Andy Harrison
Good morning,
LMAX Close
USDJPY 123.792 | EURUSD 1.09473 | AUDUSD 0.73786 | NZDUSD 0.65973 | USDCAD 1.2915 | USDCHF 0.95198 | GBPUSD 1.56409 |
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Interbank Ranges as of 6am London time
Highs   Lows
USD/JPYÂ Â Â Â Â Â Â Â Â Â Â Â Â Â 123.97 | 123.74
EUR/USDÂ Â Â Â Â Â Â Â Â Â Â Â 1.0963 | 1.0912
EUR/JPYÂ Â Â Â Â Â Â Â Â Â Â Â Â Â 135.86 | 135.16
AUD/USDÂ Â Â Â Â Â Â Â Â Â Â 0.7390 | 0.7354
NZD/USDÂ Â Â Â Â Â Â Â Â Â Â Â 0.6604 | 0.6506
USD/CADÂ Â Â Â Â Â Â Â Â Â Â Â 1.2942 | 1.2911
EUR/CHFÂ Â Â Â Â Â Â Â Â Â Â Â Â 1.0428 | 1.0413
USD/CHFÂ Â Â Â Â Â Â Â Â Â Â Â 0.9540 | 0.95165
GBP/USDÂ Â Â Â Â Â Â Â Â Â Â Â 1.5641 | 1.5609
EUR/GBPÂ Â Â Â Â Â Â Â Â Â Â Â 0.7008 | 0.6990
For Today
- EUR: In yesterday’s coverage I failed to mention the Yellen commentary however, the simple reason is nothing has changed, although she did intimate that rates will rise soon, apart from improvements yesterday the market still believes that the rises are still not likely in the short term with probably less than a 50% chance for September add to which Williams speech in Arizona seems to confuse the issue while stating the inflation may overshoot while telling the market that September is plausible while under current circumstances the two comments cancel each other. Opening around the 1.0950 levels the market traded quietly into Tokyo with light buying on the opening to trade to the 1.0960 levels before early news that the Greeks had agreed to law changes that’s required for the bailout and the market started to slip back in light volumes pushing to the 1.0920 areas with the final leg once confirmation was received in the market, decent bids held the market and the move back to above the 1.0930 was slowly achieved as the market runs to the grey hours.
- GBP: Cable opened around the 1.5640 areas and held the area into the Tokyo session before dipping to below the 1.5630 levels on the first round of news and then breaking to the 1.5610 on the confirmation before recovering to 1.5630 as the EURGBP cross dipped a little, the market currently looks to be heading into the grey hours holding around the 1.5620 areas. Topside offers through the 1.5680 levels with likely stronger offers into and through the 1.5700 level, possibly a mix of stops and offers continue with another possible batch of strong offers around the 1.5750 levels before the market opens for a stronger move higher and through the 1.5800 levels, Downside is a little more open with only light bids into the 1.5600 areas and a push below there will likely see better bids into the 1.5500 areas with the potential to move through for a deeper move however, with little in the way of data the GBP is likely to be dominated by the Euro and in particular that 0.6990 low in EURGBP with probably strong bids.
- JPY: Opening around the 123.80 levels the market made an early surge into the Tokyo opening in an attempt at the 124.00 level but as with the previous two attempts the market failed and has been steadily slipping lower, EURJPY selling was a large part of the USDJPY slipping back to the opening levels and the market currently holds around the level. Topside offers into the 124.00 level with likelihood of stops through the level and further offers into the 124.50 levels likely to be light and an opening to test the 124.80-125.00 levels through the course of the day. Downside bids are likely to be light into the 123.50 levels before opening for a test through 123.00, a push through 122.70 level is likely to see weak stops and a possible dip back to the 122.00 levels with stronger bids in the area, a move through will likely open another deep move with the market fairly open to the 120.50 areas.
- AUD: The Oz struggles for direction at the moment with decent CNY numbers yesterday the market will likely wait to see if that is translated into better numbers for the Oz however, at this juncture one suspects that exports to China have dropped back a little and if they do improve it will be a while before its translated into good news for the Oz, Opening around the 0.7380 early buying quickly ebbed away and the market dropped back from the 0.7390 levels and dipped through the 0.7360’s before halting around the lows of yesterday, Topside offers likely to be patchy until the market moves back above the 0.7410 areas where there may be light offers and weak stops, a continuation towards the 0.7460 levels will again start to see possibly stronger offers beginning to appear and those offers are likely to extend into the 0.7500 levels, the possibility of the market breaking the level and seeing increased stop interest has increased with the market less neutral than it previously was and once through that level a quick run to the 76 cent level could occur before sufficient offers again appear. Downside bids from the current levels into 73 cent possible bids into the 0.7290 before the market opens to the 0.7250 areas and an opening for further downside to the 0.7130 areas.
