Daily FX Market Commentary

Andy Harrison

Andy Harrison

Good Morning,

LMAX Close

USDJPY 108.457| EURUSD 1.1221 | AUDUSD 0.69685 | NZDUSD 0.66161 | USDCAD 1.34172 | USDCHF 0.99481 | GBPUSD 1.26853 |

LMAX highs and Lows 05.00 GMT

                                Highs | Lows

EURUSD               1.12330 | 1.1224

USDJPY                 108.408 | 108.182           

GBPUSD               1.26925 | 1.26823

USDCHF               0.99480 | 0.9937

AUDUSD              0.69741 | 0.6964

USDCAD               1.34304 | 1.34098

NZDUSD               0.66315 | 0.66204           

EURCHF                1.11713 | 1.11583

EURGBP               0.88533 | 0.8847

EURJPY                 121.735 | 121.479

For Today

  • GBP: Quiet range through the Asian session with the market opening around the 1.2690 area and generally remaining in the 1.2685-90 areas through to the grey hour, topside offers light through to the 1.2750 areas with stronger sentimental offering around that level before opening to limited offers through the 1.2800 area with weak stops likely on a push through to the 1.2820 areas and opening the chance to a quick move higher, downside bids light through to the 1.2650 area and then increasing through to the 1.2600 level, congestion likely to continue through the downside and increasing to stronger bids into the 1.2550 level.
  • JPY: Dipping on the opening the early market tested marginally through the 108.20 level before moving into the Tokyo session to rise steadily through to the 108.40 areas, all one way from the highs though and the market steadily drifted through to the grey hours falling back to hold the 108.20 level for the move into 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 quiet move through to the grey hour for the Oz with very little movement, opening around the 0.6965 area the market held the early gains around the 0.6970 area through to deep into the Tokyo session before dipping through for a period of light trading around the opening levels again before finally holding the 0.6970 area for the move to the grey hour, Topside offers into the 0.7020 area and weak stops likely on a push through the 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 quiet range, lifting lightly off the 1.1220 opening area the market pushed into the Tokyo session holding around the 1.1230 level and ranging quietly around the level through to the grey hour, Topside offers cleared to the 1.1280 level however, they 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

USD/TWD:

Trump administration readies a $2B Taiwan arms package – BBG

CNY:

China Hengfeng bank seeks to bring in strategic investors – BBG

USD:

Mnuchin to discuss currency clause with Aso on G20 margins – BBG

Pentagon eyes rare earth in Africa in push away from China- RTRS

USD/MXN:

Trump: Progress is being made in talks with Mexico but not nearly enough

Trump: Talks with Mexico will resume on Thursday

Trump: If not agreement is reached a 5% tariff will begin on Monday

MXN:

Hit on Fitch and Moody’s actions, not deal (yet) on tariffs

Fitch downgrades Mexico to BBB outlook stable – FII

Moody’s changes Mexico’s outlook to negative from stable WE1

USD/CNY:

The looming 100-year US-China conflict – FT

 

Today’s Data

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

               

AUD       Trade Balance (AUD) Apr A 4.87B | C 5.05B | P 4.95B | R 4.89B

06:00     EUR        German Factory Orders M/M Apr C 0.00% | P 0.60%

09:00     EUR        Eurozone Employment Q/Q Q1 (F) P 0.30%

09:00     EUR        Eurozone GDP Q/Q Q1 (F) C 0.40% | P 0.40%

11:30     USD       Challenger Job Cuts Y/Y May P 10.90%

11:45     EUR        ECB Rate Decision C 0.00% | P 0.00%

12:30     EUR        ECB Press Conference                   

12:30     CAD       International Merchandise Trade (CAD) Apr C -2.8B | P -3.2B

12:30     USD       Nonfarm Productivity Q1 (F) C 3.50% | P 3.60%

12:30     USD       Unit Labour Costs Q1 (F) C -0.90% | P -0.90%

12:30     USD       Initial Jobless Claims (JUN 1) C 215K | P 215K

12:30     USD       Trade Balance Apr C -50.5B | P -50.0B

14:00     CAD       Ivey PMI May C 56.2 | P 55.9

14:30     USD       Natural Gas Storage P 114B

22:30     AUD       AiG Performance of Construction Index May P 42.6

23:30     JPY         Overall Household Spending Y/Y Apr C 2.70% | P 2.10%

23:30     JPY         Labour Cash Earnings Y/Y Apr C -0.70% | P -1.90%            

 

