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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 110.99 | EURUSD 1.17441 | AUDUSD 0.7466 | NZDUSD 0.68398 | USDCAD 1.31122 | USDCHF 0.99196 | GBPUSD 1.3276 |

 

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.17388 | 1.17227

USDJPY                 111.145 | 110.765

GBPUSD               1.32704 | 1.3249

USDCHF               0.99275 | 0.99186

AUDUSD              0.74369 | 0.74049

USDCAD               1.31554 | 1.31311

NZDUSD               0.68239 | 0.68061

EURCHF                1.16469 | 1.16332

EURGBP               0.88515 | 0.88429

EURJPY                 130.414 | 129.914

 

For today

  • GBP: Initial drop from the opening around the 1.3275 level to test to the 1.3255 as the news on the US tariffs spooked the market for Asia, the market generally held in a tight range basing along the 1.3255 level with one minor move to test the 1.3250 areas before returning to trade around the 1.3260 level to the grey hour, Downside bids through the 1.3200 level with weak stops on a strong move through the 1.3180 level and congestion then continuing through the 1.3140 level and into the 1.3100 areas with bids likely to extend through the level and down to the 1.3040 areas. Topside offers light through to the 1.3300 level with offers likely to be weak through to the 1.3350 areas where offers start to increase through to stronger congestive offers into the 1.3400 areas.
  • EUR: The impact of the Tariff news was a little less fraught with the market drifting from the opening around the 1.1750 level and pushing through into the Tokyo session around the 1.1725 areas and basing around that area through to the grey hour, downside bids through to the 1.1680 with a mixture of stops and congestive bids likely to slow the decent and congestion then continuing through to the 1.1600 before any stops are likely to appear, even through the level the congestion is only likely to increase with good bids into the 1.1550 areas and the lows from last month, topside offers light through to the 1.1780-1.1800 areas with better offers likely to appear around that level and then congestion and short term sellers appear on any move through the 1.1820 level through to 1.1850 and the strongest level for the moment, a push through the 1.1860 area will possibly see some short term weakness before further offers appear into the 1.1900 areas.
  • JPY: Opening just below the 111.00 level the market found the going tough in that area attempting to test back through the figure area and failing, the move into the Tokyo session saw the market drop a little further and hold the 110.80 level through to deeper in the Tokyo session, the final attempt to push through the level failed and the market started a steady climb back to the 111.10 level and hold quietly above the 111.00 areas through to the grey hour, Topside offers weak through to the 111.30 level and most of the weak stops now gone the market pushing through the level should have very little difficulty until it attempts to push through the 111.50 areas and stronger offers are likely to appear on any move through to test the 112.00 area, weak stops on a break above the 112.20 areas could see a stronger move unfolding however, downside bids through into the 110.00 level possibly light with weak stops on a push through the 109.80 areas however, for the moment the yield players are likely to be concerned with the Trade war and the impact locally rather than further afield so may move in on any dips lower, congestion then starts to appear on any move through the 109.60 level and continues through to the stronger 109.40 areas.
  • AUD: Opening lower from the tariff news the Oz dropped through into the Tokyo session test the 0.7410 level before slowing its decent, the move then through to the grey hour saw the market basing just below the 0.7410 levels but struggling to hold its levels, Topside offers through the 0.7480 areas and stronger offers likely into the 75 cent areas with weak stops on a push through the 0.7520 area and a little weakness into the 0.7550 areas where offers start to increase and congestion continuing from there to 76 cent. Downside bids light through to the 74 cent areas with strong bids continuing through to the 0.7380 areas before weak stops appear but likely to be covered by congestive bids through to the 0.7350 level.

 

Overnight News

USD:

US trade representative Lighthizer says US will impose tariffs on 10% on the additional $200B of Chinese imports – Reuters

US released list of additional 200B in Chinese goods to be subject to tariffs

Two months process will allow public to comment on new list of goods subject to tariffs

US Government unsuccessful in efforts to negotiate with China on tariffs says senior administration official

Officials considered impact of tariffs on US consumers in compiling new list of targeted goods

CNY:

China official says in trade, they go low, we go high – BBG

Official: Global investment environment at darkest hour

US is escalating trade tension – MoFCOM official

China is committed to opening up: MoFCOM official

MoFCOM Official: Cooperation is only correct choice for US-China relations

 

Today’s data

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

JPY         Domestic CGPI Y/Y Jun A 2.80% | C 2.80% | P 2.70%

JPY         Machine Orders M/M May A -3.70% | C -5.50% | P 10.10%

AUD       Westpac Consumer Confidence Jul A 3.90% | P 0.30%

AUD       Home Loans M/M May A 1.10% | C -1.90% | P -1.40% | R -0.90%

JPY         Tertiary Industry Index M/M May A 0.10% | C -0.40% | P 1.00%

12:30     USD       PPI M/M Jun C 0.10% | P 0.50%

12:30     USD       PPI Y/Y Jun C 3.20% | P 3.10%

12:30     USD       PPI Core M/M Jun C 0.20% | P 0.30%

12:30     USD       PPI Core Y/Y Jun C 2.60% | P 2.40%

14:00     CAD       BoC Rate Decision C 1.50% | P 1.25%

14:00     USD       Wholesale Inventories M/M May (F) C 0.20% | P 0.50%

14:30     USD       Crude Oil Inventories P 1.2M

 

