Daily FX Market Commentary

Good Morning,

LMAX Close

USDJPY 108.438 | EURUSD 1.12855 | AUDUSD 0.69651 | NZDUSD 0.66683 | USDCAD 1.31332 | USDCHF 0.98771 | GBPUSD 1.26388 |

LMAX highs and Lows 05.00 GMT

                                Highs | Lows

EURUSD               1.12899 | 1.12752

USDJPY                 108.474 | 108.273

GBPUSD               1.26478 | 1.2626

USDCHF               0.98761 | 0.98672

AUDUSD              0.69861 | 0.69569

USDCAD               1.31384 | 1.31239

NZDUSD               0.66815 | 0.66668

EURCHF                1.11458 | 1.11312

EURGBP               0.89358 | 0.8921

EURJPY                 122.402 | 122.168

For Today

  • GBP: A slow rise through towards the 1.2650 areas before slowly sliding to deep into the session to the 1.2640 in limited volume, the move to the grey hour saw the market dropping quickly through the 1.2630 level before finding some support to hold through to 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 to 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: Early trading saw a dip through to the 108.30 areas before moving into the Tokyo session before starting a slow rise back to the opening levels to fall just short of the 108.50 areas and ranging through to the grey hour holding around the 108.40 levels, downside light bids through to the congested 107.40-20 areas and likely to continue until the 106.80 areas break with weak stops likely to dominate the downside through to the 106.50 areas before some bids are likely to reappear, topside offers cleared through to the 108.50 level however, congestion still remains and likely to increase on any test to the 108.80 level with weak stops likely on a push through the 109.00 level and stronger congestion in the 108.40-60 areas likely to limit further gains.
  • AUD: Opening around the 0.6965 areas the market slipped only slightly lower before moving through into the Tokyo session holding quietly, the market rose steadily deep into the session pushing towards the 0.6980 level and again holding just south of the level before the RBA cut interest rates by 0.25bps to 1.00% to the lowest ever, the market reacted as expected a spike lower and then back again as the market took the cut as a good thing for the economy and having quickly traded on the 0.6950’s the market pushed through into the 0.6985 area to hold through into the grey hour around the 0.6980 level. Topside offers from the current levels are a little thin 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: As my old boss would have called it a snooze fest for the Euro opening around the 1.1285 area and slowly testing the 1.1290 areas before slowly moving through the day to test to the 1.1275 level before holding around the 1.1280 area to 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 congested on any dip through the 1.1260 areas and likely to continue into the 1.1240 level however, even though it lightens a little the move through the 1.1200 areas is likely to see stronger bids appearing on any dip to test the 1.1150 level.

 

Overnight News

CNY:

China announces measures to expand market access

Li: Will offer targeted RRR, lower real borrowing costs to SMES

Li: China to scrap ownership limits for securities by 2020

Li: China economy in 1H has seen steady growth, in proper range

Li: Are some downward pressures facing Chinese economy

Li: Policy to remain prudent, will fine tune appropriately

USD:

Trump says he expects China’s Xi will move on some of the issues that are in dispute – RTRs

Trump says trade talks with China are already underway by phone – RTRs

Trump: Mexico tariffs are off table, country doing great job

USD/EUR:

US proposes tariffs on a further $4B of EU goods

AUD:

RBA: rate cut will help make inroads into spare capacity

RBA: To adjust policy if needed to support growth, inflation

RBA: Inflation pressures subdued across the economy

RBA: Central scenario for Australian economy remains reasonable

RBA: Tentative signs house prices stabilizing in Sydney and Melbourne

 

Today’s Data

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

NZD       Building Permits (MoM) (MAY) A 13.2% | P -7.9%

JPY         Monetary Base (YoY) (JUN) A 4.0% | P 3.6%

AUD       RBA Cash Rate Target (JUL 2) A 1.00% | C 1.00% | P 1.25%

06:00     EUR        German Retail Sales (MoM) (MAY) C 0.5% | P -2.0%

06:00     EUR        German Retail Sales (YoY) (MAY) C 2.7% | P 4.0%

06:00     GBP        Nationwide House PX (MoM) (JUN) C 0.2% | P -0.2%

06:00     GBP        Nationwide House Px n.s.a. (YoY) (JUN) C 0.5% | P 0.6%

08:30     GBP        Markit/CIPS UK Construction PMI (JUN) C 49.2 | P 48.6

09:00     EUR        Euro-Zone PPI (MoM) (MAY) C 0.1% | P -0.3%

09:00     EUR        Euro-Zone PPI (YoY) (MAY) C 1.8% | P 2.6%

09:30     AUD       RBA Governor Lowe speaks in Darwin

10:35     USD        Fed’s Williams Speaks on Global Economic and Policy Outlook

12:30     CAD       MLI Leading Indicator (MoM) (MAY) P 0.4%

13:30     CAD       RBC Canadian Manufacturing PMI (JUN) P 49.1

14:05     GBP        BOE’s Carney Speaks in Bournemouth.

