Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 112.405 | EURUSD 1.14232 | AUDUSD 0.76887 | NZDUSD 0.73342 | USDCAD 1.2966 | USDCHF 0.95841 | GBPUSD 1.30275 |

 

LMAX Ranges 6am London time

Highs    Lows

EURUSD               1.14270 | 1.14038

USDJPY                 112.574 | 112.20

GBPUSD               1.30246 | 1.29951

AUDUSD              0.76953 | 0.76676

USDCHF               0.95997 | 0.95858

USDCAD               1.29943 | 1.2968

NZDUSD               0.73455 | 0.73124

EURGBP               0.87838 | 0.87713

EURCHF                1.09585 | 1.09461

EURJPY                 128.458 | 128.092

For today

• EUR: Opening around the Fridays close the market pushed up to the 1.1425 levels in the pre-Tokyo session before starting a drift through to the 1.1405 area before recovering to the 1.1410 areas as the market approached the grey hour, offers remain around the 1.1440-60 areas with possible weak stops through that level however, stronger offers a possibility into the 1.1480-1.1500 with likely option plays in the area, a break through the 1.1500 area will likely see stronger stops appearing for a move quickly higher and the 1.1600 level more sentimental than anything else with no real resistance areas until higher in the 1.16 handle and given the early close for most of the financial market this evening as the market breaks for independence day limited potential, downside bids light through the 1.1400 areas with limited bids and stops likely on a push through the 1.1380 areas will quickly run into some congestive bids through the 1.1360-40 areas and stronger as the market pushes to the 1.1320-00 areas.
• GBP: Opening a little lower the Cable filled the small gap on the charts before starting a steady slide through to the grey hours probing below the 1.3000 level and holding into the grey hour, Strong offers remain above the 1.3030 level and likely to continue through to the 1.3050 areas, a push through the level could see some stronger stops opening with limited congestion beyond that level until around the 1.3200 areas with possible offers appearing in size as the market looks for a larger move only if it can push through cleanly, sentimental offers are joined by limited congestive offers on any move from there until the market reaches the 1.3400 areas. Downside bids light through to the 1.2950 level and even here the market is likely to be insufficiently bid to protect the level with stronger bids likely to re-enter the market closer to the 1.2900 levels with stronger stops on a break below the level.
• JPY: The USD made slow but steady gains through the session with Tankan report looking a little weak overall and USDJPY rose the weak opening around the 112.20 levels to fill the gap on the charts and test into the 112.50’s before holding quietly through to the grey hour, Topside offers into the 11280 levels likely to continue through to the 113.30 area before weak stops appear and the market opens for a test towards the 1.1400 highs from May, a break above the level is likely to find offers quickly moving in to absorb those stops and stronger offers appearing on a run towards the 114.50 area, Downside bids into the 112.00 level are likely to continue through to the 111.80 areas before weak stops appear, however the move back towards the 111.50 is likely to meet some bids with congestive orders in the area through to the 111.20-00 areas.
• AUD: As with the rest of the market the Oz slipped back from its early highs in the Tokyo session falling back from the 0.7695 trading slowly through to the 0.7670 areas and the grey hour, Topside offers into the 77 cent level likely to be a little thicker having been there and tested the level before falling back again, a push through the 0.7720-30 levels has limited potential with offers quickly moving in again around the 0.7750 areas, downside bids into the 0.7660-40 areas however, there is a possibility of stops in the area and a small battle appearing through to the 0.7640 level with weak stops likely to appear through that level and opening only limited downside potential for the moment.

