Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close Wellington open

USDJPY 122.883 122.15-25 | EURUSD 1.11119 1.0992-97 | AUDUSD 0.75185 0.7480-90 | NZDUSD 0.66894 0.6665-80 | USDCAD 1.25731 1.2575-85 | USDCHF 0.94029 0.9440-50 | GBPUSD 1.55719 1.5520-25 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               122.71 | 121.70
EUR/USD             1.10555 | 1.0969
EUR/JPY               135.85 | 133.70
AUD/USD            0.7518 | 0.7452
NZD/USD             0.6700 | 0.6645
USD/CAD             1.2615 | 1.2551
EUR/CHF              1.0428 | 1.0356
USD/CHF             0.9455 | 0.9407
GBP/USD             1.5580 | 1.5510
EUR/GBP             0.70995 | 0.7057

For today

• EUR: The opening again saw a gap lower with the news that the No vote in Greece was way ahead of the No vote and the connotations from this, whether this will force the Greeks out as suggested last week or whether this will focus the Europeans remains to be seen and although the opening saw strong selling from the 1.0990 level and into the 1.0970 area however, the pre-market had already been there and the support quickly came in and the market bounced to the 1.1030 level, the market still remained choppy with dips through the 1.1000 levels and back again before a small short squeeze took the market to the 1.1050 levels before settling back again to trade around the 1.1035 areas. Today sees a ECB meeting with Tsipras stating there is no mandate for rupture with Europe and looks to negotiate a deal over the next 24hrs, while the Media is full of Grexit, others believe a deal will now be made to keep the Greeks in Europe however, in either situation, in or out, will give a signal to others that racking up debt and no adhering to the covenants created for the stability of the Eurozone would now be in tatters and possibly lead to contagions across the zone. Topside offers light into the 1.1100 areas with a push through the 1.1120 areas likely to see light stops and a possible short squeeze through to the better offers towards the 1.1200 areas and through to 1.1250. Beyond those levels the market again opens up for moves into the 1.1300 levels if news dictates later in the day. Downside bids into the 1.0950 levels likely to be strong for the moment, a move through the level opens up the downside to 1.0900 levels with those bids likely to continue through the 1.0880 areas before giving way to stops.
• GBP: A choppy end to Fridays close saw the market quickly filling in the gap on the charts from the opening around the 1.5550 areas, touching into the 1.5540 level before recovering to the closing rates before trading around the 1.5560 level in trading more to do with cross trading. Fairly steady trading through the session leaves the Cable closely connected to the movements of the Euro for today one would suspect, especially with no tier 1 data to be seen, Topside offers now light into 1.5600 levels with the market likely to struggle a little to the 1.5650 before the possibility of a move to test into the 1.5700 and stronger levels, downside bids light around the 1.5500 levels however, technically a push through this level will open up a test through the 1.5300 levels with only patchy bids in between.
• JPY: As with last week’s start the EURJPY cross was a big loser, opening some 2 big figures lower around the 134.20-00 levels before bouncing back to the 135.00 levels once the market had absorbed the selling from the start, USDJPY there therefore saw a gap opening around the 122.00 levels before recovering to the 122.40 levels and the move into Tokyo, buying continued through the first half of the session with the market pushing to above the 122.70 before slipping back again having filled the gap on the charts. Bids into the 122.00 area are likely to be a little weaker than normal and a push through will open up the 121.00 levels open for a test and ultimately 120.00 area with the market back into the ranges from May and a stronger area, topside offers now into the 123.00 being light but the 123.50 areas possibly stronger with concern of EURJPY selling possibly continuing.
• AUD: The pre market saw the Oz firmly trading through the lows of the year and pushed through the 75 cent level, opening in the 0.7480 level for the official opening the market edged gradually higher to push towards the 0.7520 levels and the closing areas from Friday to fill in the gap before the market again drifted lower and has based around the 0.7480 level. Light offers into the 0.7520 areas however, a push through the 0.7540 will likely see weak stops and a possibility of a squeeze higher and through the 76 cent levels, downside bids into the 74 cent level however, the market sees some congestion around the 0.7500-0.7300 areas from the pre-crash period and this is likely to be mildly supportive for the time being.

Overnight News

EUR:

Merkel, Hollande Agree on Euro Area Summit Tuesday

Juncker Consulting Sunday, Monday with Euro Leaders on Greece

Tsipras Says Greece Will Return to Negotiating Table Tomorrow

No Vote Is ‘Big Yes’ to Democratic, Rational Europe: Varoufakis

Dijsselbloem Says Greek Referendum Result ‘Very Regrettable’

JPY/EUR:

Abe: Closely Watching How Markets React to Greece Issue

Japan’s Aso: Direct Economic Links With Greece Are Limited

Kuroda: Japan Has Limited Direct Connections to Greece Economy

Suga: Forex, Stock Moves from Greece Issue Are as Predicted

JPY:

