Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 105.402 | EURUSD 1.10589 | AUDUSD 0.74915 | NZDUSD 0.70665 | USDCAD 1.31882 | USDCHF 0.98596 | GBPUSD 1.32248 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.10770 | 1.10509

USDJPY                 105.448 | 104.622

GBPUSD               1.32498 | 1.31684

AUDUSD              0.75295 | 0.74889

USDCHF               0.98658 | 0.98458

USDCAD               1.31920 | 1.31230

NZDUSD               0.71187 | 0.70646

EURGBP               0.84042 | 0.83593

EURJPY                 116.731 | 115.83

EURCHF                1.09148 | 1.08978

 

For Today

• EUR: A very quiet session through Asia with the market opening around the 1.1070 levels before drifting quickly back and holding above the 1.1050 level and a gradual rise back to above the 1.1070 levels and continuing to range above the 1.1060 levels through the session. Topside offers from the highs through to the 1.1100 levels with possible light stops through the level however, congestion is likely to then continue through to the 1.1160 levels and likely to slow any move higher and increasing into the 1.1180-1.1220 levels. Downside bids through to the 1.1020 levels are likely to be light and then increasing on a move through the 1.1000 areas, through the figure a possibility of weak stops being swallowed up by strong bids moving in through the 1.09 handle with those bids concentrated into the 1.0950 areas.
• GBP: Early buyers into the Tokyo session took the market from the lows around the 1.3210 levels and pushed steadily through towards the 1.3250 area before slipping back to hold 1.3220 areas, early European selling saw the market drop quickly back to the 1.3180 areas late in the session however, the lack of volume and liquidity was closer to the mark than anything else, Topside offers through the 1.3250 areas with congestion through the level and likely to continue through to the stronger 1.3300 areas, stops likely on a break through the 1.3320 areas opens the topside however, it would need to be a strong run through the level. Downside bids into the 1.3150-1.3100 areas with short term profit taking a possibility and those bids likely to continue through the 1.3080 areas before any weakness starts to appear and a break through the 1.3050 levels leaves the downside vulnerable to stronger selling into the 1.29 handle.
• JPY: After a strong 24hrs for the USDJPY the market has returned back to the 104 handle through the session opening around the 105.40 level the market gradually lost ground as a consequence of yesterday’s FOMC, slipping to the 104.60 areas the market continued to base of that level through the session, Topside offers likely to be back in the market on a test to the 105.80 areas and through to the will likely see weak stops on a break through the 106.00 again and the market struggling from that point onwards, Downside bids into the 104.60 levels likely to be weak and the market able to push through to the stronger 104.00-20 areas with the market likely to see little in the way of solid support until light bids appear through 103.00
• AUD: As the USDJPY dipped lower the Oz was allowed to steadily rise in a quiet market, and tested to the 0.7530 levels quietly through the session and range from the 0.7510 levels through the session, Topside offers into the current highs are likely to continue through to the 0.7560 areas with only a slight weakening off the offers into the 76 cent levels, a push through will likely see a quick attempt to push through to the 0.7650 areas however, the offers are likely to be a little more substantial around and beyond that level, Downside bids weak through to the 0.7420 levels with some weak stops on a move through the 0.7440 areas however, with the market now more dependent on USD movement for the day the range is likely to continue being quiet.

Overnight News

JPY:

Abe Fiscal Plan Is Said to Include About 7 Tln Yen in Spending

Japanese Bought Net 679.3 Billion Yen Overseas Debt Last Week

Japan Defence Report to Express Concern over China Ships: Nikkei

GPIF to Start Stewardship Meetings with Co’s., Other Asset Owners

GBP:

