Daily FX Market Commentary

Andy Harrison

Good Morning,

LMAX Close

USDJPY 108.401 | EURUSD 1.12765 | AUDUSD 0.69159 | NZDUSD 0.65699 | USDCAD 1.33258 | USDCHF 0.99397 | GBPUSD 1.26736 |

LMAX highs and Lows 05.00 GMT

                                Highs | Lows

EURUSD               1.12822 | 1.12702

USDJPY                 108.397 | 108.269

GBPUSD               1.26816 | 1.26708

USDCHF               0.99417 | 0.99281

AUDUSD              0.69180 | 0.68922

USDCAD               1.33435 | 1.33237

NZDUSD               0.65728 | 0.65281           

EURCHF                1.12097 | 1.11976

EURGBP               0.88995 | 0.88926

EURJPY                 122.262 | 122.086

For Today

• GBP: A slow rise from the opening around the 1.2675 area too nudge just above the 1.2680 level in another quiet session for the Cable, the move through to the grey hour saw the market drifting and holding the 1.2670 level. Downside bids into the 1.2650 level with congestion likely to continue through to the 1.2600 level with slight weakness through there and possible stronger bids on any move to the 1.2550 level. Topside offers light through to the 1.2750 area with only minor congestion through to that level and strong stops on a move through opening up the 1.2800 level with possibly only limited sentimental resistance and opening the chance of a stronger rally.
• JPY: Choppy but limited in range, opening around the 108.37 level and moving through into early Tokyo drifting a little lower, the market then held around the 108.30 level with jerky movements in both directions before heading into the grey hour holding around the 108.30 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: A slow drift through the early part of the session having opened around the 0.6915 level the market moved through into the Tokyo session with only a slight improvement before drifting through to push through the figure level and eventually hold the 0.6890 area and recovering to the 69 cents level 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: As with the other major pairs the market saw light buying through to the Tokyo session before slowly drifting from the 1.1280 in very light trading with the market easing back to the 1.1270 level for the move into the grey hour, 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

NZD:

NZ May house sales falls 7.8% from a year ago REINZ

USD/IRR:

US navy saw unexploded mine on burning tanker CNN

Trump: Too soon to even think about making a deal with Iran

At lease one gulf tanker attacked with Mines US official

US did not know mines were laid by Iranians US official

US officials: Allege Iranian attack meant to escalate conflict

US officials: Attack shows Iran uninterested in dialogue with the US

SAR:

Al-Falih: Saudi Arabia to take steps to protect ports Arabiya

USD/CNY:

Kudlow warns of consequences if China spurns Trump summit invite BBG

CNY/USD:

EX PBoC Governor Zhou Xiaochuan: Trade war could trigger global currency depreciation

Zhou: Yuan may face pressure if China suffers from export loss BBG

Zhou: Policies can’t be precise in offsetting trade war loss BBG

Zhou: Nations likely to use more active monetary, fiscal policy BBG

Zhou: Trade war to cause GDP growth slowdown in all nations – BBG

GBP:

Johnson dominates race to be UK leader after first round BBG

AUD:

RBA goes into battle with banks over interest rates AFR

JPY:

Falling global yields deter Japanese from going abroad Sumitomo BBG

GOLD:

Tudor Jones takes a leaf out of the Buffet book and praises Gold as the market sees Mining shares bought

 

Today’s Data

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

NZD       BusinessNZ Manufacturing PMI May A 50.2 | P 53 | R 52.7            

JPY         Industrial Production M/M Apr (F) A 0.60% | C 0.60% | P 0.60% 

07:00     CNY        Fixed Assets Ex Rural YTD Y/Y May C 6.10% | P 6.10%      

07:00     CNY        Industrial Production Y/Y May C 5.40% | P 5.40%              

07:00     CNY        Retail Sales Y/Y May C 8.00% | P 7.20%  

07:00     CNY        Surveyed Jobless Rate May P 5.00%         

12:30     USD       Retail Sales Advance M/M May  C 0.70% | P -0.20%         

12:30     USD       Retail Sales Ex Auto M/M May C 0.40% | P 0.10%              

13:15     USD       Industrial Production M/M May C 0.20% | P -0.50%         

13:15     USD       Capacity Utilization May C 78.00% | P 77.90%     

14:00     USD       U. of Mich. Sentiment Jun (P) C 98 | P 100            

14:00     USD       Business Inventories Apr C 0.40% | P 0.00%

 

