Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 104.49 | EURUSD 1.1090 | AUDUSD 0.76073 | NZDUSD 0.72733 | USDCAD 1.29758 | USDCHF 0.98545 | GBPUSD 1.31465 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.11158 | 1.10868

USDJPY                 104.794 | 103.982

GBPUSD               1.32235 | 1.31047

AUDUSD              0.76387 | 0.75909

USDCHF               0.98569 | 0.98297

USDCAD               1.29868 | 1.29257

NZDUSD               0.72930 | 0.72009

EURGBP               0.84699 | 0.8406

EURJPY                 116.380 | 115.401

EURCHF                1.09272 | 1.09228

 

For Today

• EUR: The Euro steadily rose form the opening around the 1.1090 level and pushed gradually through the 1.1100 struggling for several hours with limited action at the level before squeezing through the level to the 1.1115 before struggling again and limping towards the London opening, Topside offers through the 1.1120 levels are likely to continue in some form through to the 1.1160 areas and weak stops are likely to appear however, this would likely be tempered with further offers into the 1.1180-1.1220 level and the market then seeing better stops on a move cleanly through the area, downside bids are likely to be weak through to the 1.1050 levels where better bids are likely with those bids likely to extend into the 1.1000 levels, a move through to the 1.0980 areas could see weak stops however, the 1.0950-00 area is likely to be a stronger bidding area, and with BoE rate decision the major factor for the day with an expected 25bp cut any movement is likely to depend on that or the later initial jobs number in the US.
• GBP: With the previous day dominated by the reforming of the Government and the expected rate cut for today by the BoE the Cable initially tested towards the 1.3100 levels before running into the Tokyo session and the steady flow of buying moving into the market pushing from the lows to the 1.3220 level before finding some light resistance and the rally for the moment over with. Topside offers likely to increase on a move through to the 1.3250 areas however, this is more sentimental than anything else and the market should have little problem pushing through to again test the 1.3300 areas and the stronger offers appearing around the 1.3350 levels, possible stops through the level are likely to open a test to the 1.3400 levels and limited offers. Downside bids light through to the 1.3100 areas with weak stops a potential through the level and the market then open to further selling and better bids on a push through the 1.3000 level. However, bids could quickly disappear on any surprise action by the BoE.
• JPY: With the USDJPY having drifted to a close around the 104.50 areas the early session saw some reasonable follow through as the AUDJPY pared back some of their longs, however once the market moved deeper into the Tokyo session the USDJPY again started to rise with stronger AUDJPY buying moving into the market once the employment numbers had been released in Australia with the USDJPY rising steadily through the session to test the 104.80 areas and hold quietly in a 104.60-80 range through to London, Topside offers through the 105.00 levels are likely to quickly disappear with stops appearing quickly through the level and then very little until the market moves towards the 105.80-106.00 level and stronger offers expected on that move, a push through this level is likely to still meet resistance however, that resistance is likely to be weaker and the market opens a little through to the 107-108 range, Downside bids are likely to be only of medium size on any move through the 104.00-103.80 areas with weak stops and the market not really strengthening until it starts to test into the 103.20 areas with possibly deeper bids to the 102.80 areas.
• AUD: The Oz started the day with quiet selling moving into the market and Oz drifting back through the 76 cent levels, employment numbers remained steady and a slight increase in the Consumer inflation numbers saw the Oz quickly push back above the 76 cent levels and push to the 0.7640 areas and similar highs to yesterday before dipping back to the 0.7610 areas as the buying subsided, Topside offers through to the 0.7660 areas will likely see stops appearing and the market opening quickly to the 77 cent level with some limited congestion in the area only likely to slow the move. Downside bids light through to the 0.7550 areas with possible weak stops on a move back through the level and those stops passingly larger if the 75 cent level were to break.

Overnight News

JPY:

Bernanke Floated Japan Perpetual Bonds Idea to Abe Adviser Honda

Japanese Buy Record Sum of Foreign Bonds Stocks Last Week

BOJ Outlook May Get Boost From Fiscal Plan, Oil Prices: Nikkei

Japan’s Public Pension Manager to Disclose Holdings: Nikkei

JPY/USD:

Sumitomo Life Shuns Treasuries in Favor of Mortgage, Corp Debt

AUD:

Australian June Employment Rises 7,900 M/M; Est. 10,000 Gain

Moody’s Says Australian Election Result Is Credit Negative

USD:

Fed’s Harker Says Some Measures of Inflation Approaching 2% Goal

Fed’s Harker Says Two Rate Hikes This Year May Be Appropriate

SGD:

Singapore 2Q GDP +0.8% Q/q; Estimate +0.9%

NZD:

