Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 100.889 | EURUSD 1.12236 | AUDUSD 0.76075 | NZDUSD 0.72338 | USDCAD 1.31113 | USDCHF 0.96421 | GBPUSD 1.33558 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.12283 | 1.12079

USDJPY                 101.354 | 100.747

GBPUSD               1.33558 | 1.33140

AUDUSD              0.76182 | 0.75900

USDCHF               0.96579 | 0.96399

USDCAD               1.31247 | 1.30978

NZDUSD               0.72450 | 0.71931

EURGBP               0.84210 | 0.84028

EURJPY                 113.649 | 112.974

EURCHF                1.08382 | 1.08145

 

For Today

• EUR: A fairly quiet session with the Euro giving up some of the rally above the 1.1200 areas from yesterday, trading back through the 1.1210 levels before holding steady around the 1.1215 areas into the London session, Topside offers are likely to be continuous through to the 1.1300 levels with some weak stops likely to appear on a move through the areas however, these are likely to be quickly countered by offers into the 1.1340-60 areas with the congestion possibly continuing into the 1.1400 levels and stronger offers then appearing, Downside bids light through the 1.1200 areas with weak stops on a move back through the 1.1170 levels and the market opening for a rejection of the topside and testing to the 1.1100 areas, of note are the PMI numbers for the area and retail sales for the Zone and likely to dominate the market for the London session with the US ADP figures of interest.
• GBP: As with the Euro, the Cable slowly slipping back through the session with light profit taking through the session from the 1.3360 areas and back to hold around the 1.3320 level into the London opening, Topside offers through the 1.3400 levels are likely to be light and the market building above the 1.3450 areas with this likely to be a key level for a move back to the 1.35-1.36 areas and the bottom end of the range after the referendum, Downside bids light through the 1.3300 areas with possible better bids on a move towards the 1.3250 areas, a move through the level likely to see weak stops and the 1.3150 areas open for further testing especially on a bad services PMI number.
• JPY: A quiet day for the USDJPY with early trading seeing the market rising steadily through the 101.30 levels however, that was quickly lost as the market dropped quickly late in the session to test the 100.80 level with very little volume during the period but sufficient to define the 50+ range, the market moved into the London session holding back above the 101.00 levels, downside bids through the 100.80 areas with the possibility of weak stops on a move through 100.60 however, from then on the market is likely to see importer bids appearing and the market finding plenty of buyers to move through before the 100.00 levels breaks, US numbers likely to be the main mover for the day and something to watch for, Topside offer slight through to the 102.20 areas where the market is likely to see some offers appear and a push through the 102.40 levels is likely to see the market striving for the 102.80 levels again.
• AUD: Very quiet for the Oz with the market trading around the 76 cent level for the most part, dipping to the 0.7590 areas in early trading the market recovered a touch to test above the 0.7610 areas before returning slowly to the lows for the move in to the London session, Topside offer through the 0.7640 areas with congestion likely to continue on a move to the 0.7660 levels however, better offers are likely into the 0.7680 areas and strong impetus would likely to be required to open the topside through 77 cents. Downside bids light through the 76 cent level and increasing only once the market moves towards the 0.7540 areas, with weak stops through that level and the market opening to the stronger 0.7500 levels and congestion to the 0.7440 from then on.

Overnight News

JPY:

Japan’s Abe Said to Hold Press Conference Around 6:30 P.M.

Kozo Yamamoto Said to Join Abe Cabinet in Reshuffle

Japan’s Asakawa: Watching Carefully Nervous Movements in FX

BOJ Members: Inflation Expectations Have Weakened Recently

Japan to Discuss More 40-Yr Bonds at Sept. Primary Dealer Meet

Nikkei Japan July Services PMI 50.4 vs 49.4 in June

North Korea Missile Falls into Japan’s Exclusive Economic Zone

USD:

Lockhart Says Current Asset Values Are Relatively Buoyant

CNY:

China Said to Plan Easing Restrictions on Stock-Index Futures

China Should Further Cut Rates, RRR When Appropriate, NDRC Says

Caixin China July Services PMI 51.7 vs 52.7 in June

NZD:

New Zealand Wage Inflation Held Steady in Second Quarter

RBNZ Says It Won’t Resume Pre-Release Analyst, Media Lockups

Auckland July Average House Price Rises 4.9% Y/Y: Barfoot

SGD:

Nikkei Singapore July Whole Economy PMI 50.7 vs 52.3 in June

GBP:

U.K. July BRC Shop Price Index -1.6% Y/y vs June -2% Y/y

AUD:

Turnbull: Australia’s Interest Rates Still Relatively High

Australia July Services Index Rises 2.6 Pts M/m to 53.9

HKD:

Nikkei Hong Kong July Whole Economy PMI 47.2 vs 45.4 in June

Today’s data

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

GBP       BRC Shop Price Index Y/Y Jul A -1.60% | P -2.00%

CNY        Caixin China PMI Services Jul A 51.7 | C 52.9 | P 52.7

07:45     EUR        Italy Services PMI Jul C 51.1 | P 51.9

07:50     EUR        France Services PMI Jul (F) C 50.3 | P 50.3

07:55     EUR        Germany Services PMI Jul (F) C 54.6 | P 54.6

08:00     EUR        Eurozone Services PMI Jul (F) C 52.8 | P 52.7

08:30     GBP       Services PMI Jul (F) C 47.4 | P 47.4

09:00     EUR        Eurozone Retail Sales M/M Jun C 0.00% | P 0.40%

12:15     USD       ADP Employment Change Jul C 171K | P 172K

14:00     USD       ISM Non-Manufacturing Composite Jul C 56 | P 56.5

14:30     USD       Crude Oil Inventories P 1.7M

 

Harry Hindsight              

• EUR: Rising steadily through the day the market initially opened around the 1.1160 areas and struggled through the Asian session testing to the 1.1175 levels through into the London session, London were steady buyers into the European numbers and an improvement in the PPI numbers saw the Euro test quickly through the 1.1200 areas before holding around the level into the NYK session and starting a steady rise again with mixed results for the US on its data and testing to the 1.1230 levels before grinding to a halt and slipping back to the 1.1225 to finish the day quietly.
• GBP: Cable moved around the 1.3180-1.3200 levels through the Asian session pushing through the 1.3200 level properly once the London session opened to test to the 1.3240 areas before slipping back to the figure on a better than expected but worse than previous Construction PMI, and with the data out of the way the market started a quiet rise back to the highs before hanging around the 1.3240 levels into the NYK session, NYK were quick buyers on the mixed numbers and the Cable quickly tested towards the 1.3300 levels however, the market eventually pushed through the level and the steady rise continued to the 1.3360 areas before running out of steam, EURGBP drifted from the from the 0.8490 level to test the 0.8400 levels into the close on a steady move.
• JPY: With most of the news out on easing the market made early gains to the 102.80 levels however, having failed to continue to the topside the market slipped gradually lower through the session moving into the London session little changed from the opening around 102.40 and struggling as the USD drifted against most of the major currencies, weak stops through the 102.00 areas saw the market dip to the 101.60 levels before holding through into the NYK session and then a continuation of the steady drift lower with the market testing through the 101.00 levels dipping below 100.80 before finding some support and pushing into the close around the 100.90 level.
• AUD: The Oz moved quietly higher into the RBA decision testing the 0.7550 areas before dropping quickly back on the cut of 0.25% to 1.50% dropping to the 0.7490 from the highs in a sharp but shallow move lower, the move into the London session saw the Oz again rallying as the USD slipped through the rest of the session with the steady rise pushing gradually through the 0.7550 levels and the move into NYK seen that session extending the highs further testing quickly through 0.7580 and triggering weak stops on the way to the 0.7635 levels before finding sufficient offers to turn the market for a long run to the close.

Yesterday’s premiership results

JPY         Monetary Base Y/Y Jul A 24.70% | C 24.30% | P 25.40%

AUD       Trade Balance (AUD) Jun A -3.20B | C -2.00B | P -2.22B | R -2.42B

AUD       Building Approvals M/M Jun A -2.90% | C 0.90% | P -5.20% | R -5.40%

NZD       RBNZ 2-Year Inflation Expectation Q3 A 1.70% | P 1.60%

AUD       RBA Rate Decision A 1.50% | C 1.50% | P 1.75%

JPY         Consumer Confidence Index Jul A 41.3 | C 42.2 | P 41.8

CHF        Retail Sales (Real) Y/Y Jun A -3.90% | C -2.00% | P -1.60% | R -1.70%

CHF        SVME-PMI Jul A 50.1 | C 51.9 | P 51.6

GBP       Construction PMI Jul A 45.9 | C 44.2 | P 46

EUR        Eurozone PPI M/M Jun A 0.70% | C 0.40% | P 0.60%

EUR        Eurozone PPI Y/Y Jun A -3.10% | C -3.50% | P -3.90% | R -3.80%

USD       Personal Income Jun A 0.20% | C 0.30% | P 0.20%

USD       Personal Spending Jun A 0.40% | C 0.30% | P 0.40%

USD       PCE Deflator M/M Jun A 0.10% | P 0.20%

USD       PCE Deflator Y/Y Jun A 0.90% | P 0.90%

USD       PCE Core M/M Jun A 0.10% | C 0.10% | P 0.20%

USD       PCE Core Y/Y Jun A 1.60% | P 1.60%

Good Luck,

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.