Daily FX Market Commentary

Andy Harrison

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 107.322 | EURUSD 1.1263 | AUDUSD 0.68895 | NZDUSD 0.64481 | USDCAD 1.35407 | USDCHF 0.95135 | GBPUSD 1.25729 |

 

LMAX Highs and Lows 0500 GMT

Highs | Lows  

EURUSD               1.12734 | 1.12531

USDJPY                107.430 | 107.167

GBPUSD               1.25844 | 1.25417

USDCHF               0.95205 | 0.9506

AUDUSD              0.68966 | 0.6854

NZDUSD               0.64631 | 0.6430

USDCAD               1.35604 | 1.35377

EURCHF               1.07250 | 1.07079

EURGBP               0.89768 | 0.89515

EURJPY                121.032 | 120.649

 

For Today

 

  • GBP: A slight dip from the opening around the 1.2575 area testing through to the 1.2555 level before running into early Tokyo buyers and the market making the high of the session on a push through the 1.2585 level, fixing supply saw the Cable dipping back a little and the market headed for the 1.2550 level holding through to midsession before breaking through to test the 1.2540 area and a slow grind back to just above the 1.2550 level for the move into the grey hour, Downside congestion through the 1.2450 level likely to temper any downward trend for the moment with stronger bids likely into the 1.2400 level however, a break here could see limited congestion through sentimental levels through to the 1.2200 level before stronger bids start to really appear. Topside offers stronger around the 1.2700 level for the moment through to the 1.2750 area. A push through the 1.2760 level will likely see strong offers again on any approach and push through to the 1.2810-20 area before stops appear and the market opens to weaker congestion through to the 1.2900 level where stronger offers are likely to appear to slow any further gains.
  • JPY: All about the Tokyo fix today with the market slowly rising from the opening around the 107.30 area to push to just short of the 107.45 level and then dropping quickly on supply through to make the low around the 107.15 area for neither level to be tested again and a narrowing of the range through to the grey hour around the 107.30 level. Downside bids limited through to the 106.80 area and then weak stops for a quick move through to 106.50 level before turning into solid buyers through to the 106.00 level and likely through to the 105.70-80 area. Topside offers increasing through the 107.80 area and likely to continue through to the 108.10-20 area before weak stops appear and limited offers through to the 108.50 area where steady offers are likely to appear through to the 109.00 levels.

AUD: A slow drift through the session with the Oz making its highs only for supply fixing in Tokyo to take the market from the high 0.6890’s through to the 0.6850’s with a little chop continuing through to midsession the market eventually settled down having touched closer to the 0.6850 area to slowly crawl back to the 0.6870 level for the move into the grey hour, Topside offers likely to be light through the 0.7000 area and stiffen on any move through to the 0.7050-0.7100 area, once through the 0.7120 area the possibility of a small squeeze however, Downside bids light through to the 0.6800 area and continuing on any push through to the 0.6780 level is likely to see stronger stops appearing and the downside opening to a deeper move. With limited bids through to the 0.6700-0.6680 before stronger bids appear.

  • EUR: Fairly non-eventful for the Euro dipping to early lows just below the 1.1260 level and slowly rising through into the Tokyo session pushing to just above the 1.1270 area before settling into the 1.1260 level to range through to the grey hour, Some congestion through to the 1.1400-20 level with limited stops through the area of 1.1420 should see stronger offers then appearing and increasing from the 1.1440 area onwards particularly through the 1.1480 level with stops quickly appearing on a push through the 1.1500 level to open up further gains technically to the topside. Downside bids light through to the 1.1200 level and weak stops on any dip through those weak bids into that level however, stronger bids start to appear on any push for the 1.1150 level and likely to continue in size to the 1.1100 level.

 

 

Overnight News

 

OIL:

Oil Retreats as China Virus outbreak darkens outlook for demand – BBG

INR/CNY:

Multiple casualties as fresh clashes between Indian and Chinese forces in disputed areas

KRW:

  1. Korea to deploy military units to Mt. Kumgang, Kaesong – BBG
  2. Korea to deploy civil police posts to demilitarized zone – KCNA

Kim May have more targets after blowing up Korea liaison office – BBG

USD:

US Cases rise 1%; Texas Hospitalizations surge – BBG

AUD:

RBA Voices unease about soaring share prices – AFR

NZD:

RBNZ’s Orr pleased with impact of QE, still has plenty of tools – BBG

USD/CNY:

US-China tech stand-off appears to be escalating – Nikkei

US Blacklists China’s MIT as tech war enters new phase – Nikkei

Harbin institute of Technology loses access to American technology and talent – Nikkei

JPY:

Japan’s exports fall most since 2009 as virus hits US shipments

GBP:

Generic 60-year-old Steroid has 1 in 8 chance of helping serious cases of the virus – BBC

UK eyes Billion GBP boost from Australia, New Zealand trade deals

GBP/EUR:

Brexit deal’s last hope: Germany – Politico.EU

 

