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All the latest business and technology views and insights on the FX industry from LMAX Exchange management and staff

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Daily FX Market Commentary

Good morning,

 

LMAX Close

USDJPY 110.035 | EURUSD 1.17848 | AUDUSD 0.76104 | NZDUSD 0.70188 | USDCAD 1.29799 | USDCHF 0.98531 | GBPUSD 1.33809 |

 

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.17825 | 1.1741

USDJPY                 110.495 | 110.047

GBPUSD               1.33814 | 1.33461

USDCHF               0.98751 | 0.98541

AUDUSD              0.76217 | 0.75846

USDCAD               1.30128 | 1.29847

NZDUSD               0.70437 | 0.69989

EURCHF                1.16195 | 1.15928

EURGBP               0.88082 | 0.87949

EURJPY                 130.017 | 129.51

 

For today

  • GBP: Cable started the day quietly drifting through from the open and the move into the Tokyo session saw the market testing through to yesterdays 1.3350 levels before holding and slowly moving through to the 1.3360 areas, Topside offers slightly stronger on a move through to the 1.3440 area with weak stops likely on a break through the 1.3450 areas and opening the market to a test to the 1.3500 areas and possibly stronger offers, downside bids light through to the 1.3350 level and some strong bids through to the 1.3340 level before the market opens a little before strong bids again appear into the 1.3300 areas with congestion then continuing through the level and likely to continue through to the next set of strong bids.
  • EUR: More concerns beginning to filter through as German manufacturing faces a double whammy from US trade sanctions and UK Brexit, Euro dropped quickly back through the 1.1750 levels stretching close to the 1.1740 area before finding some support, the market slowly recovered through the day testing through to the 1.1770 areas before holding quietly through to the grey hour, downside congestive bids into the 1.1700 areas with weak stops through the level and then stronger bids into the 1.1650 level, weakness through the level and the market then opening to a weaker 1.1600 level likely to continue through to the stronger 1.1550 levels, topside offers light through the 1.1800 level with stronger offers likely into the 1.1840 level and those offers likely to continue through to the stronger 1.1880 area.
  • JPY: USDJPY opened quietly around the 110.05 areas and then slowly rose through into the Tokyo session testing from the 110.20 level through to the 110.40 level with markets talking about weak stops moving the market however, the USD seemed to strengthen through the early part of the session across the board, USDJPY tested to the 110.50 level in early trading before slowly drifting through the balance of the session before recovering into the grey hour, offers in the current areas and stronger offers likely on any attempt to the 111.00 level however, some weak stops are likely to be mixed in before that level, weak stops on a test through the 111.20 areas however, offers are likely to increase in size from that point through to the 111.50 areas.
  • AUD: opening around the 0.7610 level quick USD buying into the Tokyo session saw the Oz dropping quickly back into the 0.7580’s areas held for a brief period before running back to the opening levels and then skipping through to the 0.7620 areas before holding quietly through to the grey hour, downside bids through the 0.7560 level likely to be strongly protected on a move through to the 0.7500 areas, congestion is likely to continue through the level with stronger bids likely to continue, topside offers through to the 0.7680 level likely to be light before increasing above the level and into the likely very strong 77 cent level.

 

Overnight News

OPEC:

OPEC resistance to Saudi plan grows with Iraqi defiance

GBP:

May edges toward Brexit bill compromise to see off rebellion

Davis said to sign compromise Brexit customs amendment for Govt

Brexit secretary said to back deal to buy off Tory rebels

EUR:

Germany wants Greece to get financial buffer, not debt relief – Sueddeutsche Zeitung

ECB will have to mutualize all sovereign debt to prevent an EU breakup – source

Bunds face heavy macro spill over risk ahead of live ECB meeting

German car industry fears double shock of Trump tariffs and a Brexit break

MXN:

Cheese gets caught in trade crossfire as US – Mexico spat brews

USD:

NY Fed survey: Inflation expectations unchanged

DJ Lawrence Kudlow, Director of the White house NEC suffers heart attack

NZD:

NZ May retail card spending rise 0.4% MoM est. 1.2%

USD/KRW/SGD:

Summit begins in Singapore between Trump and Kim

Trump and Kim pose for pictures after lunch

 

