Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 104.842 | EURUSD 1.10348 | AUDUSD 0.75732 | NZDUSD 0.71169 | USDCAD 1.29687 | USDCHF 0.9828 | GBPUSD 1.31844 |

 

LMAX Ranges 6am London time

Highs    Lows

EURUSD               1.10709 | 1.10433

USDJPY                 106.034 | 105.316

GBPUSD               1.32705 | 1.32004

USDCHF               0.98402 | 0.98193

AUDUSD              0.76046 | 0.75765

USDCAD               1.29663 | 1.29333

NZDUSD               0.71509 | 0.70689

EURCHF                1.08820 | 1.08574

EURGBP               0.83782 | 0.83300

EURJPY                 117.212 | 116.445

For today

• EUR: The events of Friday evening unfolded over the weekend and the next news item unfolded as a coup in Turkey hit the news, this saw the markets effected on the opening however it was somewhat limited to the TRY, Euro’s opened around the 1.1050 levels and drifted higher through the session to push through to the 1.1070 areas before ranging quietly through to the 1.1060-70 level. Topside offers limited through the 1.1100 areas with light offers likely to be through the 1.1120 levels and increasing on a move through the 1.1150 areas and increasing through the 1.1180 and above. Downside bids into the 1.1050 areas and likely to continue through to the 1.1020 areas with better bids with light stops likely through to the 1.0980 before stronger bids start to appear as the market targets the 1.0950-00 areas.
• GBP: Cable opened around the 1.3190 areas and little difference to the nervous close on Friday, the market moved into the second hour and tested quickly to the 1.3250 areas and pushed eventually into the Tokyo session to the 1.3270 before holding for several hours into the Tokyo session around the 1.3250 levels. The market saw some movement to the 1.3200 level with GBPJPY selling moving in and the downside still weak however, the market returned to test the 1.3270 areas before drifting into the London session holding around the 1.3250 areas into London. Topside offers light through the 1.3300 areas with light offers likely to continue to the 1.3400 level where the market starts to get stronger with particular strength through towards the 1.3500 areas. Downside bids light into the 1.3150 areas and then a little stronger on a move through to the 1.3100 level, however, with current events the market is likely to disappear on any strong moves.
• JPY: Opening around the 105.40 areas and some 60 pips from the close the market headed into the limited Tokyo session with a bank holiday testing through to the 106.00 before dropping back and trading quietly through the session around the 105.50 making some limited moves higher but they were limited, Topside offer likely to increase on a move through the 106.30 areas with weak stops likely on a test through the level and opening up further topside movement into possibly stronger offers above the 106.80 areas and likely to be deeper, downside bids limited to the 104.00 areas with a push through the level likely to see weak stops joined by stronger sellers and the market moving towards the 103.00 areas and better bids.
• AUD: The Oz Opened in line with the market before the announcement of events in Nice around the 76 cent levels however, the market never really got going with the Japanese out for the day and the Oz traded around the 76 cent levels and struggling to break through the level before dropping back to test below 0.7580, the market then continued around the 0.7590 in a very quiet session, Topside offers light before moving through the 0.7650 areas then the offers start to thicken and increasing into the 0.7680 areas where the market is likely to have strong resistance before opening the market to the 0.7850 areas, and a new range. Downside bids a little weak through to the 0.7550 levels however, the market is likely to see congestion through the 75 cent level with possible weak stops on a move through the 0.7480 areas.

Overnight News                                                                  

CNY:

Central bank official says China has room to increase fiscal deficit to 5% of GDP

GBP:

Engulfed by doubt, top UK firms shelve spending plans after EU vote

In May’s first test, UK MPs vote on nuclear deterrent

NZD:

Growth in NZ’s services sector slips in June

EUR:

Attacker staked out Nice site, accomplice suspected

Today’s data

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

NZD       CPI Q/Q Q2 A 0.40% | C 0.50% | P 0.20%

NZD       CPI Y/Y Q2 A 0.40% | C 0.50% | P 0.40%

GBP       Rightmove House Prices M/M Jul A -0.90% | P 0.80%

12:30     CAD       International Securities Transactions (CAD) May P 15.52B

14:00     USD       NAHB Housing Market Index Jul C 60 | P 60

20:00     USD       Net Long-term TIC Flows May P -79.6B

Weekend News

CNY:

China may build nuclear plants in South China Sea

China Q2 GDP Strong but weakness ahead

USD:

Regulator paves way for speedy next generation 5G network

Fed policy makers signal no rush to raise rate

USD/CNY:

US and China clash over market economy status

JPY:

Japan may be on route for a soft form of helicopter money

RUB:

Russia to impose stiffer punishments on errant banks

EUR/GBP:

Ireland woos financial institutions that may relocate over Brexit

TRY:

