Daily FX Market Commentary

Good Morning,

LMAX Close

USDJPY 108.075 | EURUSD 1.12413 | AUDUSD 0.69765 | NZDUSD 0.65986 | USDCAD 1.34399 | USDCHF 0.99255 | GBPUSD 1.2664 |

LMAX highs and Lows 05.00 GMT

                                Highs | Lows

EURUSD               1.12578 | 1.12439

USDJPY                 108.063 | 107.858           

GBPUSD               1.26710 | 1.26598

USDCHF               0.99333 | 0.99215

AUDUSD              0.69949 | 0.69589

USDCAD               1.34462 | 1.3433

NZDUSD               0.66002 | 0.65773           

EURCHF                1.11762 | 1.11572

EURGBP               0.88870 | 0.88761

EURJPY                 121.578 | 121.308

For Today

  • GBP: A flat day with a very narrow range, opening around the 1.2660 and unable to push through the 1.2670 areas, the market moved through to the grey hours holding around the 1.2665 area, , limited congestion through to the 1.2700 areas with weak stops likely to run into further congestion on a break through the level, with stronger offers likely in a move above the 1.2750 areas with the congestion likely to increase into the 1.2800 levels, downside bids light through the 1.2600 level with congestion then through to the 1.2550 areas and possibly stronger bids likely through to the 1.2500 level with strong stops through the level if the market can find the momentum to push through the willing buyers.
  • JPY: Opening on its highs slipping through into the Tokyo session testing through the 108.00 level and quietly ranging around the level through into the Tokyo session, before slowly moving through to the lows around the 107.85 area with a slow climb back above the 108.00 area for the move to the grey hour, downside congestion through to the 107.50 level with stops likely to still be below the 107.80 areas, a push through the 107.50 area though is likely to see weakness appearing and the possibility of a quick dip to the 107.00 level with possibly only sentimental bids likely with further congestion not likely until the market dips through the level and continuing through to the 106.00 levels. With limited bids until below 106.50 area, topside offers light through to the 108.50 area with some congestion likely on a move through to the level however a push towards the 109.00 level may see a short squeeze through the level and opening a larger topside move.
  • AUD: A flat move through to the Tokyo session with the market holding the 0.6975 area before dipping in early Tokyo with the Asian sellers squaring off some of their AUDJPY positions and the market making a little dip through to the 0.6960area before recovering the opening levels for the RBA announcement, as expected a 0.25% cut saw the Oz rise quickly from the 0.6975 to the 0.6990 area and the market obviously a little happier about the cut and correcting a little before dipping back to the 0.6980 for the move into the grey hour, Topside offers into the 0.7000 area and weak stops likely on a push through the 0.7020 level the congestion is likely to continue with some minor stops in the mix but likely to struggle to the 0.7050 areas, downside bids light through to the 0.6900 area before stronger bids again appear on any dip through the level and increasing on any dip to the 0.6850 areas.
  • EUR: A very slow day for the Euro with the market opening around the 1.1240 area and slowly rising into the Tokyo session to push lightly through to the 1.1255 area and the highs for the day after ranging around the 1.1250 to the grey hour, Topside offers continue through to the 1.1280 level and are likely to increase into the 1.1300 areas with weak stops likely through the 1.1320 area with stronger offers into the 1.1350 level. Downside bids light through the 1.1180 level with weak stops likely to appear and opening another test to the 1.1100 areas with light congestion into the 1.1150 level.

 

Overnight News

EUR:

Plunging yields expose sorry state of European banks – WSJ

GBP:

UK retail sales drop by most on record in May – BBG

USD/CNY:

US trade representative, Says China misrepresenting why talks broke down

US said to be disappointed China is misrepresenting trade talks

US positions have been consistent while China back pedalled

US position on enforcement does not threaten Chinese sovereignty

CNY/NZD:

China unveils plan to reduce reliance on imported baby formula – BBG

USD:

House democrats plan sweeping antitrust investigation of Facebook, Google and other tech giants – TWT

Bullard: Yield curve signals Fed policy may be too restrictive

USD/MXN:

Mexico says tariffs may backfire as talks with US begin – BBG

Citing Mexico tariffs threat lawmakers say N. American trade deal is in peril – WAPO

EUR/GBP:

Macron says October should be final deadline for Brexit – BBG

AUD:

RBA cuts for the first time in 3yrs after months of warnings

RBA: Board to be paying close attention to labour market

RBA; Cut to make further inroads into spare capacity

RBA: Will adjust policy to support sustainable growth

RBA: Rate of price decline in some housing markets has slowed

RBA: Cut to provide confidence inflation would meet target band

 

Today’s Data

Actual – A | Consensus – C | Previous – P | Revised R | all timings GMT/UTC

               