Today’s data

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

JPY         BSI Large Manufacturing Q/Q Q2 A -3.2 | C 3.2 | P 2.9

JPY         Domestic CGPI Y/Y May A 2.70% | C 2.10% | P 2.00% | R 2.10%

AUD       NAB Business Conditions May A 15 | C 18 | P 21

AUD       NAB Business Confidence May A 6 | C 9 | P 10 | R 11

AUD       Home Loans M/M Apr A -1.40% | C -1.70% | P -2.20% | R -2.30%

JPY         Tertiary Industry Index M/M Apr A 1.00% | C 0.60% | P -0.30%

08:30     GBP       Jobless Claims Change May C 11.3K | P 31.2k

08:30     GBP       Claimant Count Rate May P 2.50%

08:30     GBP       Average Weekly Earnings 3M/Y Apr C 2.60% | P 2.60%

08:30     GBP       Weekly Earnings ex-Bonus 3M/Y Apr C 2.90% | P 2.90%

08:30     GBP       ILO Unemployment Rate 3Mths Apr C 4.20% | P 4.20%

09:00     EUR        German ZEW Economic Sentiment Jun C -14.6 | P -8.2

09:00     EUR        German ZEW Current Situation Jun C 85 | P 87.4

09:00     EUR        Eurozone ZEW Economic Sentiment Jun C 0.1 | P 2.4

12:30     USD       CPI M/M May C 0.20% | P 0.20%

12:30     USD       CPI Y/Y May C 2.60% | P 2.50%

12:30     USD       CPI Core M/M May C 0.20% | P 0.10%

12:30     USD       CPI Core Y/Y May C 2.20% | P 2.10%

18:00     USD       Monthly Budget Statement May C -119.0B | P 214.3B

 

Harry Hindsight

  • EUR: Opening around the 1.1775 level and trading quietly into the Tokyo session the market lifted quickly through to the 1.1785 level before pausing, weekend news on the subject of trade between the US and everyone, the market again ran higher this time pushing to the Asian highs above the 1.1805 level before struggling through to the London session holding below the 1.1800 areas, the move into the London session saw the market push quickly through to the 1.1815 levels and although the market continued to push at the level it was unable to move through the 1.1820 level with any conviction before dropping back several hours later to hold the opening levels through into the NYK session, NYK were slow buyers taking the market towards the highs but the move developed slowly and once London closed the Euro dropped back again and held through to the 1.1780 area close.
  • GBP: Cable opened quietly and saw a slow rise through the Asian session testing through to the 1.3425 levels before drifting back to the opening levels for the move into the London session, London bought strongly from the opening testing above the old resistance line to the 1.3440 areas before moving to the UK numbers, and disappointing ones at that falling quickly back to the 1.3365 level with monthly dips in production numbers and the only rising number was the Visible trade balance, not what was needed and the market again pushed through to test the 1.3350 level before finding sufficient support to rally the Cable into the NYK session and pushing back to the 1.3400 level in a steady push, however, with London out of the picture the market drifted through the session holding through to the close around the 1.3380’s.
  • JPY: USDJPY opened weaker but filled the gap in early trading and holding the 109.50 areas through to late in the session, before rallying sharply and pushing through to the London session testing the 110.00 levels in two quick moves, the rest of the day saw the market fairly static trading around the figure level through to the close holding just off the 110.10 highs.
  • AUD: Opening a little lower the market filled the gap quickly and then traded through to the 76 cent holding into the Tokyo session and rising through to the 0.7610 areas to hold through to the London session, early London extended the highs a touch through to the 0.7615 areas but generally continuing the range into NYK, NYK took the market to the high of the day but again it was only a small rise and holding the 0.7620 and drifting back to the close.

 

Yesterday’s premiership results

NZD       Manufacturing Activity Q1 A 0.60% | C 2.80% | P 2.60%

JPY         Japan Money Stock M2+CD Y/Y May A 3.20% | C 3.30% | P 3.30% | R 3.20%

JPY         Machine Orders M/M Apr A 10.10% | C 2.50% | P -3.90%

JPY         Machine Tool Orders Y/Y May (P) A 14.90% | P 22.00%

GBP       Visible Trade Balance (GBP) Apr A -14.0B | C -11.5B | P -12.3B | R -12.0B

GBP       Industrial Production M/M Apr A -0.80% | C 0.10% | P 0.10%

GBP       Industrial Production Y/Y Apr A 1.80% | C 2.70% | P 2.90%

GBP       Manufacturing Production M/M Apr A -1.40% | C 0.30% | P -0.10%

GBP       Manufacturing Production Y/Y Apr A 1.40% | C 2.90% | P 2.90%

GBP       Construction Output M/M Apr A 0.50% | C 2.40% | P -2.30%

GBP       NIESR GDP Estimate May A 0.20% | P 0.10%

 

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