Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 111.279 | EURUSD 1.11939 | AUDUSD 0.75675 | NZDUSD 0.72822 | USDCAD 1.32684 | USDCHF 0.96929 | GBPUSD 1.27185 |

 

LMAX Ranges 6am London time

Highs    Lows

EURUSD               1.12001 | 1.11894

USDJPY                 111.349 | 111.208

GBPUSD               1.27550 | 1.27368

AUDUSD              0.75838 | 0.75629

USDCHF               0.97030 | 0.96893

USDCAD               1.32710 | 1.32537

NZDUSD               0.72886 | 0.72728

EURGBP               0.87915 | 0.8778

EURCHF                1.08576 | 1.0850

EURJPY                 124.682 | 124.482

For today

• EUR: A very quiet session overall with the market pushing towards the 1.1200 areas in early trading before slipping back and trading in a very narrow 1.1197-90 range for the most part with the market again starting to drift as it pushed into the grey hour, Topside offers through the 1.1210 level likely to continue through to the 1.1230 level before weak stops appear however, the topside remains congestive with the offers increasing into the 1.1280 areas and only a strong push through the 1.1300 level will release stronger stops and increased ranges on that handle, Downside bids light into the 1.1150 areas with limited congestion and stop likely on a move down towards the 1.1120 areas, sentimental bids likely to be around the 1.1100 areas however, a strong push through the level will likely see weak stops appearing through the 1.1080 areas and the market quickly opening to the downside.
• GBP: Opening some 20 pips higher the market continued with a slight rise from the 1.2735-40 opening to test through the 1.2750 before slowly slipping back to the 1.2740 level in quiet trading, Topside light congestion through to the 1.2800 areas with some sentimental offering in the area however, a strong push through the 1.2810 areas will likely open the market to a test through to 1.2850 and then the market will be focused on the gap from the 9^th June’s General election, with the 1.2900 area likely to be very strong for the time being. Downside bids light into the 1.2700 levels with some congestion below and through to the 1.2650 areas and very little to upset the cart for the day that is unless the EU/UK start another round of tit for tat comments.
• JPY: Another narrow range for the USDJPY with the market opening a little lower but quickly pushing back to Friday’s close with the early low remaining in place around the 111.18 area, the Tokyo fix saw the market rise to test the 111.35 level however, once the demand was over with the market traded quietly for the most part around the 111.30 level and in contact with the day’s highs. Topside offers weak through to the 111.80 levels with likely stronger offers on any attempt to push through the 112.00 level however, a push through that level will likely see weak stops appearing and the market seeing limited congestion from there through to the 113.00 areas. Downside bids light through to the 111.00 areas with some bids continuing through the level and into the 110.80’s before stops are likely to appear, however, the market is likely to see stronger congestion through to the 110.50 areas before the downside becomes vulnerable.
• AUD: As with the rest of the market a very quiet session with the Oz slowly rising from the 0.7565 opening lows to test towards the 0.7585 level into mid-session before drifting around the 0.7575 area into the grey hour, Topside offers strong into the 0.7580-0.7600 areas with limited stops on a move through the level and increasing offers as the market pushes through to the 0.7640 areas, those offers are likely to continue through to the 0.7660 areas with some light stops and further offers if the market makes an attempt towards the 77 cent level. Downside bids into the 0.7530 areas light with stronger bids into the 75 cent level with limited stops and stronger bids moving in around the 0.7450 areas and continuing with congestion lower.

Overnight News

CNY:

Iron ore stockpiles rise 2.7% to 131.9M ton

JPY:

Abe rating falls 9pp to 39% in Yomiuri poll of Tokyo voters

Japanese Banks at risk as borrowing in USD doubles – BIS

NZD:

First time house buyers worst hit as house sales fall by 30%

EUR:

Italy Centre-right performs strongly in Mayoral runoff elections likely to take Genoa Exit polls

Also set to take Verona, Catanzaro exit polls

TRY:

Turkey rushes troops to Qatar as Gulf crisis grows

USD:

Williams sees inflation reaching FED’s 2% goal in 2018

Williams very strong US jobmarket carries risks

Williams backs further gradual rate increases

Today’s data

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

JPY         BOJ Summary of Opinions at June 15-16 Meeting

JPY         Corporate Service Price Y/Y May A 0.70% | C 0.70% | P 0.70% | R 0.80%

