Daily FX Market Commentary

Andy Harrison

Andy Harrison

Good Morning,

LMAX Close

USDJPY 108.18 | EURUSD 1.11394 | AUDUSD 0.69784 | NZDUSD 0.67034 | USDCAD 1.31407 | USDCHF 0.98478 | GBPUSD 1.24839 |

LMAX highs and Lows 05.00 GMT

                                Highs | Lows

EURUSD              1.11444 | 1.11337

USDJPY                108.237 | 108.12

GBPUSD              1.24869 | 1.24723

USDCHF               0.98529 | 0.98447

AUDUSD             0.69841 | 0.69651

USDCAD              1.31448 | 1.31313

NZDUSD              0.67070 | 0.66955

EURCHF               1.09738 | 1.0966

EURGBP              0.89282 | 0.89196

EURJPY                120.567 | 120.404

For Today

  • GBP: A very slow session with the market trading in the 1.2480-85 area through to deep into the session before finally drifting off a little to test towards the 1.2470 areas, , Downside bids light through to the 1.2440 level before stronger bids start to appear and continue through to the 1.2400-1.2380 area, a breach through the level is likely to see some weak stops with congestion likely to appear on that dip and possible stronger bids into the 1.2360 area before opening the market to a deeper move with sentimental levels around the 50-00 areas likely to be limited. Topside offers likely to be weak through to the 1.2550 areas before stronger offers begin to appear, with limited offers through to the 1.2600 level where stronger offers are likely.
  • JPY: A little lower on the opening holding around the 108.15 area and slowly pushing through into early Tokyo to test towards the 108.25 area before drifting back and holding around the 108.15 area to the grey hour, downside bids light through to the 107.20 area where they are likely to increase through to the 106.80 level with possibly strong stops through the level with congestion through to the 106.00 area but only likely to slow the decline rather than stop it. Topside offers light through to the 108.20 areas with weak stops on any move through to the 108.50 level likely to meet congestion and continuing through to the 108.80-109.00 level where offers are likely to be stronger.
  • AUD: A slow range through into mid-Tokyo holding around the 0.6976-78 area before lifting up to above the 0.6980 levels, then came Lowes comments and the market quickly dipped into the 0.6965 area and hold around the 0.6970 area to the London session, 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 congested through the 0.6950 areas with stronger bids increasing the closer the market moves towards the 0.6900 areas and likely to continue
  • EUR: Opening just above the 1.1140 areas the market held the early high before moving into the Tokyo session and dipping through to the 1.1135 areas in light trading and a slow quiet move through to the London session, 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:

Is the RBA about to break free from the shackles of inflation target – The Australian

Lowe: Tax cuts, commodity prices, housing stabilizing to help economy

Lowe: RBA’s June, July interest rate cuts will support demand

Lowe: Its reasonable to expect extended period of low rates

Lowe: Underlying foundations of economy remain strong

Lowe: RBA strongly committed to getting CPI to target range

Lowe: Unlikely to mull hike till CPI returning to target

Lowe: RBA is prepared to ease policy further if needed

Lowe: No case to adjust 2-3% inflation target

JPY:

Poor economic data suggest Governor Kuroda will need more monetary easing – Nikkei

GBP:

Boris Johnson’s brilliant Brexit dream team proves that his is deadly serious – Telegraph

CHF:

CHF strength against Euro may prompt early SNB move – BBG

JPY/KRW:

Japan may soon wield new weapon in trade fight with S. Korea – BBG

CNY:

China regulators discuss liquidity issue at Bank of Jinzhou – RTRs

HKD:

Terror attacks in Hong Kong result of power struggle – Epoch times

 

Today’s Data

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

JPY         Corporate Service Price (YoY) (JUN) A 0.7% | C 0.8% | P 0.8% | R 0.9%

AUD       RBA’s Lowe Gives Speech in Sydney

08:00     EUR        German IFO Business Climate (JUL) C 97.0 | P 97.4

08:00     EUR        German IFO Expectations (JUL) C 94.0 | P 94.2

08:00     EUR        German IFO Current Assessment (JUL) C 100.4 | P 100.8

10:00     GBP        CBI Reported Sales (JUL) C -8 | P -42

11:45     EUR        European Central Bank Rate Decision (JUL 25) C 0.00% | P 0.00%

11:45     EUR        ECB Marginal Lending Facility (JUL 25) C 0.25% | P 0.25%

11:45     EUR        ECB Deposit Facility Rate (JUL 25) C -0.40% | P -0.40%

12:30     EUR        ECB’s Draghi Speaks in Frankfurt After Policy Decision

12:30     USD        Wholesale Inventories (MoM) (JUN P) C 0.4% | P 0.4%

12:30     USD        Durable Goods Orders (JUN P) C 0.7% | P -1.3%

12:30     USD        Durables Ex Transportation (JUN P) C 0.2% | P 0.4%

12:30     USD        Advance Goods Trade Balance (JUN) C -$72.2b | P -$74.5b

12:30     USD        Retail Inventories (MoM) (JUN) C 0.2% | P 0.5%

12:30     USD        Initial Jobless Claims (JUL 20) C 217k | P 216k

12:30     USD        Continuing Claims (JUL 13) P 1686k

14:30     USD        EIA Natural Gas Storage Change (JUL 19) P 62

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

 