Today’s Data

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

NZD       Current Account YoY (Q1) A -8.51b | C -8.47b | P -9.23b

NZD       Current Account QoQ (Q1) A 1.56b | C 1.48b | P -2.66b

JPY         Adjusted Trade Balance A -0.60T | C -0.16T | P -1.00T | R -1.04T

JPY         Exports YoY (MAY) A -29.3% | C -22.7% | P -21.9%

JPY         Trade Balance (MAY) A -833.4b | C -560.0b | P -930.4b | R -931.9b

AUD       HIA New Home Sales MoM A -4.2% | P -23.2% | R -1.1%

0600      GBP        CPI MoM (MAY) A | C -0.1% | P -0.2%

0600      GBP        CPI YoY (MAY) A | C 0.5% | P 0.8%

0600      GBP        PPI Input MoM (MAY) A | C 4.5% | P -5.1%

0900      EUR       Eurozone Core CPI YoY (MAY) A | C 0.9% | P 0.9%

0900      EUR       Eurozone CPI MoM (MAY) A | C -0.1% | P 0.3%

0900      EUR       Eurozone CPI YoY (MAY) A | 0.1% | P 0.1%

0900      EUR       ECB’s Mersch Speaks

1100      EUR       ECB’s De Guindos Speaks

1230      USD       Building Permits MoM (MAY) A | P -21.4%

1230      USD       Building Permits (MAY) A | C 1.228m | P 1.066m

1230      USD       Housing Starts MoM (MAY) A | P -30.2%

1230      USD       Housing Starts (MAY) A | C 1.095m | P 0.891m

1230      CAD       Core CPI YoY (MAY) A | P 1.2%

1230      CAD       Core CPI MoM (MAY) A | P -0.4%

1230      CAD       CPI MoM (MAY) A | C 0.7% | P -0.7%

1430      USD       Crude Oil Inventories A | C -0.152m | P 5.720m

1600      USD       FED Chair Powell Testifies

2000      USD       FOMC Member Mester Speaks

2245      NZD       GDP QoQ (Q1) A | C -1.0% | P 0.5%

 

Harry Hindsight

 

  • GBP: Rising from the opening around the 1.2600 level the market eased through into early Tokyo pushing through the 1.2630 level and pausing for a few hours before the BoJ announcement was over with and GBP continued to rise pushing through to the 1.2670 level after a flirtation with the 1.2650 area and then trading tightly around the 1.2665 level through into the grey hour where the days high was made just through the 1.2685 area, London moved in with a steady but strong bout of selling through to the 1.2610 level before ranging around the 1.2650 level through to the NYK session initially testing higher before better retail sales numbers kicked and the market quickly dropped through to the 1.2550 area bouncing weakly through to just above the 1.2600 level again and then drifting to the close.
  • JPY: Choppy day for the USDJPY, opening around the 107.35 level and pushing through into early Tokyo testing the 107.50 level before quickly dropping back to the 107.25 level for the release of the BoJ announcement then rushing higher to make the high of the day just short of the 107.65 level and back to range around the 107.50 level through to the London session, quick move lower to the 107.30 area and the market then jostled around the 107.40 area dipping towards the lows then winding up for the move through to the NYK session and quickly pushing through the 107.60 level again and dropping back just as quickly once the US retail sales numbers were absorbed to test to the low of the day just above the 107.20 level and a slow push to just above the 107.30 level and unchanged on the day or thereabouts
  • AUD: Opening around the 0.6915 level the market moved up quickly to the 0.6950 area on the RBA minutes and then traded around the level with a brief push through to the 0.6970 level on the BoJ announcement to make the high of the day before drifting through into the London session slowly testing through to the 69 cents before finding some support and holding around the 0.6925 area through to the NYK session in an uneventful market, NYK initially did very little however the downside broke and the Oz quickly dipped through to the 0.6830 area to make the low of the day before recovering through to the 0.6885 areas for the move into the close.
  • EUR: Overall a very lacklustre day for the Euro, pushing from the opening levels around the 1.1325 area the market slowly rose into the Tokyo session testing the 1.1235 area held for a couple of hours in the area and then managed to move another 10 pips but was unable to test the 1.1350 until into the grey hour, and then only fractionally moving through the level and starting a steady slow drift with an increasing curve into the NYK session and pushing quickly through to the 1.1225 level into the London close before managing to scramble off the low and hold in a tight range around the 1.1250 level .

 

Yesterday’s Premiership Results

NZD       Westpac Consumer Sentiment (Q2) A 97.2 | P 104.2

AUD       House Price Index QoQ (Q1) A 1.6% | C 2.7% | P 3.9%

AUD       RBA Meeting Minutes

JPY         BoJ Rate Decision A -0.10% | C -0.10% | P -0.10%

JPY         BoJ Monetary Policy Statement

GBP        Average Earnings Index +Bonus A 1.0% | C 1.4% | P 2.4% | R 2.3%

GBP        Claimant Count Change (MAY) A 528.9k | C 400k | P 858.5k

GBP        Employment Change 3m/3m MoM (APR) A 6k | C -83k | P 211k

GBP        Unemployment Rate (APR) A 3.9% | 4.7% | P 3.9%

EUR       German CPI MoM (MAY) A -0.1% | C -0.1% | P -0.1%

JPY         BoJ Press Conference

EUR       German ZEW Current Conditions (JUN) A -83.1 | C -84.0 | P 93.5

EUR       German ZEW Economic Sentiments (JUN) A 63.4 | C 60.0 | P 51.0

EUR       Eurozone Wages YoY (Q1) A 3.40% | P 2.30% | R 2.40%

EUR       Eurozone ZEW Economic Sentiment (JUN) A 58.6 | P 46.0

USD       Core Retail Sales MoM (MAY) A 12.4% | C 5.4% | P -17.2% | R -15.2%

USD       Retail Sales MoM (MAY) A 17.7% | C 8.0% | P -16.4% | R -14.7%

USD       Industrial Production YoY (MAY) A -15.27% | P -15.04% | R -16.25%

USD       Industrial Production MoM (MAY) A 1.4% | C 2.9% | P -11.2% | R -12.5%

USD       Business Inventories MoM (APR) A -1.3% | C -0.8% | P -0.2% | R -0.3%

USD       Fed Chair Powell Testifies

USD       Retail Inventories Ex Auto (APR) A -1.1% | P -1.1%

 

Best Regards

Andy

 

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