Daily FX Market Commentary

Andy Harrison

Andy Harrison

Good Morning,

LMAX Close

USDJPY 107.792 | EURUSD 1.13695 | AUDUSD 0.69852| NZDUSD 0.66798 | USDCAD 1.3127 | USDCHF 0.97797 | GBPUSD 1.26886 |

LMAX highs and Lows 05.00 GMT

                                Highs | Lows

EURUSD               1.13751 | 1.1349

USDJPY                 108.133 | 107.65

GBPUSD               1.26977 | 1.26748

USDCHF               0.98094 | 0.9774

AUDUSD              0.69995 | 0.69842

USDCAD               1.31344 | 1.31176

NZDUSD               0.66872 | 0.66741

EURCHF                1.11365 | 1.11161

EURGBP               0.89629 | 0.89502

EURJPY                 122.799 | 122.425

For Today

  • GBP: A slow start to the day rising through to test towards the 1.2700 levels before drifting back and testing through the 1.2690 level and eventually testing through to the 1.2680 level for the move into the grey hour, strong congestion above the 1.2760 level with possibly weak stops on a test through the 1.2780 areas and a quick push through the sentimental levels and momentum building to a stronger test through to the 1.2900 level and limited congestion in the area likely to slow the rise however, very little technical wise to stop further movement higher other than Brexit news. Downside Strong congestion on any move through the 1.2650 level and building into the 1.2620-00 area, a dip through the level is likely to see some weak stops however, the downside is possibly going to see better buyers moving in on any dips through towards the 1.2500  levels and limited interest from sellers for the time being.
  • JPY: The move through the early part of the session saw the market drifting a little before reversing the lows around the 107.65 area saw the market start to rise quickly through to the 108.00 level helped by the tentative peace initiative between the US and China, once through the figure level the market pushed steadily through to the 108.15 area for the move into the grey hour, Congestion likely through the downside with weak stops on a break through the 106.80 areas and support are likely to start appearing on any push through to the 106.20-00 areas and the congestion then increasing on any attempt to break through to the 105.80 levels. Topside offers with weak stops likely on a break above the 108.30 areas and opening a move through to the 108.80-109.00 level where better offers are likely to appear.
  • AUD: Moving quietly through the early part of the day into the Tokyo session and rising through to the 70 cents area in limited trading before drifting back to the low 0.6990 areas for the move into the grey hour, Topside offers from the current levels are a little thin but increase as the market pushes towards the 0.6980 level with weak stops on a move through the 0.7050 and then some stronger offers appearing to slow the market from squeezing higher, Downside bids light through the 69 cents level with limited stops likely to appear before stronger bids start to reappear on a move through the 0.6850 level and increasing the closer to the 68 cents level the market gets.
  • EUR: Rising from the 1.1370 level the move to the topside saw limited action and once into the Tokyo session and drifting through to the opening levels the market dipped quickly to the 1.1360 level before slowly drifting again and repeating the move to hold around the 1.1350 level for the move into the grey hour, , Congestive offers still remain to the topside with possible weak stops above the 1.1420 level and lighter congestion from there through the usual 1.1440-60 area to build into stronger offers on any push for the 1.1480-1.1500 area, even through this level the market continues to see resistance to the 1.1550 level and the market moving into the ranges from last summer, downside bids light back through to the 1.1350 area with some possible stronger congestion in the area however, through there leaves very little until the approach of the 1.1320-00 area where some older bids could still be holding

 

Overnight News

USD:

Trump’s impulsive approach to China makes US vulnerable – FT

Teardown of Huawei’s latest model shows reliance on US sourcing – Nikkei

Containment plan: How Trump can challenge China’s rising power – Nationalinterest

San Francisco Fed’s Daly says US labour market is very tight – BBG

Daly: Plateauing wage growth gives me pause – BBG

Daly: Uncomfortable inflation lower than target – BBG

Daly: May have to do more to drive inflation above 2% target – BBG

Daly: A little inflation right now would be welcome – BBG

Daly: Inflation has been softer since may meeting – BBG

Daly: She doesn’t see a recession around the corner – BBG

Daly: Lingering trade headwinds to slow economic momentum – BBG

Daly: Aim of rate cut would’ve be to get economy back to potential – BBG

EUR:

Loophole may let ECB buy unlimited government debt – BLG

USD/EUR/IRR:

Iran, will exceed uranium limits unless Europeans act – ABC

OIL:

WTI’s Big rally has room to keep running, technically – BBG

CNY:

China says Pork supply to tighten this year, Armyworm spreading – BBG

China’s economy slows further as Trump, Xi set to meet – BBG

NZD:

RBNZ to match cuts of other Central Banks – DJ

USD/CNY:

Trump ready for tariff with China – Politico

These giant cranes show why the next fight in the US-China trade war could be so damaging – WPT

Trump warns of plan B on China trade: Billions more in tariffs – BBG

Huawei personnel worked with China military on research projects – BBG

US and China agree tentative truce before G20 – SCMP

Trump and Xi to meet at 1130am on Saturday in Osaka (0230GMT)

EUR/USD/CNY:

EU commissioner on US-China trade war… Countermeasures ready – Spiegel

SGD:

MAS sees no policy impact from US treasury report

Menon Mas: concerns over facebook libra not trivial

Inflation to remain subdued within forecast range

No significant shift in business, funds from Hong Kong

Global economy is not headed for crash

Reviewing 1.5-2.5% GDP forecast range for 2019

Prolonged Hong Kong uncertainty not good for Singapore

GDP growth likely to be weaker than previous est.

Monetary policy stance remains appropriate

 

Today’s Data

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

JPY         Retail Trade (YoY) (MAY) A 1.2% | C 1.2% | P 0.5% | R 0.4%

JPY         Retail Trade s.a. (MoM) (MAY) A 0.3% | C 0.6% | P 0.0% | R -0.1%

JPY         Large Retailers’ Sales (MAY) A -0.5% | C 0.2% | P -1.8%

NZD       ANZ Activity Outlook (JUN) A 8.0 | P 8.5

NZD       ANZ Business Confidence (JUN) A -38.1 | P -32

CNY        Industrial Profits (YoY) (MAY) A 1.1% | P -3.7%

JPY         BOJ Wakatabe speaks in Aomori

09:00                     EUR Euro-Zone Economic Confidence (JUN) C 104.7 | P 105.1

09:00                     EUR Euro-Zone Business Climate Indicator (JUN) C 0.28 | P 0.3

09:00                     EUR Euro-Zone Industrial Confidence (JUN) C -3.0 | P -2.9

09:00                     EUR Euro-Zone Services Confidence (JUN) C 12.4 | P 12.2

09:00                     EUR Euro-Zone Consumer Confidence (JUN F) C -7.2 | P -7.2

12:00                     EUR German CPI (MoM) (JUN P) C 0.2% | P 0.2%

12:00                     EUR German CPI (YoY) (JUN P) C 1.4% | P 1.4%

12:30                     USD GDP Annualized (QoQ) (1Q T) C 3.2% | P 3.1%

12:30                     USD Personal Consumption (1Q T) C 1.3% | P 1.3%

12:30                     USD Initial Jobless Claims (JUN 22) C 219k | P 216k

12:30                     USD GDP Price Index (1Q T) C 0.8% | P 0.8%

12:30                     USD Continuing Claims (JUN 15) P 1662k

12:30                     USD Core PCE (QoQ) (1Q T) C 1.0% | P 1.0%

14:00                     USD Pending Home Sales (MoM) (MAY) C 1.0% | P -1.5%

14:00                     USD Pending Home Sales (YoY) (MAY) P 0.4%

22:00                     NZD ANZ Consumer Confidence (MoM) (JUN) P -3.2%

22:00                     NZD ANZ Consumer Confidence Index (JUN) P 119.3

23:01                     GBP GfK Consumer Confidence (JUN) C -11 | P -10

23:01                     GBP Lloyds Business Barometer (JUN) P 10

23:30                     JPY Jobless Rate (MAY) C 2.4% | P 2.4%

23:30                     JPY Job-To-Applicant Ratio (MAY) C 1.63 | P 1.63

23:30                     JPY Tokyo Consumer Price Index (YoY) (JUN) C 1.0% | P 1.1%