08:00     EUR        German IFO – Business Climate Jun C 114.5 | P 114.6

08:00     EUR        German IFO – Expectations Jun C 106.4 | P 106.5

08:00     EUR        German IFO – Current Assessment Jun C               123.2 | P 123.2

08:30     GBP       BBA Mortgage Approvals May C 40.3K | P 40.8K

12:30     USD       Durable Goods Orders May (P) C -0.60% | P -0.80%

12:30     USD       Durables Ex Transportation May (P) C 0.40% | P -0.50%

Weekend News

USD:

FED officials split on inflation’s path

The $1.5T business tax change flying under the radar WSJ

Mester says she doesn’t think the FED is behind the curve

Mester favours starting FED balance sheet unwind this year

Bullard Sept balance sheet move possible, options should stay open

Bullard we ar in low interest rate, low inflation regime

EUR:

Greece raised to Caa2 from Caa3 by Moody’s outlook positive

Hanover Rueck CFO sees ECB rates staying low for years.

Time may be nearing for ECB stimulus exit: Weidmann tells Reuters

ECB formally deems Veneto Banca and Banca Popolare de Vicenza failing or likely to fail

GBP:

UK credit binge may spur BoE’s Carney to rein in exuberance

Next global financial crisis to hit with a vengeance warns BIS UKT

UK turns to emerging markets for trade as Brexit talks begin

AUD:

Western Australia state considers new bank tax, AFR reports

Ozzies face consumer crunch on spiralling debt and sickly wages

GBP/EUR:

Brexit fight looms over role of European court, UK warns BBG

Harry Hindsight

• EUR: A quiet start to the session with the market dipping from the opening just above the 1.1150 areas and drifting into Tokyo to test through towards 1.1145 levels and the lows for the day, a steady rise from that point with some minor EURJPY buying moving in and the market pushed through to hold around the 1.1160 levels for a limited period before slowly pushing through into the grey hour and early buyers moving in and continuing into the London session to the 1.1185 levels with some better PMI numbers however, the Eurozone numbers disappointed and the market dipped back into the 1.1160’s before holding through to the NYK session, USD sellers move into the market with volumes below the norm for the day and the Euro rose through to test towards the 1.1210 areas and then trading quietly through to the close around the 1.1200 areas.
• GBP: Pushing up from the opening around the 1.2680 areas the market saw USD selling into the Tokyo session and the Cable pushed through to the 1.2700 areas before moving higher from the opening in London, Cable traded to the 1.2740 for the rest of the day unable to push below the 1.2710 level and finishing around the 1.2720 levels on very quiet trading.
• JPY: USDJPY ranged narrowly throughout the day with the market opening around the 111.30 levels and unable to push to far beyond the 111.40 areas making the highs in Tokyo before drifting into the London session to trade through the rest of the day trading around the 111.25 level and unable to challenge the early highs or move beyond the 111.15 levels.
• AUD: Limited range for the Oz with the market climbing steadily through the day from the opening around 0.7540 to test to the 0.7580’s into the London session and then slipping back a little on limited profit taking before holding around the 0.7565-75 through to the close.

Yesterday’s premiership results

JPY         Manufacturing PMI Jun (P) A 52 | C 53.4 | P 53.1

EUR        France Manufacturing PMI Jun (P) A 55 | C 54 | P 53.8

EUR        France Services PMI Jun (P) A 55.3 | C 57 | P 57.2

EUR        Germany Manufacturing PMI Jun (P) A 59.3 | C 59 | P 59.5

EUR        Germany Services PMI Jun (P) A 53.7 | C 55.4 | P 55.4

EUR        Eurozone Manufacturing PMI Jun (P) A 57.3 | C 56.8 | P 57

EUR        Eurozone Services PMI Jun (P) A 54.7 | C 56.1 | P 56.3

CAD       CPI M/M May A 0.10% | C 0.20% | P 0.40%

CAD       CPI Y/Y May A 1.30% | C 1.50% | P 1.60%

CAD       CPI Core – Common Y/Y May A 1.30% | C 1.40% | P 1.30%

CAD       CPI Core – Median Y/Y May A 1.50% | P 1.60%

CAD       CPI Core – Trim Y/Y May A 1.20% | P 1.30%

USD       US Manufacturing PMI Jun (P) A 52.1 | C 52.9 | P 52.7

USD       US Services PMI Jun (P) A 53 | C 53.9 | P 53.6

USD       New Home Sales May A 610K | C 593K | P 569K

Stay lucky

Andy

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