Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 110.328 | EURUSD 1.11959 | AUDUSD 0.7530 | NZDUSD 0.7212 | USDCAD 1.34672 | USDCHF 0.96935 | GBPUSD 1.27414 |

 

LMAX Ranges 6am London time

Highs    Lows

EURUSD               1.12120 | 1.1197

USDJPY                 110.439 | 110.155

GBPUSD               1.27696 | 1.27299

AUDUSD              0.75370 | 0.75218

USDCHF               0.96932 | 0.96832

USDCAD               1.34643 | 1.34381

NZDUSD               0.72129 | 0.71928

EURGBP               0.88010 | 0.87796

EURCHF                1.08586 | 1.08524

EURJPY                 123.731 | 123.436

For today

• EUR: The market opened above the 1.1200 areas testing to the 1.1200 in early trading before slipping slowly lower through into the Tokyo session to test through the 1.1200 areas to fill the gap on the charts before ranging through the rest of the session between the 1.1212-1.1198 areas. Topside offers from the 1.1270-1.1300 levels are likely to be strong with weak stops on a move through the level and the market facing only minor congestion through to the 1.1400 areas with a further round of strong offers likely in the move to those levels, Downside bids light through to the 1.1150 areas with some congestion in the areas with the market thickening as the market moves through to the 1.1100 areas and likely strong bids appearing in the area through to the 1.1080-90 areas.
• GBP: Rising quickly from the opening from the lows to push towards the 1.2750 areas and holding in a narrow range through too late in the session before breaking through to the 1.2770 levels and then a long steady drift into the grey hour holding onto the 1.2750 areas. Cable is likely to find rumours and comments on the newly formed government, rumours about a softer Brexit and so on but as said previously I don’t believe either side was willing to draw swords over Brexit and the posturing is likely to subside once the negotiations start however, for now the EU will press as it sees the present situation to its liking, downside bids into the 1.2650 areas with bids likely to continue through the level into a the supportive 1.2630 areas a push through will open the market to some extent however, there is likely to be strong congestion on a move through to the 1.2500 areas if the market can push lower, Topside offers are likely to be around the 1.2800 areas with some weak offers into the area and the market likely to open only slightly on a move through the level.
• JPY: A quiet opening with the market holding around the 110.40 levels before slowly slipping lower through the early part of Tokyo to test the 110.20 levels and holding the level but unable to push much beyond the 110.30 levels. Offers into the 110.50-55 areas likely to be weak with stronger offers likely on a move to the 110.80 areas congestion through to the 111.00 areas then possibly stronger offers before weak stops appear and the market opens towards the 111.40-60 areas, and then stronger into the 111.80-112.00 areas, downside bids light through to the 110.00 areas some weak bids likely through to the 109.60 level and then stronger bids start to appear through to the 109.00 increasing in size as the market moves lower.
• AUD: A patchy start with the market trading around the 0.7532 levels with the market moving into the Tokyo session slipping a little the market held for a while rising back above the 0.7536 areas before the market slipping back towards the grey hours testing towards the 0.7520 areas. A quiet session with a bank holiday in Australia and the ranges bore that out, Topside offers into the 0.7560 areas likely to be weak with stronger offers appearing through the 0.7580 levels and into the 76 handle, Downside sees weak bids into the 0.7520 with deepening bids through to the 0.7480 levels with congestion likely to continue through the level and stronger bids as the market approaches the 0.7420 levels.

Overnight News

JPY:

Japan core machinery orders fall more than forecast in sign of economic fragility

GBP:

May’s Parliament plot softer Brexit to keep UK in single market

UK Consumer spending falls for the first time in nearly 4 Years Visa

USD:

NYK to probe money shifted from Eric Trump charity to father’s company

White House says Trump and May didn’t discuss UK trip

Trump says Comey not telling truth, willing to respond under oath

CNY:

Iron Ore Mountain continues to grow in China with stockpiles rising 2.6% to move above 140m tons

NZD:

NZ retail card spending unexpectedly declined in May

Today’s data

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

JPY         Machine Orders M/M Apr A -3.10% | C 0.60% | P 1.40%

JPY         Domestic CGPI Y/Y May A 2.10% | C 2.20% | P 2.10%

06:00     JPY         Machine Tool Orders Y/Y May (P) 34.70%

18:00     USD       Monthly Budget Statement May C -87.3B | P 182.4B

Weekend News

KRW:

N.Korea says it’s not far away from test firing an ICBM

GBP:

May Scrapes together a Government as Tory backlash begins

2 Key Aides resign from May’s inner circle

DUP support for the Conservative government is on a supply and confidence on internal laws only

Theresa May signals soft Brexit by naming Damian Green as deputy PM a staunch remain MP

EUR/GBP:

After telling the UK that there are priorities all of a sudden it’s we need to get Brexit out of the way

USD:

Wall st slashes 2017 yield forecasts ahead of Fed Hike.