Overnight News

JPY/CNY/USD:

Xi, Abe get phone calls from Trump as N. Asia tensions rise

AUD:

Australia May building approvals fall 5.6% MoM est. -1.3%

June Melbourne inst. Inflation gauge rises 0.1% MoM

JPY:

Japan’s Aso may be in violation of Minister code, Kyodo says

Historic defeat of LDP In Tokyo assembly election, makes outlook for Japan’s Politics uncertain

GBP:

UK government now accepts painful Brexit trade-offs Guardian

USD/EUR:

Big US funds aren’t buying the European recovery story WSJ

EUR:

Merkel overshadows party ahead of Sept election as she goes for a fourth term

ECB’s Weidmann; ECB working on move away from ultra easy policy

German FinMin Schaeuble, room for more tax cuts after election

Today’s data

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

JPY         Tankan Large Manufacturers Index Q2 A 17 | C 15 | P 12

JPY         Tankan Large Manufacturers Outlook Q2 A 15 | C 14 | P 11

JPY         Tankan Non-Manufacturing Index Q2 A 23 | C 23 | P 20

JPY         Tankan Non-Manufacturing Outlook Q2 A 18 | C 21 | P 16

JPY         Tankan Small Mfg Index Q2 A 7 | C 7 | P 5

JPY         Tankan Small Mfg Outlook Q2 A 6 | C 4 | P 0

JPY         Tankan Small Non-Mfg Index Q2 A 7 | C 6 | P 4

JPY         Tankan Small Non-Mfg Outlook Q2 A 2 | C 3 | P -1

JPY         Manufacturing PMI Jun (F) A 52.4 | C 52 | P 52

AUD       TD Securities Inflation M/M Jun A 0.10% | P 0.00%

AUD       Building Approvals M/M May A -5.60% | C -1.30% | P 4.40%

CNY        Caixin PMI Manufacturing Jun A 50.4 | C 49.8 | P 49.6

JPY         Consumer Confidence Jun A 43.3 | C 43.9 | P 43.6

07:15     CHF        Retail Sales (Real) Y/Y May C -0.80% | P -1.20%

07:30     CHF        SVME PMI Jun C 56.3 | P 55.6

07:45     EUR        Italy Manufacturing PMI Jun C 55.3 | P 55.1

07:50     EUR        France Manufacturing PMI Jun (F) C 55 | P 55

07:55     EUR        Germany Manufacturing PMI Jun (F) C 59.3 | P 59.3

08:00     EUR        Eurozone Manufacturing PMI Jun (F) C 57.3 | P 57.3

08:30     GBP       PMI Manufacturing Jun C 56.3 | P 56.7

09:00     EUR        Eurozone Unemployment Rate May C 9.30% | P 9.30%

14:00     USD       ISM Manufacturing Jun C 55 | P 54.9

14:00     USD       ISM Prices Paid Jun C 58.5 | P 60.5

14:00     USD       Construction Spending M/M May C 0.20% | P -1.40%

Weekend News

JPY:

Scandal hit Abe plunged into crisis after Tokyo election loss

AUD:

Australian housing still remains a problem with household debt seen rising

GBP/EUR:

Theresa May could storm out of Brexit talks over divorce bill

Britain says will move to control EU fishing in its waters.

EUR:

Mersch joins Weidmann in explaining policy path to Germans

German conservatives to promise full employment in party platform

USD/CNY:

US warship in operation near disputed island in S. China sea

Harry Hindsight

• EUR: Euro opened around the 1.1440 levels and traded quietly through to the Tokyo session before dipping back to the 1.1420’s as USD saw some limited improvement, the market bounced back to the opening levels and then held through into the grey hour, the move into the London session saw the market dropping back through to test below the 1.1400 levels testing towards the 1.1390 areas before finding sufficient support, a slight rise in the German unemployment numbers was possibly the reason for the weaker Euro with limited encouragement from CPI numbers and the market made some limited trading back towards the 1.1425 levels, a strong Michigan number saw the market back to the lows before a slow move into the 1.1420 levels and the close.
• GBP: Cable moved from a low opening around the 1.3000 areas and slowly moved to the 1.3010 on the run into the Tokyo session, fixing demand saw the market rising steadily through to the 1.3030 level to post the highs of the day before drifting to the grey hour holding around the 1.3020 levels, EU and ECB had plenty to say from making up committees but generally the Cable saw a move through the 1.3000 level as the USD showed some improvement with the market testing steadily down to the 1.2960 areas and holding around the level into the NYK session, the market did test briefly through to the 1.2950 areas before slowly rising again for the close to approach the highs again into the close.
• JPY: Moving from the 112.10 levels the market struggled into the Tokyo session dipping back to range around the 112.00 levels deep into the session before dropping to make the lows into the 111.75 areas before slowly making its way back to the previous levels into the 112.00 areas and holding through the London session into the NYK session, the market slowly rose from that point to the 112.20 areas and after a couple of hours broke through to test to the 112.40 level, the market struggled from there but did clear to the 112.60 levels in steady trading before finishing the day around the 112.40 areas.
• AUD: A tight range for the Oz through the day, with the market making early gains into the Tokyo session, the market moved steadily through to the 0.7710 level before holding for the run into the grey hour around the 77 cent areas, London were sellers taking the market down towards the 0.7670 areas and through the opening level however, it was short lived and the market ranged around the opening 0.7685 areas through to the NYK session, a whippy period around the Michigan number saw the market move towards the 77 cent level again before dropping back to make fresh lows through the 0.7670 areas, the run to the close saw the market rise steadily through the balance of the day testing just through the opening levels to move back into positive territory for the close.

