Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 105.805 | EURUSD 1.09945 | AUDUSD 0.74707 | NZDUSD 0.69929 | USDCAD 1.32187 | USDCHF 0.98588 | GBPUSD 1.31401 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.10060 | 1.09833

USDJPY                 105.897 | 104.269

GBPUSD               1.31459 | 1.30826

AUDUSD              0.75369 | 0.74621

USDCHF               0.98652 | 0.98518

USDCAD               1.32308 | 1.31905

NZDUSD               0.70613 | 0.69853

EURGBP               0.83992 | 0.83649

EURJPY                 116.407 | 114.665

EURCHF                1.08409 | 1.08331

 

For Today

• EUR: USD liquidation continues through the session, with the Euro moving quietly for the most part from around the 1.0990 areas and test through 1.0985 before moving into the later part of the session rising quickly through the highs to test through the 1.1005 levels before meeting light selling, Topside offers likely to continue through to the 1.1020 levels with some light congestion continuing through to the 1.1040 levels and possibly light stops, a move through the level is likely to see stronger offers appearing on any test through the 1.1060 levels and building in size on a move towards the 1.1100 areas and limited data for the day. Downside bids down below the 1.0960 levels still hold and are likely to continue on any test to the 1.0900 areas with possible strong stops on a move through the 1.0880 areas.
• GBP: Weaker economic news so far this week has weakened the Cable for the most part with the move into the Tokyo session seeing strong GBPJPY selling dropping the market from the 1.3140 levels dropping quickly through to the 1.3110 levels before slowing its descent, the market moved into the Tokyo session fully and the selling continued in a slow manner and tested through the 1.3100 areas to pushing into the mid 1.3080’s before the market ran out of sellers and the market rebounded to the 1.3120 levels to hold around the level through the session into London, Downside bids light through to the 1.3080 areas and those bids are likely to continue through the 1.3050 levels and better bids which have held over the past couple of weeks, a move through the level will likely see weak stops and the market opening for a test through the 1.3000 which likely to see only sentimental bids and the 1.2900 handle possibly less supportive.
• JPY: Moving off the open 105.80 areas the market slipped to the 105.60 area into early Tokyo and the market saw weak stops and a continuing weakness in the USD to dip to the 105.00 levels and drifting through to the 104.80 level, the bids were limited and the possibility of squeezed margins saw the market holding for an extended period before the bids gave way and the market dropped quickly to the 104.40 as the market moved into the lunch period and things quietened down. Downside bids through to the 104.00 levels area likely to be reasonably strong and key to the market not revisiting the 102-103 levels over the course of the day, with weak stops through the 104.00 level a possibility, Topside offers light through to the 105.50 levels with congestion on a move through to the 106.00 areas.
• AUD: The Oz like the others traded quietly through the early part of the session lifting from the 0.7470 opening levels towards the 0.7490 areas and held in the areas until the run towards London when the USD selling seemed to increase and the Oz quickly pushed through the 0.7500 areas triggering some weak stops and pushing quickly to the 0.7530’s into the grey hour. Light offers through the 0.7540 areas are likely to disappear once the market clears the 0.7560 level, from there though the market is likely to run into stronger offers as it pushes to test the 76 cent levels with congestion through the level and into the 0.7650 areas with stronger offers likely to appear, downside bids light through the 75 cent level with some weak stops likely and the market likely to see light bids into the 0.7450 areas before becoming stronger.

Overnight News

JPY:

Japan to Double Planned Fiscal Stimulus: Nikkei

Japan Stimulus Draft Calls for Continued BOJ Cooperation

Japan Won’t Achieve FY2020 Target of a Primary Balance Surplus

Aso: Leave Actual Policy Measures to the Bank of Japan

Japan to Support Overseas Infrastructure Lending: Nikkei

GBP:

BoE’s Weale Changes Mind, Now Favours Immediate Stimulus: FT

CNY:

China Has Basis For Interest Rate or RRR Cuts: Securities Daily

NZD:

New Zealand 2Q Exports Rise on Log, Kiwifruit Shipments

New Zealand June New Residential Mortgage Lending Rises 18% Y/Y

SGD:

Singapore June Factory Output -0.3% Y/y; Est. +0.5%

AUD:

Australia ANZ Weekly Consumer Confidence Rises 0.5% to 115.5

PLN:

Poland Sees 2017 Borrowing Needs at Less Than 182B Zloty: Puls

Today’s data

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

NZD       Trade Balance (NZD) Jun A 127M | C 128M | P 358M | R 348M

JPY         Corporate Service Price Y/Y Jun A 0.20% | C 0.10% | P 0.20%

08:30     GBP       BBA Mortgage Approvals Jun C 40.2K | P 42.2K

13:00     USD       S&P/Case-Shiller Composite-20 Y/Y May C 5.60% | P 5.40%

14:00     USD       Consumer Confidence Jul C 95 | P 98

14:00     USD       New Home Sales Jun C 554K | P 551K

 

Harry Hindsight              

• EUR: A quiet day over all with a decent set of IFO numbers doing little for the Euro as it remained in a tight range throughout. Opening around the 1.0975 areas, pre Tokyo saw the market moving steadily lower into the new session and the fixing in Tokyo saw the market drop back to the 1.0955 areas to make the lows of the day before starting a steady rally through to the London session pushing to the opening levels. London were less impressed with the IFO numbers however after some light selling before beginning a slow rise through the session and into NYK testing through the 1.0995 levels, the rest of the day saw the market again test the highs late in the session with the market finishing just off those highs.
• GBP: As with the Euro, a moment of pause with the market trading quietly through the day holding the 1.3100 levels for the most part, opening around the 1.3135 levels the market traded quietly through the Asian session pushing to the 1.3110 areas in early trading before slowly rising through into the London day testing above the 1.3160 in light choppy trading, CBI numbers were not as poor as expected however, worse than Junes and the market slowly traded away from the highs to test towards the 1.3100 levels before recovering over the remaining half of the session to finish towards the opening levels.
• JPY: Early rise from the opening around the 106.20 areas saw the market running into more discussions of limitations to any further easing, with the G20 hardly touching on the FX markets the BoJ and MoF seem to be left in limbo with decisions to make some of which may be a little uncomfortable for the rest of the community, having pushed to the 106.70 levels into the first half of the Asian session it drifted from that point through the day gradually moving to the 105.80 areas and holding the area through into the later part of the NYK session.
• AUD: The opening was similar to the close on Friday and the market made slow headway through into the London session pushing above the 0.7490 levels however, that was all it could do on a quiet session and only once the NYK session moved in did we see any reasonable moves with the market dropping back quickly to test through the 0.7460 areas before rising back to the 0.7470 levels over the course of the NYK period to finished the day little changed.

Yesterday’s premiership results

JPY         Trade Balance (JPY) Jun A 0.33T | C 0.24T | P 0.27T | R 0.29T

EUR        German IFO – Business Climate Jul A 108.3 | C 107.5 | P 108.7

EUR        German IFO – Current Assessment Jul A 114.7 | C 114 | P 114.5 | R 114.6

EUR        German IFO – Expectations Jul A 102.2 | C 101.2 | P 103.1

GBP       CBI Trends Total Orders Jul A -4 | C -6 | P -2

Good Luck,

Andy

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