Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 106.124 | EURUSD 1.10207 | AUDUSD 0.75039 | NZDUSD 0.70496 | USDCAD 1.30217 | USDCHF 0.98556 | GBPUSD 1.31104 |

 

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.10221 | 1.09968

USDJPY                 106.267 | 105.828

GBPUSD               1.31158 | 1.30645

AUDUSD              0.75176 | 0.74892

USDCHF               0.98710 | 0.98531

USDCAD               1.30441 | 1.30152

NZDUSD               0.70601 | 0.70209

EURGBP               0.84242 | 0.83998

EURJPY                 117.103 | 116.537

EURCHF                1.08644 | 1.08551

 

For Today

  • EUR: A very quiet session with the Euro holding around the 1.1000-20 levels for the session with a minor dip to through the 1.1000 levels and slightly below before returning to the 1.1010 levels for the move into the London session. Topside offers are likely to be light through to the 1.1050-60 areas with possibly better offers from the 1.1080 area and onwards however, the offers are likely to continue being light through the level with stronger offers into the 1.1130-50 areas. Downside bids strong through the 1.1000 areas with possible weak stops before stronger offers again reappear on a move through the 1.0950 levels and into the 1.0900 levels.
  • GBP: Opening above the 1.3100 levels saw the market saw limited topside action and started to drift from the Tokyo fixing period and pushing steadily lower through to the 1.3060’s before beginning a long steady rise back to the 1.3090 levels as the market moved towards London, Topside offers likely to be light through to the 1.3200 areas with offers likely to strengthen from that point however, as with yesterday’s move strength is a moot  point and the market remains open to the vagaries caused by the Brexit vote, through the 1.32000 through the market could see weak stops and the 1.3300 levels opening for another test. Downside bids into the 1.3050 seem to be only slightly stronger than the 1.3100 level was yesterday however the closer the market gets to the 1.3000 areas the stronger they become with the market likely to now start to see liquidity moving in as the nervousness or general lethargy over Brexit starting to kick in.
  • JPY: The market struggled higher through the early session and the Tokyo session tested to the 106.25 areas before dropping back with light trading as the fix saw limited interest and the drift pushed the USDJPY down to the 105.80’s before finding a base and then traded for the bulk of the session around the 106.00 areas to London, Topside offers again appear on any move higher through the 106.40 areas with only slight weakness on a break of the 106.60 level before stronger offerings into the 107.00 areas. Downside bids into the 105.60 levels are likely to continue through to the 105.20 levels, with bids likely to increase and the market watching for any further safe haven flows away from Europe.
  • AUD: The Oz was very muted through the session, with early movement above the 0.7515 areas before slipping slowly lower through to the 0.7490 areas and then trading around the 75 cent level into the London session, Downside bids into the 0.7480 areas with light bids likely in the 0.7460 level and continuing through to the 0.7440 areas before weakness appears on a move towards the 74 cent levels however, the RBA announcement was limited at best and was no real change to the previous announcements, topside offers through the 0.7540 levels and likely to continue with stronger offers possible from then on.

 

Overnight News

CNY:

Yuan rises most in a month as PBoC fixing seen backing currency

USD:

Trump will seek new law to sack Obama appointees if he wins presidency

 

Today’s data

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

AUD       Westpac Leading Index M/M Jun A -0.20% | P 0.20%

6:00        EUR        German PPI M/M Jun C 0.20% | P 0.40%

6:00        EUR        German PPI Y/Y Jun C -2.40% | P -2.70%

8:00        EUR        Eurozone Current Account (EUR) May C 24.9B | P 36.2B

8:30        GBP       Jobless Claims Change Jun C 4.1K | P -0.4K

8:30        GBP       Claimant Count Rate Jun P 2.20%

8:30        GBP       ILO Unemployment Rate 3M May C 5.00 | P 5.00%

8:30        GBP       Average Weekly Earnings 3M/Y May C 2.30% | P 2.00%

9:00        CHF        ZEW (Expectations) Jul P 19.4

14:30    USD       Crude Oil Inventories P -2.5M

 