23:30                     JPY Tokyo Consumer Price Index Ex-Fresh Food (YoY) (JUN) C 1.0% | P 1.1%

23:30                     JPY Tokyo CPI Ex-Fresh Food, Energy (YoY) (JUN) C 0.8% | P 0.8%

23:50                     JPY BOJ Summary of Opinions

23:50                     JPY Industrial Production (MoM) (MAY P) C 0.7% | P 0.6%

23:50                     JPY Industrial Production (YoY) (MAY P)  C -3.0% | P -1.1%

 

Harry Hindsight

 

  • GBP: A limited 50 pip range over the course of the day, opening quietly around the 1.2690 level the market ranged quietly into the Tokyo session dipping a little from there to the 1.2680 area and running to the grey hour before extending the lows testing through to the 1.2665 level for a limited range around the 1.2670 areas and a slow rise through to the late morning session to test towards the 1.2710 levels before dropping quickly back as the early NYK sellers moved into the market and another test to the lows, the move through to the end of the session saw the market moving back to the opening levels and a slow range around the opening level to the close.
  • JPY: USDJPY rose quietly in the Tokyo session after a quiet move into that session, testing through to the 107.50 levels from the opening around the 107.20 areas, and holding steady just below the level through deep into the London session, the break through the 107.50 level saw the market quickly test to the 107.70 areas and another long drawn out tight range to just after the London close before extending the highs through to the 107.85 areas before drifting to the close.
  • AUD: Rising through the day, the Oz opened around the 0.6960 level with minor selling early in the day to test the 0.6955 areas and apart from a brief spike to towards the 0.6950 level the market remained in a slow push to the London session before accelerating through the 0.6970 level for a push through in early morning to the mid 0.6990’s, failing and drifting back through to deep into the NYK session dipping into the 0.6970’s before again trying and failing for the second time and drifting to a close just below the highs.
  • EUR: Reasonable quiet until deep into the NYK session, opening around the 1.1370 levels the market moved through into Asia testing initially to the 1.1360 level before rising a little through the opening level into the Tokyo session, Tokyo now in full flow saw limited selling with the market drifting through to the 1.1355 areas and holding quietly through into the London session to start a slow rise through to the opening levels before drifting back and ranging around the 1.1360 level through deep into the NYK session before seeing a steady grind through to make the highs of the day around the 1.1390 level before drifting back to the close almost unchanged.

 

Yesterday’s Premiership results

NZD       RBNZ Official Cash Rate (JUN 26) A 1.50% | C 1.50% | P 1.50%

EUR        German GfK Consumer Confidence (JUL) A 9.8 | C 10 | P 10.1

CHF        Credit Suisse Survey Expectations (JUN) A -30 | P -14.3

GBP        BBA Loans for House Purchase (MAY) A 42400 | C 41000 | P 42989

GBP        BOE’s Carney, Cunliffe, Tenreyro and Saunders Speak

USD        MBA Mortgage Applications (JUN 21) A 1.3% | P -3.4%

USD        Durable Goods Orders (MAY P) A -1.3% | C -0.1% | P -2.1% | R -2.8%

USD        Durables Ex Transportation (MAY P) A 0.3% | C 0.1% | P 0.0% | R -0.1%

USD        Advance Goods Trade Balance (MAY) A -$74.5b | C -$71.9b | P -$72.1b

USD        Retail Inventories (MoM) (MAY) A 0.5% | C 0.3% | P 0.5%

USD        Wholesale Inventories (MoM) (MAY P) A 0.4% | C 0.5% | P 0.8% | R 0.9%

USD        DOE U.S. Crude Oil Inventories (JUN 21) A -1.2788K | C -2837K | P -3106k

USD        DOE U.S. Gasoline Inventories (JUN 21) A -996k | C -330.64k | P -1692k

USD        Fed’s Daly Speaks to the Forecasters Club of New York

 

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