P 0.30%

12:30     USD       PCE Core M/M Apr C 0.10% | P 0.10%

12:30     USD       PCE Core Y/Y Apr P 1.30%

14:00     USD       Construction Spending M/M Apr C 0.70% | P -0.60%

14:00     USD       ISM Manufacturing May C 52 | P 51.5

14:00     USD       ISM Prices Paid May C 42.5 | P 40.5

Weekend News

EUR:

Greece Locked in Talks With Creditors as Payment Clock Ticks
Greece Could Borrow From ESM to Buy ECB’s SMP Bonds: Varoufakis
EU Commission Seeks to Keep Greece as Euro Member, Katainen Says
ECB’s Constancio Says Euro-Area Recovery Needs Higher Investment
EUR/RUB:

EU Says Russia Bans 89 Officials From Entry, Criticizes Measure
CNY:

China Not Seeking Conflict in South China Sea, Admiral Says
China Says South China Sea Islands Have Defence Facilities: WSJ
CNY/USD:

China Says Carter Comments ‘Foment Dissension’ on Its Sea Rights
JPY:

Japanese Cos. Plan Increased Capital Spending in FY15: Nikkei
LDP Lawmaker Contradicts Abe on Risks to Japan SDF Troops: Kyodo
Japan Govt. Fails to Explain Security Legislation Say 81%: Kyodo
Magnitude 7.8 Quake Strikes Deep Under Sea Off Japan

JPY/KRW:

Japan, S. Korea Reached ‘Foundation of Trust’ on Defence Ties
JPY/CNY:

Japan Calls on China to be ’Responsible Power’: Nakatani
CHF:

SNB’s Jordan: More Rate Cuts Depend on Global Environment: SamS
AUD:

Australia’s South China Sea Surveillance Ongoing, Says Andrews
TRY:

Turkey Encourages Foreign Bank Branches to Borrow Longer Term

Friday’s premiership results

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

NZD       Building Permits M/M Apr A -1.70% | P 11.00% | R 10.30%

GBP       GfK Consumer Sentiment May A 1 | C 4 | P 4

JPY         Unemployment Rate Apr A 3.30% | C 3.40% | P 3.40%

JPY         Household Spending Y/Y Apr A -1.30% | C 3.10% | P -10.60%

JPY         National CPI Core Y/Y Apr A 0.30% | C 0.20% | P 2.20%

JPY         Tokyo CPI Core Y/Y May A 0.20% | C 0.20% | P 0.40%

JPY         Industrial Production M/M Apr (P) A 1.00% | C 1.10% | P -0.80%

JPY         Housing Starts Y/Y Apr A 0.40% | C 0.10% | P 0.70%

CHF        GDP Q/Q Q1 A -0.20% | C 0.00% | P 0.60% | R 0.50%

CHF        KOF Leading Indicator May A 93.1 | C 90.3 | P 89.5 | P 89.8

EUR        Eurozone M3 Y/Y Apr A 5.30% | C 4.90% | P 4.60%

CAD       GDP M/M Mar A -0.20% | C 0.20% | P 0.00%

USD       GDP (Annualized) Q1 (S) A -0.70% | C -0.90% | P 0.20%

USD       GDP Price Index Q1 (S) A -0.10% | C -0.10% | P -0.10%

USD       Chicago PMI May A 46.2 | C 53.1 | P 52.3

USD       U. of Michigan Confidence May (F) A 90.7 | C 90 | P 88.6

Stay lucky

Andy

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