Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 113.912 | EURUSD 1.14013 | AUDUSD 0.76057 | NZDUSD 0.72821 | USDCAD 1.28773 | USDCHF 0.96406 | GBPUSD 1.28844 |

 

LMAX Ranges 6am London time

Highs    Lows

EURUSD               1.14087 | 1.13981

USDJPY                 114.202 | 113.949

GBPUSD               1.29007 | 1.28858

AUDUSD              0.76148 | 0.75984

USDCHF               0.96428 | 0.96358

USDCAD               1.28911 | 1.28755

NZDUSD               0.72781 | 0.72648

EURGBP               0.88482 | 0.8839

EURCHF                1.09945 | 1.09878

EURJPY                 130.274 | 129.931

For today

• EUR: A quiet session just for a change, ranging around the 1.1400 levels with an early dip through the 1.1395 areas before recovering the opening level and holding quietly through to the midsession before testing towards the 1.1410 level in a half-hearted move before drifting back to the opening levels. Topside sees strong offers into the 1.1440 levels and likely to see weak stops on a move through the level however, stronger offers likely to appear into the 1.1480-1.1500 areas before decent stops appear and the market opens up to a limited offers through to the 1.1580-00 areas. Downside bids light through to the 1.1320-112.80 area with stops on a move through the 112.75 areas opening up a move through to the 1.1200 area however, there is likely to be some congestion in the area and possibly slow going.
• GBP: Cable opening a little stronger, filling the gap and then slowly drifting higher through the Tokyo session to test the 1.2900 areas before holding just below those levels, limited offers through the 1.2900 areas again, with very little until closer to the 1.2950 areas where offers start to increase as the market moves beyond the 1.2970 level with stronger offers around the 1.3000 level with congestion likely to continue through to the 1.3050 level where the market is likely to see some limited option plays as well as strong offers, a break through the level sees the market triggering large stops as the market moves through the sentimental levels with weak offers until the 1.3200 areas. Downside bids light through to the 1.2850 level with limited congestion in the area however, bids then start to increase on any attempt through the level with stronger bids likely to continue through the 1.2800 areas with 1.2765 area possibly key to a move lower with weak stops likely through the level.
• JPY: Opening almost unchanged the market moved to the 114.00 levels before holding around the figure through into CNY numbers with a little movement higher to challenge the 114.20 areas before ranging in the 114.10-20 areas through to the grey hour, Topside offers into the 114.20 areas with possible weak stops through the level with stronger offers likely to reappear on a push through the 114.50 levels and into the 114.80-115.00 area and stronger offers possible. Downside bids light back through the 114.00 level with light stops possible and then limited congestion through to the 113.20 areas and while there may be weak stops on a move below 113.00 the market is likely to see congestion continuing.
• AUD: Drifting from the opening the market tested towards the 0.7595 level before slowly rising back to the opening levels and a slow rise to the 0.7605 areas, CNY numbers helped the Oz a little higher however 0.7615 area is the most it could do before drifting into the grey hour around the 0.7610 areas. Weak offers on a move to the 0.7640 level where the market sees the offers increasing into the 0.7660 area, limited potential for stops until the 77 cent level however, the offers there are likely to be very strong and continuing through to the 0.7750 areas before stops increase. Downside bids light through the 76 cent areas and congestion running through the 75 cent handle with stronger bids into the 0.7550 areas and then increasing as the market moves towards the 0.7530-00 areas.

Overnight News

EUR:

Europe must claim tax due from US giants France

JPY:

Japan PM Abe to reshuffle cabinet as support plunges to lowest since 2012

BoJ Kuroda: Reiterates economy is turning towards moderate expansion and will continue to adjust policy

Kuroda: Reiterates CPI to rise toward 2% target as output gap improves

Financial system has remained stable

GBP:

Weakened May appeals to opponents to help deliver Brexit success

USD:

Trumps Son met Russian lawyer after promise of info on Clinton: NY Times

Today’s data

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

JPY         Machine Orders M/M May A -3.60% | C 1.70% | P -3.10%

JPY         Current Account (JPY) May A 1.40T | C 1.63T | P 1.81T

CNY        CPI Y/Y Jun A 1.50% | C 1.60% | P 1.50%

CNY        PPI Y/Y Jun A 5.50% | C 5.50% | P 5.50%

JPY         Eco Watchers Survey Current Jun A 50 | C 49 | P 48.6

06:00     EUR        German Trade Balance (EUR) May C 20.3B | P 19.8B

08:30     EUR        Eurozone Sentix Investor Confidence Jul C 28.1 | P 28.4

14:00     USD       Labour Market Conditions Index Change Jun P 2.3

Weekend News

G20:

