Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 110.439 | EURUSD 1.1282 | AUDUSD 0.74431 | NZDUSD 0.71451 | USDCAD 1.3485 | USDCHF 0.96242 | GBPUSD 1.2892 |

 

LMAX Ranges 6am London time

Highs    Lows

EURUSD               1.12843 | 1.12634

USDJPY                 110.624 | 110.314

GBPUSD               1.28759 | 1.28599

AUDUSD              0.74571 | 0.74225

USDCHF               0.96450 | 0.96288

USDCAD               1.35009 | 1.34752

NZDUSD               0.71466 | 0.71147

EURGBP               0.87680 | 0.87544

EURCHF                1.08656 | 1.08612

EURJPY                 124.680 | 124.407

For today

• EUR: A slow drift lower with very little Euro news over the weekend with the opening slightly off the closing level and filling the small gap into the Tokyo session before slipping from the 1.1285 highs to the 1.1260 level to hold around the 1.1270 area to the grey hour. Topside offers through the current highs and into the 1.1300 level a solid push through the 1.1310 areas will likely see stops appearing and the market seeing very little congestion through to the 1.1400 area and strong offers in the area, Downside bids light into the 1.1205 area with the market likely to see some weak stops appearing and the market congested into the 1.1150 areas with the market likely to be stronger into the 1.1100 areas with stronger bids likely to continue through the level.
• GBP: Opening lower from Friday after the Terrorist attack on Saturday in London, the market from the opening around the 1.2860 levels tested higher to fill the gap and leaving only a small portion unfilled on a test towards the 1.2880 levels before ranging in a choppy manner through to the 1.2860 level and holding broadly around the 1.2865 through to the grey hour, Downside bids into the 1.2850 levels with weak stops likely through the level with stronger congestion on a move to the 1.2800 areas with a strong support line around the 1.2765 areas then becomes the key level for any movement through to the 1.2630 areas. Topside offers light through to the 1.2905 level where resistance has limited impact however, a move through the level will see stronger congestion through to the 1.3000 areas with offers increasing in the area.
• JPY: USDJPY traded quietly through the day so far with the market dipping into the low 110.30 areas on quiet trading before rising to trade around the 110.60 levels for the move into grey hour, Topside offers light through the 111.00 areas with likely stops through the level for a move towards the 111.40 areas with stronger offers through the 111.70 areas and into the 112.00 level, weak stops possibly through the 112.20 area with market opening only to the 112.50 area. Downside bids through the 110.40 levels with the congestion likely to run to the stronger 110.00 areas and stronger stops likely on a move through the area.
• AUD: Weaker opening around the 0.7430 levels with weak buying filling the gap on the charts and then once done drifting lower to test into the low 0.7420s, a stronger CNY PMI number helped the market slowly push higher and push through the 0.7450 areas but unable to get through the 0.7460 level before drifting through to the grey hour, Topside offers sees congestion above through to the 0.7520 areas before the possibility of some weak stops however, as we’ve seen over the past few months the market has moved in a limited manner and likely to continue in that manner with congestion likely to slow any movement, Downside bids light through to the 0.7350 level and stronger bids in that area with weak stops likely through the level but again congestive bids likely around the sentimental areas.

Overnight News

AUD:

Some inventory relief for 1Q GDP

May services index falls 1.5pts MoM to 51.5

CNY/USD:

China upset at Mattis irresponsible remarks on South China Sea

MXN:

Pri’s Del Mazo ahead in official early count for Mexico state

CNY:

China hits back at Taiwan leaders offer of help of democracy

USD/AUD:

US and Australian official warn of returning foreign fighters

GBP:

Sovereign wealth funds may sell off UK assets on Brexit vote

IMF:

IMF warns US of fiscal uncertainty

Chinas credit growth risk to Asia

RUB/USD:

Putin denies knowledge of Trump son in law back channel proposal

SAR:

Saudi led alliance cuts Qatar ties as Gulf crisis escalates.