Yesterday’s premiership results

NZD       Building Permits M/M May A 7.00% | P -7.60% | R -7.40%

GBP       GfK Consumer Confidence Jun A -10 | C -7 | P -5

JPY         Jobless Rate May A 3.10% | C 2.80% | P 2.80%

JPY         Household Spending Y/Y May A -0.10% | C -0.50% | P -1.40%

JPY         National CPI Core Y/Y May A 0.40% | C 0.40% | P 0.30%

JPY         Tokyo CPI Core Y/Y Jun A 0.00% | C 0.20% | P 0.10%

JPY         Industrial Production M/M May (P) A -3.30% | C -3.00% | P 4.00%

CNY        Manufacturing PMI Jun A 51.7 | C 51 | P 51.2

CNY        Non-manufacturing PMI Jun A 54.9 | P 54.5

JPY         Housing Starts Y/Y May A -0.30% | C -0.70% | P 1.90%

EUR        German Retail Sales M/M May A 0.50% | C 0.30% | P -0.20%

CHF        KOF Leading Indicator Jun A 105.5 | C 102.5 | P 101.6 | R 102

EUR        German Unemployment Change Jun A 7K | C -10K | P -9K | R -7K

EUR        German Unemployment Rate Jun A 5.70% | C 5.70% | P 5.70%

GBP       Current Account (Pounds) Q1 A -16.9B | C -16.5B | P -12.1B

GBP       GDP Q/Q Q1 (F) A 0.20% | C 0.20% | P 0.20%

GBP       GDP Y/Y Q1 (F) A 2.00% | C 2.00% | P 2.00%

GBP       Index of Services 3M/3M Apr A 0.20% | C 0.30% | P 0.20%

EUR        Eurozone CPI Estimate Y/Y Jun A 1.30% | C 1.20% | P 1.40%

EUR        Eurozone CPI – Core Y/Y Jun (A) A 1.20% | C 1.00% | P 0.90%

CAD       GDP M/M Apr A 0.20% | C 0.20% | P 0.50%

CAD       Industrial Product Price M/M May A -0.20% | C 0.30% | P 0.60%

CAD       Raw Materials Price Index M/M May A -1.80% | C -1.00% | P 1.60%

USD       Personal Income May A 0.40% | C 0.30% | P 0.40% | R 0.30%

USD       Personal Spending May A 0.10% | 0.10% | P 0.40%

USD       PCE Deflator M/M May A -0.10% | C -0.10% | P 0.20%

USD       PCE Deflator Y/Y May A 1.40% | C 1.50% | P 1.70%

USD       PCE Core M/M May A 0.10% | C 0.10% | P 0.20% | R 0.10%

USD       PCE Core Y/Y May A 1.40% | C 1.40% | P 1.50%

USD       Chicago PMI Jun A 65.7 | C 58 | P 59.4

USD       U. of Michigan Confidence Jun (F) A 95.1 | C 94.5 | P 94.5

Stay lucky

Andy

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