Overnight News                                                                                                                        Â
USD:
Feds’ William’s:Â had the following to say in Arizona speech
Overshooting inflation goal wouldn’t bother me much
Good chance of exceeding 2% inflation in 2016
Strengthening USD has greater policy implications
September very plausible time for rate lift off
Very focused on lagged effect of monetary policy
Oil supply shock wouldn’t cause FED to shift gears
IMF:
IMF Chief Comments; IMF may accept Greek debt maturity extension, lower rates as sufficient
Eurozone politics means Greek debt haircut is not in the cards
Very tight timetable for Greece to negotiate emergency financing
Have some hope Eurozone will commit to Greek debt restructuring
Greek bailout talks a colossal challenge going forward
NZD:
Kiwi PMI beats expectations at 55.2 vs. 51.5 previously
July consumer confidence fell 5% MoM
JPY:
GPIF’s Head, Takahiro Mitani said no need to be bang on with asset targets, signalling a possible slackening of yield buying.
EUR:
Greek parliamentary voting on the bailout has been passed
Eurogroup to hold conference call on Greece today
Violent protests continue in Greece
Today’s data
Actual = A | Consensus = C | Previous = P | Revised = R All timings GMT
22:30Â Â Â Â NZDÂ Â Â Â Â Â Business NZ Manufacturing Index Jun A 55.2 | P 51.5 | C 52
22:45Â Â Â Â NZDÂ Â Â Â Â Â CPI Q/Q Q2 A 0.40% | C 0.50% | P -0.30%
1:00Â Â Â Â Â Â Â AUDÂ Â Â Â Â Â Consumer Inflation Expectation Jul A 3.40% | P 3.00%
7:15Â Â Â Â Â Â Â CHFÂ Â Â Â Â Â Â Retail Sales (Real) Y/Y May C 1.90% | P 1.60%
9:00Â Â Â Â Â Â Â EURÂ Â Â Â Â Â Â Eurozone Trade Balance (EUR) May C 22.3B | P 24.3B
9:00Â Â Â Â Â Â Â EURÂ Â Â Â Â Â Â Eurozone CPI M/M Jun C 0.00% | P 0.20%
9:00Â Â Â Â Â Â Â EURÂ Â Â Â Â Â Â Eurozone CPI Y/Y Jun (F) C 0.20% | P 0.20%
9:00Â Â Â Â Â Â Â EURÂ Â Â Â Â Â Â Eurozone CPI – Core Y/Y Jun (F) C 0.80% | P 0.80%
11:45Â Â Â Â EURÂ Â Â Â Â Â Â ECB Rate Decision (JUL 16) C 0.05% | P 0.05%
12:30Â Â Â Â CADÂ Â Â Â Â Â International Securities Transactions (CAD) May C 10.23B | P 12.94B
12:30Â Â Â Â USDÂ Â Â Â Â Â Initial Jobless Claims (JUL 11) C 282K | P 297K
14:00Â Â Â Â USDÂ Â Â Â Â Â Philly Fed Survey Jul C 11.5 | P 15.2
14:00Â Â Â Â USDÂ Â Â Â Â Â NAHB Housing Market Index Jul C 59 | P 59
20:00Â Â Â USDÂ Â Â Â Â Â Net Long-term TIC Flows May P $53.9B
Harry Hindsight                  Â
- EUR: Euro’s traded quietly through the Asian session with the market on hold with expectations of trouble ahead in Greek PM struggling to get the relevant laws passed in time, moving from the 1.1010 areas the market traded in a narrow range through the session dipping through to the 1.0990 levels but holding the levels into the grey hours on light volumes, the move through the grey hours saw the market start to test higher as the rumours started to move around however, the market was contained through the London session and the Euro was unable to move to far beyond the 1.1030 levels, the move into NYK saw the market drop back on the release of the PPI numbers with the data coming in better than expected and inspiring a limited USD rally and weak stops triggered through the 1.1000 levels before stalling a little into the 1.0980 areas, the next US number released the Industrial Production again saw a gain and the bids gave way and the Euro drove steadily down to the 1.0940 levels and then traded around the 1.0940-60 levels to the close.