Harry Hindsight              

  • EUR: The market ranged tightly around the 1.1070 levels through the Asian session with the market unable to push beyond the 1.1080 areas and then dipping lower into the London session, falling back to the 1.1050 levels on weaker ZEW numbers in Germany and Eurozone, the market bounced back once the numbers were out of the way however, having tested lower the market started to drift eventually breaking through the 1.1050 levels and dropping quickly with weak stops were triggered and the downgrades to Turkey spread through the market impacting the Euro to some degree, the market slowed is decent as it pushed through the 1.1030 levels however, the steady drift lower continued into the NYK session and tested to the 1.1000 level before finding buyers and the market moving back to trade to the 1.1020 levels in the run to the close.
  • GBP: Cable spent the day drifting lower over the course of the day with no really quick moves but a large range overall, Trading from the opening 1.3260 areas the market tested towards the 1.3280 levels into the pre-Tokyo session before failing and drifting through the session to test back to the 1.3200 levels, with the IMF calling both UK and the Eurozone lower for the future, the market continued its move lower and tested into the NYK session already through to the 1.3140 levels and pushing steadily into the close in London to the 1.3100 areas and once the London session finished the market continued albeit slowly to test through the 1.3080 levels before rising slightly into the close with light profit taking entering.
  • JPY: The USDJPY saw light safe haven flows away from Europe and the market having tested above the 106.30 levels struggled and dropped back in light trading with AUDJPY doing most of the movement before holding the 105.70 areas, the movement through the London session saw the market making steady progress to test back above the 106.00 levels however, the move to the highs took several hours and pushed into the NYK session before weak stops took the market to the 106.50 levels pushing for a short period the level failed and the market dropped back steadily to the 106.00 areas before drifting to the close.
  • AUD: Opening a touch lower the market traded into the Tokyo session holding around the 0.7580 areas, the release of the RBA minutes was little different than previous however, with current Oz rates the potential for further easing remains and the market dropped back in a couple of waves testing to the 0.7510 levels before holding the levels through into the London session, the trading was lighter from that point however, it was in the same direction and the move through to the NYK session was a steady drift lower and through to the 0.7480 levels before holding the level and gradually moving back above the 75 cent levels into the close.

 

Yesterday’s premiership results

AUD       RBA Minutes

GBP       CPI M/M Jun A 0.20% | C 0.10% | P 0.20%

GBP       CPI Y/Y Jun A 0.50% | C 0.40% | P 0.30%

GBP       Core CPI Y/Y Jun A 1.40% | C 1.30% | P 1.20%

GBP       RPI M/M Jun A 0.40% | C 0.20% | P 0.30%

GBP       RPI Y/Y Jun A 1.60% | C 1.40% | P 1.40%

GBP       PPI Input M/M Jun A 1.80% | C 1.10% | P 2.60% | R 2.20%

GBP       PPI Input Y/Y Jun A -0.50% | C -0.80% | P -3.90% | R -4.40%

GBP       PPI Output M/M Jun A 0.20% | C 0.20% | P 0.10% | R 0.20%

GBP       PPI Output Y/Y Jun A -0.40% | C -0.50% | P -0.70% | R -0.60%

GBP       PPI Output Core M/M Jun A 0.10% | C 0.10% | P 0.00% | R 0.10%

GBP       PPI Output Core Y/Y Jun A 0.70% | C 0.60% | P 0.50% | R 0.60%

EUR        German ZEW (Economic Sentiment) Jul A -6.8 | C 9.1 | P 19.2

EUR        German ZEW (Current Situation) Jul A 49.8 | C 52 | P 54.5

EUR        Eurozone ZEW (Economic Sentiment) Jul A -14.7 | C 12.3 | P 20.2

USD       Housing Starts Jun A 1.19M | C 1.17M | P 1.16M

USD       Building Permits Jun A 1.15M | C   1.15M | P 1.14M

 

Good Luck,

Andy

 

 

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