Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 106.109 | EURUSD 1.1207 | AUDUSD 0.73581 | NZDUSD 0.70051 | USDCAD 1.28722 | USDCHF 0.96328 | GBPUSD 1.41139 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.12186 | 1.11901

USDJPY                 106.311 | 105.938

GBPUSD               1.41449 | 1.40847

AUDUSD              0.73730 | 0.73339

USDCHF               0.96463 | 0.96286

USDCAD               1.28789 | 1.28521

NZDUSD               0.70260 | 0.69653

EURGBP               0.79571 | 0.79215

EURJPY                 119.111 | 118.726

EURCHF                1.08048 | 1.07940

 

For Today

• EUR: With FOMC later in the day the ranges have been for the most part tight and the Euro has traded around the 1.1200 areas for the Asian session, drifting from the early highs above the 1.1210 level before slowly drifting down through the 1.1190 areas, the market returned to the 1.1200-10 areas and has held since then above the level, and with FOMC later in the day it may remain quiet unless there is a surprise in the Trade balance for the Eurozone, Topside offers light into the 1.1300 areas before better offers on a move through the level, a push through to the 1.1340 areas is likely to see some weak stops however, then onwards is probably strong offers, notwithstanding the FOMC of course, downside bids through to the 1.1180 areas sees possible weakness into the 1.1160 areas where the market becomes a little congested and stronger bids on a move back to the 1.1120-1.1100 areas with stops likely to appear beyond that level.
• GBP: Slightly stronger day for the Cable with the market moving off the 1.4100 levels and heading slowly through the session to test into the 1.4140 areas before holding into the London session, Topside offers light throughout and the liquidity is likely to remain suspect, with a dovish FOMC likely to see the market squeezing higher with weak shorts quickly covering and the market open to the 1.4250-1.4300 areas before some better offers are likely, even there though the market is likely to be limited and a move through to the 1.4400 areas could be seen with a remain poll being released, downside bids into the 1.4050-1.4000 levels limited but are likely to be the strongest area on the chart for the moment, a push through the level is likely to see strong stops appearing and the market opening for a deeper move.
• JPY: A slow rise to the 106.30 areas through the course of the day and moving off the early lows below the 106.00 areas, however, a very quiet session for USDJPY today and the market looks to be prepared for the FOMC later this evening, topside offers light through to the 106.50 areas with possible weak stops through the level before stronger offers appear into the 106.80-107.00 levels with these offers likely to run to the 107.20 areas before returning to a lighter resistance to further gains, a push through the 108.00 level is likely to see something of a short squeeze and the market quiet capable of moving through to the 109.00 levels if the FOMC takes a hawkish stance. Downside bids through the 106.00 levels and into the 105.80-60 areas with those bids likely to continue through to the 105.00 areas and stronger bids protecting the 102-104 areas.
• AUD: Early selling into the Tokyo session saw the market dipping from the opening and recovering once the Tokyo session moved in, the market moved off the lows with AUDJPY buying again moving in after yesterday’s sell off and pushing through to the 0.7370 areas into the late part of the session, Topside offers remain fairly strong into the 74 cent levels and short term offers are likely to add to that resistance, however, a strong push through the 74 cent level will likely catch the market wrong footed and a move through the 0.7450 areas will likely see the market continuing before running into stronger offers from 75 cent. Downside bids light through current lows and a move to the 73 cent level is likely to see only minimal bids appearing and the market vulnerable to a move back to the 0.7250 areas an better bids.

Overnight News

CNY:

China A-Shares Fail to Win MSCI Inclusion After Review

China regulator says benchmark index without China shares “incomplete” after MSCI decision

China to Prevent Potential Risks in FX Reserves Operation: PBOC

MSCI Wants to See Fewer China Stock Suspensions

PBOC Weakens Yuan Fixing Beyond 6.6/USD First Time Since 2011

China May Start SOE Mixed-Ownership Reform Trial in 2H: Daily

China Stats Bureau Head Urges Prevention of Fake Economic Data

JPY:

Negative Japan Interest Rates Won’t Affect Individuals: Minister

BOJ Could Be Bracing for Brexit with Bond Buying Delay: Nikkei

Tokyo Governor Masuzoe Intends to Resign, NHK Says

CNY/JPY:

China Navy Vessel Entered Japanese Territorial Waters, NHK Says

JPY/CNY:

Japan Conveys Concern To China After Navy Ship Enters Its Waters

NZD:

NZ Posts Smallest Current Account Deficit in Six Quarters

New Zealand May Home Sales Rise 13.6% Y/Y, REINZ Says

USD:

Clinton Campaign Says ‘Positive Discussion’ With Sanders

EUR:

Greek Opposition Leader Mitsotakis Says Govt. Won’t Complete Term

AUD:

Australia June Consumer Confidence Falls 1% M/m to 102.2

Australia ANZ Weekly Consumer Confidence Falls 0.3% to 116.4

SGD:

Singapore ‘16 GDP to Rise 1.8% vs March Est. 1.9% : MAS Survey

Today’s data

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

22:45     NZD       Current Account Balance (NZD) Q1 A 1.31B | C 0.97B | P -2.61B | R -2.89B

