Daily FX Market Commentary

Andy Harrison

Andy Harrison

Good Morning,
LMAX Close
USDJPY 108.227 | EURUSD 1.11516 | AUDUSD 0.7005 | NZDUSD 0.67057 | USDCAD 1.31361 | USDCHF 0.98526 | GBPUSD 1.24395 |
LMAX highs and Lows 05.00 GMT
Highs | Lows
EURUSD 1.11554 | 1.11428
USDJPY 108.275 | 108.12
GBPUSD 1.24464 | 1.24288
USDCHF 0.98677 | 0.98488
AUDUSD 0.70097 | 0.69783
USDCAD 1.31434 | 1.31315
NZDUSD 0.67046 | 0.66923
EURCHF 1.09961 | 1.09844
EURGBP 0.89695 | 0.89597
EURJPY 120.708 | 120.523
For Today
• GBP: Opening a little lower the market filled in the small gap and moved into the Tokyo session pushing the 1.2440 areas but generally holding around the 1.2435 level deep into the session before spiking and dropping back from above the 1.2440 area to test the 1.2430 level and holding through to the London session, Downside bids into the 1.2400 area and likely to increase on a dip through towards the 1.2360 level with bids likely to increase on any test to the area, stops are likely to quickly appear on a move through the 1.2350 areas and the downside opens up for a deeper move with sentimental values possibly the only real supportive areas. Topside offers light through the 1.2450-1.2500 level with weak stops likely on a push through the area but likely to run out of space quickly with stronger congestion on a move to the 1.2550 areas any break here though could see a small short squeeze and the area up and through the 1.2600 level open.
• JPY: A quiet range for the day for USDJPY with the market opening around the 108.20 level and generally trading around the level to the London session, testing lightly through to the 108.28 area and one spike down to the 108.12 proved to be the range for the session, downside bids light through to the 107.30 areas where stronger congestion starts to appear with that congestion likely to continue through to the 106.80 and possibly weak stops below opening a quick test to the 106.50 where stronger congestion is likely to reappear, topside offers light through to the 108.50 areas with strong congestion in the area and likely to increase through to the 109.00 areas, with weak stops through the level quickly running into old trendlines through 109.30-60 area.
• AUD: Westpac set the tone for the day calling another cut in Oct and one to follow in Feb, Oz dropped away from the opening 0.7005 areas testing into the Tokyo session through to 0.6990 and then slowly drifting to hold around the 0.6980 areas for the run to London, topside offers likely to be fairly strong into the 0.7040-60 area with possible strong stops on a push through the level and limited offers from the 0.7080-0.7120 area and the topside likely to quickly push for the 0.7150 areas on a break, Downside bids light through the 70 cents level with limited stops likely to appear before stronger bids start to reappear on a dip through to the 0.6950 level and strong congestion below.
• EUR: Opening just above the 1.1150 level the market slowly drifted down to the 1.1145 level and spent a long time penetrating the level gradually pushing through to the lower 1.1140’s for the move into London, downside congestion limited through to the stronger 1.1120 area with a push through to the 1.1100 areas likely to see weak stops on any dip through the level and increasing sellers through the 1.1080 level with dated congestion from pre 2017 as the market aims for lower levels. Topside offers light through to the 1.1200 areas before some resistance is likely to be seen however, a push through the 1.1220 area could see some limited squeeze higher and stronger offers not appearing until the market starts to move through the 1.1260 areas and increasing in size on a test towards the 1.1300 level.

Overnight News
AUD:
Westpac brings forward RBA cut call to Oct, sees 2nd in Feb
EUR/USD:
Europe braces for Trump trade war
EUR:
ECB Plans to restart government bond purchases in Nov – Spiegel
NZD:
NZ June imports drop to 16 months low on fuel and cars
USD:
API reports US crude stockpiles dropped 10.96M bbl last week
CNY:
PBoC’s Yi thinks the current interest rate level in China is appropriate in latest Caixin interview
China it won’t’ rule out force to reunify Taiwan with the mainland – CBC
GBP:
BoE’s Haldane sees strong case for keeping rates on hold
Jeremy Corbyn says Labour will table a motion of no confidence designed to force Boris Johnson from office, at a time of their choosing
JPY:
Abe advisor Hamada concerned about USDJPY nearing 100- Nikkei
Hamada: If FED eases, BoJ may need to act on Yen – Nikkei

