Daily FX Market Commentary

Andy Harrison

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 113.379 | EURUSD 1.13642 | AUDUSD 0.76608 | NZDUSD 0.72964 | USDCAD 1.30007 | USDCHF 0.96361 | GBPUSD 1.29404 |

 

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.13772 | 1.13639

USDJPY                 113.402 | 113.084

GBPUSD               1.29553 | 1.2934

USDCHF               0.96380 | 0.96271

AUDUSD              0.76844 | 0.76212

USDCAD               1.30092 | 1.29827

NZDUSD               0.72945 | 0.72627

EURCHF                1.09554 | 1.09483

EURGBP               0.87872 | 0.87789

EURJPY                 128.970 | 128.594

 

For today

  • EUR: A quiet session with a US bank holiday showing in the volumes, trading from the 1.1360 levels the market moved up through the 1.1375 areas before ranging around the 1.1370 in a 10 pip range through to the grey hour, limited offers likely on a move through the 1.1390-1.1400 areas with stronger offers likely to appear on a move through the 1.1440-60 levels with some congestion likely into the 1.1480-1.1500 levels, downside bids light into the 1.1350 areas and weak stops possibly on a move through the level with bids limited through the 1.1300 areas and better bids likely to appear around the 1.1280 level and congestive bids likely to continue through the 1.1240 level, with the US bank holiday the market is likely to be limited at best with Eurozone PPI.
  • GBP: Cable moved quietly from the opening 1.2940 areas with the market touching into the low 1.2930’s before rising up through to the 1.2955 areas and ranging in that area through to the grey hour, downside bids through to the 1.2900 areas with congestive bids in the area and continuing through to the 1.2850 areas before the likelihood of stops appear in strength and a test lower, Topside offers likely through the 1.3000 level and increasing as the market moves towards the 1.3040-50 areas with possible strong stops on a move through that level opening the market to the 1.3200 areas.
  • JPY: USDJPY drifted from the opening 113.45 levels moving into the Tokyo session holding close to the level before dipping towards the 113.10 area and then holding through to the RBA announcement with no change the market dipped a little to again test the 113.10 areas with some AUDJPY cross selling moving through, Downside bids light through the 113.00 levels with weak stops likely on the move back through the level, a push through to the 112.50 level with some congestive bids likely to run through to the 112.00 however, the area is likely to be weak having not had time to really adjust to this move higher, a break through the 111.80 level will likely see stronger congestive bids through to the 111.50 areas. Topside offers into the 113.50 have largely gone unchallenged and has the potential of seeing stronger stops through the level possibly strong offers into the 113.90 levels.
  • AUD: Having opened around the 0.7660 level the market saw a steady climb through to the 0.7680 area, with a little spike to that high on the release of the retail sales number before heading into the RBA announcement, with the rate remaining unchanged and no sign of any hawkishness in the commentary the Oz was a quick drop to the 0.7625 level before holding in the area into the grey hour, Downside bids into the 0.7620 areas see congestive bids into the 76 cent areas with weak stops likely on a push through the 0.7580 levels with the possibility of bids continuing through to the 0.7520 areas. Topside offers light through to the 0.7680-0.7700 areas with stronger offers then kicking in above the level and stops likely to above the 0.7720 areas opening up limited topside potential with strong offers likely to reappear quickly.

 

Overnight News                                                                  

JPY:

Abe may shelve his most divisive policies after Tokyo defeat

EUR:

Some ECB members cautious on lifting easing bias in July

One dead, six wounded by gunman in southern France: official

GBP:

UK factory growth stutters as Eurozone storms ahead

AUD:

PM Turnbull feels the heat from members who feel he is taking the coalition to far to the left

RBA leaves cash rate target unchanged at 1.50%

RBA unchanged policy consistent with sustainable economic growth

RBA an appreciating AUD would complicate economic adjustment

RBA housing prices rising briskly in some markets

RBA inflation expected to increase gradually

NZD:

Little urgency for rate rise as capacity pressures ease

CNY:

China sets new framework for sharing economy policy

  1. Korea crisis could get out of control China’s UN envoy

China opens local bond ratings to global agencies

 

Today’s data

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

JPY       Monetary Base Y/Y Jun A 17.00% | C 19.20% | P 19.40%

AUD      Retail Sales M/M May A 0.60% | C 0.20% | P 1.00%

AUD      RBA Rate Decision A 1.50% | C 1.50% | P 1.50%

08:30    GBP       Construction PMI Jun C 55 | P 56

09:00    EUR       Eurozone PPI M/M May C -0.20% | P 0.00%

09:00    EUR       Eurozone PPI Y/Y May C 3.50% | P 4.30%

 

Harry Hindsight

  • EUR: Opening around the 1.1420 levels the market tested only slightly higher to nudge through the 1.1425 level before slipping into the Tokyo session and a steady drift to the 1.1405 areas and through into the grey hour, ranging through into early London the market eventually dipped through the 1.1400 level as USD buyers moved into the market in front of independence day in the US, mixed PMI numbers across Europe and the movement lower was a steady slip through to the 1.1360 areas before holding around the 1.1355 area ranging quietly in a long run to the close.
  • GBP: Cable opened a little lower and the market ran through to the Tokyo session filling that gap testing through to the 1.3020 areas before starting a slow slip lower through the Asian session, before bouncing into the London session to push back through the 1.3020 levels, the release of worse than expected PMI numbers PMI numbers saw the Cable drop quickly back to the 1.2970 areas and then a steady decline through to the 1.2950 area, holding around the level through to the close with dips to the 1.2930 areas but unable to push much beyond the 1.2960 level.
  • JPY: Opening below Friday’s close the market rose steadily into the Tokyo session filling the gap from the 112.15 area to 112.40 before holding quietly through until deeper into the Tokyo session, from that point the market started a steady rise through into the London session rising to above the 112.60 level and then pushing to the 113.00 levels into the NYK session as the USD recovered, decent ISM numbers in the US saw the market move up to the 113.30 areas with the market continuing to push however, it struggled each time it moved towards the 113.50 level and was unable to get through the level and held around the 113.40 level to the close.
  • AUD: Early gains tested the 0.7695 levels and troubled the area into early Tokyo before starting a slow slip lower through the day, trading steadily through to the 0.7645 areas as the USD saw a minor recovery through the day, having pushed to the lows the market had limited success in moving off the level and traded to the close only 15pips off the lows.

 

Yesterday’s premiership results

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

CHF        Retail Sales (Real) Y/Y May A -0.30% | C -0.80% | P -1.20%

CHF        SVME PMI Jun A 60.1 | C 56.3 | P 55.6

EUR        Italy Manufacturing PMI Jun A 55.2 | C 55.3 | P 55.1

EUR        France Manufacturing PMI Jun (F) A 54.8 | C 55 | P 55

EUR        Germany Manufacturing PMI Jun (F) A 59.6 | C 59.3 | P 59.3

EUR        Eurozone Manufacturing PMI Jun (F) A 57.4 | C 57.3 | P 57.3

GBP       PMI Manufacturing Jun A 54.3 | C 56.3 | P 56.7 | R 56.3

EUR        Eurozone Unemployment Rate May A 9.30% | C 9.30% | P 9.30%

USD       ISM Manufacturing Jun A 57.8 | C 55 | P 54.9

USD       ISM Prices Paid Jun A 55 | C 58.5 | P 60.5

USD       Construction Spending M/M May A 0.00% | C 0.20% | P -1.40% | R -0.70%

 

Good Luck,

Andy

 

 

 

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