Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 106.276 | EURUSD 1.12925 | AUDUSD 0.73869 | NZDUSD 0.70476 | USDCAD 1.28381 | USDCHF 0.9644 | GBPUSD 1.4272 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.12986 | 1.12854

USDJPY                 106.426 | 105.836

GBPUSD               1.42486 | 1.41787

AUDUSD              0.74004 | 0.73753

USDCHF               0.96441 | 0.96234

USDCAD               1.28367 | 1.28151

NZDUSD               0.70626 | 0.70222

EURGBP               0.79666 | 0.79246

EURJPY                 120.109 | 119.647

EURCHF                1.08922 | 1.08676

 

For Today

• EUR: Overall a reasonably quiet session with the market moving around the 1.1290 areas with the market unwilling to test the 1.1300 areas and holding the 1.1285 areas as the market again saw light EURJPY selling moving through, Topside offers light through the 1.1300 areas with those offers likely to be spread over the 20-30 pips until the possibility of weak stops appear through the 1.1330 areas, congestion through to the 1.1360 areas is likely to slow a move higher however, the chances of stronger offers into the 1.1380-1.1420 areas seems likely with a push here still limited with more offers likely to be present around the 1.1450 level. Downside bids light through to the 1.1250 areas and then likely to see some congestive bids through to the 1.1200 areas before the market opens a little with bids likely through the 1.1150 areas and into the 1.1100 areas in particular.
• GBP: A slow drift lower for the Cable with the opening around the 1.4240 areas seeing the same type of selling through to the Tokyo session as the market saw yesterday, the market eventually tested through the 1.4200 levels and held the level for the most part for several hours before slowly drifting through to settle into a tight range into the later part of the session holding the 1.4180 areas. Topside offers if there are any as such are likely to be around the 1.4320 areas now with even those levels suspect if faced with a remain camp poll however, the liquidity is the issue as the volatility increases with real trading probably suspended until the 23^rd as momentum types attempt to gauge moves for a quick profit. Downside bids into the 1.4120 areas like the topside possibly limited and only the pure sentimental 1.4000 level is likely to see anything fixed in place with no news being defined by those two levels.
• JPY: Early session saw the 106.00 level before the market lifted into the Tokyo session to push through to the 106.40 areas, the market quickly returned to the 106.00 levels and traded along that level for the bulk of the session before pushing quickly below into the grey hours to test to the 105.85 areas. Topside offers light through the 106.50 areas before seeing stronger resistance through the 107.00-20 areas, congestive offers likely to replace those offers on a slow move through the 107.50 areas and the market likely to see weak stops on a move through to the 108.00 areas and the topside possibly seeing a short squeeze through to the 109.00 areas if the momentum can get going. Downside bids through the 105.80 areas and continuing in limited size with better bids possibly sub 105.50 areas however; the break below that level could see stops appearing and the market open to a move into the 102-104 range.
• AUD: The Oz drifted on light selling through the early part of the session dipping to the 0.7375 levels as USDJPY made its highs however, the market then recovered from the early selling pushing through the 0.7390 opening levels to test the 74 cent levels again before ranging to the 0.7385 levels from those highs, Topside offers into the 0.7410-20 areas with likely weak stops on a push through the area with potentially stronger offers on a move towards the 0.7450 areas. Downside bids through to the 0.7350 levels are likely to be light with the market potentially weak until the 73 cent levels and even through this level the market seems thing until the 0.7250 areas where the stronger bids are likely to be.

Overnight News

JPY:

Aso: Must Monitor FX to Prevent Speculative Moves From Lasting

BTMU Tells Govt. It Will Drop Out as JGB Primary Dealer: Nikkei

Shinichi Sato to Become Top Official at Japan’s Finance Ministry

AUD:

