Daily FX Market Commentary

Andy Harrison

Andy Harrison

Good Morning,
LMAX Close
USDJPY 108.771 | EURUSD 1.10762 | AUDUSD 0.68465 | NZDUSD 0.6558| USDCAD 1.31913 | USDCHF 0.99396 | GBPUSD 1.21594 |
LMAX highs and Lows 05.00 GMT
Highs | Lows
EURUSD 1.10831 | 1.10347
USDJPY 109.315 | 108.697
GBPUSD 1.21660 | 1.21016
USDCHF 0.99743 | 0.99337
AUDUSD 0.68571 | 0.68283
USDCAD 1.32191 | 1.31865
NZDUSD 0.65628 | 0.65344
EURCHF 1.10190 | 1.0028
EURGBP 0.91238 | 0.91044
EURJPY 120.707 | 120.400
For Today
• GBP: Cable opened quietly and moved into the Tokyo session holding just above the 1.2150 areas with a minor move through to the 1.2160 level before dipping through to test the 1.2100 level bouncing and rising through to the 1.2135 area and then drifting through into London holding the 1.2120 area, Downside see’s light congestion around the sentimental values with particular strength on any push towards the 1.2100 level however strong stops are likely on any sudden push through the level and exposes the lows from 2017 below 1.2000 where buyers possibly lurk in size, topside offers limited through to the 1.2350 area with a push through possibly causing a short squeeze through the 1.2400 level however, from there the offers are again likely to appear and with the market struggling for liquidity any signal that the selling is over beware a bounce.
• JPY: What does Mr Yen know? Opening around the 108.75 level the market moved steadily higher into the Tokyo session before pushing quickly through the 109.00 level on its way to the 109.30 areas with suspected good demand for USD’s into the Tokyo fix, having made the highs just beyond that 109.30 level the market ranged for the most part around the 109.20 areas for the run to the London session, Topside strong offers remain through the 109.30-60 area before light congestion moves in for any further move towards the 109.80-110.00 level with increasing offers on any move through to the 110.20 level and a cautionary note not to listen to the afore mentioned Sakakibara-san, downside bids light through to the 108.40 level with some congestion likely to then appear on any dips through to the 108.00 level and possibly stronger stops on a break through to the 107.50 areas, through the 107.50 level there could be a quick dip to test the 107.00 level before hitting stronger bids on any test of the 106.80 level.
• AUD: Limited day with the market edging a little higher from the opening around the 0.6845 area to test slightly through 0.6850 before dropping back quickly to test the 0.6830 level in Tokyo, the market steadily recovered from the lows and slowly made its way through to just below 0.6860 before drifting in late session through to the London opening, downside bids cleared through to the 0.6830 level and stronger bids suspected into the area, a dip through the 0.6825 level is likely to see a mixture on a the way to the stronger 68 cents level before weak stops appear on any dip through the 0.6780 level. Topside offers lightly through to the 0.6950 areas with congestion then building from that point up the offers increase through to the 70 cents level with strong offers likely to increase through to the 0.7030 areas with limited stops and congestion likely to continue.
• EUR: Similar pattern of movement through into Tokyo a quiet rise slightly higher before dipping away from the highs around the 1.1080 level to test steadily through to the 1.1035 level before holding quietly around the 1.1045 level through to London, Downside bids likely to be reasonably strong into the 1.1000 level with congestion around the level before lightening a little for a test to the 1.0950 areas. Topside offers light through to the 1.1100 level with weak stops likely just beyond the level and opening a stronger possible move through to the 1.1200 areas before resistance starts to increase.

Overnight News
JPY:
Japanese sold net 162.2B Yen overseas debt last week
Pension giant pivots to Yen hedging just as other firms cut back – BBG
CHF:
The SNB will attempt to prevent more currency appreciation – EIU
CNY:
Farm futures signal trade scepticism – BBG
China suspends individual tourist permits to Taiwan before election – FTI
CNY/USD:
Beijing slams Washington for lack of sincerity after Trump tweet – Nikkei
China-US plan next round of trade talks for Sept – BBG
GBP:
UK doubles no deal Brexit preparation spending – Telegraph
AUD;
Australia’s RBA may not cut-rate next week despite soft inflation data – DJ
Australia’s Big banks may need A$93.5B extra capital – Moody’s
USD:
President Trump blasts Fed chair Powell after Central bank cut rates – CNBC
Trump: As usual, Powell let us down – CNBC
Trump: The market wanted to hear Powell say the Fed was embarking on lengthy and aggressive rate cutting cycle – CNBC
FED: George, Rosengren dissent in favour of no rate change – CNBC
USD/RUB/EUR:
Senate Panel advances US sanctions for Nord Stream 2 pipeline – BBG
CNY/HKD:
Chinese Army’s Hong Kong chief says troops ready to protect China’s sovereignty – SCMP

