Daily FX Market Commentary

Andy Harrison

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 106.973 | EURUSD 1.12053 | AUDUSD 0.68521 | NZDUSD 0.64256 | USDCAD 1.35997 | USDCHF 0.95144 | GBPUSD 1.24241 |

 

LMAX Highs and Lows 0500 GMT

Highs | Lows  

EURUSD               1.12151 | 1.11998

USDJPY                107.055 | 106.836

GBPUSD               1.24370 | 1.24051

USDCHF               0.95196 | 0.95061

AUDUSD              0.68665 | 0.68411

NZDUSD               0.64455 | 0.64381

USDCAD               1.36147 | 1.35882

EURCHF               1.06696 | 1.06508

EURGBP               0.90309 | 0.90137

EURJPY                120.028 | 119.762

 

For Today

 

  • GBP: A slow range from the 1.2420 level to push lightly above the 1.2430 area into Tokyo before dropping quickly back to test the 1.2405 area and the low for the session before starting another rise this time pushing through to the 1.2435 levels and then holding tightly above the 1.2430 area to the grey hour, 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: Quiet range into the Tokyo session to test towards the 107.10 level before dropping quickly back on Tokyo fix through to just below the 106.50 level and basing there through to the grey hour, 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: Rising slowly from the opening around the 0.6850 area to test into Tokyo pushing towards the 0.6870 area before losing steam and slipping through to the lows just above 0.6840 with very little movement on the strong retail sales number to returning to the 0.6860 for the run to 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: Slow rise through the 1.1210 level before moving into the Tokyo session testing the 1.1200 level for a couple of hours and then restarting the move through 1.1210 area to test the 1.1215 area on a very slow day for the Euro, 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

 

AUD:

RBA’s Harper warns against stimulus cold turkey, urges taper – BBG

PM Morrison: Australia being targeted by sophisticated state level cyber attacks

USD/CNY:

Trump tweets about complete decoupling from China – TWT

China not forthcoming in Hawaii talks, but made commitment on trade – US Diplomat – RTRs

Stilwell: China’s attitude in talks in Hawaii cannot be described as having been forthcoming – RPT

Stilwell: Will have to see in next couple of weeks whether US-China talks were productive

Stilwell: Chinese actions of late have not been really constructive, cites India, South China Sea, Hong Kong and Trade

Stilwell: Will see in coming weeks if there is a reduction in China’s aggressive behaviour

Stilwell: Says Chinese actions on trade have not lived up to billing

Stilwell: US would like to find ways to cooperate with China on N. Korea, also positive engagement on arms control

Stilwell: US looks forward to China considering national security legislation on Hong Kong

Stilwell: Trade is a good acid test to see if China will be a cooperative partner

Stilwell: Overall US-China relationship is tense

Stilwell: US Made position known to China about what it expects on coronavirus cooperation, still insists on transparency

Stilwell: China needs to allow in neutral observers for Coronavirus transparency

Stilwell: N. Korea is an obvious potential area for cooperation with China

Stilwell: China made a clear commitment to follow through on phase one of trade agreement

USD:

Oil’s rally sparks concern US production returning too fast – BBG

 

 

Today’s Data

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

JPY         National Core CPI YoY (MAY) A -0.2% | C -0.1% | P -0.2%

JPY         Monetary Policy Meeting Minutes

AUD       Retail Sales MoM A 16.3% | P -17.7%

0600      GBP        Core Retail Sales MoM (MAY) A | C 4.5% | P -15.2%

0600      GBP        Core Retail Sales YoY (MAY) A | C -14.4% | P -18.4%

0600      GBP        Retail Sales MoM (MAY) A | C 5.7% | P -18.1%

0600      GBP        Retail Sales YoY (MAY) A | C -17.1% | P -22.6%

0600      EUR       German PPI MoM (MAY) A | C -0.3% | P -0.7%

1230      USD       Current Account (Q1) A | C -103.0b | P -109.8b

1230      CAD       Core Retail Sales MoM (APR) A | C -13.5% | P -0.4%

1230      CAD       Retail Sales MoM (APR) A | C -15.1% | P -10.0%

1415      USD       FOMC Member Rosengren Speaks

1600      USD       FOMC Member Quartles Speaks

1700      USD       US Baker Hughes Total Oil Rig Count A | P 279

1700      USD       FED Chair Powell Speaks

1700      USD       FOMC Member Mester Speaks

 