Harry Hindsight

 

  • GBP: A slow drift through the Asian session with the market on hold waiting for the first moves of Boris Johnson, drifting from the early 1.2440 level to test lightly through the 1.1130 level and the lows for the session, the move into London saw the market recovering and steadily rising to test the 1.2450 level before holding through to mid-morning in London, rumours of names to be sacked from the cabinet while speculated started to come out and as each name appeared the market moved steadily higher and the confirmation of 15 members replaced saw the market spike through to the 1.2520 level before dropping back and heading into the NYK session holding just below the 1.2500 level and trading around the level deep into the day before drifting a little on a dip to the closing areas.
  • JPY: Opening around the 108.20-25 level the market held through into the Tokyo session before dipping towards the 108.10 area, the market recovered from the level and ranged around the 108.20 levels through to the London session before renewing its descent trading quietly to the 108.10 area and then dropping quickly to the first test of the 108.00 area, the move through to the NYK session saw the market trading around the 108.05 areas and deep into the session the market saw a final dip for the 108.00 level this time touching 107.95 areas before rebounding and starting a slow but steady climb to recover the lost ground and finish the day only a little lower on the day.
  • AUD: A quiet opening with a weak spike towards the 0.7010 level saw the market trading around 0.7005 soon afterwards, Westpac released an item stating another cut by the RBA in Oct was likely followed by a further cut in Feb20 saw the market dropping quickly off into the Tokyo session hitting 0.6990 and then dropping a second time through to the 0.6980 level and a slow move from there through to London holding the level deep through before hitting the low around the 0.6975 level, the market then ranged between 0.6975 and 0.6990 through to the close finishing the end of the day holding for an extended period just below the 0.6980 levels.
  • EUR: A limited session for the Euro with the market trading for the most part around the 1.1145 level, opening around the 1.1155 highs the market drifted slowly through into the Tokyo session dipping through the 1.1145 level and then slowly testing the 1.1140 level before grey hour buying moved into to test the highs again, London were quick sellers and the move this time through the 1.1145 level gapping a little on a test towards the 1.1125 level before bouncing and slowly recovering through the day to test again to the highs, the market then traded the 1.1140-55 level through to deep into the NYK session before dropping off again this time only to the 1.1130 level and then recovering to the close.

 

Yesterday’s Premiership results

NZD       Trade Balance 12 Mth 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 Mfg (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

EUR        Markit France Manufacturing PMI (JUL P) A 50.0 | C 51.6 | P 51.9

EUR        Markit France Services PMI (JUL P) A 52.2 | C 52.8 | P 52.9

EUR        Markit France Composite PMI (JUL P) A 51.7 | C 52.5 | P 52.7

EUR        Markit/BME Germany Manufacturing PMI (JUL P) A 43.1 | C 45.2 | P 45.0

EUR        Markit Germany Services PMI (JUL P) A 55.4 | C 55.2 | P 55.8

EUR        Markit/BME Germany Composite PMI (JUL P) A 51.4 | C 52.3 | P 52.6

EUR        Markit Eurozone Manufacturing PMI (JUL P) A 46.4 | C 47.6 | P 47.6

EUR        Markit Eurozone Services PMI (JUL P) A 53.3 | C 53.3 | P 53.6

EUR        Markit Eurozone Composite PMI (JUL P) A 51.5 | C 52.1 | P 52.2

GBP        BBA Loans for House Purchase (JUN) A 42653 | C 42800 | P 42384

USD        MBA Mortgage Applications (JUL 19) A -1.9% | P -1.1%

MXN      Bi-Weekly CPI (YoY) (JUL 15) A 3.84% | C 3.82% | P 3.89%

MXN      Bi-Weekly CPI (JUL 15) A 0.27% | C 0.31% | P 0.14%

MXN      Bi-Weekly Core CPI (JUL 15) A 0.17% | C 0.17% | P 0.11%

USD        Markit US Manufacturing PMI (JUL P) 50.0 | C 51.0 | P 50.6

USD        Markit US Services PMI (JUL P) A 52.2 | C 51.8 | P 51.5

USD        Markit US Composite PMI (JUL P) A 51.6 | P 51.5

USD        New Home Sales (JUN) A 646k | C 658k | P 626k | R 604k

USD        New Home Sales (MoM) (JUN) A 7.0% | C 5.1% | P -7.8% | R -8.2%

USD        DOE U.S. Crude Oil Inventories (JUL 19) A -10835K | C -4443k | P -3116k

 

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