Daily FX Market Commentary

Andy Harrison

Good Morning,

LMAX Close

USDJPY 108.634 | EURUSD 1.11471 | AUDUSD 0.6951 | NZDUSD 0.66557 | USDCAD 1.31647 | USDCHF 0.99089 | GBPUSD 1.24544 |

LMAX highs and Lows 05.00 GMT

                                Highs | Lows

EURUSD              1.11514 | 1.11425

USDJPY                108.744 | 108.563

GBPUSD              1.24641 | 1.24445

USDCHF               0.99120 | 0.99026

AUDUSD             0.69539 | 0.69414

USDCAD              1.31634 | 1.31553

NZDUSD              0.66627 | 0.66522

EURCHF               1.10496 | 1.10389

EURGBP              0.89577 | 0.89483

EURJPY                121.195 | 121.025

For Today

• GBP: A very quiet session for the end of the week with the market holding above the 1.2450 level for the bulk of the session before drifting through the level to hold the 1.2445 level through to the London session, , 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 quiet range through the session, rising in early Tokyo to test towards the 108.75 areas before drifting through the back end of the session to hold around the 108.60 levels through to the London session, 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 congestion through to the 108.80-109.00 level where offers are likely to be stronger, a break above the 109.20 level is likely to run into congestion and stronger offers into the 109.35-60 level.
• AUD: Limited movement through the session with the market drifting through the session, opening around the 0.6950 areas the market made a meagre push to the 0.6955 area before slowly dropping back to run close to the 0.6940 areas through 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 0.6940 areas with stronger bids increasing the closer the market moves towards the 0.6900 areas and likely to continue
• EUR: Of all the currencies Euro’s was the quietest, opening around the 1.1145 level and unable to breach the topside cleanly the market ran through to the London session barely unchanged, , downside congestion limited through to the stronger 1.1120 area with a push through to the 1.1100 areas, although cleared yesterday day traders may still be hanging around, 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

JPY/KRW:

Japan set to strike S. Korea off trade white list STS

JPY:

Some at BoJ are said to doubt effectiveness of stronger guidance BBG

AUD:

Australia to set out proposals to rein in Facebook, Google RTRs

RBA lacks credibility on housing – AFR

IRR:

Iran test fires medium range ballistic missile CNN

EUR/GBP:

EU says no to Boris Johnson, increasing no deal Brexit risk BBG

KRW/USD:

While Trump and Kim talk, N. Korea appears to expand it Nuclear arsenal WSJ

CHF:

Amundi asset management ditches CHF as ECB evokes painful 2015 memories – BBG

CNY:

Xi ally Zhong emerges from shadows as US trade talks restart BBG

EUR:

Risk sags as German FinMin undermines ECB message, with no plans for stimulus to spur growth – BBG

German economy in freefall as exhausted Draghi loses his magic Telegraph

Today’s Data

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

23:30     JPY         Tokyo Consumer Price Index (YoY) (JUL) A 0.9% | C 1.0% | P 1.1%

06:00     EUR        German Import Price Index (MoM) (JUN) C -0.8% | P -0.1%

06:00     EUR        German Import Price Index (YoY) (JUN) C -1.5% | P -0.2%

08:00     EUR        ECB Survey of Professional Forecasters

11:00     MXN      Economic Activity IGAE (YoY) (MAY) P -1.4%

12:30     USD        Revisions: National Income and Accounts (GDP)

12:30     USD        Gross Domestic Product Annualized (QoQ) (2Q A) C 1.8% | P 3.1%

12:30     USD        Personal Consumption (2Q A) C 4.0% | P 0.9%

12:30     USD        Gross Domestic Product Price Index (2Q A) C 1.9% | P 0.9%

12:30     USD        Core PCE (QoQ) (2Q A) C 2.0% | P 1.2%

 

Harry Hindsight

• GBP: A quiet move through the Asian session as the market looks for the next bit of Boris Johnson’s gambit, opening around the 1.2480-85 level the market moved deep into the Asian session before breaking through the 1.2480 level and slipping into the low 1.2470’s area, the market increased its range it didn’t move to far away from the 1.2470’s dipping in early London to the 1.2465 areas and rising on a spike through to the 1.2490 area through deep into the session, the market eventually pushed through to the 1.2500 level eventually pushing a little through on the move into the NYK session, a dip on the US numbers saw the market back to the opening levels before running through towards the 1.2520 areas before starting a slow steady drift through to the opening levels again and then breaking lower for a minor push through the 1.2450 to touch the 1.2440 and running along the 1.2450 levels to the close.
• JPY: A very quiet start to the day with the USDJPY slowly moving through to the 108.25 level from its low opening around the 108.15 areas, the slow rise was limited and eventually reversed and started to drift through to make the lows around the 108.05 area into early London and ranged tightly through to the NYK session before USD buying moved in strongly on the pair to push the 108.50 levels into the close of London and eventually triggering light stops and a further push through to the 108.75 area to make the highs of the day a little drift to the close.
• AUD: Opening around the 0.6980 level the market moved quietly into the Tokyo session rising eventually through to the mid 80’s before the comments from Lowe set the market quickly lower, pushing through the 0.6970 areas the market ranged around the area through the balance of the Asian session and deep into London before NYK appeared as sellers chasing the market down through the 0.6950 congestive areas and holding quietly into the London close around the 0.6940 level and recovering only a fraction for the move to the close.
• EUR: A steady drift from the opening with the market opening around the 1.1140 levels and testing through to the London session holding the 1.1135 level, with minor selling through the opening the market tested the 1.1125 level before pushing back to the 1.1150 levels with no change on interest rates, a very dovish commentary from Draghi saw the market initially spike then drop back quickly to test the 1.1100 and make the lows before rallying quickly once his commentary finished test through into the NYK session to the 1.1190 level before slowly slipping lower and barely finishing the day above the opening level.

Yesterday’s Premiership results

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

EUR        German IFO Business Climate (JUL) A 95.7 | C 97.0 | P 97.4

EUR        German IFO Expectations (JUL) A 92.2 | C 94.0 | P 94.2

EUR        German IFO Current Assessment (JUL) A 99.4 | C 100.4 | P 100.8

GBP        CBI Reported Sales (JUL) A -16 | C -8 | P -42

EUR        European Central Bank Rate Decision (JUL 25) A 0.00% | C 0.00% | P 0.00%

EUR        ECB Marginal Lending Facility (JUL 25) A 0.25% | C 0.25% | P 0.25%

EUR        ECB Deposit Facility Rate (JUL 25) A -0.40% | C -0.40% | P -0.40%

EUR        ECB’s Draghi Speaks in Frankfurt After Policy Decision

USD        Wholesale Inventories (MoM) (JUN P) A 0.2% | C 0.4% | P 0.4%

USD        Durable Goods Orders (JUN P) A 2.0% | C 0.7% | P -1.3% | R -2.3%

USD        Durables Ex Transportation (JUN P) A 1.2% | C 0.2% | P 0.4%

USD        Advance Goods Trade Balance (JUN) A -$74.2b | C -$72.2b | P -$74.5b | R $75.0B

USD        Retail Inventories (MoM) (JUN) A 1.9% | C 0.2% | P 0.5% | R 0.3%

USD        Initial Jobless Claims (JUL 20) A 206k | C 217k | P 216k

USD        Continuing Claims (JUL 13) A 1676k | P 1686k

USD        EIA Natural Gas Storage Change (JUL 19) A 36 | P 62

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