Today’s data

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

AUD       TD Securities Inflation M/M May A 0.00% | P 0.50%

AUD       TD Securities Inflation Y/Y May A 2.80% | P 2.60%

CNY        Caixin PMI Services May A 52.8 | C 51.4 | P 51.5

07:45     EUR        Italy Services PMI May C 55.3 | P 56.2

07:50     EUR        France Services PMI May (F) C 58 | P 58

07:55     EUR        Germany Services PMI May (F) C 55.2 | P 55.2

08:00     EUR        Eurozone Services PMI May (F) C 56.2 | P 56.2

08:30     GBP       Services PMI May C 55 | P 55.8

12:30     USD       Non-Farm Productivity Q1 (F) C -0.20% | P -0.60%

12:30     USD       Unit Labour Costs Q1 (F) C 2.40% | P 3.00%

14:00     USD       ISM Non-Manufacturing Composite May C 57.1 | P 57.5

14:00     USD       Labour Market Conditions Index Change May C 3 | P 3.5

14:00     USD       Factory Orders Apr C -0.20% | P 0.20%

23:01     GBP       BRC Retail Sales Monitor Y/Y May C -0.50% | P 5.60%

Weekend News

USD:

Trump said to pick nominees for 2 positions on Fed Board

Comey to be pressed on whether Trump interfered with Russia probe

JPY:

Japan’s Central bank nearly doubles ETF holdings in one year

GBP:

7 killed and 48 injured in another vehicle followed by Knife attacks in London

Harry Hindsight

• EUR: A quiet day through to the NFP number in the US with the euro moving in a tight range holding the opening areas around the 1.1215 areas with minor dips just below the level and testing briefly above the 1.1220, the market remained like this through deep into the London session with the market only just increasing the range pushing towards the 1.1230 level, the move through into the NYK session saw the market dropping to the 1.1205 levels before bouncing on the release of a worse than expected number and the Euro quickly pushing through to the 1.1280 areas and ranging in a wide 1.1255-80 areas eventually settling down do a tight range into the closing couple of hours above the 1.1280 area and holding just below 1.1285 into the close.
• GBP: Early Asia took the Cable to the 1.1895 levels but struggled with the offers into the 1.3000 level before starting a slow drift back through the opening 1.2880 level and saw limited selling through towards the 1.2870 areas where it held into the London session, earlier sellers saw the market testing through to the 1.2855 level before the release of the Construction PMI giving a limited boost before dropping back to the 1.2850 levels and gyrating for a while between 1.2850 and 1.2875 before running into the NFP and a quick rise through to the 1.2905 with the market very choppy over the next few hours retuning to the 1,2950’s and then back to the highs before drifting to finish the day around the 1.2890 areas.
• JPY: Rising in early trading in Tokyo to push through to the 1.1165 areas to range through deep into the London session drifting back to the 111.50 areas and holding around that level to the NFP, a weaker number and the USDJPY dropped quickly through to the 110.70 levels and then drifting steadily lower to trade around the 110.40-50 levels with a brief periods on the 110.30’s into the close.
• AUD: As with the other markets the Oz was very slow through the Asia and into the London session with Asia pushing through the 0.7390 levels from the opening around the 0.7375 areas, the move into the London session saw the market slipping back to the opening areas, London saw the market pushing through to the 0.7400 levels before breaking through the level on the release of the NFP rising quickly to the 0.7420 areas before slowly moving to the 0.7440 areas and holding around the level to the close.

Yesterday’s premiership results

JPY         Monetary Base Y/Y May A 19.40% | C 19.60% | P 19.80%

JPY         Consumer Confidence May A 43.6 | C 43.5 | P 43.2

GBP       Construction PMI May A 56 | C 52.6 | P 53.1

EUR        Eurozone PPI M/M Apr A 0.00% | 0.20% | P -0.30%

EUR        Eurozone PPI Y/Y Apr A 4.30% | C 4.50% | P 3.90%

CAD       Labour Productivity Q/Q Q1 A 1.40% | C 0.20% | P 0.40%

CAD       International Merchandise Trade (CAD) Apr A -0.4B | C 0.0B | P -0.1B | R -0.9B

USD       Trade Balance Apr A -47.6B | C -45.5B | P -43.7B | R -45.3B

USD       Change in Non-farm Payrolls May A 138K | C 185K | P 211K | R 174K

USD       Unemployment Rate May A 4.30% | C 4.40% | P 4.40%

USD       Average Hourly Earnings M/M May A 0.20% | C 0.20% | P 0.30% | R 0.20%

Stay lucky

Andy

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