NZD       Terms of Trade Index Q/Q Q1 A 1.00% | C 0.50% | P -3.00% | R -3.20%

GBP       BRC Retail Sales Monitor Y/Y May A -3.00% | C 0.80% | P 3.70% 

JPY         Monetary Base Y/Y May A 3.60% | C 3.20% | P 3.10%     

AUD       Current Account Balance (AUD) Q1 A -2.9B | C -2.9B | P -7.2B | R -6.3B

AUD       Retail Sales M/M Apr A -0.10% | C 0.20% | P 0.30%          

AUD       RBA Rate Decision A 1.25% | C 1.25% | P 1.50% 

08:30     GBP       Construction PMI May C 50.6 | P 50.5     

09:00     EUR        Eurozone Unemployment Rate Apr C 7.70% | P 7.70%    

09:00     EUR        Eurozone CPI Core Y/Y May (A) C 0.90% | P 1.30%             

09:00     EUR        Eurozone CPI Estimate Y/Y May C 1.30% | P 1.70%            

14:00     USD       Factory Orders Apr C -0.90% | P 1.90%

 

Harry Hindsight

 

  • GBP: A slow rise from the opening around the 1.2635 area and slowly pushing up through the Tokyo session to just above the 1.2650 areas before slowly drifting back through into the grey hours to the opening level again, early London were steady buyers and the market pushed through to test the 1.2660 level and the market ranged around the 1.2650 areas towards the NYK session dropping quickly through to make the low around the 1.2610 level for the move into the NYK session, the market quickly recovered to range around the 1.2630 level through to the end of London and strong buying reappeared to test through the 1.2670 level before drifting back a touch for the close.
  • JPY: A new day a new low, the USDJPY opened around the 108.30 levels and was quickly pushing the 108.20 level before slowing and heading into the Tokyo session recovering to the opening levels, the move through to the grey hour saw the market rising into the London session to push to new highs around the 108.40 level and dipping on the official open and basing on the 108.20 level through to the NYK session with early NYK pushing the market through the previous high a little and keeping the pressure on through to the end of the London session before dipping away and starting a slow steady drop through to the 107.90 levels for the days lows and recovering late in the session to hold around the 108.05 area.
  • AUD: A weaker USD saw the Oz rising a little through into the Tokyo session to the 0.6940 areas from an opening just above 0.6930 before starting a slow steady rise through to the 0.6960 level for the early high, the move through to the grey hour and the London session saw a slow drift through to hold the 0.6940 areas before again starting a slow push higher this time pushing through the 0.6960 area and holding through to deep into the NYK session before again lifting as the early Sydney market moved in, the close saw the market testing just above the 0.6980 areas before drifting to a close just off the high.
  • EUR: A steady strong rally through the day, opening around the 1.1160 level the market pushed gently higher through the Asian session testing to the 1.1190 level and then drifting through into the London session testing through the opening level, the London market was slow to pick up the ball and struggled through to the NYK opening testing towards the highs again, NYK saw the market pushing further struggling around the 1.1200 level before triggering weak stops and testing quickly to the 1.1250 level before pausing and then extending the highs through to just above the 1.1260 levels before dropping back to the close around the 1.1240 level and USD suffering from various trade wars.

 

Yesterday’s Premiership results

AUD       AiG Performance of Manufacturing Index May A 52.7 | P 54.8     

JPY         Capital Spending Q1 A 6.10% | C 2.60% | P 5.70%             

JPY         PMI Manufacturing May (F) A 49.8 | C 49.7 | P 49.6         

AUD       TD Securities Inflation M/M May A 0.00% | P 0.20%         

AUD       Company Operating Profit Q/Q Q1 A 1.70% | C 2.80% | P 0.80% 

CNY        Caixin PMI Manufacturing May A 50.2 | C 50 | P 50.2      

CHF        CPI M/M May A 0.30% | C 0.30% | P 0.20%          

CHF        CPI Y/Y May A 0.60% | C 0.60% | P 0.70%             

CHF        PMI Manufacturing May A 48.6 | C 48.8 | P 48.5

EUR        Italy Manufacturing PMI May A 49.7 | C 48.5 | P 49.1      

EUR        France Manufacturing PMI May (F) A 50.6 | C 50.6 | P 50.6           

EUR        Germany Manufacturing PMI May (F) A 44.3 | C 44.3 | P 44.3      

EUR        Eurozone Manufacturing PMI May (F) A 47.7 | C 47.7 | P 47.7     

GBP       PMI Manufacturing May A 49.4 | C 52.2 | P 53.1

CAD       Manufacturing PMI May A 49.1 | P 49.7

USD       Manufacturing PMI May (F) A 50.5 | C 50.6 | P 50.6         

USD       ISM Manufacturing May A 52.1 | C 53 | P 52.8    

USD       ISM Prices Paid May A 53.2 | C 51 | P 50               

USD       ISM Employment May A 53.7 | P 52.4     

USD       Construction Spending M/M Apr A 0.00% | C 0.40% | P -0.90% | R 0.10%

 

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