Daily FX Market Commentary

Good Morning,

LMAX Close

USDJPY 108.555 | EURUSD 1.12107 | AUDUSD 0.68706 | NZDUSD 0.64915 | USDCAD 1.34116 | USDCHF 0.99868 | GBPUSD 1.25912 |

LMAX highs and Lows 05.00 GMT

                                Highs | Lows

EURUSD               1.12242 | 1.12093

USDJPY                 108.704 | 108.478

GBPUSD               1.26001 | 1.28777

USDCHF               0.99977 | 0.99816

AUDUSD              0.68843 | 0.68721

USDCAD               1.34154 | 1.3406

NZDUSD               0.65101 | 0.64916           

EURCHF                1.12159 | 1.11922

EURGBP               0.89140 | 0.88941

EURJPY                 121.961 | 121.584

For Today

  • GBP: A nervous opening saw some jumpy movement between the 1.2580-1.2595 before settling into a tight range between the 1.2590 1.2598 area through to the grey hour with the market trending to the upper 90’s but with limited volume through the day not really threatening the topside. Downside light sentimental bids through the 1.2550 areas but then opening the market to the stronger bids on any move to the 1.2500 areas and the lows from the end of last year, a break through will likely see plenty of congestion continuing through to the 1.2450 level with limited stops on the break, topside offers light through the 1.2600 level with a possibility of weak stops and the potential for a short squeeze through the 1.2620 level and into the stronger 1.2680-1.2700 areas with possibly decent sized stops on a strong move through the level, congestion above the area though could take the edge off the move and grinding to a halt into the 1.2750 levels and sentimental offers.
  • JPY: Opening a touch weaker the USDJPY moved off the early lows just below the 108.50 and put in a few minor steps higher pushing into the Tokyo session around the 108.50 level and then forcing its way to 108.60 before quickly moving above the area and a slow move to the highs around the 108.70 level before drifting for the balance of the session to the grey hour holding 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 unchanged the Oz started a slow but steady rise from the 0.6870 level to push slowly to above the 0.6880 area and hold quietly through to the grey hour on very light volume, downside bids light through to the 0.6850 level with stronger bids then appearing through to the 0.6840 area before weak stops appear in the market however, 0.6830 area is likely to see some congestive bids from an old trendline appearing and the market likely to see deeper bids appearing through to the 0.6780 area before the downside opens for another deep move. Topside offers light through to the 69 cents level with some light congestive offers likely on any push to the level and then increasing into the 0.6940-60 areas before any chance of a short squeeze appearing and the 70 cents level while likely to be well offered coming under strong threat.
  • EUR: A slow steady rise from the 1.1210 level through to the 1.1225 area before starting a slow drift through to the grey hour with very little movement on the day for the most part, a push through to the 1.1275 level with light offers quickly sees stronger offers starting to build again into the 1.1300 areas with strong stops likely on a test through the 1.1320 level. Downside bids likely to continue through the 1.1200 areas through with congestion likely to dominate the 1.11 handle with particular strength through to the 1.1180 level and again around the 1.1140-60 areas before facing the lows from May.

 

Overnight News

CNY:

Huawei braces for steep drop in overseas smartphone sales – BBG

USD:

Trump: Will the people demand I stay in office after two terms in the White House – Haaretz

Fisher sees Powell’s end, Fed to push BoJ – BBG

NZD:

NZ economists lower GDP growth forecasts – NZIER

NZ May non-tradeable inflation gauge rises 0.2% – ANZ

 

 

Today’s Data

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

GBP       Rightmove House Prices M/M Jun A 0.30% | P 0.90%

09:00     EUR        Eurozone Labour Costs Y/Y Q1 P 2.30%

12:30     CAD       International Securities Transactions (CAD) Apr P -1.49B

12:30     USD       Empire State Manufacturing Jun C 11 | P 17.8

14:00     USD       NAHB Housing Market Index Jun C 67 | P 66

21:00     NZD       Westpac Consumer Confidence Q2 P 103.8

 

Weekend News

 