Debelle: BIS Central Banks Signalled They Will Follow FX Code

Australia May Business Confidence Falls 2 Pts M/m to 3

Today’s data

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

AUD       NAB Business Confidence May A 3 | P 5

JPY         Industrial Production M/M Apr (F) A 0.50% | C 0.40% | P 0.30%

07:15     CHF        Producer & Import Prices M/M May C 0.10% | P 0.30%

07:15     CHF        Producer & Import Prices Y/Y May P -2.40%

08:30     GBP       CPI M/M May C 0.30% | P 0.10%

08:30     GBP       CPI Y/Y May C 0.40% | P 0.30%

08:30     GBP       Core CPI Y/Y May C 1.30% | P 1.20%

08:30     GBP       RPI M/M May C 0.30% | P 0.10%

08:30     GBP       RPI Y/Y May C 1.50% | P 1.30%

08:30     GBP       PPI Input M/M May C 0.90% | P 0.90%

08:30     GBP       PPI Input Y/Y May C -5.10% | P -6.50%

08:30     GBP       PPI Output M/M May C 0.30% | P 0.40%

08:30     GBP       PPI Output Y/Y May C -0.40% | P -0.70%

08:30     GBP       PPI Output Core M/M May C 0.10% | P 0.20%

08:30     GBP       PPI Output Core Y/Y May C 0.60% | P 0.50%

09:00     EUR        Eurozone Industrial Production M/M Apr C 0.70% | P -0.80%

09:00     EUR        Eurozone Employment Q/Q Q1 C 0.20% | P 0.30%

12:30     USD       Advance Retail Sales May C 0.30% | P 1.30%

12:30     USD       Retail Sales Less Autos May C 0.40% | P 0.80%

12:30     USD       Import Price Index M/M May C 0.80% | P 0.30%

14:00     USD       Business Inventories Apr C 0.20% | P 0.40%

Harry Hindsight              

• EUR: Asia saw the Euro drift a little lower through the early part of the session with the market opening around the 1.1250 areas and slowly moving through to the 1.1235 levels with EURJPY selling showing some movement, the market recovered into the later part of the session moving into the London session unchanged on the day overall and seeing light buying from the opening in London to push to the 1.1275 levels, the opening in NYK saw strong selling into the opening period and the downside below 1.1240 tested again, however, the market squeezed higher from that point with some weak stops as the market moved through the highs to smooth the way to a light test through the 1.1300 areas before dipping back a little to range between that high and the 1.1280 levels to the close.
• GBP: A strong range over the course of the day with the market opening around the 1.4240 level and slowly trading lower through the early part of the session dipping to the 1.4160 areas into early NYK as the Brexit sellers in Asia moved into the market, the market then bounced a little back to the 1.4200 areas and held the area into the London session before fresh worries about the vote out polls seemingly overshadowing the remain and the market tested this time to the 1.4120 levels before finding limited buying in the area with light profit taking from some shorts to move the market towards the opening levels again as we moved to the NYK session, EURGBP had pushed through the day to test towards the 0.7990 levels however, the market was unable to move to the 80 levels and the drift lower into the NYK session saw strong selling appear and a test of the 0.7900 areas instead, this saw Cable quickly push higher with the remain camp showing gains in confidence elsewhere and the market spiked above the 1.4320 areas on a couple of occasions before settling back to trade in a 1.4200-40 range to the close before spiking with late buyers.
• JPY: Opening around the 106.80 areas and just short of the Friday close the market was steadily sold lower through the session testing through to the 105.80 areas into the London opening as safe haven buying in the JPY took precedence as equity markets around the globe turned red, London where light buyers and from that point the market traded in a narrow range through to the close in NYK between the 106.00-50 areas and holding the close around the mid-way point.
• AUD: In a quiet bank holiday the Oz saw steady gains as the JPY strengthened pushing from the early lows after the CNY numbers around the 0.7360 areas to trade steadily back through the opening 0.7380 areas and into the London session, the market lifted off the 0.7380 areas and the London players steadily took the market back through the 74 cent levels and although the market remained above that level for the most part was unable to push too far through the 0.7410 areas, NYK were quick sellers from the opening however, the move lower was quickly recovered pushing back to the 0.7410 areas before drifting to the close.

Yesterday’s premiership results

JPY         BSI Large Manufacturing Q/Q Q2 A -11.1 | C -2.1 | P -7.9

CNY        Industrial Production Y/Y May A 6.00% | C 6.00% | P 6.00%

CNY        Retail Sales Y/Y May A 10.00% | C 10.10% | P 10.10%

CNY       Fixed Assets Ex Rural YTD Y/Y May A 9.60% | C 10.40% | P 10.50%

Good Luck,

Andy

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