Daily FX Market Commentary

Andy Harrison

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 107.009 | EURUSD 1.12442 | AUDUSD 0.6884 | NZDUSD 0.64629 | USDCAD 1.35636 | USDCHF 0.94864 | GBPUSD 1.25562 |

 

LMAX Highs and Lows 0500 GMT

Highs | Lows  

EURUSD               1.12516 | 1.1225

USDJPY                107.054 | 106.702

GBPUSD               1.25678 | 1.25258

USDCHF               0.95007 | 0.94848

AUDUSD              0.68963 | 0.6840

NZDUSD               0.64811 | 0.64248

USDCAD               1.36086 | 1.35574

EURCHF               1.06763 | 1.0662

EURGBP               0.89743 | 0.89505

EURJPY                120.409 | 119.831

 

For Today

 

  • GBP: Opening on a wide one the market moved from the 1.2555 level through to the 1.2540 level before stabilizing around the 1.2550 area and rise slowly through to test just above the 1.2565 level in early Tokyo buying only to move back into the opening and range around the 1.2550 level for the fix in Tokyo, barely moving the Cable touched above the 1.2560 area before eventually dropping through to the 1.2530 areas and ticking through to the 1.2525 area several times through the midsession and a quiet range before running steadily back to the closing levels 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: Opening above the 107.00 level and through into the Tokyo session the market held above the level testing through to the 107.05 area however, Tokyo came in selling from the opening and the market pushed through into the Fix testing through to the 106.70 area and finding a base ranged through into midsession around the 106.80 level before slowly pushing through the 106.90 before drifting through to the grey hour holding just above the 106.80 area. Downside bids into the 106.50 level with likely weakness through the level limited and stronger bids appearing from the 106.20 area through to 105.80, 105.50 has primarily been a tough level in the dips in 2018 and 2019 so strong congestion likely to appear and continue through to the 104.80 levels. 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: Opening a little lower and straight away filling that gap the early Tokyo buyers took the market through to the 0.6895 area before drifting off and slowly push through the opening 0.6880 level to hold quietly around that level for several hours before dipping quickly with poor employment numbers and testing the 0.6840, a steady recovery through to the grey hours saw the market make its way back to the 0.6875 areas. 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: Euro dragged lower on the Oz employment numbers otherwise the market would have remained around the 1.1245 level ranging early between the 1.1240-50 level before dipping away to push below the 1.1230 level testing the 1.1225 level at a test before slowly rising through to the 1.1250 area again to hold quietly for 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

 

CNY/INR:

Message or a mess: India-China clash in the Himalayas – SYH

PRC says clash all India’s fault as gruesome details emerge

PM Modi: India’s integrity and sovereignty is supreme for us, and no one can stop us from defending it – thepointout

USD:

Mnuchin declares global corporate tax talks at an impasse – DJ

NZD:

New Zealand economy contracted more than forecast in first Qtr. – BBG

G7/CNY:

G7 Foreign Ministers urge China not impose security law in Hong Kong

ForMin issue joint statement underscoring grave concern regarding China’s decision to impose a national security law on Hong Kong

Ministers say they strongly urge the government of China to reconsider the decision

CNY:

China seeks more reasonable pricing for imported Iron Ore – BBG

China forbids new steel smelting capacity in 2020 – BBG

CNY/USD:

Chia Diplomat Yank told Pompeo that cooperation between US/China the only correct choice – RTRs

 

Today’s Data

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

NZD       GDP QoQ (Q1) A -1.6% | C -1.0% | P 0.5%

AUD       Employment Change (MAY) A -227.7k | C -125.0k | P -594.3k

AUD       Full Employment Change (MAY) A -89.1k | P -220.5k

AUD       Unemployment Rate (MAY) A 7.1% | C 7.0% | P 6.2%

0730      CHF        SNB Interest rate Decision A | C -0.75% | P -0.75%

0730      CHF        SNB Monetary policy assessment

0800      CHF        SNB Press Conference

0800      EUR       ECB Economic Bulletin

1100      GBP        BoE MPC Vote Unchanged (JUN) A | C 9 | P 9

1100      GBP        BoE QE Total (JUN) A | C 725b | P 625b

1100      GBP        Interest Rate Decision A | C 0.10% | P 0.10%

1100      GBP       MPC Meeting Minutes

1230      USD       Initial Jobless Claims A | C 1,300k | P 1.542k

1230      USD       Philly FED Employment A | P -15.3

1230      CAD       New Housing Price Index MoM (MAY) A | P 0.0%

1230      CAD       Wholesale Sales MoM (APR) A | C -12.6% | P -2.2%

1615      USD       FOMC Member Mester Speaks

1730      CAD       BoC GCM Schemri Speaks

 