EUR:

League’s Borghi says he’ll convince Tria on Mini bills – ANSA

ECB will act if inflation expectations deteriorate, Guindos – BBG

Nowotny favours flexible ECB inflation target – Handelsbatt says – BBG

CNY:

As trade war hits, China factories see slowest growth since 2002 – BBG

USD/HKD:

Washington can pull the plug on Hong Kong’s economic model at any moment – Tel

USD:

Powell’s concern over zero rates seen lowering bar for FED cut – BBG

USD/JPY:

Fed’s impact on Yen seen forcing BoJ’s hand on stimulus – BBG

USD/CNY:

Commerce Sec, Ross downplays prospect of major trade deal at Trump-Xi meeting

CHF:

SNB keeps ultra-loose policy with new rate to tame currency – BBG

TRY:

Turkey cut to B1 from Ba3, outlook negative (pre-close Friday)

 

Harry Hindsight

 

  • GBP: Early highs saw the market rising through to just above the 1.2680 level before a slow drift through to the grey hour, the move into the London session saw the market continuing to drift and the market dipped quickly on the break through the 1.2650 level and held quietly around the 1.2630 areas through into the NYK session, US numbers showed a better than expected IP and capacity number and sent the USD scrambling higher across the board with the Cable being pushed through the 1.2600 level triggering weak stops through to the 1.2590 level before holding bouncing and then running lower in a drive to the 1.2580 areas and the close of the day.
  • JPY: A tight range through the Asian session with the market slowly drifting off from the opening around the 108.40 areas and then trading around the 108.30 area for the most part through to the London session where stronger selling appeared for a push to the lows of the day, the market then held in a tight range around that level with a brief couple of attempts towards the 108.15 area through to the NYK session and the release of the US numbers and a quick reversal, the move back through the 108.40 level saw some weak stops appearing however, the market struggled on the first move through to the 108.50 area drifting a little in mid NYK, some slow selling set up the next move and the market moved away from the opening levels this time grinding through to the upper 108.50’s before running out of space and a quiet range through to the close holding just off the highs.
  • AUD: Opening just off its highs the market touched the 0.6918 area before going into a slow decline through to the 0.6890 level on the initial moves in Asia, the move into the London session saw a quiet range through to the NYK session holding the 69 cents level through to the release of the US numbers, strong selling quickly appeared and the market dipped back to the 0.6890 level again and then slowly drifted to the end of the session testing to the 0.6860 level, a slow rise through to the close saw the market pushing back above the 0.6870 levels in a minor reversal.
  • EUR: A quiet session through Asia with the Euro trading around the 1.1275 opening levels into the London session before pushing through to make the highs in early trading just below the 1.1290 area, before dipping through to the 1.1260 level on the London fix and never quiet recovering and stepping lower through to the break of the 1.1250 level into the NYK session and after the brief bounce on the 1.1230 level the rampant USD saw the market dropping steadily touching close to the 1.1200 level before running to the close just above the lows.

 

Yesterday’s Premiership results

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% 

CNY        Fixed Assets Ex Rural YTD Y/Y May A 5.60% | C 6.10% | P 6.10% 

CNY        Industrial Production Y/Y May A 5.00% | C 5.40% | P 5.40%          

CNY        Retail Sales Y/Y May A 8.60% | C 8.00% | P 7.20%             

CNY        Surveyed Jobless Rate May A 5.00% | P 5.00%    

USD       Retail Sales Advance M/M May A 0.50% | C 0.70% | P -0.20% | R 0.30%

USD       Retail Sales Ex Auto M/M May A 0.50% | C 0.40% | P 0.10% | R 0.50%

USD       Industrial Production M/M May A 0.40% | C 0.20% | P -0.50% | R -0.40%

USD       Capacity Utilization May A 78.10% | C 78.00% | P 77.90%              

USD       U. of Mich. Sentiment Jun (P) A 97.9 | C 98 | P 100           

USD       Business Inventories Apr A 0.50% | C 0.40% | P 0.00%

 

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