Daily FX Market Commentary

Andy Harrison

Andy Harrison

Good Morning,

LMAX Close

USDJPY 108.399 | EURUSD 1.12753 | AUDUSD 0.69772 | NZDUSD 0.66233 | USDCAD 1.33616 | USDCHF 0.99131 | GBPUSD 1.26928 |

LMAX highs and Lows 05.00 GMT

                                Highs | Lows

EURUSD               1.12796 | 1.12663

USDJPY                 108.533 | 108.32             

GBPUSD               1.26996 | 1.26887

USDCHF               0.99185 | 0.99098

AUDUSD              0.69821 | 0.69713

USDCAD               1.33617 | 1.33464

NZDUSD               0.66251 | 0.66143           

EURCHF                1.11823 | 1.11739

EURGBP               0.88846 | 0.88747

EURJPY                 122.378 | 122.184

For Today

  • GBP: Would you be surprised if I said a quiet session with a tight range, opening around the 1.2690 level not quite able to push through the 1.2700 level and then drifting back to the opening levels before running to the grey hour, in the middle of the range. 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: Pushing off the early lows around the 108.30 area the market moved into the Tokyo session pushing through the 108.50 areas but unable to push to far through and ranged in the 108.40-50 areas 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 tight range through the Asian session with the market remaining in the 0.6975 area with limited attempts to the 0.6980 area before heading into the grey hour, more or less unchanged. 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 slow drift from the opening levels moving through to the grey hour pushing towards the 1.1265 level from the opening just short of the 1.1280 area, , Topside offers cleared to 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:

Deflation alert in Europe as markets lose faith in powerless ECB – TEL

Draghi talks tough on stimulus as ECB discusses more rate cuts

ECB a bit more dovish than expected

MXN/USD:

Mexico’s Ebrard says talks on tariffs to continue on Friday – RTRS

Ebrard: US-Mexico talks advancing, no agreement yet -RTRS

USD/MXN:

Draft emergency order seen by the hill justifies Mexico tariffs

Pence: Encouraged Mexican officials went into talks of Thursday offering to do more on immigration – BBG

GBP/EUR:

Germany and most other EU governments will back another delay to Brexit regardless of who becomes UK PM – Times

AUD:

Australia’s economy may not survive Trump’s war – SKY

RBA adjusts committed liquidity facility – BBG

JPY:

BoJ raises purchases of 10-25yr bonds after frequency cut – BBG

CNY:

Yi Gang (PBoC Governor) China has lots of policy room if trade war worsens – BBG

 

Today’s Data

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

AUD       AiG Performance of Construction Index May A 40.4 | P 42.6

JPY         Overall Household Spending Y/Y Apr A 1.30% | C 2.70% | P 2.10%

JPY         Labour Cash Earnings Y/Y Apr A -0.10% | C -0.70% | P -1.90% | -1.30%    

AUD       Home Loans M/M Apr A -1.20% | C -0.30% | P -2.80% | R 2.30%

JPY         Leading Index CI Apr (P) A 95.5 | C 96 | P 95.9

05:45     CHF        Unemployment Rate May C 2.40% | P 2.40%

06:00     EUR        German Industrial Production M/M Apr C -0.50% | P 0.50%

06:00     EUR        German Trade Balance (EUR) Apr C 18.7B | P 20.0B

07:00     CHF        Foreign Currency Reserves (CHF) May P 772B

12:30     CAD       Net Change in Employment May C -5.5K | P 106.5K

12:30     CAD       Unemployment Rate May C 5.70% | P 5.70%

12:30     USD       Change in Non-farm Payrolls May C 180K | P 263K

12:30     USD       Unemployment Rate May C 3.60% | P 3.60%

12:30     USD       Average Hourly Earnings M/M May C 0.30% | P 0.20%

14:00     USD       Wholesale Inventories M/M Apr (F) C 0.70% | P 0.70%

 

Harry Hindsight

 

  • GBP: Opening around the 1.2690 area the market held around the level in a narrow range through to the grey hour, the move into the grey hour saw some strong selling with the opening in London setting the low for the day just beyond the 1.2670 level before starting a slow rise back to the opening levels and while the range improved a little through to the NYK session it remained reasonable tight and unable to test those lows again, the move into the NYK session saw the market quickly pushing higher with ECB a little dovish but the market finding that acceptable, the Cable ran quickly through to the 1.2740 testing a touch through before dropping quickly back in some choppy movements before rising again as Draghi spoke and US numbers disappointed but then drifting from the 1.2730 areas through to finish the day almost unchanged.
  • JPY: Fairly quiet through the day with the market dipping from the opening levels around the 108.40 area to test into the Tokyo session the 108.20 area and then recovering into the Tokyo fix, the market again drifted from the 108.40 areas through to the grey hours this time pushing slowly through to the 108.10 level, the market then based along the level for the balance of the day ranging for the most part in the 108.10-20 areas making the lows through to the 108.00 level before returning to the previous range and once the London session ended the USD started a steady push higher through to the 108.50 areas dipping into the close to the opening levels again.
  • AUD: A slow rise through the day in a limited range, opening around the 0.6970 area dipping a little on the opening before recovering and then dipping again to repeat the lows in early Tokyo holding the 0.6965 area before returning to the 0.6975 area for the move into the grey hour, and a slow push through into the London session testing to the 0.6980 area. NYK saw the market adrift with a quick spike lower on the early numbers and then pushing quickly through to the 0.6985 area and after a brief pause making the highs just through the 0.6990 level before dropping back and holding around the 0.6985 into the later part of the session and slowly drifting through to the close just above the 0.6975 area.
  • EUR: A quiet run through to the NYK session with the market rising a little from the opening around the 1.1225 level and ranging around the 1.1230 area into the London session, the range increased a little with the market ranging around the 1.1235 areas and the run to NYK and disappointing numbers, the market initially dipped towards the 1.1200 area before snapping quickly back and testing initially to the 1.1260 level briefly pausing before testing through the 1.1300 on a spike and dropping back in two steps to the 1.1250 level and rising slowly through to the 1.1300 on a stronger push only to fail a second time and drift to the close around the 1.1275 area.

 

Yesterday’s Premiership results

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

EUR        German Factory Orders M/M Apr A 0.30% | C 0.00% | P 0.60% | R 0.80%

EUR        Eurozone Employment Q/Q Q1 (F) A 0.30% | C 0.30% | P 0.30% 

EUR        Eurozone GDP Q/Q Q1 (F) A 0.40% | C 0.40% | P 0.40%  

USD       Challenger Job Cuts Y/Y May A 85.90% | P 10.90%            

EUR        ECB Rate Decision A 0.00% | C 0.00% | P 0.00% 

EUR        ECB Press Conference                                                   

CAD       International Merchandise Trade (CAD) Apr A -0.97B | C -2.8B | P -3.2B | R -2.34B

USD       Nonfarm Productivity Q1 (F) A 3.40% | C 3.50% | P 3.60%             

USD       Unit Labour Costs Q1 (F) A -1.60% | C -0.90% | P -0.90%

USD       Initial Jobless Claims (JUN 1) A 218K | C 215K | P 215K | R 218K

USD       Trade Balance Apr A -50.8B | C -50.5B | P -50.0B | R -51.9B

CAD       Ivey PMI May A 55.9 | C 56.2 | P 55.9     

USD       Natural Gas Storage A 119B | C 110B | P 114B    

 

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