Communique to fight protectionism, secure free trade

G20 bows to Trumps imbalances concern state to “strive to ensure a level playing field”

GBP:

Big UK firms curtail investment plans surveys

GBP/USD:

Trump says trade deal will be good with the UK

EUR:

Firm part owned by Siemens hired to help install turbines in Crimea, breaking EU sanctions

USD/RUB:

Trump says discussed forming cyber security unit with Putin

USD:

Republicans deride Trump’s idea for cyber security unit with Russia

Harry Hindsight

• EUR: A quiet Asian session with the market opening around the 1.1425 levels and testing the level several times through into the London session but struggling each time, the market pushed through the early Asian session to the 1.1410 areas and finally drifted slightly through into the grey hours but with no conviction on testing through the figure, Limited buying from the opening in London but as with Asia the 1.1425 level remained mostly intact and the market remained in the same 1.1405-25 areas until the move into the NYK session, NFP saw the widen and spike to the 1.1440 as the unemployment rate dominated first with a weaker number however, NFP was a strong number and balanced the market with Euro dropping back to the 1.1380 areas bouncing just a little before dropping and testing the level a little stronger, it held and the market then started a steady rise through the session to trade for the bulk of the run to the close around the 1.1405 level before drifting a little into the close.
• GBP: Moving through the Asian session quietly the market held through to the grey hour around the 1.2970 level before dipping into London to hold the 1.2950 level, poor industrial production numbers saw the market drop back quickly to the 1.2920 level to hold for a limited period before slipping through to trade around the 1.2900 areas, the move into the NYK session saw a quick move to the 1.2920 level before dropping back to the 1.2880 areas and then ranging around that level through to the close with a minor run to below 1.2870.
• JPY: USDJPY saw a strong move in the Tokyo session however, the early part of the session saw the market holding the 113.10 levels before pushing above the 113.20 areas and quickly testing the 113.50 area with only a brief pause, before renewing its push to the 113.80 level, from midsession was dull with the market drifting back a little and then centring around the 113.70 areas through into the grey hour, the move through London was limited and only the move into the US numbers reawakened the market with a dip to 113.50 before pushing through the 113.90 levels, the push through the 114.00 levels was a slow grind through to the 114.20 areas before drifting to a close around the 113.90 level.
• AUD: The Oz drifted in early trading from the 0.7585 level to briefly test the 0.7570 areas before finding some support and buying moving in, the move through to the London session saw the push continuing however, as we’ve seen the range over all was about as impressive as the Asian session with the NYK opening seeing the data moving the Oz initially to the 0.7620 areas before dropping back to the 76 cent level to range around the level through to the close.

Yesterday’s premiership results

JPY         Labour Cash Earnings Y/Y May A 0.70% | C 0.40% | P 0.50%

JPY         Real Cash Earnings Y/Y May A 0.10% | C -0.10% | P 0.00%

JPY         Leading Index May (P) A 104.7 | C 104.6 | P 104.2

CHF        Unemployment Rate Jun A 3.20% | C 3.20% | P 3.20%

EUR        German Industrial Production M/M May A 1.20% | C 0.20% | P 0.80% | R 0.70%

CHF        Foreign Currency Reserves Jun A 693.5B | C 695.0B | P 693.7B

GBP       Industrial Production M/M May A -0.10% | C 0.40% | P 0.20%

GBP       Industrial Production Y/Y May A -0.20% | C 0.20% | P -0.80%

GBP       Manufacturing Production M/M May A -0.20% | C 0.40% | P 0.20%

GBP       Manufacturing Production Y/Y May A 0.40% | C 0.90% | P 0.00%

GBP       Construction Output M/M May A -1.20% | C 0.60% | P -1.60% | R -1.10%

GBP       Visible Trade Balance (GBP) May A -11.9B | C -10.9B | P -10.4B | R -10.6B

GBP       NIESR GDP Estimate Jun A 0.30% | P 0.20%

CAD       Net Change in Employment Jun A 45.3K | C 11.4K | P 54.5K

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

USD       Change in Non-farm Payrolls Jun A 222K | C 173K | P 138K | R 152K

USD       Unemployment Rate Jun A 4.40% | C 4.30% | P 4.30%

USD       Average Hourly Earnings M/M Jun A 0.20% | C 0.30% | P 0.20% | R 0.10%

CAD       Ivey PMI Jun A 61.6 | C 57.7 | P 53.8

USD       Natural Gas Storage A 72B | C 61B | P 46B

Stay lucky

Andy

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