US attorney general to face questions on Comey firing

US deny Trump state visit delayed

EUR:

5 Star movement seen failing in local vote exit polls.

Macron expected to get a large majority for Parliament

Harry Hindsight

• EUR: Given the gyrations in Cable the Euro traded quietly really with the market opening and testing quickly to the 1.1230 areas to make the highs as the Cable collapsed before dropping back as the market was dragged lower through into the Tokyo session holding the 1.1200 levels, Tokyo opening saw the Euro test through to the 1.1180 levels and hold through for several hours before slowly rising back through the 1.1200 areas into the grey hour, London saw further Euro selling as Cable dropped again into the London opening, EURGBP buying saw the market around the 1.1215 levels before Euro’s again slipped through the 1.1200 levels and pushed to the 1.1170 levels to hold around the level into the NYK session rising slowly through to the evening pushing back to the 1.1200 area.
• GBP: The close saw the market holding around the 1.2950 areas the opening was a different story with the release of the exit polls showing May winning but not with a majority she hoped for, the market opened around the 1.2765 levels and testing through to the 1.2715 areas before holding, the move through to the Tokyo session saw some recovery with early safe Labour seats remaining Labour with reduced majorities however, that was all she wrote as the market pushed into the 1.2820’s result after result saw close seats swinging to the Labour party and from expectations of a strong Conservative government slipping away, the move through towards the grey hour saw early Europeans selling Cable and the move into the London session seeing the low on the day just above the supportive line around the 1.2630 areas, London opening saw the market starting a slow and steady rise through to NYK testing to the 1.2770 areas and then slipping to trade around the 1.2740 levels through to the close in NYK.
• JPY: A weaker opening as a consequence of the GBP move with the market opening around the 109.80 levels and testing in the first hour back to the 110.00 areas to fill the gap, opening in Tokyo saw the market again test back to the 109.80 areas before starting a steady climb through to the 110.30 levels to trade quietly into the grey hours, London opening saw the market pushing a little higher however, through to the NYK session saw the market holding below the 110.50 areas before weak stops saw the market pop up through the 110.80 level before slowly slipping back quietly through the balance of the session to the 110.20 levels and a quiet rise to the close.
• AUD: The opening saw the Oz trading around the 0.7530 levels before making an attempt to fill the gap on the charts in the run to the Tokyo session, before slipping back from the 0.7540 level to test the 0.7525 areas again, the day was a repeat of the early action with the market unable to push through to the 0.7550 areas and although the market saw the 0.7520 areas in NYK that was the limit for the downside, the Run to the close saw quiet trading around the 0.7530 levels in what must be one of the quietest days this year.

Yesterday’s premiership results

JPY         Japan Money Stock M2+CD Y/Y May A 3.90% | C 4.30% | P 4.30% | R 4.00%

CNY        CPI Y/Y May A 1.50% | C 1.50% | P 1.20%

CNY        PPI Y/Y May A 5.50% | C 5.70% | P 6.40%

AUD       Home Loans Apr A -1.90% | C -1.00% | P -0.50%

JPY         Tertiary Industry Index M/M Apr A 1.20% | C 0.50% | P -0.20% | R -0.30%

EUR        German Trade Balance (EUR) Apr A 19.8B | C 20.3B | P 19.6B

GBP       Industrial Production M/M Apr A 0.20% | C 0.70% | P -0.50%

GBP       Industrial Production Y/Y Apr A -0.80% | C -0.30% | P 1.40%

GBP       Manufacturing Production M/M Apr A 0.20% | C 0.80% | P -0.60%

GBP       Manufacturing Production Y/Y Apr A 0.00% | C 0.70% | P 2.30%

GBP       Construction Output M/M Apr A -1.60% | C 0.40% | P -0.70%

GBP       Visible Trade Balance (GBP) Apr A -10.4B | C -12.0B | P -13.4B

GBP       NIESR GDP Estimate May A 0.20% | P 0.20%

CAD       Capacity Utilization Rate Q1 A 83.30% | C 82.40% | P 82.20%

CAD       Net Change in Employment May A 54.5K | C 17.0K | P 3.2K

CAD       Unemployment Rate May A 6.60% | C 6.60% | P 6.50%

USD       Wholesale Inventories Apr (F) A -0.50% | C -0.30% | P -0.30%

Stay lucky

Andy

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