Harry Hindsight

 

  • GBP: Opening around the 1.2550 level with a stretched dip to the 1.2530 area before returning and then pushing lightly though the 1.2560 area into the Tokyo opening before holding quietly through to the Tokyo midsession dipping through to the 1.2520 level for several hours it held the area before recovering for the run through into the morning session in London, BoE threw in another 100b QE and the market started a steady decline as the Media suggested that it would be anti-inflationary when in fact any anti-inflationary pressures will come from price cutting to kick start companies on the way to recovery and burying any further debt quickly while servicing debt is particularly easy, but what would I know go BBC/SKY always at the cutting edge of journalism, initially the market was talked down through to the 1.2475 levels before strong buying into early NYK saw the market testing the 1.2550 level again and the opening USD strength saw the Cable dropping quickly through to the 1.2450 area and then slipping further on steadier selling to make the lows just above the 1.2400 area and a long drawn out range through to the close with only a minor higher level.
  • JPY: Early gains from the opening around the 107.00 level to test the 107.05 area before slipping into the Tokyo session with USD sellers before testing to the Asian lows around the 106.70 level holding in a tight 106,70-80 level for a few hours before recovering through to the 106.90 area and ranging through to the grey hour in the 106.80-90 for the end of the quiet Asian session and London starting a steady buying to make the highs of the day on a push through the 107.10 level before losing ground for the move into the NYK session drifting back to the 106.80 level and spikes either way on commentary and data only to recover through to the end of the session with a spike in the final hour to test the 107.10 level again and hold almost unchanged on the day.
  • AUD: Early Tokyo buyers took the market off the opening 0.6880 level to push through towards the 69 cents levels and then dropping back from the early highs through to the 0.6870 level on the Tokyo opening, and then holding for a couple of hours through to the midsession and the employment numbers setting the Oz lower through to the 0.6840 in a quick move, then spend the rest of the session moving into the London to range around the 0.6880-70 area through early morning in London before heading to the 69 cents level, unable to truly break the level the market started to retrace steadily through to the London close pushing the lows again and testing lightly through the 0.6840 level with tight rising range through to the 0.6850 area for the close.
  • EUR: Opening just above the 1.1240 level the market continued to hold the levels through into early morning in Tokyo before dipping on the Oz employment numbers to traded lightly through the 1.1230 area before as with some of the other currencies rising slowly through into the London session pushing above the 1.1260 level and the high of the day, the move through to the NYK session saw the market ranging around the 1.1250 level with another push through the 1.1260 area and a minor dip to the 1.1230 level before strong USD buying moved into the opening NYK and the market testing through to the 1.1220 level pausing then dipping again to the 1.1210 area, the final push saw the market quickly test through the 1.1190 area and then bounce back to the figure and range through to the close in the 1.1200 figure 1.1210 level.

 

Yesterday’s Premiership Results

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%

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

CHF        SNB Monetary policy assessment

CHF        SNB Press Conference

EUR       ECB Economic Bulletin

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

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

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

GBP       MPC Meeting Minutes

USD       Initial Jobless Claims A 1,588k | C 1,300k | P 1.542k

USD       Philly FED Employment A -4.3 | P -15.3

CAD       New Housing Price Index MoM (MAY) A 0.1% | P 0.0%

CAD       Wholesale Sales MoM (APR) A -21.6% | C -12.6% | P -2.2%

USD       FOMC Member Mester Speaks

CAD       BoC GCM Schemri Speaks

 

Best Regards

Andy

 

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