New Zealand Manufacturing Growth Accelerated After Brexit: PMI

RBNZ Publishes Letter of Expectations From Finance Minister

RBNZ to Update Market on Assessment of Economy on July 21

New Zealand ANZ June Job Advertisements Rise 0.5% M/m to 39,788

New Zealand Confidence Gauge Adds to Signs of Faster Growth: ANZ

Today’s data

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

NZD       Business NZ Manufacturing Index Jun A 57.7 | P 57.1 | R 57.2

GBP       RICS House Price Balance Jun A 16% | C 8% | P 19%

AUD       Consumer Inflation Expectation Jul A 3.70% | P 3.50%

AUD       Employment Change Jun A 7.9K | C 10.1K | P 17.9k

AUD       Unemployment Rate Jun A 5.80% | C 5.80% | P 5.70%

07:15     CHF        Producer & Import Prices M/M Jun C 0.20% | P 0.40%

07:15     CHF        Producer & Import Prices Y/Y Jun P -1.20%

11:00     GBP       BoE Rate Decision C 0.25% | P 0.50%

11:00     GBP       BoE Asset Purchase Target Jul C 375B | P 375B

11:00     GBP       MPC Official Bank Rate Votes C 0–9—0 | P 0–0–9

11:00     GBP       MPC Asset Purchase Facility Votes C 0–0—9 | P 0–0–9

12:30     USD       Initial Jobless Claims (JUL 9) C 263K | P 254K

12:30     CAD       New Housing Price Index M/M May C 0.20% | P 0.30%

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

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

12:30     USD       PPI Core M/M Jun C 0.10% | P 0.30%

12:30     USD       PPI Core Y/Y Jun C 1.00% | P 1.20%

14:30    USD       Natural Gas Storage P 39B

Harry Hindsight              

• EUR: A quiet session through the early part of the day with the Asian session trading for the most part in a 1.1055-70 range before moving into the London session to test through the 1.1050 levels with very little conviction after poor Eurozone industrial numbers, failure of the Cable to continue rallying saw the EURGBP starting to push from the early London lows and Euro’s pushing steadily through to the 1.1090 areas before holding through the opening in the NYK session, the market saw some weak stops triggered and taken to the 1.1120 levels before trading quietly around the 1.1110 levels before dipping into the final hour of trading.
• GBP: Asian trading in the Cable saw the market testing through the 1.3300 levels and pushing to the 1.3340 area from the early lows, and although there was plenty of dips through to the 1.3240 areas the market continued pushing to the topside and that 1.3300 levels until moving into the London session, a new government in the making saw the early London session dipping back towards the 1.3220 levels, EURGBP saw modest rises considering the previous days move and the Cable initially pushed a little higher as the Euro rose however, again trading from the 1.3300 levels the market saw a steady decline through the NYK session testing back steadily through to the 1.3140 levels and the lows for the day.
• JPY: USDJPY was range bound for the most part with the market falling back from the opening levels and the highs around the 104.90 areas, as the market stumbled after the strong rises post election, pushing initially into the 104.50 levels before eventually pushing through to eventually test the 104.00 levels before seeing a choppy market through into the early London session, cross buying again figured in the early morning push and the USDJPY again tested steadily to the highs before moving into the NYK session and a similar pattern to that in London with the market moving first lower through to the NYK option expiry period and then pushing gradually higher to finish the day around the 104.50 levels with a day more about consolidation than anything else.
• AUD: A poor confidence number set the market on a move from the opening levels around the 0.7630 areas to trade steadily lower to the 0.7580 areas through the Asian session, carry trade buying played some role in holding the Oz and the move into the London session saw the market again making limited gains back to the opening levels however, having spent the NYK session holding the level the last few hours of the market saw the Oz drifting with very little volume moving in.

Yesterday’s premiership results

AUD       Westpac Consumer Confidence Jul A -3.00% | P -1.00%

JPY         Industrial Production M/M May (F) A -2.60% | C -2.20% | P -2.30%

CNY        Trade Balance Jun A 48.11B | C 46.0B | P 50.0B

CNY        Trade Balance CNY Jun A 311B | C 320B | P 325B

EUR        Eurozone Industrial Production M/M May A -1.20% | C -0.80% | P 1.10%

USD       Import Price Index M/M Jun A 0.20% | C 0.60% | P 1.40%

CAD       BoC Rate Decision A 0.50% | C 0.50% | P 0.50%

USD       Crude Oil Inventories A -2.5M | C -2.3M | P -2.2M

USD       Monthly Budget Statement Jun A 24.2B | P -52.5B

USD       Fed Beige Book

Good Luck,

Andy

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