- GBP: Cable traded slightly higher through the Asian session pushing from the 1.5635 areas and trading to the 1.5650 levels before finding limited supply but enough to hold the market in place until the London session got underway and a quick move into the 1.5670’s. UK employment numbers disappointed and the market dipped back on the numbers however, in the back ground to this was the release of the average weekly earnings number coming in below expectations but still on the high side of 3.2% YoY and possibly making the MPC sit up and pay attention to the possibility of inflationary pressures building in the background. However, the headline employment numbers overshadowed and the market dipped towards the 1.5600 levels before finding light buying and a 1.5610-40 levels into the NYK session and the US numbers, Cable was little different to the Euro and the market moved to its lows through the 1.5580 however, the UK numbers still dominated the market and the pair returned steadily to the opening levels over the next few hours to trade around the 1.5640 levels into the close.
- JPY: USDJPY opened just below the 123.40 levels and dipped through to the 123.30 in early trading before steadily rising once the BoJ monetary policy statement, with very little of note that wasn’t in the last one, moving steadily higher and pushing to the 123.50 levels with the breakthrough of the level into the grey hours and continued into the London session rising steadily to above 123.60’s, the market then paused waiting for the release of the US numbers dipping back to the 123.40 level before rising quickly on the release of better numbers to quickly hit the 123.80 area and then a steady grind through the offers in attempt at the 124.00 levels failing just short of the level and spending a couple of hours trying to push through with limited volume, having failed the level again the market drifted back to the 123.70 area before closing in the 123.80 areas.
- AUD: Oz opened around the 0.7450 areas before slowly slipping a little lower in front of the CNY numbers, touching down to the 0.7440 levels before the release, with numbers better than expected and showing a little recovery in the CNY economy the Oz took heart and rallied steadily to just below the 0.7490 levels before slipping back to trade the 0.7470 areas into the London session, the usual day traders seemed to have stayed away into the London session and the market only slipped lower slightly holding around the 0.7460 for most of the session and moving into NYK struggling for direction, the US data release though gave the market the direction it needed and the Oz started a steady descent triggering light stops along the way and falling into the London close to the 0.7360 levels, with no bounce as such the market moved a little higher over the remaining hours of the day and traded to the 0.7380 closing area.
Yesterday’s premiership results
Actual = A | Consensus = C | Previous = P | Revised = R All timings GMT
AUDÂ Â Â Â Â Â Westpac Consumer Confidence Jul A -3.20% | C -6.90%
CNYÂ Â Â Â Â Â Â Retail Sales Y/Y Jun A 10.60% | C 10.20% | P 10.10%
CNYÂ Â Â Â Â Â Â Industrial Production Y/Y Jun A 6.80% | C 6.00% | P 6.10%
CNYÂ Â Â Â Â Â Â Fixed Assets Ex Rural YTD Y/Y Jun A 11.40% | C 11.20% | P 11.40%
CNYÂ Â Â Â Â Â Â GDP Y/Y Q2 A 7.00% | C 6.80% | P 7.00%
GBPÂ Â Â Â Â Â Jobless Claims Change Jun A 7.0K | C -8.8K | P -6.5K | R -1.1K
GBPÂ Â Â Â Â Â Claimant Count Rate Jun A 2.30% | P 2.30%
GBPÂ Â Â Â Â Â ILO Unemployment Rate 3M) May A 5.60% | C 5.50% | P 5.50%
CHFÂ Â Â Â Â Â Â ZEW (Expectations) Jul A -5.4 | P 0.1
CADÂ Â Â Â Â Â Manufacturing Shipments M/M May A 0.10% | P -21%
USDÂ Â Â Â Â Â PPI M/M Jun A 0.40% | C 0.30% | P 0.50%
USDÂ Â Â Â Â Â PPI Y/Y Jun A -0.70% | C -0.90% | P -1.10%
USDÂ Â Â Â Â Â PPI Core M/M Jun A 0.30% | C 0.10% | P 0.10%
USDÂ Â Â Â Â Â PPI Core Y/Y Jun A 0.80% | C 0.70% | P 0.60%
USDÂ Â Â Â Â Â Empire State Manufacturing Jul A 3.86 | C 3 | P -1.98
USDÂ Â Â Â Â Â Industrial Production Jun A 0.30% | C 0.20% | P -0.20%
USDÂ Â Â Â Â Â Capacity Utilization Jun A 78.40% | C 78.20% | P 78.10%
CADÂ Â Â Â Â Â BoC Rate Decision A 0.50% | C 0.75% | P 0.75%
USDÂ Â Â Â Â Â Crude Oil Inventories A -4.3M | C -2.0M | P 0.4M
Good Luck,
Andy
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