15:00     USD        Fed’s Mester to Speak on Economy in London

17:00     NZD       QV House Prices (YoY) (JUN) P 2.3%

22:30     AUD       AiG Performance of Service Index (JUN) P 52.5

23:00     AUD       CBA Australia PMI Services (JUN F)           P 53.3

23:00     AUD       CBA Australia PMI Composite (JUN F) P 53.1

23:01     GBP        BRC Shop Price Index (YoY) (JUN) P 0.8%

 

Harry Hindsight

 

  • GBP: Strong volume but limited movement opening unchanged around the 1.2700 level and dipping a little through into the Tokyo session to around the 1.2690 level with limited dips below the level before pushing back through to the 1.2705 areas and moving into the grey hour around the opening level, the move into the London session saw the market dipping in 10 pip steps through to the 1.2635 level and basing along that level through the day, the move into the NYK session pushing through to the 1.2670 areas topping a couple of times before returning to the supportive base through to the close.
  • JPY: USDJPY opened a little higher after a poor tankan and a softening of the US-China situation saw the USDJPY rising steadily through the session to the 108.50 area into the London session before running into light selling and the market then basing around the 108.25 level through to NYK, some light buying deep into the NYK session were unable to test the previous level and then struggling between the 108.45-50 level through to the close with decent volume but ultimately limited range.
  • AUD: Oz drifted from the opening with the selling of AUDJPY driving the Oz a little lower through to the 0.6990 areas, the market then ranged through to London with limited volume, saw the market holding quietly just below the 70 cents level before dipping into the NYK session and fall back to the 0.6960 areas before finding some bids to hold through to the end of the session only slightly off those lows.
  • EUR: Opening a touch lower the market held through into the Tokyo session filling the small gap before slowly drifting off with EURJPY selling possibly a dominant factor, the market dipped through to the 1.1325 areas for the move through early London before light buying pushed the market back through the 1.1350 level however, unable to break higher the market ran to the NYK session sliding slowly through the session until testing through to the 1.1280 level where the market held through to the close.

 

Yesterday’s Premiership results

CNY        Composite PMI (JUN) A 53 | P 53.3

CNY        Manufacturing PMI (JUN) A 49.4 | C 49.5 | P 49.4

CNY        Non-manufacturing PMI (JUN) A 54.2 | C 54.2 | P 54.3

AUD       AiG Performance of Manufacturing Index (JUN) A 49.4 | P 52.7

AUD       CBA Australia PMI Mfg (JUN F) A52 | P 51.7

JPY         Tankan Large Manufacturing Index (2Q) A 7 | C 9 | P 12

JPY         Tankan Large Manufacturers Outlook (2Q) A 7 | C 6 | P 8

JPY         Tankan Large Non-Manufacturing Index (2Q) A 23 | C 20 | P 21

JPY         Tankan Non-Manufacturing Outlook (2Q) A 17 | C 19 | P 20

JPY         Tankan Large All Industry Capex (2Q) A 7.4% | C 8.1% | P 1.2%

JPY         Tankan Small Manufacturing Index (2Q) A -1 | C 2 | P 6

JPY         Tankan Small Manufacturing Outlook (2Q) A -5 | C -2 | P -2

JPY         Tankan Small Non-Manufacturing Index (2Q) A 10 | C 10 | P 12

JPY         Tankan Small Non-Manufacturing Outlook (2Q) A 3 | C 6 | P 5

JPY         Nikkei Japan PMI Manufacturing (JUN F) A 49.3 | P 49.5

AUD       TD Securities Inflation (YoY) (JUN) A 1.6% | P 1.7%

CNY        Caixin China PMI Mfg (JUN) A 49.4 | C 50.1 | P 50.2

JPY         Consumer Confidence Index (JUN) A 38.7 | C 39.2 | P 39.4 | R 40.8

CHF        Retail Sales Real (YoY) (MAY) A -1.7% | P -0.7% | R -0.8%

EUR        ECB Vice President Guindos Speaks in Frankfurt

CNY        PBOC’s Yi speaks in Helsinki

CHF        PMI Manufacturing (JUN) A 47.7 | C 49.0 | P 48.6

EUR        Markit/ADACI Italy Manufacturing PMI (JUN) A 48.4 | C 48.7 | P 9.7

EUR        Markit France Manufacturing PMI (JUN F) A 51.9 | C 52.0 | P 52.0

EUR        Markit/BME Germany Manufacturing PMI (JUN F) A 45.0 | C 45.4 | P 45.4

EUR        German Unemployment Change (000’s) (JUN) A -1k | C -3k | P 60.0k

EUR        German Unemployment Claims Rate s.a. (JUN) A 5.0% | C 5.0% | P 5.0%

EUR        Markit Eurozone Manufacturing PMI (JUN F) A 47.6 | C 47.8 | P 47.8

GBP        Net Consumer Credit (MAY) A 0.8B | C 0.9b | P 0.9b

GBP        Consumer Credit (YoY) (MAY) A 5.6% | P 5.9%

GBP        Net Lending Sec. on Dwellings (MAY) A 3.1B | C 4.2b | P 4.3b

GBP        Mortgage Approvals (MAY) Medium A 65.4k | C 65.5k | P 66.3k

GBP        Money Supply M4 (MoM) (MAY) A -0.1% | P 0.9%

GBP        M4 Money Supply (YoY) (MAY) A 2.2% | P 3.0%

GBP        Markit UK PMI Manufacturing s.a. (JUN) A 48 | C 49.5 | P 49.4

EUR        Euro-Zone Unemployment Rate (MAY) A 7.5% | C 7.6% | P 7.6%

USD        Markit US Manufacturing PMI (JUN F) A 50.6 | C 50.1 | P 50.1

USD        ISM Manufacturing (JUN) A 51.7 | C 51.0 | P 52.1

USD        ISM Employment (JUN) A 54.5 | C 52.8 | P 53.7

USD        Construction Spending (MoM) (MAY) A -0.8% | C 0.1% | P 0.0%

 

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