Today’s Data
Actual – A | Consensus – C | Previous – P | Revised R | all timings GMT/UTC
AUD AiG Performance of Manufacturing Index (JUL) A 51.3 | P 49.4
CNY Caixin China PMI Mfg (JUL) A 49.9 | C 49.6 | P 49.4
08:30 GBP Markit UK PMI Manufacturing s.a. (JUL) C 47.7 | P 48.0
11:00 GBP Bank of England Bank Rate (AUG 1) C 0.75% | P 0.75%
11:00 GBP Bank of England Inflation Report
11:00 GBP BOE Asset Purchase Target (AUG) C 435b | P 435b
11:30 USD Challenger Job Cuts (YoY) (JUL) P 12.8%
11:30 GBP BOE’s Carney speaks at press conference in London
12:30 USD Initial Jobless Claims (JUL 27) C 212k | P 206k
12:30 USD Continuing Claims (JUL 20) P 1676k
13:30 CAD RBC Canadian Manufacturing PMI (JUL) P 49.2
14:00 USD ISM Manufacturing (JUL) C 52.0 | P 51.7
14:00 USD ISM Employment (JUL) P 54.5
14:00 USD ISM Prices Paid (JUL) C 49.0 | P 47.9
14:00 USD Construction Spending (MoM) (JUN) C 0.4% | P -0.8%
14:30 MXN Markit Mexico PMI Mfg (JUL) P 49.2
23:50 JPY BOJ Minutes of June Policy Meeting (JUN)
23:50 JPY Monetary Base (YoY) (JUL) P 4.0%
23:50 JPY Monetary Base End of period (JUL) P ¥523.2t

Harry Hindsight

• GBP: A quiet session through too deep into London with the market opening around the 1.2150 area and forming a base line for the day, rising in early Tokyo to test the 1.2170 level the market then drifted back and ranged quietly into the London session, early London took the market to the 1.2175 area before drifting back again to the base line too start a slow push through into the NYK session and a steady round bout of EURGBP selling moved through the market taking the cross from the 0.9165 areas through to below 0.9100 and the Cable pushing through to the 1.2225 areas, the market continued with the topside for several hours before the FOMC release saw it drop back quickly to push through the 1.2150 level having tested the 1.2250 level, a slow run to the close kept the market in that base area.
• JPY: Range wise the market didn’t really awaken until the FOMC release with the market trading in the 108.50-65 area all the way through to that point, the market lifted quickly through to the 108.90 areas then chopped a little through to the final hour before slipping back from a final 109.00 to the 108.75 for the close.
• AUD: As with most of the pairings a very quiet session for the most part with the market opening around the 0.6875 area and quietly moving into the Tokyo session slipping through to the 0.6860 as the market absorbed the CPI number before bouncing off the initial lows to test the 0.6890 level, the market then struggled for a short period before slowly pushing through to look at the 69 cents levels and then held through to the FOMC around the 0.6890 before dipping quickly through to the 0.6830 areas with USD buyers happy to see the FOMC cut.
• EUR: Holding the opening levels around the 1.1155 area through and then ranging quietly in the 1.1160-50 area through into the London session before running along the 1.1145 areas through into the NYK session, the market drifted through the NYK session with EURGBP selling moving in and no sign of the strong buyers from early in the week, the move to the FOMC saw the market test the 1.1125 level before dropping quickly and triggering some weak stops on the move through the 1.1100 level area to hold the 1.1160 level and a small bounce to the close.