Harry Hindsight

 

  • GBP: Opening around the 1.2700 level the market held around the level for much of the day, rising steadily from the opening and starting a slow rise through the Asian session to test to the 1.2725 level before reversing on the move into the grey hour, London were quick buyers taking the market to the same highs in the first hour having seen the early Europeans push the market to below the 1.2700 level, the move through to the NYK session saw the market drifting back from the highs to again test the 1.2700 level before NYK quickly pushed through to the 1.2740 areas for the highs of the day and a slow run through to the end of London drifting back to figure level again and slowly drifting through to the close holding the 1.2685 areas.
  • JPY: Opening around the 108.15 area the early market saw the market pushing into the Tokyo session testing above the 108.20 area however, once we moved passed the Tokyo fix the market saw a slow drift lower through to hold around the 108.10 level and holding through to the grey hour before starting the drift again with a light push through the 108.00 level, the move into the London session saw a slow but steady climb away from the level and holding around the 108.30 areas for the move into the NYK session, NYK were quick sellers with safe haven flows probably a misnomer, the market dropped quickly through to the 107.80 area before bouncing a little and forcing its way back through to the 108.10 level and a slow recovery through the balance of the session and a slow grind to the highs of the day just short of the 108.50 area and holding quietly through to the close just off those highs.
  • AUD: Drifting a little from the opening the market held around the 0.6990 level through into the Tokyo session and after a short period started a steady rise through to the 70 cents level with the market then holding around that level through too deep in London, rising early to test to the 0.7008 area and the high of the day before heading into the NYK session falling quickly back to the 0.6980 level bouncing off the level to above the 70 cents level again before starting a slow but steady drift lower through to the 0.6970 level into the London close then holding quietly through to the end of the session testing to the 0.6962 area before finishing the day just below the 0.6970 area.
  • EUR: A slow rise through to the 1.1265 area and holding in a very tight range through to the grey hour before lifting through to the 1.1270 and then London pushing through gradually to the 1.1285 areas, the move through to the NYK session saw the market back to the opening 1.1255 area and a quick rise on the back of the trade war issues and the Euro pushing quickly too the 1.1300 level and clearing the offers through to the level and opening up a chance for a higher Euro, as it was the market started to drift and the momentum was lost and the market steadily reversed through to the 1.1260 level triggering weak stops on the move through the level and testing steadily through to the 1.1230 area, and eventually finding its feet along the 1.1220 level for a slow move through to the close.

 

Yesterday’s Premiership results

AUD       AiG Performance of Service Index May A 52.5 | P 46.5    

AUD       GDP Q/Q Q1 A 0.40% | C 0.40% | P 0.20%            

AUD       GDP Y/Y Q1 A 1.80% | C 1.80% | P 2.30%              

CNY        Caixin PMI Services May A 52.7 | C 54.2 | P 54.5

EUR        Italy Services PMI May A 50 | C 49.8 | P 50.4       

EUR        France Services PMI May (F) A 51.5 | C 51.7 | P 51.7        

EUR        Germany Services PMI May (F) A 55.4 | C 55 | P 55           

EUR        Eurozone Services PMI May (F) A 52.9 | C 52.5 | P 52.5   

GBP       Services PMI May A 51 | C 50.6 | P 50.4 

EUR        Eurozone PPI M/M Apr A -0.30% | C 0.20% | P -0.10%    

EUR        Eurozone PPI Y/Y Apr A 2.60% | C 3.10% | P 2.90%           

EUR        Eurozone Retail Sales M/M Apr A -0.40% | C -0.50% | P 0.00%    

USD       ADP Employment Change May A 27K | C 185K | P 275K  

CAD       Labour Productivity Q/Q Q1 A 0.30% | C 0.40% | P -0.40%            

USD       Services PMI May (F) A 50.9 | C 50.9 | P 50.9       

USD       ISM Non-Manufacturing/Services Composite May A 56.9 | C 55.5 | P 55.5             

USD       Crude Oil Inventories A 6.8M | C -1.7M | P -0.3M             

USD       Federal Reserve Beige Book       

 

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