Daily FX Market Commentary

Good Morning,

LMAX Close

USDJPY 108.207 | EURUSD 1.13328 | AUDUSD 0.70000 | NZDUSD 0.66642 | USDCAD 1.33667| USDCHF 0.98738 | GBPUSD 1.27378 |

LMAX highs and Lows 05.00 GMT

                                Highs | Lows

EURUSD               1.13306 | 1.13069

USDJPY                 108.651 | 108.371           

GBPUSD               1.27578 | 1.27106

USDCHF               0.99105 | 0.98789

AUDUSD              0.70090 | 0.69707

USDCAD               1.32766 | 1.32379

NZDUSD               0.66679 | 0.66311           

EURCHF                1.12103 | 1.11907

EURGBP               0.89021 | 0.88903

EURJPY                 122.925 | 122.68

For Today

  • GBP: Scrappy opening with the market testing quickly higher and then back again to stabilize around the 1.2730 area and close to the closing on Friday the market held for the first hour before drifting off as the early Tokyo sellers pushed the market into the opening in Tokyo testing to the 1.2720 level the market then limped into the early part of the session testing the 1.2710 area and ranged through to the grey hour holding that low. Light congestion through the 1.2700 area with possible weak stops opening the downside to the 1.2650 area with possibly some stronger bids into the level however, better bids lurk down through to the 1.2600 level before weakness is likely to appear. Topside offers through to the 1.2765 areas with possibly only limited offers through the 1.2800 level and sentimental values seeing limited offers through to the 1.2900 level where offers increase.
  • JPY: USDJPY opened quickly higher pushing the 108.50 level before ranging around the level with an early test through to the 108.40 level and a little through before recovering and starting a stronger rally on the move to the grey hour to test just above the 108.60 level. Topside congestion light through to the 109.00 area with stronger offers competing with weak stops on a move through the 109.20 areas with the offers increasing on any move towards the 109.60 level and likely to be stubborn on any test of the 110.00 level, downside bids light through to the 108.00 area with stronger bids likely to appear on any dip through the level and while stops may be lurking the 107.50 is likely to see increased buying interest.
  • AUD: Opening a little higher around the 0.7005 area the market started drifting shortly after the opening and pushed steadily through the 70 cents level to slowly push into the Tokyo opening to the 0.6995 level and a brief pause before moving deeper into the session and recommitting to the downside and pushing steadily through to the 0.6970 level for the move into 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: Opening a little lower from the close on Friday the market slowly covered the gap before drifting through to the grey hour testing towards the 1.1305 area, Topside offers through the 1.1350 level possibly some mild weakness on a push through the 1.1360 level however, stronger offers are likely to reappear on any test through the 1.1380 level and increasing into the 1.1400 level with weak stops possibly on a push through the 1.1410-20 areas to open a stronger move, downside bids light through to the 1.1250 level with congestion likely in that area with that congestion likely to continue through to the 1.1200 and while there may be some weak stops congestion is likely to continue.

 

Overnight News

EUR:

ECB policymakers open to cut rates if growth weakens – RTRS

Japanese sell $17B of French Bonds after record purchases – BBG

USD/JPY:

Mnuchin spoke on Saturday on the sidelines with G20 FinMin meeting in Japan – SMP

Trump ready to extend tariffs if no trade deal is made – SMP

CNY:

Trade data to show fallout from rift – BBG

 