Kuroda: BOJ Will Keep Close Contact With Counterparts on Greece

Public Debt to Remain High Under Japan Fiscal Plan, Fitch Says

CNY:

China’s Natl Pension Fund Orders Halt to Stock Sale: Caijing

China Deflation Risk Is Mounting, Ex-PBOC Adviser Says: Daily

China End-May Yuan Positions at PBOC Balance Sheet 26.732t Yuan

NZD:

N.Z.’s Key Still Reasonably Confident Growth Will Remain Robust

N.Z. Treasury Says Data Point to Slower-Than-Forecast GDP Growth

AUD:

Australia’s June TD Monthly Inflation Gauge Rises 0.1% M/m

Australia June ANZ Job Ads Rise 1.3% vs 0.1% in May

Today’s data

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

AUD       TD Securities Inflation M/M Jun A 0.10% | P 0.30%

JPY         Leading Index May (P) A 106.2 | C 106.2 | P 106.4

06:00     EUR        German Factory Orders M/M May C 0.00% | P 1.40%

07:15     CHF        CPI M/M Jun C -0.10% | P 0.20%

07:15     CHF        CPI Y/Y Jun C 1.20% | P -1.20%

08:10     EUR        Eurozone Retail PMI Jun P 51.4

08:30     EUR        Eurozone Sentix Investor Confidence Jul C 15.6 | P 17.1

14:00     CAD       Ivey PMI Jun C 56.2 | P 62.3

14:00     USD       ISM Non-Manufacturing Composite Jun C 56 | P 55.7

14:30     CAD       BOC Business Outlook Survey

Weekend News

EUR:

Greeks Head to Polls Divided for Referendum to Chart New Course
Tsipras Says Greek People Will Reject Ultimatums
Greece May Get Emergency Credit, EU’s Schulz Tells Welt
Schaeuble does not Rule Out Greek Euro Exit, Bild Reports
Germany Asks ESM to Return Bond Profits Set Aside for Greek Aid
CNY:

China Freezes IPOs in Attempt to Stem Stock Market Bleeding
JPY:

Japan to Ease Rules to Allow Risky Infrastructure Loans: Nikkei
AUD:

Greece Economic Crisis a Warning for Australia, Morrison Says
GBP:

U.K. Growth to Rebound in 3Q after Slowing in 2Q: CBI Survey
Osborne to Grant New Powers to U.K. Regions in Budget Speech: FT
Osborne Set to Curb Level of Housing Benefit in U.K. Budget

Harry Hindsight

• EUR: A very quiet but nervous day with the market affectively closed in NYK so volumes much reduced on the day, opening around the 1.1090 levels the market gradually moved into the 1.1100 areas into the London session and then pushed through to trade around the 1.1110 levels for several hours before again slipping back to the opening levels, as the market moved into the later part of the day so possibly large individual tickets impacted the market with a final dip into the end of the London session to the mid 1.1060’s before snapping back higher again to ease to a close around the 1.1110 level.
• GBP: A quiet session through Asia with the market holding around the 1.5610 levels before moving into the London session and rising to above the 1.5640 level with strong PMI services number before finding some light but steady EURGBP buying passing through the market, this caused the Cable to slip lower with the Euro barely flickering and pushing steadily to 1.5600 levels and triggering light stops through the 1.5570 levels, with London gone and just minimal volumes available the market jumped around into the close but finished roughly in the 1.5570 levels.
• JPY: Opening just above the 123.00 level the market dipped in early Tokyo towards the 122.80 levels before the market recovered gradually over the rest of the session and into the London session pushing towards the 123.20 levels before running out of steam, from there the market drifted on EURJPY selling, drifting for several hours to the 122.60 areas before holding and then rising a little to the close.
• AUD: Oz opened just below the 0.7640 levels and pushed in early trading to above the opening levels but only just, concerns about the economic woes of Australia and weak retail sales numbers sent the market quickly through the 0.7600 levels before holding on the 0.7580 levels into the London session, with little liquidity and very little seemingly of interest the London session continued the move in the Oz and through the early London period took the market to new lows for the year pushing down through the 0.7520 levels and then trading around the level to the close with a lack of impetus to test lower.

Friday’s premiership results

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

AUD       Retail Sales M/M May A 0.30% | C 0.40% | P 0.00% | R -0.10%

CNY        HSBC China Services PMI Jun A 51.8 | C 53.8 | P 53.5

EUR        Italy Services PMI Jun A 53.4 | C 52.9 | P 52.5

EUR        France Services PMI Jun (F) A 54.1 | C 54.1 | P 54.1

EUR        Germany Services PMI Jun (F) A 53.8 | C 54.2 | P 54.2

EUR        Eurozone Services PMI Jun (F) A 54.4 | C 54.4 | P 54.4

GBP       Services PMI Jun A 58.5 | C 57.5 | P 56.5

EUR        Eurozone Retail Sales M/M May A 0.20% | C 0.10% | P 0.70%

Stay lucky

Andy

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