Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 109.944 | EURUSD 1.12042 | AUDUSD 0.75415 | NZDUSD 0.72028 | USDCAD 1.33243 | USDCHF 0.96869 | GBPUSD 1.2661 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.12051 | 1.1189

USDJPY                 110.109 | 109.827

GBPUSD               1.26738 | 1.26445

USDCHF               0.96983 | 0.96864

AUDUSD              0.75651 | 0.75396

USDCAD               1.33211 | 1.32742

NZDUSD               0.72274 | 0.71985

EURCHF                1.08533 | 1.08487

EURGBP               0.88504 | 0.88366

EURJPY                 123.248 | 123.018

For today

• EUR: Opening around the 1.1205 areas before drifting in the Tokyo session holding around the before slipping slowly down to base along the 1.1190 levels through to the grey hours, Topside offers building into the 1.1240-60 levels with congestion through that level to the stronger 1.1270-1.1300 levels so fairly tough until that level breaks with weak stops and possibly minor stops appearing through the levels, downside bids light through the 1.1180 areas with weak stops on a move through the level, with bids into the 1.1150 areas with further strong bids likely on a move through to the 1.1100 areas with bids continuing through the level with stops likely to appear on a move through the 1.1080 areas and opening the market to a deeper move with limited bids into the 1.1000 areas.
• GBP: Initially pushing higher from the opening moving off the 1.2660 areas to test into the 1.2680 level before holding quietly through into the Tokyo session around the 1.2665-70 before quickly dipping back to base along the 1.2650 areas through to the grey hours, Inflationary data for the UK will likely to play second fiddle to today’s commentary from EU and the UK as the Europeans press the advantage and hike up the rhetoric that makes them so dearly loved at the moment, Topside offers light through the 1.2700 areas with limited offers into the 1.2750 areas and possible stops on a move through to the stronger 1.2800 levels and congestion likely to continue. Downside bids into the 1.2650 areas remain with stronger support likely into the 1.2630 areas any push through the level will likely see sharp selling appearing.
• JPY: A quiet day for the USDJPY with the market opening around the 109.90 areas and drifting into the Tokyo session before lifting off the lows to push eventually through the 110.10 areas to make the highs before drifting around the 110.00 levels to the grey hours, Topside offers into the 110.50 areas are likely to be weak but a push through will likely see weak congestion on a move towards the 110.80 and stronger offers then appearing on a move towards the 111.00 areas, congestion then increases through that level and into the 111.50 level. Downside bids into the 109.60-30 levels and while the market is likely to see some strong stops the 1.0900 areas will have bids appearing quickly continuing deep into the 108 handle.
• AUD: Another quiet day for the Oz but a little wider than yesterday’s bank holiday range, opening around the 0.7540 areas the market slowly rose once into the Tokyo session to test the 0.7565 levels and holding in a narrow range unable to push to far through, Topside offers into the 0.7570-0.7600 areas with congestion likely on a move through the level and the stops that await quickly absorbed, downside bids into the 0.7520 areas likely to be lighter with stops on a move through the 75 cent level likely to open the market a little however, congestion is likely to continue through to the 74 cent levels.

Overnight News                                                                  

USD/KRW:

Mattis warns N.Korea is most urgent threat

USD/RUB:

US Senators near deal on Russia sanctions

AUD:

Australia business conditions stay upbeat in May NAB

CNY:

Two more Chinese provinces found faking economic data

CAD:

BoC says next move likely an interest rate hike

Today’s data

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

JPY       BSI Large All Industry Q/Q Q2 A -2.9 | C 1.5 | P 1.3

AUD       NAB Business Confidence May A 7 | P 13

08:30    GBP       CPI M/M May C 0.20% | P 0.50%

08:30    GBP       CPI Y/Y May C 2.70% | P 2.70%

08:30    GBP       Core CPI Y/Y May C 2.30% | P 2.40%

08:30    GBP       RPI M/M May C 0.30% | P 0.50%

08:30    GBP       RPI Y/Y May C 3.50% | P 3.50%

08:30    GBP       PPI Input M/M May C -0.40% | P 0.10%

08:30    GBP       PPI Input Y/Y May C 13.40% | P 16.60%

08:30    GBP       PPI Output M/M May C 0.10% | P 0.40%

08:30    GBP       PPI Output Y/Y May C 3.60% | P 3.60%

08:30    GBP       PPI Output Core M/M May C 0.20% | P 0.50%

08:30    GBP       PPI Output Core Y/Y May P 2.80%

08:30    GBP       House Price Index Y/Y Apr P 3.70%

09:00    EUR       German ZEW (Economic Sentiment) Jun C 21.8 | P 20.6

09:00    EUR       German ZEW (Current Situation) Jun P 83.9

09:00    EUR       Eurozone ZEW (Economic Sentiment) Jun C 37.2 | P 35.1

12:30    USD       PPI M/M May C 0.00% | P 0.50%

12:30    USD       PPI Y/Y May C 2.50% | P 2.50%

12:30    USD       PPI Core M/M May C 0.20% | P 0.40%

12:30    USD       PPI Core Y/Y May C 2.00% | P 1.90%

Harry Hindsight

• EUR: A quiet session through Asia with the market opening higher around the 1.1205 areas to drift through the 1.1200 into the Tokyo session, the market moved through the rest of the session struggling to break through the 1.1200-10 areas until the grey hours, at this point the market started a slow climb through the London session testing above the 1.1230 levels, ECB’s Coeure spoke inflation requiring less stimulus now, the move into the NYK session saw the market drifting lower through into early NYK before holding around the 1.1200 through to the close of play having tested into the 1.1190’s.
• GBP: Opening was a little messing with the opening range from the 1.2720 to 1.2750 areas before narrowing down and then moving quietly through the 1.2750 areas to push above the 1.2770 levels bolding around the area into early London, from the London opening only the market slowly slipped lower as rumour and counter rumour continued through the session, either way PM May is likely to try to continue as PM for as long as possible with Brexit negotiations starting in just under a weeks time the market moved through to the London close testing to the 1.2650 areas before holding around the 1.2640-50 level late into the session to test back to the 1.2660 level for the close.
• JPY: Opening around the 110.30 levels saw the market testing to the 110.40 levels before moving into the Tokyo session drifting back to the 110.20 levels and holding in a tight range into early London testing back quickly to the 110.00 areas, the market drifted below the level and moved quietly through into the NYK session testing back to the 109.80 areas, the move towards the London close saw the market dipping through into the 109.60 areas before starting a slow recovery through to close just above the 109.90 areas.
• AUD: Patchy start to a bank holiday day ranging quietly around the 0.7530 areas initially slowly pushing above the 0.7535 level before slipping back and testing towards the 0.7520 areas , the market remained in a tight range through into the London session before breaking higher in early London to the 0.7545 areas and holding quietly again in a tight range around the 0.7540 areas before dropping back towards the lows, late trading saw the market moving back to the highs for a quiet close.

Yesterday’s premiership results

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%

JPY       Machine Tool Orders Y/Y May (P) A 24.40% | P 34.70%

USD       Monthly Budget Statement May A -88.4B | C -87.3B | P -52.5B

Good Luck,

Andy

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