Today’s Data

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

CNY        Trade Balance (USD) May A 41.7B | C 23.2B | P 13.8B

CNY        Imports (USD) Y/Y May A 0.8.50% | C -3.30% | P 4.00%

CNY        Exports (USD) Y/Y May A 1.10% | C -3.80% | P -2.70%

CNY        Trade Balance (CNY) May A 279B | C 136B | P 94B

CNY        Imports Y/Y (CNY) May A -2.50% | C 5.80% | P 10.30%

CNY        Exports Y/Y (CNY) May A 7.70% | C 4.70% | P 3.10%

JPY         Current Account Total (JPY) Apr (P) A 1.60T | C 1.44T | P 1.27T

JPY         GDP Q/Q Q1 (F) A 0.60% | C 0.60% | P 0.50%

JPY         GDP Deflator Y/Y Q1 (F) A 0.10% | C 0.20% | P 0.20%

JPY         Bank Lending incl Trusts Y/Y May A 2.60% | C 2.40% | P 2.40%

JPY         Bank Lending Ex-Trusts Y/Y May A 2.80% | P 2.50%

JPY         Eco Watchers Survey Current May A 44.1 | C 45.5 | P 45.3 | R 45

08:30     GBP       GDP M/M Apr C -0.10% | P -0.10%

08:30     GBP       Index of Services 3M/3M Apr C 0.20% | P 0.30%

08:30     GBP       Industrial Production M/M Apr C -1.00% | P 0.70%

08:30     GBP       Industrial Production Y/Y Apr C 0.90% | P 1.30%

08:30     GBP       Manufacturing Production M/M Apr C -1.40% | P 0.90%

08:30     GBP       Manufacturing Production Y/Y Apr C 2.00% | P 2.60%

08:30     GBP       Construction Output M/M Apr C 0.50% | P -1.90%

08:30     GBP       Visible Trade Balance (GBP) Apr C -13.1B | P -13.7B

12:15     CAD       Housing Starts May C 220K | P 235K

12:30     CAD       Building Permits M/M Apr C 1.80% | P 2.10%

22:45     NZD       Manufacturing Activity Q1 P -0.50%

23:50     JPY         Japan Money Stock M2+CD Y/Y May C 2.60% | P 2.60%

 

Weekend News

 

MXN:

Mexico never agreed to farm deal with US, contradicting Trump – BBG

USD/MXN:

Trump says he’ll drop Mexico tariff as deal reached on migrants

EUR:

Germany’s Greens oust Merkel’s Christian democrats as most popular party – Tel

Germany braced for catastrophic Trump auto tariffs, which could create a perfect storm for Europe – Tel

HKD/CNY:

Hong Kong protest draws up 1 million in rebuff to China – BBG

USD:

Trump, attacking NYT article, claims Mexico deal has secret provisions – NYT

USD/IRR:

US, Iran plan oil for goods deal to ease sanctions – Arab News

CNY:

China summons Tech giants to warn against cooperating with Trump Ban – NYT

G20:

Wrangles on trade as it warns on downside risks to growth – BBG

 

Harry Hindsight

 

  • GBP: A meagre range through the Asian session before pushing through to the grey hour finally pushing through the topside after the 1.2690-1.2700 level for the most part, early buyers saw the market testing through into the London session and holding through to NYK around the 1.2720 area, a weaker NFP number saw the market in USD drop and the Cable quickly rose through to the 1.2750 areas and eventually grinding higher to the 1.2760 areas before drifting off again on a long run to the close.
  • JPY: Rising from the opening levels on the move into the Tokyo session and pushing through to the 108.50 level and then ranging through into the London session to push through to the highs of the day just through the 108.60 before drifting through to the NYK session and the NFP dominating the releases and the USDJPY dropping quickly through to the 107.90 level for the lows of the day before starting a slow rally back through the 108.00 level and holding through to the close around the 108.20 areas.
  • AUD: Opening just below the 0.6980 areas and ranging through to deep into the London session before posting the lows into the 0.6965 area, the market then slowly pushed back to the 0.6970 areas before the release in NYK and the USD dropping quickly and allowing the Oz to rise quickly through to the 70 cents level, the market held for a short period before a steady grind through to the 0.7020 area before dipping back and holding in a tight range to the close around the figure level.
  • EUR: A slow steady drift from the 1.1280 area opening to test into the grey hour pushing through into the 1.1255 areas, for the most part the market remained mired to the downside through to the 1.1250 level before finding an opening on the release to the US numbers and a quick push to the 1.1325 level and like the Cable pausing for a short period before rising through to just below the 1.1350 level before drifting through to the close.

 

Yesterday’s Premiership results

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

CHF        Unemployment Rate May A 2.40% | C 2.40% | P 2.40%  

EUR        German Industrial Production M/M Apr A -1.90% | C -0.50% | P 0.50%    

EUR        German Trade Balance (EUR) Apr A 17.0B | C 18.7B | P 20.0B      

CHF        Foreign Currency Reserves (CHF) May A 760B | P 772B   

CAD       Net Change in Employment May A 27.7K | C -5.5K | P 106.5K      

CAD       Unemployment Rate May A 5.40% | C 5.70% | P 5.70%  

USD       Change in Non-farm Payrolls May A 75K | C 180K | P 263K | R 224K

USD       Unemployment Rate May A 3.60% | C 3.60% | P 3.60%  

USD       Average Hourly Earnings M/M May A 0.20% | C 0.30% | P 0.20%

USD       Wholesale Inventories M/M Apr (F) A 0.80% | C 0.70% | P 0.70%               

 

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