Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 123.904 | EURUSD 1.09369 | AUDUSD 0.74198 | NZDUSD 0.66406 | USDCAD 1.29461 | USDCHF 0.95857 | GBPUSD 1.55582 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               123.89 | 123.615

EUR/USD             1.0961 | 1.0924

EUR/JPY               135.61 | 135.13

AUD/USD            0.7440 | 0.7372

NZD/USD             0.6645 | 0.6603

USD/CAD             1.2969 | 1.2937

EUR/CHF              1.0487 | 1.0474

USD/CHF             0.9587 | 0.95685

GBP/USD             1.5577 | 1.5551

EUR/GBP             0.70355 | 0.7023
For Today

• EUR: Another weak day of trading with the market moving off the opening levels and pushing into the Tokyo session pressing towards the 1.0960 levels before movement in the Oz stirred the market dropping quickly back from the 1.0960 levels dipping to the 1.0930 before holding steady, Topside offers through the 1.0970 levels with those offers running into the 1.1000 levels, possible weak stops through the level will likely be mixed with congestive offers in a move to the 1.1050 areas, and a push through the 1.1060 levels will open a test to 1.1100 areas. Downside bids light into the 1.0900 levels with weak stops through the 1.0870 areas and the potential to run a little and into the stronger bids into the 1.0830 areas that held over the past few days. Greece’s vote and the fact that one item is expected to be left of the table with tax subsidies to farmers missing having been agreed prior to the bailout out.
• GBP: A reasonably tight range for the Cable with early buying into the Tokyo session taking the market from the opening 1.5555 areas to push to above the 1.5575 before Oz cross action bought the market back to the opening levels. Topside offers light into the 1.5600 levels and a push through will likely see weak stops but only light and possibly better offers starting around the 1.5650 areas and stronger still in any move towards the 1.5680 areas. Downside bids light into the 1.5500 levels and the market is likely to open for a further test to the downside and an opening through the 1.5400 areas.
• JPY: USDJPY opened around the mid 123.80’s before slipping a little after the release of Oz numbers pushing through the 123.80 areas and triggering light stops through the 123.70 areas to trade into the 123.60’s before starting a light recovery towards the 123.80 areas trading in the 70’s into the grey hours. Offers to the 124.50 areas with the market struggling to the upside with the commentary from Kuroda last month still weighing on the minds of investors and for the moment the 125.00 levels are likely to see strong offers appearing with that in mind. Downside bids sees weak bids on the way to the 123.30 areas and the bids gaining strength from then until just through the 123.00 levels, congestion continues through with bids likely to again gain strength around the 122.50 levels before an opening to test the 122.00 areas and a bigger potential below to the 120.50 areas.
• AUD: What volume we’ve seen has been generated by the moves in the Oz for the most part, opening around the 0.7420 areas the market slowly moved sideways into the Tokyo session with the market holding around the 0.7420-30 levels, CPI numbers gave the market an initial boost with mixed results sending the market to the 0.7440 areas before the market quickly dropped as commentary from Steven’s started to hit the market and then as he continued the market reversed from the stab lower to the 0.7370 levels to bounce back to the opening areas and into the grey hours. Topside offers cleared to the 0.7450 areas and a push through the 0.7460 level will only see a brief respite before running into probably stronger offers into the 75 cent level, the market will likely need stronger impetus from here to push through those offers and a push towards the 0.7550 and then an opening to test above the 76 cent levels. Downside congestion is likely to continue through the 0.7380 areas into the 0.7360 areas before a little bit of an opening before strong bids from the 0.7330 areas and through to possible option plays around the 73cents and then the potential for a deeper move lower.

