Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 100.572 | EURUSD 1.10519 | AUDUSD 0.75687 | NZDUSD 0.73051 | USDCAD 1.30402 | USDCHF 0.9834 | GBPUSD 1.29557 |

 

LMAX Ranges 6am London time

Highs    Lows

EURUSD               1.10560 | 1.10336

USDJPY                 101.247 | 100.511

GBPUSD               1.29711 | 1.29268

USDCHF               0.98351 | 0.98171

AUDUSD              0.75760 | 0.75418

USDCAD               1.30655 | 1.30300

NZDUSD               0.73050 | 0.72800

EURCHF                1.08661 | 1.08530

EURGBP               0.85420 | 0.85193

EURJPY                 111.879 | 111.080

For today

• EUR: A quiet session even though there were plenty of comments over the weekend, opening in line with Fridays close the Euro drifted to test into the 1.1035 level before recovering to the opening levels over the session and holding around the 1.1050 levels for the most part, Topside offers likely through the 1.1100 area are possibly light having been penetrated on Friday, a push through the 1.1130 areas will likely see some weak stops appearing and the market light through to the 1.1180-1.1200 levels, downside bids into the 1.1000 still remain reasonably strong however the level is more sentimental one suspect than relevant and the better bids will be through the 1.0980 levels and into the mid-level.
• GBP: Cable opened a touch lower and drifted to the lows around the 1.2930 levels in early trading in the Tokyo session before bouncing back to push through to the 1.2970 areas in the second half and into the grey hour, Topside offers through the 1.3000 levels are now weak however, stronger offers are likely through the 1.3050 areas with the market then opening too the possibility of a small short squeeze with possibly only sentimental offers in the way of the 1.3150 areas. Downside bids light through the 1.2900 level however, that level is beginning to show some support, however, better bids are still through the level and into the 1.2850 areas and ultimately the 31yr lows made last week around 1.2800 area with possibly large stops on a move through that level.
• JPY: With the help of Abe’s continuing success for control of the upper house the USDJPY saw the market start to rise in the second half of the session with the market opening slightly higher around the 100.60 levels the market struggled through to the mi-session period around the 100.80 levels before confirmation of Abe’s control and therefore, allowing a continuation of easing and possible intervention for the future in the market and the USDJPY ran to the 101.50 levels into the grey hour and the London session. AUDJPY buying saw the 200 DMA breaking and helping the USDJPY in its move. Light offers through to the 102.00 levels with stronger offers likely to be through the 102.50 areas and likely to continue through to the 103.00 levels with a possibility of weak stops and possible breakout stops and the market opening a little. Downside bids light back through 101.00 areas with better bids possibly on 100.50 areas, a move through the level are likely to see stronger bids building into the 100.00 areas with possibly weak stops through the level and then possible verbal intervention expected to keep the market from dipping to far.
• AUD: Initially the market dipped on weak selling of the AUDJPY and straight Oz pushing from the opening 0.7570 levels and away from resistance to test through to the 0.7540 levels however, as the JPY started to weaken the Oz saw increasing AUDJPY buying pushing through the 200 DMA so the Oz pushed back to the Fridays highs and holding in the area to the London session. Topside offers likely into the 76 cent levels with the market then possibly seeing weak stops and the market opening to the 0.7650 areas and the topside ranges open from April, downside bids light through to the 74 cent levels where better bids are likely to be seen and limited bids in front of those levels, those bids are likely to continue through to 0.7350 areas before weakness opens.

Overnight News                                                                  

JPY:

Abe to Order Stimulus July 12, Mulls Additional JGB Issuance: Nikkei

Japan’s Abe Will Order Preparation of Stimulus Tomorrow

Japan’s ruling bloc wins landslide in upper house election

Abe’s Fiscal Stimulus Plans to Take Shape After Election Win

Japan May Core Machine Orders Fall 1.4% M/m; est. +3.2%

USD/JPY:

Former Fed Chairman Bernanke Visits Bank of Japan, Reuters Says

CNY/EUR:

China Set to Invest EU2b in New EU Infrastructure Fund: Reuters

GBP:

U.K. 2Q Consumer Spending Grew at Slowest Annual Pace Since 2014

AUD:

Australia May Home-Loan Approvals Fall 1.0% M/M; Est 2% Fall

NZD:

RBNZ Says It Now Relies Less on Single Decision-Maker Model

Today’s data

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

CNY        CPI Y/Y Jun A 1.90% | C 1.90% | P 2.00%

CNY        PPI Y/Y June A -2.60% | C -2.60% | P -2.80%

JPY         Machine Orders M/M May A -1.40% | C 2.80% | P -11.00%

JPY         Japan Money Stock M2+CD Y/Y Jun A 3.40% | C 3.40% | P 3.40%

AUD       Home Loans May A -1.00% | C -1.90% | P 1.70% | R 1.40%

06:00     JPY         Machine Tool Orders Y/Y Jun (P) P -24.70%

12:15     CAD       Housing Starts Jun C 192K | P 188.6K

14:00     USD       Labour Market Conditions Index Change Jun P -4.8

Weekend News

CNY:

China June Consumer Prices Rise 1.9% Y/Y; Est. 1.8% Gain
China’s Xiamen City Raises Down payment Rates for Some Mortgages
China to Ensure Stable Food Prices in Flood Season: NDRC
G20:

G-20 Sees Global Investment Dropping 10%-15% This Year, Gao Says
G-20 Trade Ministers Agree to Cooperate More on Steel Capacity
JPY:

Voting Starts in Japan as Abe Seeks Upper House Majority
Japan’s Local Govt. Tax Revenue Likely Hit Record, Nikkei Says
Japan to Create Market to Trade Renewable Energy, Nikkei Reports
JPY/USD:

Japan’s Orix Said to Buy Boston Financial Investment: Reuters
EUR/CHF:

SNB Has No Exchange Rate Target Vs Euro, Jordan Tells Matin
EUR/USD:

Hollande Says U.S. Election Risks Becoming Brexit Vote II
France Says U.S. Elections Can’t Risk Relationship with Europe

Tsipras, Obama Discussed Greek Bailout Progress: Greek Official
USD/GBP:

Obama Says Must Assume Brexit Vote Will ‘Stick’
USD/EUR:

Obama, Merkel Agreed on Need for Orderly Brexit Process
GBP:

BOE Said to Consider U.K. Property Sale Measures: Telegraph
U.K.’s Hammond Says Brexit Dominated His Talks at NATO Summit
Theresa May Says Future to Be Brighter After Brexit: Telegraph
GBP/EUR:

U.K. Government Rejects Petition for 2nd Vote on EU Membership
GBP/PLN:

Cameron Said He Expects Rights of Poles in U.K. to Be Respected
EUR:

EU Should Set New Deficit Targets for Spain Soon: Rajoy
USD:

Obama Says NATO Sending Clear Message It Will Defend Every Ally
RUB/USD:

Russia Says It Expelled 2 CIA Agents Under Diplomatic Cover
AUD:

Turnbull Will ‘Definitely’ Remain Australian Premier, ABC Says
Australian Opposition May Concede Election Defeat Today: Sky

Harry Hindsight

• EUR: A slow rise through the Asian session with the USD broadly weakening through the Tokyo session to test into the resistance around the 1.1090 areas before moving into the London session and slipping slowly back to the opening around 1.1060 areas, before holding through to the NFP Unemployment saw a rise to 4.90% and the market reacted to that however, the NFP showed a big move higher to compensate for the poor one last month and at first the USD rallied pushing the Euro to the 1.1000 areas and holding in the areas for about an hour before rejecting the level as the market looked at this and last month’s number as an average and lighter than would be expected for the FED and so therefore the Euro quickly rallied as the market chattered on the subject and Euro’s quickly rallied through to the 1.1120 levels before pushing back to the 1.1060 levels and slowly ebbing to the 1.1050 areas and trading quietly through to the close holding around that level.
• GBP: After dipping from the opening 1.2920 levels to test through to the 1.2880 areas into the Tokyo session the market started a steady recover to push through to the 1.2960 levels into the mid-session and holding just below the levels through to the London opening, and then a steady rise through to test the 1.3000 levels into the NYK session and the release of the NFP and the same movement that the market saw in the Euro with USD initially rallying and Cable dropping to the 1.2910 areas before snapping back to push through the 1.3000 areas holding the 1.3020 level before settling back to trade around the 1.2940 areas and slightly better than the opening.
• JPY: A little bit of movement through the session, opening around the 100.70 levels and rising through towards the 101.00 levels and holding for several hours testing the level before nervously edging lower as the market moved towards the grey hour testing the opening levels and then dipping through to the 100.25 areas to set the early low. The market moved through the balance of the session and into the London opening steadily regaining the opening levels and held until just before the NYK opening where it started to slip lower again. NFP saw the USD rally and the USDJPY push quickly to the 101.30 levels before dropping back and testing the 100.00 level to set the range for the day and then settling in to eventually trade around the 100.50 areas to the close.
• AUD: The Oz opening around the 0.7480 levels pushing gradually higher through to the 0.7510 levels in quiet trading, however, once reaching the limited offers the market drifted into the London session retesting the opening levels before starting the move again into the NYK session, the release saw USD rally and the Oz tested to the 0.7470 levels before pushing quickly to the 0.7560 levels while there was limited reversal the market continued moving steadily higher through the session to test through the 0.7570 areas before the close.

Friday’s premiership results

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

JPY         Current Account (JPY) May A 1.41T | C 1.52T | P 1.63T

JPY         Labour Cash Earnings Y/Y May A -0.20% | C 0.50% | P 0.30%

JPY         Eco Watchers Survey: Current Jun A 41.2 | C 42.9 | P 43

CHF        Unemployment Rate Jun A 3.30% | C 3.50% | P 3.50%

EUR        German Trade Balance (EUR) May A 22.2B | C 22.3B | P 24.0B

GBP       Visible Trade Balance (GDP) May A -9.9B | C -10.2B | P -10.5B | R -9.4B

USD       Change in Non-farm Payrolls Jun A 287K | C 180K | P 38K | R 11K

USD       Unemployment Rate Jun A 4.90% | C 4.80% | P 4.70%

USD       Average Hourly Earnings M/M Jun A 0.10% | C 0.20% | P 0.20%

CAD       Net Change in Employment Jun A -0.7K | C 6.9K | P 13.8K

CAD       Unemployment Rate Jun A 6.80% | C 7.00% | P 6.90%

Stay lucky

Andy

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