Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 104.76 | EURUSD 1.12428 | AUDUSD 0.74498 | NZDUSD 0.71449 | USDCAD 1.28182 | USDCHF 0.96223 | GBPUSD 1.46535 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.12701 | 1.12361

USDJPY                 104.846 | 104.364

GBPUSD               1.46942 | 1.46445

AUDUSD              0.74726 | 0.74414

USDCHF               0.96269 | 0.95943

USDCAD               1.28126 | 1.27803

NZDUSD               0.71480 | 0.71174

EURGBP               0.76811 | 0.76627

EURJPY                 117.947 | 117.454

EURCHF                1.08365 | 1.08164

 

For Today

• EUR: A very quiet day through the Asian session with volumes muted as the market goes into the final day of political scare mongering in the UK, opening around the 1.1250 areas the market initially pushed light through to the 1.1230’s before rising quietly from the early lows to push against the 1.1270 level and drifting from then into the London session, Topside offers light through the 1.1300 levels with possibly stronger offers as the market moves towards the 1.1350 areas, with possibly stronger offers on a move through the 1.1400 areas, Downside bids limited with only light offers remaining on a run to the 1.1230 areas and then only slightly stronger bids into the 1.1200 areas with possibly weak stops below the level.
• GBP: Cable rose from the opening lows around the 1.4620 areas and pushed once again towards the 1.4700 levels struggling into the 1.4690 areas before holding in a very tight range around the 1.4680 area into the London session, Topside offers into the 1.4780 areas and likely to be a little bit of a level in normal circumstances however, with latest polls showing 54-46 in favour of remaining that level becomes suspect if the market were to decide to be active however, one only has to look at the general election polls prior to the vote to realise that the polls may not tell the market everything and until the votes are counted nothing is certain, downside bids into the 1.4650 areas are light and the market is likely to be stronger around the 1.4600 areas before further weakness appears in the market and the downside opens up completely for a deeper move.
• JPY: Light trading throughout the session saw the move into the Tokyo session setting the highs around the 104.85 areas before drifting through the session as the market takes a breather before the UK vote tomorrow, trading slowly through to the 104.40 areas the market then held those levels ranging to the 104.60 areas before moving towards London in the middle of the late range, Topside offers into the 105.00 areas and likely to be a little problematic on any test higher and likely to be dominated on events in Europe for the moment a move through the 105.20 levels is likely to see some stops appearing in the market and the market open to the 105.50 areas before light offers reappear through to the stronger 106.00 levels. Downside bids into the 104.00 areas light and stronger bids are likely on a test through the 103.60 areas and into the past few days lows around that 103.50 level, a push through this level though could see stronger stops appearing as the market pushes into the lower ranges.
• AUD: Oz remained in a tight range through the session with the rest of the market, drifting from the opening around the 0.7460 areas to dip into the low 0.7440’s before steadily testing through 0.7470 into the later part of the session and holding around those opening levels into the London session, Topside offers remain above the 75 cent levels and possibly continue through the 0.7550 areas before some weakness appears however, this could be a moot point if safe haven flows move into the market. Downside bids light through to the 0.7350 areas and stronger bids a possibility with bids likely to continue once any light stops are cleared through the level with strength returning into the 73 cent level.

Overnight News

JPY:

Kuroda: Monetary Policy Result Don’t Always Turn Out as Expected

Japan Inc backs sales tax hike delay though frets about impact – Reuters poll

S&P’s Sheard: Time Needed to See Effect of Neg. Rates on Japan

KRW:

1. Korea Fires Missile, Appears to Have Failed: S.Korea Official

CNY:

China Should Keep Forex Rate Flexibility: Sec. Journal

NZD:

New Zealand Immigration Rose to Fresh Record in Year through May

Today’s data

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

AUD       Westpac Leading Index M/M May A 0.20% | P 0.20% | R 0.10%

09:00     CHF        ZEW (Expectations) Jun P 17.5

12:30     CAD       Retail Sales M/M Apr P -1.00%

12:30     CAD       Retail Sales Less Autos M/M Apr P -0.30%

13:00     USD       House Price Index M/M Apr C 0.60% | P 0.70%

14:00     EUR        Eurozone Consumer Confidence Jun (A) C -7 | P -7

14:00     USD       Existing Home Sales May C 5.53M | P 5.45M

14:30    USD       Crude Oil Inventories P -0.9M

Harry Hindsight              

• EUR: Asia were steady buyers through the session and the market moved from the 1.1310 areas to push through the 1.1340 levels as weekend news continued through into the new day with the Bremain vs. Brexit, the move into the London session saw the market rise to the 1.1350 levels and hold steady through to the NYK session when the market started to see the longs beginning to close their positions, either because of rising margin rates as the market starts to raise them against the risks involved with the vote, the Euro started to drop back steadily then into the NYK session proper the market dropped quickly to the 1.1240’s and then ranging around the 1.1250 areas for several hours to the close.
• GBP: The market in Asia saw very little movement in the Cable with the market initially gyrating in the early pre-Tokyo session bouncing from the 1.4650 levels into the 1.4720 areas before settling back to a quieter session with the market slipping back to trade around the 1.4660 areas through into the London session, and another round of Cable buying with the market pushing through to the 1.4780 levels and into the near term offers, the market then saw longs cutting positions as the day of the vote draws closer and margins begin to bite into collateral and the move into the NYK session saw the market trading back to the opening levels before seeing another strong round of selling into the close of the session to push the lows to the 1.4620 areas.
• JPY: Early trading was quiet before USDJPY dipped to its lows and into the 103.50 levels with talk of Abenomics needing fresh impetus and the safe haven flows away from the European area the early selling was soon finished with and the USDJPY started to reverse its losses and push quietly through to the London session testing above the 104.00 levels, London were strong buyers of USDJPY with both currencies a better investment over the next 48 hrs one assumes than the risk from Cable, Euro and possibly some of the peripheral European currencies. Testing steadily higher the USDJPY pushed through to the 104.50 levels before stalling and holding in the 104.40-70 range for the bulk of the NYK session before rising into the close to test briefly above the 105 level and holding just below there to the close.
• AUD: The Oz spent the first half of the day rising steadily through the session pushing from the opening around the 0.7450 areas with AUDJPY buying moving in after the USDJPY’s early dip and the Oz took a slow move to the 0.7485 areas before running into light selling as the market moved towards the London session, however, London also were steady buyers with the and the Oz eventually pushed to above the 75 cent level and into the waiting offers above, NYK were buyers however, unlike the earlier participants the offers were too strong and the market pulled sharply back from the 0.7510 areas dipping quickly back to the 0.7485 areas before continuing a steady decline as the USD became king more or less across the board and the market finished little changed on the day.

Yesterday’s premiership results

AUD       RBA June Minutes

AUD       House Price Index Q/Q Q1 A -0.20% | C 0.80% | P 0.20%

JPY         All Industry Activity Index M/M Apr A 1.30% | C 1.30% | P 0.10% | R 0.20%

CHF        Trade Balance (CHF) May A 3.79B | C 2.88B | P 2.50B | R 2.51B

GBP       Public Sector Net Borrowing (GBP) May A 9.1B | C 9.5B | P 6.6B | R 7.6B

EUR        German ZEW (Economic Sentiment) Jun A 19.2 | C 5.1 | P 6.4

EUR        German ZEW (Current Situation) Jun A 54.5 | C 53 | P 53.1

EUR        Eurozone ZEW (Economic Sentiment) Jun A 20.2 | C 15.3 | P 16.8

GBP       CBI Trends Total Orders Jun A -2 | C -10 | P -8

Good Luck,

Andy

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