Overnight News

NZD:

RBNZ shadow board says, shouldn’t cut rates to aggressively on Thursday

AUD:

RBA’s Steven’s: question of further rate cuts is on the table

Steven’s: A$ adjustment occurring, having expansionary effect and employment picking up noticeably

Steven’s: says would be desirable to have above trend growth for a while

Steven’s: has been better economic news of late

Steven’s has balance right on rates at the moment

Steven’s: neutral rates are lower than used to be and likely to be for a while

Steven’s: Oz is adjusting as you would expect

Steven’s: refuses to be drawn on whether A$ has fallen enough

EUR:

Greece to vote on second bailout bill in test for Tsipras

Greek PM Tsipras rallies Syriza backing before bailout vote

CNY:

China’s industrial sector still faces significant downward pressure

Today’s data

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

AUD       Westpac Leading Index M/M Jun A 0.00% | P -0.10%

AUD       CPI Q/Q Q2 A 0.70% | C 0.80% | P 0.20%

AUD       CPI Y/Y Q2 A 1.50% | C 1.70% | P 1.30%

AUD       CPI Trimmed Mean Q/Q Q2 A 0.60% | C 0.60% | P 0.60% | R 0.70%

AUD       CPI Trimmed Mean Y/Y Q2 A 2.20% | C 2.10% | P 2.30%

AUD       CPI Weighted Median Q/Q Q2 A 0.50% | C 0.60% | P 0.60% | R 0.80%

AUD       CPI Weighted Median Y/Y Q2 A 2.40% | C 2.30% | P 2.40% | R 2.50%

JPY         All Industry Activity Index M/M May A -0.50% | C -0.60% | P 0.10%

08:30     GBP       Bank of England Minutes

08:30     GBP       MPC Official Bank Rate Votes C 0–0—9 | P 0–0–9

08:30     GBP       MPC Asset Purchase Facility Votes C 0–0—9 | P 0–0–9

13:00     USD       House Price Index M/M May C 0.40% | P 0.0%

14:00     USD       Existing Home Sales Jun C 5.40M | P 5.35M

14:30    USD       Crude Oil Inventories P -4.3M

Harry Hindsight              

• EUR: A quiet session through Asia moving from the opening 1.0820 areas to test a little above the 1.0830 level before dipping into the grey hours to test the 1.0810 in limited volumes. Early London saw limited buying and the market moved to the 1.0860 levels before slowly rising over the next few hours into NYK, with no data to talk of the market pushed gradually through the 1.0880 levels and once it broke above the 1.0890 levels the market opened up and pushed steadily over the course of the session and pushed towards the 1.0970 areas before finding sufficient offers to curb the rise.
• GBP: A nothing day for the Cable and while a lot in the market are talking about a USD selloff, GBP would suggest otherwise, the market held the opening 1.5565 areas with minor dips through 1.5555 levels, the move into London saw the market rise a little with a better than expected PSBR number and a good revision, rising to the 1.5590 levels before the Euro started its move higher at which point the GBP came under pressure as EURGBP rose higher pushing from the 0.6950 levels to the 0.6990 areas and light offers holding the cross into the NYK session and a stronger rally in Euro’s saw the cross hitting above the 0.7040 levels, Cable was forced a little lower however, it was only a little and the market closed around the opening levels.
• JPY: The USDJPY traded steadily higher through the Asian session on limited volume pushing from the 124.30 levels however the markets move into the grey hours was unable to push through the 124.50 level and started to drift into the London session. The move into NYK saw the USDJPY come under pressure as the EURJPY rose through the session and running into offerings along the way, the break down into the NYK session dropped quickly accelerating through the 124.00 levels with light stops triggered to bounce of the 123.80 levels and better bids, finishing the day just off the lows.
• AUD: The Oz saw a light move higher then low on the RBA minutes with only minor difference in the speech from previously, one suggesting that would suggest that further rate cuts are on hold and the other suggesting that the fall in the Oz level is not finished and the RBA would like it weaker, needless to say the minor fluctuation would be explained by the contrary comments however, the market continued to slip lower through the session with the market opening around the 0.7370 areas touching above 0.7385 only to fall back to 0.7360 and then the drift into the London session trading around the 0.7350 levels, once the London session was in full flow the Oz moved back to the opening levels and held the 0.7370-80 levels into the NYK session, with the USDJPY falling back the Oz found room to move higher, what started as a Euro move allowed the Oz to quickly push to the 0.7450 levels before finding sufficient resistance to curb the market with really light volumes involved in the market and the market drifting into the close.

Yesterday’s premiership results

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

CHF        Trade Balance Jun A 3.58B | C 2.50B | P 3.43B | R 6.41B

GBP       Public Sector Net Borrowing (GBP) Jun A 8.6B | C 8.7B | P 9.4B | R 8.4B

Good Luck,

Andy

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