U.K. Consumer Confidence Falls to 106.6, 3-Yr Low: Cebr/YouGov

Today’s data

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

AUD       Import Price Index Q/Q Q2 A -1.00% | C 1.60% | P -3.00%

07:55     EUR        German Unemployment Change Jul C -3K | P -6k

07:55     EUR        German Unemployment Rate s.a. Jul C 6.10% | P 6.10%

09:00     EUR        Eurozone Business Climate Indicator Jul C 0.16 | P 0.22

09:00     EUR        Eurozone Economic Confidence Jul C 103.7 | P 104.4

09:00     EUR        Eurozone Industrial Confidence Jul C -3.5 | P -2.8

09:00     EUR        Eurozone Services Confidence Jul C 10.3 | P 10.8

09:00     EUR        Eurozone Consumer Confidence Jul (F) C -7.9 | P -7.9

12:00     EUR        German CPI M/M Jul (P) C 0.20% | P 0.10%

12:00     EUR        German CPI Y/Y Jul (P) C 0.30% | P 0.30%

12:30     USD       Advance Goods Trade Balance Jun C -61.0B | P -60.6B

12:30     USD       Initial Jobless Claims (JUL 23) C 261K | P 253K

14:30     USD       Natural Gas Storage P 34B

Harry Hindsight              

EUR: A quiet day for the Euro through till the FOMC that is, with the market ranging from the 1.0980 levels to test above the 1.1000 levels repeatedly but unable to do anything major to either side, the move into the FOMC though saw the market drop quickly initially with the no change release before a commentary saw the Euro bounce higher again, pushing to the 1.1010 levels a brief pause before running quickly through to the 1.1060 levels into the close. The lack of movement could be down to the limited expectations with talk from different FED members leaning one way or the other poor durable goods early in the session balanced what hawkish comments followed.

GBP: Cable drifted lower from the early highs in Tokyo dropping back from the 1.3160 levels to push through the opening 1.3130 areas, the market in Asia was limited for Cable and the move held through to the London session unable to push through the 1.3100 levels, the release of the better than expected GDP figure saw the market bounce a little however, the numbers are lagging and largely predate the Brexit vote, the market continued through the session to test to the 1.3080 areas and ranged to the 1.3140 levels before the FOMC and the quick move higher to test through the 1.3200 levels triggering some weak stops along the war and test to the close around the 1.3230’s.

JPY:  The market moved off the opening 104.60 areas and gradually rose on expectations of the easing announcement, when the announcement was released the USDJPY quickly jumped to the 106.50 levels and remained above the level for only a short period with Abe not commenting on the subject causing the market to drop quickly back to the 105.40 areas and a quiet range through the session with minor flurries on one comment or another, the movement on the FOMC release was less traumatic and saw barely a 40 pip gyration before steadily dipping back to the 105.40 areas and the close.

AUD: Better inflationary news saw the Oz jump from the opening levels to test towards the 0.7570 levels before slipping back to the 75 cent levels as the JPY weakened, the fall below the figure saw the Oz trigger weak stops and the market dipping to the 0.7460 areas, the market based along this line for several hours through to the FOMC release with a quick stab lower and the 0.7420 areas before rallying back to the 75 cent level and holding just below to the close.

Yesterday’s premiership results

AUD       CPI Q/Q Q2 A 0.40% | C 0.40% | P -0.20%

AUD       CPI Y/Y Q2 A 1.00% | C 1.10% | P 1.30%

AUD       CPI RBA Trimmed Mean Q/Q Q2 A 0.50% | C 0.40% | P 0.20%

AUD       CPI RBA Trimmed Mean Y/Y Q2 A 1.70% | C 1.50% | P 1.70%

AUD       CPI RBA Weighted Median Q/Q Q2 A 0.40% | C 0.40% | P 0.10%

AUD       CPI RBA Weighted Median Y/Y Q2 A 1.30% | C 1.30% | P 1.30%

EUR        German GfK Consumer Sentiment Aug A 10 | C 9.9 | P 10.1

CHF        UBS Consumption Indicator Jun A 1.34 | P 1.35

EUR        Eurozone M3 Y/Y Jun A 5.00% | C 5.00% | P 4.90%

GBP       GDP Q/Q Q2 (A) A 0.60% | C 0.50% | P 0.40%

GBP       Index of Services 3M/3M May A 0.30% | C 0.30% | P 0.50%

GBP       CBI Retailing Reported Sales Jul A -14 | C 2 | P 4

USD       Durable Goods Orders Jun (P) A -4.00% | C -0.40% | P -2.30%

USD       Durables Ex Transportation Jun (P) A -0.50% | C 0.30% | P -0.30% | R -0.40%

USD       Pending Home Sales M/M Jun A 0.20% | C 1.90% | P -3.70%

USD       Crude Oil Inventories A 1.7M | C -2.1M | P -2.3M

USD        FOMC Rate Decision A 0.50% | C   0.50% | P 0.50%

Good Luck,

Andy

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