Yesterday’s Premiership results
GBP GfK Consumer Confidence (JUL) A -11 | C -13 | P -13
JPY Loans & Discounts Corp (YoY) (JUN) A 2.73% | P 3.24%
NZD ANZ Activity Outlook (JUL) A 5 | P 8
NZD ANZ Business Confidence (JUL) A -44.3 | P -38.1
CNY Composite PMI (JUL) A 53.1 | P 53
CNY Manufacturing PMI (JUL) A 49.7 | C 49.6 | P 49.4
CNY Non-manufacturing PMI (JUL) A 53.7 | C 54.0 | P 54.2
AUD Consumer Prices Index (QoQ) (2Q) A 0.6% | C 0.5% | P 0.0%
AUD Consumer Prices Index (YoY) (2Q) A 1.6% | C 1.5% | P 1.3%
AUD Consumer Prices Index RBA Trimmed Mean (QoQ) (2Q) A 0.3% | C 0.4% | P 0.3%
AUD Consumer Prices Index RBA Trimmed Mean (YoY) (2Q) A 1.6% | C 1.5% | P 1.6%
AUD Consumer Prices Index RBA Weighted Median (QoQ) (2Q) A 0.4% | C 0.4% | P 0.1%
AUD Consumer Prices Index RBA Weighted Median (YoY) (2Q) A 1.2% | C 1.2% | P 1.4%
AUD Private Sector Credit (YoY) (JUN) A 3.3% | C 3.5% | P 3.6%
JPY Housing Starts (YoY) (JUN) A 0.3% | C -2.2% | P -8.7%
JPY Construction Orders (YoY) (JUN) A -4.2% | P -16.9%
JPY Consumer Confidence Index (JUL) A 37.8 | C 38.5 | P 38.7
CHF Swiss National Bank Releases 2Q 2019 Currency Allocation
EUR German Retail Sales (MoM) (JUN) A 3.5% | C 0.5% | P -0.6% | R -1.7%
EUR German Retail Sales (YoY) (JUN) A -1.6% | C 0.6% | P 4.0% | R 3.8%
GBP Nationwide House Px n.s.a. (YoY) (JUL) A 0.3% | C 0.1% | P 0.5%
EUR German Unemployment Change (000’s) (JUL) A 1.0k | C 2.0k | P -1.0k | R 0.0%
EUR German Unemployment Claims Rate s.a. (JUL) A 5.0% | C 5.0% | P 5.0%
EUR Euro-Zone Unemployment Rate (JUN) A 7.5% | C 7.5% | P 7.5% | R 7.6%
EUR Euro-Zone Gross Domestic Product s.a. (QoQ) (2Q A) A 0.2% | C 0.2% | P 0.4%
EUR Euro-Zone Gross Domestic Product s.a. (YoY) (2Q A) A 1.1% | C 1.0% | P 1.2%
EUR Euro-Zone Consumer Price Index Core (YoY) (JUL A) A 0.9% | C 1.0% | P 1.1%
EUR Euro-Zone Consumer Price Index Estimate (YoY) (JUL) A 1.1% | C 1.1% | P 1.2%
EUR Italian Gross Domestic Product w.d.a. (YoY) (2Q P) A 0.0% | C -0.1% | P -0.1%
EUR Italian Gross Domestic Product w.d.a. (QoQ) (2Q P) A 0.0% | C -0.1% | P 0.1%
USD MBA Mortgage Applications (JUL 26) A -1.4% | P -1.9%
USD ADP Employment Change (JUL) A 156k | C 150k | P 102k
USD Employment Cost Index (2Q) A 0.6% | C 0.7% | P 0.7%
CAD Gross Domestic Product (MoM) (MAY) A 0.2% | C 0.1% | P 0.3%
CAD Gross Domestic Product (YoY) (MAY) A 1.4% | C 1.3% | P 1.5%
USD Chicago Purchasing Manager (JUL) A 44.1 | C 51.5 | P 49.7
USD DOE U.S. Crude Oil Inventories (JUL 26) A -8496k | P -10835k
USD DOE U.S. Gasoline Inventories (JUL 26) A -1791k | P -226k
USD FOMC Rate Decision (Upper Bound) (JUL 31) A 2.25% | C 2.25% | P 2.50%
USD FOMC Rate Decision (Lower Bound) (JUL 31) A 2.00% | C 2.00% | P 2.25%
USD Interest Rate on Excess Reserves (AUG 1) A 2.10% | C 2.10% | P 2.35%
USD Fed Chair Powell Holds Press Conference After FOMC Meeting

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