Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 101.244 | EURUSD 1.1150 | AUDUSD 0.75881 | NZDUSD 0.71518 | USDCAD 1.30664 | USDCHF 0.97319 | GBPUSD 1.33253 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.11570 | 1.11354

USDJPY                 101.372 | 100.858

GBPUSD               1.33460 | 1.33180

AUDUSD              0.76265 | 0.75836

USDCHF               0.97360 | 0.97216

USDCAD               1.30750 | 1.30380

NZDUSD               0.71829 | 0.71477

EURGBP               0.83711 | 0.83512

EURJPY                 113.028 | 112.479

EURCHF                1.08488 | 1.08400

 

For Today

• EUR: A quiet session in front of the ECB economic bulletin and BoE announcement, with expectations for both mixed at best, the market traded into the midday in Asia testing below the 1.1140 levels before bouncing back to the opening around 1.1150 and then drifting between the two through to the London session, Topside offers likely to be light on a move towards the 1.1200 areas with better offers to appear above the 1.1230 levels and weak stops above 1.1260 for the moment, before stronger offers start to move in. Downside bids through the current lows and building into the 1.1100 areas, with congestion through to the 1.1050 areas likely to slow any move lower however, a break here will open up further tests through the 1.1000 level.
• GBP: Slightly better bid with the market initially testing to the 1.3320 levels before rising towards the 1.3350 areas and ranging between 1.3330-40 for the most part through the Asian session, Topside offers light through to the 1.3370 areas with better offers likely above the 1.3400 level and into the 1.3450 areas, a move through the level leaves the 1.3500 level vulnerable however, there is a possibility of interest to sell continuing through 1.3500 before the market sees stops appearing and the market opening to the 1.3600 level. Downside bids light through the 1.3300 levels with better bids likely to start appearing on a push through the 1.3250 levels and likely to quickly open the market to the 1.3100 levels on a push through the congestion.
• JPY: The Asian market remains contained within the range of yesterday with the same sort of pattern to the day, early steady rise through to the 101.30 levels quicly sold back to the 100.90 areas before rising quietly through towards the 101.50 levels during the balance of the session, Topside offers light through the 101.60 areas and then starting to increase the closer to the 102.00 levels however, the levels have been penetrated to often to be anything meaningful and a push through the 102.30 areas will see weak stops likely to appear and the market opening through to the 102.80 areas and better offers. Downside bids light through to the 100.80 areas and better bids thereafter on a move to the 100.50 levels a move through the level is likely to see some weakness appearing on a move to the 100.20 areas and better bids from then on with some weak stops likely to appear around the 99.70 areas before likely solid bids through to the 99.00 areas.
• AUD: The Oz opened quietly and held around the 0.7585-90 levels moving into the Tokyo session before jumping above the 76 cent levels and trading strongly over the next few hours to the 0.7625 areas, with good two way business going through, having hit the highs the market started to slowly give ground as it moved towards the London session with the market slipping back to the 0.7610 levels even after a poor retail sales numbers, Topside offers into the 0.7650-60 areas likely to continue to slow the market on any attempt higher with further offers likely to move in once weak stops are cleared through the level, with the 77 cent levels likely to be stronger still, downside bids light through to the 75 cent levels with congestion around the level and deep into the 0.7450 areas a push here will likely see some stops appearing and the market testing through to the 74 cent levels.

Overnight News

JPY:

Iwata: BOJ, Govt Policy Mix ‘Different From Helicopter Money’

Yamamoto: Poor Wage Gains Slow Japan’s Escape From Deflation

Japanese Bought Net 312.1 Billion Yen Overseas Debt Last Week

AUD:

Australian June Retail Sales Rose 0.1% M/M; Est. 0.3% Gain

GBP:

One Killed, 5 Injured in Russell Square Attack: Police

Today’s data

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

AUD       Retail Sales M/M Jun A 0.10% | C 0.30% | P 0.20%

CHF        SECO Consumer Confidence Jul A -15 | C -16 | P -15

08:00     EUR        ECB Economic Bulletin

08:10     EUR        Eurozone Retail PMI Jul P 48.5

11:00     GBP       BoE Rate Decision C 0.25% | P 0.50%

11:00     GBP       BoE Asset Purchase Target C 375B | P 375B

11:00     GBP       MPC Official Bank Rate Votes C 0–0—9 | P 0–1–8

11:00     GBP       MPC Asset Purchase Facility Votes C 0–0—9 | P 0–0–9

11:00     GBP       Bank of England Inflation Report

11:30     USD       Challenger Job Cuts Y/Y Jul P -14.10%

12:30     USD       Initial Jobless Claims (JUL 30) C 265K | P 266K

14:00     USD       Factory Orders Jun C -1.80% | P -1.00%

14:30     USD       Natural Gas Storage P 17B

 

Harry Hindsight              

• EUR: Steady and quiet selling from the opening with the market never returning to the 1.1225 area opening, pushing to the 1.1210 levels through the Asian session the market, the move into the London session saw early sellers attempting the 1.1200 level and once the data was released the market dropped through the level to test to the 1.1190 level, slightly better ADP employment figures in the US saw the USD attempting to rally and the Euro saw some light stops on the push down through the 1.1170 levels and then holding around the 1.1150 levels through to the close.
• GBP: A little bit narrower than normal saw the market trade roughly around the 1.3320 level through the session having slowly declined from the opening around the 1.3350 areas and dipping into the London session with an unchanged and expected service PMI number setting the tone for the day, London were quick sellers and the market dipped below the 1.3300 levels in early trading before the Services PMI reversed those losses and a long steady climb to the day’s highs above the 1.3370 levels before moving into the NYK session and the USD rally with numbers better than expected on employment, the Cable again tested through to the 1.3290 areas touching lightly through the area before bouncing back above the 1.3320 level and then trading around the level to the close.
• JPY: USDJPY started the day with a steady rise from the opening around the 100.90 levels to push into the Tokyo session trading to the 101.30’s, the market dropped back on a quick move through to the 100.80 levels in the run to London before the buying resumed and the market again pushed to the highs, the market generally held around the 101.15 areas through into the NYK session with slightly better employment numbers triggering some further buying to extend the highs to above the 101.50 areas however, it was a limited reaction and the market drifted back to hold to the close in the 101.20 areas.
• AUD: The Oz slipped slowly lower through the session with a slightly stronger USD dominating the day, drifting from the opening 0.7610 levels the market pushed into the London session pushing the 0.7575 levels before slightly extending the lows into the NYK session however, having dipped below the 76 cent levels the market was unable for the day to recover those losses and the market held around the 0.7585 level for the balance of the day.

Yesterday’s premiership results

23:01     GBP       BRC Shop Price Index Y/Y Jul A -1.60% | P -2.00%

01:45     CNY        Caixin China PMI Services Jul A 51.7 | C 52.9 | P 52.7

07:45     EUR        Italy Services PMI Jul A 52 | C 51.1 | P 51.9

07:50     EUR        France Services PMI Jul (F) A 50.5 | C 50.3 | P 50.3

07:55     EUR        Germany Services PMI Jul (F) A 54.4 | C 54.6 | P 54.6

08:00     EUR        Eurozone Services PMI Jul (F) A 52.9 | C 52.8 | P 52.7

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

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

12:15     USD       ADP Employment Change Jul A 179K | C 171K | P 172K | R 176K

14:00     USD       ISM Non-Manufacturing Composite Jul A 55.5 | C 56 | P 56.5

14:30    USD       Crude Oil Inventories A 1.4M | C -1.6M | P 1.7M

Good Luck,

Andy

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