Today’s Data
Actual – A | Consensus – C | Previous – P | Revised R | all timings GMT/UTC
NZD Trade Balance 12 Manufacturing YTD (JUN) A -4937m | C -5105m | P -5492m
NZD Trade Balance (JUN) A 365m | C 100m | P 264m
NZD Exports (JUN) A 5.01b | C 5.29b | P 5.81b
NZD Imports (JUN) A 4.65b | C 5.20b | P 5.54b
AUD CBA Australia PMI Manufacturing (JUL P) A 51.4 | P 52.0
AUD CBA Australia PMI Services (JUL P) A 51.9 | P 52.6
AUD CBA Australia PMI Composite (JUL P) A 51.8 | P 52.5
JPY Nikkei Japan PMI Manufacturing (JUL P) A 49.6 | P 49.3
JPY Coincident Index (MAY F) A 103.4 | P 103.2
JPY Leading Index CI (MAY F) A 94.9 | P 95.2
07:15 EUR Markit France Manufacturing PMI (JUL P) C 51.6 | P 51.9
07:15 EUR Markit France Services PMI (JUL P) C 52.8 | P 52.9
07:15 EUR Markit France Composite PMI (JUL P) C 52.5 | P 52.7
07:30 EUR Markit/BME Germany Manufacturing PMI (JUL P) C 45.2 | P 45.0
07:30 EUR Markit Germany Services PMI (JUL P) C 55.2 | P 55.8
07:30 EUR Markit/BME Germany Composite PMI (JUL P) C 52.3 | P 52.6
08:00 EUR Markit Eurozone Manufacturing PMI (JUL P) C 47.6 | P 47.6
08:00 EUR Markit Eurozone Services PMI (JUL P) C 53.3 | P 53.6
08:00 EUR Markit Eurozone Composite PMI (JUL P) C 52.1 | P 52.2
08:30 GBP BBA Loans for House Purchase (JUN) C 42800 | P 42384
11:00 USD MBA Mortgage Applications (JUL 19) P -1.1%
11:00 MXN Bi-Weekly CPI (YoY) (JUL 15) C 3.82% | P 3.89%
11:00 MXN Bi-Weekly CPI (JUL 15) C 0.31% | P 0.14%
11:00 MXN Bi-Weekly Core CPI (JUL 15) C 0.17% | P 0.11%
13:45 USD Markit US Manufacturing PMI (JUL P) C 51.0 | P 50.6
13:45 USD Markit US Services PMI (JUL P) C 51.8 | P 51.5
13:45 USD Markit US Composite PMI (JUL P) P 51.5
14:00 USD New Home Sales (JUN) C 658k | P 626k
14:00 USD New Home Sales (MoM) (JUN) C 5.1% | P -7.8%
14:30 USD DOE U.S. Crude Oil Inventories (JUL 19) P -3116k
23:50 JPY Corporate Service Price (YoY) (JUN) C 0.8% | P 0.8%

Harry Hindsight

• GBP: A steady decline through the Asian session saw the opening highs around the 1.2480 level holding through into the Tokyo session, Tokyo started a slow selloff in early morning taking the market through to Lunch time testing the 1.2450 level and eventually pushing through on the move into the London opening to test down into the 1.2430’s holding for a brief period before dipping through to the lows after the poor CBI trend numbers to test lightly through the 1.2420 level and with Boris Johnson announced as PM the market started a quicker rally to make the highs of the day over the course of the move into NYK trading just above the 1.2480 levels, the move into Tokyo was about the USD and the Cable quickly centred on the 1.2440 level with the odd move back to 1.2460 but always returning to that level and holding too the close.
• JPY: Most of the rise in USDJPY was through the Asian session with the market moving from the opening just below the 107.90 level and moving into the Tokyo session just above the level, Tokyo fix saw the low made with quick selling testing towards the low 107.80 areas before quickly reversing and moving to above the 108.05 area before holding quietly through to the grey hour, late Asian buying saw the market pushing through to initially challenge the 108.20 areas and then holding quietly in the 108.10-20 areas through to NYK with early buyers pushing the market through to the 108.30 area but again failing to penetrate the level through the remainder of the session but holding most of its gains.
• AUD: The Oz struggled through the session in Asia drifting from the opening around the 0.7035 level to test into the London session pushing the 0.7020 areas and holding through to deep into London before seeing a limited move through the 0.7030 areas for the move into the NYK session, NYK were steady USD buyers and the Oz saw another stronger move forward relative to the day in general with the market testing down to the 0.7000 level with minor penetration and then holding below 0.7010 through to the close.
• EUR: With Boris Johnson the lead runner of the Brexit movement now PM the Euro slowly drifted through the session, opening around the 1.1210 areas the market drifted in early Tokyo to push through to the 1.1190 level for the move into the London session and while there was a brief reprieve the market again started to dip again and slowly traded through to the NYK session pushing the 1.1170 level, USD buying picked up in NYIK and the Euro steadily pushed through to the 1.1150 level and held on a long run to the close testing to the 1.1145 level to make the lows.

Yesterday’s Premiership results
JPY Machine Tool Orders (YoY) (JUN F) A -37.9% | P -38.0%
GBP CBI Trends Total Orders (JUL) A -34 | C -15 | P -15
GBP CBI Trends Selling Prices (JUL) A 12 | P 4
GBP CBI Business Optimism (JUL) A -32 | C -20 | P -13
USD House Price Index (MoM) (MAY) A 0.1% | C 0.3% | P 0.4%
USD Richmond Fed Manufact. Index (JUL) A -12 | C 5 | P 3
EUR Euro-Zone Consumer Confidence (JUL A) A -6.6 | C -7.2 | P -7.2
USD Existing Home Sales (JUN) A 5.27m | C 5.34m | P 5.34m
USD Existing Home Sales (MoM) (JUN) A -1.7% | C -0.1% | P 2.5%

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