Harry Hindsight

  • GBP: A couple of more minor ministerial resignations as Brexiters push there point, and the market holding deep into the Tokyo session in a very narrow range, opening around the 1.3260 areas the opening was close to the Asian highs and drifting from there to base along the 1.3250, the move towards the grey hour saw the market drifting and testing to the 1.3225 level before early buyers took advantage and pushed the market through to fresh highs around the 1.3270, a pause before renewing the rally to test the 1.3300 area, some stronger numbers but generally mixed and the market fell back once the initial rally was over with plenty willing to sell, testing back through the opening levels the market eventually tested towards the lows again before rising more slowly through the NYK opening and ranging around the 1.3270 areas until the run to London close and sellers reappearing for a short test to the 1.3250 levels. The run to the close saw a slow push back to the 1.3270 areas again.
  • EUR: With trade tensions building the market ignored the problem through Asia concentrating more on Brexit, the Euro made early highs in Tokyo through the 1.1760 areas before dropping back in midsession to the opening levels around the 1.1750 level, the move towards the grey hour saw the Euro drifting and the move into the grey hour saw the market testing towards the 1.1730 level, London open saw the 1.1750 quickly recaptured and the market trading through the UK numbers in a tight range, before falling back through to the 1.1690 levels taking out minor stops on the run lower, the move into the NYK session saw a steady recovery through the session with NYK being contrary to the general tone and the market moving back to the 1.1750 areas for the close.
  • JPY: Opening around the 110.80 level the USD buying continued through the Asian session with the market moving steadily through to the 111.00 levels into late Tokyo, the move through to the grey hour saw the market increase its move a little to top the 111.20 areas for the move into London, some light profit taking saw the market holding around the 111.10 level for a brief period before renewing the rally as the market moved to the NYK session and pushing through the 111.30 level to make the high for the day, the long run to the close saw the market holding the 111.20-30 level through to a sudden drop as news of the additional tariffs hit just before the close with AUD/JPY doing a lot of work and the market slipping just below 111.00 for the close.
  • AUD: Asia were quiet buyers from the opening with the market rising from the 0.7465 level to test towards the 0.7485 areas before starting a slow drift lower into the London opening and testing to the 0.7455 areas and run through quietly for a short period holding around that level. USD buying saw the Oz drop quickly through to the 0.7435 levels into midmorning in London before slowly recovering through to the close in NYK rising back to the 0.7470 level however, AUDJPY selling on the Tariff news saw the market drop quickly for the close to the 0.7460 area.

 

Yesterday’s premiership results

GBP       BRC Retail Sales Monitor Y/Y Jun A 1.10% | P 2.80%

JPY         Japan Money Stock M2+CD Y/Y Jun A 3.20% | C 3.20% | P 3.20%

AUD       NAB Business Conditions Jun A 15 | P 15

AUD       NAB Business Confidence Jun A 6 | P 6 | R 7

CNY        CPI Y/Y Jun A 1.90% | C 1.90% | P 1.80%

CNY        PPI Y/Y Jun A 4.70% | C 4.50% | P 4.10%

JPY         Machine Tool Orders Y/Y Jun (P) A 11.40% | P 14.90%

GBP       Visible Trade Balance (GBP) May A -12.4B | C -11.9B | P -14.0B

GBP       Industrial Production M/M May A -0.40% | C 0.20% | P -0.80%

GBP       Industrial Production Y/Y May A 0.80% | C 2.70% | P 1.80% | R 1.60%

GBP       Manufacturing Production M/M May A 0.40% | C 0.30% | P -1.40%

GBP       Manufacturing Production Y/Y May A 1.10% | C 3.10% | P 1.40% | R 0.90%

GBP       Construction Output M/M May A 2.90% | C 0.40% | P 0.50%

GBP       GDP M/M May

GBP       Index of Services 3M/3M May A 0.40% | C 0.40% | P 0.20%

EUR        German ZEW Economic Sentiment Jul A -24.7 | C -18.2 | P -16.1

EUR        German ZEW Current Situation Jul A 72.4 | C 78 | P 80.6

EUR        Eurozone ZEW Economic Sentiment Jul A -18.7 | C -5.1 | P -12.6

CAD       Housing Starts Jun A 248K | C 214K | P 196K

CAD       Building Permits M/M May A 4.70% | C 1.40% | P -4.60%

 

 

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