Harry Hindsight

 

• GBP: The usual mantra with a very quiet Asian session and tight range through to the grey hour, opening around the 1.2690 level the market pushed slowly through to challenge the 1.2700 level into midsession before reversing back to the opening level and slowly slipping through to the 1.2685 area, the move through into the grey hour saw the market more or less unchanged and early European sellers sending the market too its lows for the day just above the 1.2660 then ranging around the 1.2670 level through to the NYK opening with a quicker reversal and the highs being made just after the opening and a test to the 1.2710 level, the move through the balance of the session was a slow drift through to the 1.2670 levels for the close.
• JPY: A quiet opening and move into the Tokyo session with the early highs for the day on a test above the 108.50 level however, safe haven USDJPY selling saw the market quickly testing through to just below the 108.10 level and the range for the day set, the move to the grey hour was a steady grind higher to push through the 108.30 level and holding through into the grey hour, London opening saw some selling to retest through the 108.25 level before slowly pushing through to the opening levels and ranging through in the area to the end of the London session, slow selling late into the session saw the market holding the 108.25 area and a slow meander through to the close.
• AUD: Another quiet day for the Oz with the bulk of the movement around the employment numbers, opening around the 0.6930 level the market moved through into the Tokyo session edging a little higher to push into the 0.6935 area for the numbers, and while the movement was not particularly large it did test initially towards the 0.6940 level before dropping back quickly on the headline number to push into the 0.6915 area, from there it was a slow drift into the London session and while London did take it too its lows there was not much in it with the market testing the 0.6900 level just before the NYK session, the long move through to the close saw the market trading around the 0.6910-20 levels with very little in it.
• EUR: A becalmed Euro continues with the market struggling to move higher, opening around the 1.1290 level the market slowly moved through to test the 1.1300 area into the London session before starting a slow drift through the day, the move through into the NYK session saw the market dip through to the 1.1275 areas and base along the 1.1270 level through to the close.

 

Yesterday’s Premiership results

GBP       RICS House Price Balance May A -10.00% | C -21.00% | P -23.00% | R -22.00%     

JPY         BSI Large Manufacturing Q/Q Q2 A -10.4 | C 4.5 | P -7.3

AUD       Consumer Inflation Expectation Jun A 3.30% | P 3.30%   

AUD       Employment Change May A 42.3K | C 16.0K | P 28.4K | R 43.1K  

AUD       Unemployment Rate May A 5.20% | C 5.10% | P 5.20%  

JPY         Tertiary Industry Index M/M Apr A 0.80% | C 0.40% | P -0.40%   

EUR        German CPI M/M May (F) A 0.20% | C 0.20% | P 0.20%  

EUR        German CPI Y/Y May (F) A 1.40% | C 1.40% | P 1.40%      

CHF        Producer & Import Prices M/M May A 0.00% | C 0.10% | P 0.00%              

CHF        Producer & Import Prices Y/Y May A -0.80% | C -0.70% | P -0.60%             

CHF        SNB Sight Deposit Interest Rate A -0.75% | C -0.75% | P -0.75% 

CHF        SNB 3-Month Libor Lower Target Range A -1.25% | C -1.25% | P -1.25%  

CHF        SNB 3-Month Libor Upper Target Range A -0.25% | C -0.25% | P -0.25%  

EUR        Eurozone Industrial Production M/M Apr A -0.50% | C -0.50% | P -0.30% | R -0.40%

CAD       New Housing Price Index M/M Apr A 0.00% | C 0.00% | P 0.00%

USD       Import Price Index M/M May A -0.30% | C -0.30% | C 0.20% | P 0.10%

USD       Initial Jobless Claims (JUN 8) A 222K | C 215K | P 218K | R 219K

USD       Natural Gas Storage A 102B | C 110B | P 119B    

 

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