0:30        AUD       Westpac Consumer Confidence Jun A -1.00% | P 8.50%

8:30        GBP       Jobless Claims Change May C 0.1K | P -2.4K

8:30        GBP       Claimant Count Rate May P 2.10%

8:30        GBP       ILO Unemployment Rate 3M Apr C 5.10% | P 5.10%

8:30        GBP       Average Weekly Earnings 3M/Y Apr C 1.70% | P 2.00%

9:00        EUR        Eurozone Trade Balance (EUR) Apr C 21.6B | P 22.3B

12:30     CAD       Manufacturing Shipments M/M Apr P -0.90%

12:30     USD       PPI M/M May C 0.40% | P 0.20%

12:30     USD       PPI Y/Y May C -0.10% | P 0.00%

12:30     USD       PPI Core M/M May C 0.10% | P 0.10%

12:30     USD       PPI Core Y/Y May C 1.00% | P 0.90%

12:30     USD       Empire State Manufacturing Index Jun C -4.95 | P -9.02

13:15     USD       Industrial Production May C -0.20% | P 0.70%

13:15     USD       Capacity Utilization May C 75.20% | P 75.40%

14:30     USD       Crude Oil Inventories P -3.2M

18:00     USD       FOMC Rate Decision C 0.50% | P 0.50%

18:30     USD       FOMC Press Conference

20:00    USD       Net Long-term TIC Flows Apr P 78.1B

Harry Hindsight              

• EUR: Euro’s held a tight range through the Asian session trading along the 1.1290 areas but unable to break through the topside began to lose ground as the London session moved in, UK releases and Brexit started to weigh on the market with the Euro losing ground against GBP as well as the USD, the market dropped steadily through the early morning session with the market dipping to the 1.1210 areas before finding light bids sufficient to hold into the NYK session, however, with advance retail sales numbers in the US the USD rallied against the Euro and it again dipped to test below the 1.1200 areas and into the 1.1190 level before holding a tight range through to the close just above the 1.1200 areas.
• GBP: Dropping from above the 1.4200 levels in early trading the Cable spent the day moving steadily lower through the Asian session to the 1.4180 areas before a choppy London session started with the market initially dipping to the 1.4120 areas with weaker inflationary data, the market then chopped through the session moving off the 1.4110 levels and testing as high as 1.4180 as the lack of liquidity saw the volatility increase through to the NYK session, solid selling from the opening saw the market test through the 1.4100 areas before bouncing and slowly trading to the lows again through to the close.
• JPY: USDJPY moved off the 106.20 area opening and dipped into the early Tokyo period before recovering from the early test below 106.00 to push through the 106.40 areas, the rally was short lived and the market then settled back around the 106.00 deep into the session before dropping through to test into the 105.80 in the run to London, early London followed the move however, bids into the 105.60 areas was enough to turn the market and although the bounce higher was quickly challenged the move off the lows the second time was a more gradual affair once the safe haven movement was over with and the USDJPY slowly pushed through the session to the 106.20 areas.
• AUD: With JPY safe haven buying the Oz slipped held its ground for the most part and rose steadily over the course of the Asian session to test above the 74 cent levels however, the offers held the market in check through to the London opening however, the break of the 78.45 AUDJPY support level saw the market track quickly lower in the Oz and the market dropped to the 0.7330 levels from its highs in the early part of London, it recovered a little moving into NYK with the buyers appearing from the opening however, once the initial rally was exhausted the market drifted again into the mid-range of the day holding to the close in a lacklustre end to the day.

Yesterday’s premiership results

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%

CHF        Producer & Import Prices M/M May A 0.40% | C 0.10% | P 0.30%

CHF        Producer & Import Prices Y/Y May A -1.20% | P -2.40%

GBP       CPI M/M May A 0.20% | C 0.30% | P 0.10%

GBP       CPI Y/Y May A 0.30% | C 0.40% | P 0.30%

GBP       Core CPI Y/Y May A 1.20% | C 1.30% | P 1.20%

GBP       RPI M/M May A 0.30% | C 0.30% | P 0.10%

GBP       RPI Y/Y May A 1.40% | C 1.50% | P 1.30%

GBP       PPI Input M/M May A 2.60% | C 0.90% | P 0.90%

GBP       PPI Input Y/Y May A -3.90% | C -5.10% | P -6.50% | R -7.00%

GBP       PPI Output M/M May A 0.10% | C 0.30% | P 0.40%

GBP       PPI Output Y/Y May A -0.70% | C -0.40% | P -0.70%

GBP       PPI Output Core M/M May A 0.00% | C 0.10% | P 0.20%

GBP       PPI Output Core Y/Y May A 0.50% | C 0.60% | P 0.50%

EUR        Eurozone Industrial Production M/M Apr A 1.10% | C 0.70% | P -0.80%

EUR       Eurozone Employment Q/Q Q1 A 0.30% | C 0.20% | P 0.30%

USD       Advance Retail Sales May A 0.50% | C 0.30% | P 1.30%

USD       Retail Sales Less Autos May A 0.40% | C 0.40% | P 0.80%

USD       Import Price Index M/M May A 1.40% | C 0.80% | P 0.30% | R 0.70%

USD       Business Inventories Apr A 0.10% | C 0.20% | P 0.40% | R 0.30%

Good Luck,

Andy

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