Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 101.216 | EURUSD 1.11296 | AUDUSD 0.76281 | NZDUSD 0.71776 | USDCAD 1.30168 | USDCHF 0.97413 | GBPUSD 1.31077 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.11358 | 1.11259

USDJPY                 101.368 | 101.054

GBPUSD               1.31361 | 1.31072

AUDUSD              0.76629 | 0.76237

USDCHF               0.97438 | 0.97369

USDCAD               1.30361 | 1.30158

NZDUSD               0.71989 | 0.71696

EURGBP               0.84932 | 0.84773

EURJPY                 112.801 | 112.519

EURCHF                1.08472 | 1.08398

 

For Today

• EUR: Another quiet day for the Euro with the market dipping from the opening a little before rising from the lows back through the 1.1130 levels to test to the 1.1135 areas and that I’m afraid is all barely 8 pips range for the session, Topside offers light through to the 1.1160 levels with offers limited even there, a move through to the 1.1180 areas sees stronger offers appearing into the 1.1200 level, with a push through the 1.1220 areas likely to see weak stops appearing however, congestion through to the 1.1300 areas with those offers likely to be increasing for the moment. Downside bids into the 1.1100 levels are likely to slow any movement however, they are not likely to be strong and the market is more likely to see continual bids rather than any particular area with the bids into the 1.1050 levels possibly a little stronger and then congestive bids continuing to the 1.1000 and possibly getting stronger from that point on.
• GBP: Cable has slowly pushed from the 1.3110 areas to test towards the 1.3140 areas, with the market comfortable with the 0.25% cut in interest rates, downside bids likely to be building into the 1.3100 levels with those bids likely to be in depth running to the 1.3050 areas before the market is likely to see weak stops and the downside opening to the 1.2900 levels, Topside bids light through to the 1.3300 areas with the market well traversed over the past few weeks as the market consolidated in the 1.3100-1.3300 range for several weeks, a push higher could see a small short squeeze and with little interest the market could surprise on any move.
• JPY: Opening around the 101.20 levels the USDJPY saw only tentative trading in front of the NFP numbers later in the day, trading slightly higer from the fixing demand to the 101.35 areas before dipping back to hold around the 101.15 levels having touched towards the 101.05 level. Topside offers light through the 101.50 areas with stronger offers likely into the 102.00 area, a push through the 102.30 level will likely see weak stops appearing and the market vulnerable to a squeeze towards the 103.00 areas, Downside bids likely to be in depth rather than specific areas with bids into the 100.80 areas likely to continue through to the 100 level with bids likely to be every 10 pips or so with any stops likely to be absorbed by resting bids.
• AUD: A steady rise through the session with RBA anticipating a long game with low inflation but continuing growth through the year and beyond, not major movement from the statement however after a brief dip the market pushed off the opening levels again and traded steadily through the 0.7660 levels before meeting sufficient offers to turn the market and the market held the levels into the London session. Topside offers continue through to the 77 cent levels, with the current levels having been visited 3 times since the end of June and unable to push through with congestion likely to continue through the level with weak stops possibly quickly absorbed on the move through, however, better offers are likely to appear through the 0.7770 areas and continuing into 78 cent. Downside bids light through the 76 cent levels and likely to see better bids on a move towards the 0.7560 areas and beyond with the 75 cent level likely to be stronger for the moment.

Overnight News

JPY:

Japan Public See No Need to Renew Abe’s Tenure: Mainichi Poll

Japan’s June Cash Earnings Rise 1.3%; Est. +0.3%

Japan’s Finance Minister Aso Sees Recovery, But Risks Remain

GBP:

U.K. July LFL Sales Flat Amid Heavy Discounting, BDO Says

U.K. Hiring Plunges as BOE Warns That Unemployment Will Rise

AUD:

RBA Says CPI, GDP, Labour Mkt Forecasts Little Changed From May

Australia’s July Construction Index Falls 1.6 Pts M/m to 51.6

Today’s data

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

JPY         Labour Cash Earnings Y/Y Jun A 1.30% | C 0.40% | P -0.20% | R -0.10%

AUD       RBA Monetary Policy Statement

JPY         Leading Index Jun (P) A 98.4 | C 99.60 | P 99.70

06:00     EUR        German Factory Orders M/M Jun C 0.50% | P 0.00%

07:00     CHF        Foreign Currency Reserves Jul P 608.8b

12:30     USD       Change in Non-farm Payrolls Jul C 175K | P 287K

12:30     USD       Unemployment Rate Jul C 4.90% | P 4.90%

12:30     USD       Average Hourly Earnings M/M Jul C 0.20% | P 0.10%

12:30     USD       Trade Balance Jun C -42.1B | P -41.1B

12:30     CAD       Net Change in Employment Jul C 10.2K | P -0.7K

12:30     CAD       Unemployment Rate Jul C 6.90% | P 6.80%

12:30     CAD       International Merchandise Trade (CAD) Jun C -2.6B | P -3.3B

14:00     CAD       Ivey PMI Jul C 51.9 | P 51.7

 

Harry Hindsight              

• EUR: Another dull day for the Euro with the early market through the Asian session holding in a tight 1.1135-55 range before slowly slipping towards London testing lower through the session dripping to the 1.1115 areas as the BoE cut interest rates and the drag of the Cable pulled the Euro to its lows, light resistance through the 0.8450 areas in the EURGBP cross eventually broke and tested towards the 0.8500 areas before holding around the 0.8480 for the bulk of the session unable to push through the level.
• GBP: A tight range through the Asian session with the market rising to the 1.3340 levels before drifting back to the 1.3320 opening levels, the move into the London session saw the market drifting lower to below the 1.3280 areas, with expectations for a cut the market started to doubt itself into the final hour before the BoE release rising back through the highs, before dropping back quickly on the release and cut of the interest rate to 0.25%, the market quickly pushed below the 1.3200 levels before starting to see limited support and the market eventually pressing the 1.3120 levels after an hour or so, the market continued to pressure the 1.3100 levels however, through the rest of the day it was unable to break that level and held through to the close.
• JPY: USDJPY was unable to break out of the very recent levels with the market dipping into the early part of the Asian session to test the 100.85 areas before steadily rising through to the London session pushing to above the 101.65 areas to make the highs for the day, the move towards the NYK session saw the USDJPY drifting back towards the opening levels around the 101.20 levels and the market traded around the level to the close in a very slow market for the USDJPY.
• AUD: Opening below the 0.7600 levels the retail sales number while not so strong the market saw a quick rise through the figure level to test steadily through 0.7620 before running out of steam and slipping back to the figure as the market moved into the figure levels, with weakness of GBP the Oz caught some steady buying through the session and gradually pushed through the highs and into the 0.7630 areas before trading quietly into the close.

Yesterday’s premiership results

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

EUR        ECB Economic Bulletin

EUR        Eurozone Retail PMI Jul A 48.9 | P 48.5

GBP       BoE Rate Decision A 0.25% | C 0.25% | P 0.50%

GBP       BoE Asset Purchase Target A 435B | C 375B | P 375B

GBP       MPC Official Bank Rate Votes A 0–9—0 | C 0–9—0 | P 0–1–8

GBP       MPC Asset Purchase Facility Votes A 6–0—3 | C 0–0—9 | P 0–0–9

GBP       Bank of England Inflation Report

USD       Challenger Job Cuts Y/Y Jul A -57.10% | P -14.10%

USD       Initial Jobless Claims (JUL 30) A 269K | C 265K | P 266K

USD       Factory Orders Jun A -1.50% | C -1.80% | P -1.00% | R -1.20%

USD       Natural Gas Storage A -6B | C 3B | P 17B

Good Luck,

Andy

That is me done for 2 weeks as it’s that time of year, and the fish are not particularly worried about it either!!

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