Harry Hindsight

 

  • GBP: Overall not a bad range for the day however, the first half generally saw the market ranging above the 1.2550 level and the second half below that level, Opening around the 1.2565 level the market made its way to the 1.2585 areas before the Tokyo fix sent the GBPJPY lower and both legs taking the hit testing the Cable to the 1.2550 level are the market based there for a limited period before dipping a little through and then moving through into the grey hours pushing lightly above the 1.2550 area and early London taking the Cable back to the highs testing slightly through to make the high for the day just short of the 1.2590 area before drifting back into late morning to test through to the 1.2520 level before bouncing for the move into the NYK session and close to the highs again, A slow drift through the NYK session saw the lows extended through to the 1.2510 level and again bouncing off the level and the market then settling in around the 1.2550 level through to the close.
  • JPY: Opening around the 107.30 level the market ran steadily through to the 107.40 area and fixing saw a quick reach for the 107.45 level and then a quick dip down to the 107.20 basing along the 107.20 level through the Asian session the excitement of the fix was the only excitement in Tokyo with the move through into the grey hour seeing the market pushing through to the highs again testing it a couple of times before heading quietly into the NYK session and the last test of the highs before safe haven flows started to form the basis for the move lower through to the 107.00 level
  • AUD: A very quiet session for the Oz with limited movement leading to choppy movements through the day, opening a little off the closing price and dipping through to the 0.6870 area for the initial hour, early Tokyo took the market steadily through to just above the 0.6890 area and as with the other pairs Tokyo fixing hit the Oz and a quick move through to the 0.6860 level spending a few hours through midsession testing lower bouncing and finally close to the 0.6850 area before starting a slow steady recovery into the 0.6880 area and Early London quickly took the market through to the 0.6910 level and the opening in London saw the high just sneaking through the 0.6920 level before drifting a little and then dipping quickly through to the 0.6870 level before settling around the 0.6900 area for the run through the NYK session, dipping and rising to just below the highs before drifting through to the close.
  • EUR: A slow range through into midsession in Tokyo before starting a slow rise from the 1.1260 level to push through into early London pushing the 1.1290 level and the high of the day just above the area, weak inflationary numbers were again the centre for attention and the market dropped back to the 1.1230 level for a quiet move through into the NYK session and then ranging around the 1.1240 until a dip through to the 1.1205 area was eventually turned and the market slowly pushed through to the close just above the 1.1240 level.

 

Yesterday’s Premiership Results

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%

GBP        CPI MoM (MAY) A 0.0% | C -0.1% | P -0.2%

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

GBP        PPI Input MoM (MAY) A 0.3% | C 4.5% | P -5.1%

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

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

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

EUR       ECB’s Mersch Speaks

EUR       ECB’s De Guindos Speaks

USD       Building Permits MoM (MAY) A 14.4% | P -21.4%

USD       Building Permits (MAY) A 1.220m | C 1.228m | P 1.066m

USD       Housing Starts MoM (MAY) A 4.3% | P -30.2% | R -26.4%

USD       Housing Starts (MAY) A 0.974m | C 1.095m | P 0.891m | R 0.934m

CAD       Core CPI YoY (MAY) A 0.7% | P 1.2%

CAD       Core CPI MoM (MAY) A -0.1% | P -0.4%

CAD       CPI MoM (MAY) A 0.3% | C 0.7% | P -0.7%

USD       Crude Oil Inventories A 1.215m | C -0.152m | P 5.720m

USD       FED Chair Powell Testifies

USD       FOMC Member Mester Speaks

 

Best Regards

Andy

 

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