Coup attempt swiftly dealt with as hundreds of military are swiftly rounded up

Judges are removed from office

Harry Hindsight

• EUR: Opening around the 1.1120 levels the market moved deep into the Tokyo session holding around the level dipping several times towards the 1.1100 areas however, it was unable to break and eventually pushed through the 1.1120 levels triggering weak stops on a move to the 1.1140 level, the move into the London session saw the market again testing a little higher and through towards the 1.1150 areas however, again weaker numbers on the Trade balance and an unconvincing CPI numbers left the market drifting through into the NYK session, better than expected retail sales numbers saw the USD rallying across the board and the Euro quickly pushed back through the 1.1100 levels triggering weak stops into the 1.1070 areas and then continuing through to what was expected to be a quiet ranging session to the close however, events in Nice saw another terrorist attack leaving 84 dead and hundreds injured, the market dropped from the 1.1070 in the final hour to the 1.1020’s in a knee jerk reaction into the close.
• GBP: Cable made quick headway through into the Tokyo session with the market lifting off the opening areas around the 1.3350 levels and once through quickly pushed to above the 1.3400 levels before sliding a little and then heading steadily higher through to the 1.3480 areas and the previous day’s highs before sliding lower and chopping around through the London session holding above the 1.3350 levels into the NYK session, better US numbers saw the USD rallying and the Cable dropped steadily through to the close in London testing through the 1.3150 areas as the weak bids were limited and the rally of the USD’s left the GBP wanting, the move to the close saw the Cable recovering to the 1.3200 levels before the European news impacted the market.
• JPY: With a Japanese long weekend the market drifted in pre-Tokyo testing to the 105.10 areas before the USD buying emerged and USDJPY started a steady rise over the next two hours or so testing to the 106.30 area and holding on its highs for a few hours before dropping quickly back to the 105.60 areas for the move into the London session, from there the market moved in a 40-50 pip range unable to push to far through the 105.60 and struggling on each attempt to move back above the 106.00 levels until the end of London, that saw the USDJPY slide a little lower but generally continue to hold around the 105.60-70 areas for the move towards the close, news in Europe saw the market quickly drop as safe haven flows bought the JPY and the USDJPY quickly dropped to the 104.60 level before holding the close around the 104.80 areas.
• AUD: Opening around the 0.7630 areas and then drifting through into the Tokyo session to push towards the 0.7610 areas. Before the strong buying in USDJPY triggered decent carry trade buying and the Oz quickly pushed towards the 0.7680 areas before running into strong offers and drifting back to the 0.7650 level and dropping quickly to the opening areas and holding steady through into the London opening, London were quiet buyers moving towards the 0.7650 areas again however, the market was unable to hold once the US numberw were released and the market moved quickly to below the 76 cent levels to hold the 0.7580 areas through the London close, a slight recovery to the 76 cent level was quickly lost again as the Nice events unfolded and the market closed near the lows in the 0.7560 areas.

Friday’s premiership results

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

CNY        Industrial Production Y/Y Jun A 6.20% | C 5.90% | P 6.00%

CNY        Retail Sales Y/Y Jun A 10.60% | C 9.90% | P 10.00%

CNY        Fixed Assets Ex Rural YTD Y/Y Jun A 9.00% | C 9.40% | P 9.60%

CNY        GDP Y/Y Q2 A 6.70% | C 6.60% | P 6.70%

EUR        Eurozone Trade Balance (EUR) May A 24.5B | C 25.2B | P 28.0B | R 25.4B

EUR        Eurozone CPI M/M Jun A 0.20% | C 0.20% | P 0.40%

EUR        Eurozone CPI Y/Y Jun (F) A 0.10% | C 0.10% | P 0.10%

EUR        Eurozone CPI – Core Y/Y Jun (F) A 0.90% | C 0.90% | P 0.90%

CAD       Manufacturing Shipments M/M May A -1.00% | P 1.00%

USD       Advance Retail Sales Jun A 0.60% | C 0.10% | P 0.50% | R 0.20%

USD       Retail Sales Less Autos Jun A 0.50% | C 0.40% | P 0.40%

USD       CPI M/M Jun A 0.20% | C 0.20% | P 0.20%

USD       CPI Y/Y Jun A 1.00% | C 1.10% | P 1.00%

USD       CPI Core M/M Jun A 0.20% | C 0.20% | P 0.20%

USD       CPI Core Y/Y Jun A 2.30% | P 2.20%

USD       Empire State Manufacturing Index Jul A 0.6 | C 5.1 | P 6

USD       Industrial Production Jun A 0.60% | C 0.20% | P -0.40% | R -0.30%

USD       Capacity Utilization Jun A 75.40% | C 75.20% | P 74.90%

USD       Business Inventories May A 0.20% | C 0.10% | P 0.10%

USD       U. of Michigan Confidence Jul A 89.5 | C 93.7 | P 93.5

Stay lucky

Andy

Any opinions, news, research, analyses, prices or other information contained on this Blog, whether by LMAX, its employees, partners or contributors, does not constitute investment advice nor has it been prepared in accordance with legal requirements designed to promote the independence of investment research. Further, the material contained within this Blog does not contain (and should not be construed as containing) investment advice or an investment recommendation, or an offer of, or solicitation for, a transaction in any financial instrument. Whilst information provided on this Blog may help with your investment research you must consider carefully whether you should make (or refrain from making) investment or other decisions based on what you see without doing further research on the investments you are interested in. Participating in this Blog cannot be a substitute for obtaining advice from an appropriate expert independent adviser who takes into account your circumstances and specific investment needs in selected investments that are appropriate for you. LMAX has not verified the accuracy or basis-in-fact of any claim or statement made by any third parties as comments for every Blog entry.

LMAX will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. No representation or warranty is given as to the accuracy or completeness of the above information. While the material produced in this Blog was obtained from sources deemed to be reliable, LMAX does not provide any guarantees about the reliability of such sources.

Consequently any person acting on it does so entirely at his or her own risk.

If you currently hold an account with LMAX for the purposes of trading FX and CFD’s, you are encouraged to use a different Username and Password to access the Blog or any other online systems. The Blog is a place to learn, discuss and share information and ideas with Blog followers. It is not a place to slander, use unacceptable language or to promote LMAX or any other FX, Spread Betting and CFD provider and any such postings, excessive or unjust comments and attacks will not be allowed and will be removed from the site immediately.