Daily FX Market Commentary

Andy Harrison

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 107.194 | EURUSD 1.1218 | AUDUSD 0.68687 | NZDUSD 0.64236 | USDCAD 1.3632 | USDCHF 0.94846 | GBPUSD 1.2419 |

 

LMAX Highs and Lows 0500 GMT

Highs | Lows  

EURUSD               1.12257 | 1.12087

USDJPY                107.270 | 107.086

GBPUSD               1.24369 | 1.24102

USDCHF               0.94910 | 0.94801

AUDUSD              0.68956 | 0.68647

NZDUSD               0.64490 | 0.64154

USDCAD               1.36511 | 1.36289

EURCHF               1.06422 | 1.06379

EURGBP               0.90357 | 0.9028

EURJPY                120.298 | 120.068

 

For Today

 

  • GBP: A very quiet session even for a Summer Friday, opening around the 1.2420 level the market made feeble attempts to both the 1.2410 level and the 1.2430 area and finally holding for the move into the grey hour around the topside, strong congestion likely on a move to the 1.2550 area with weaker offers through the level on a push for the 1.2600 level before congestion reappears around the 1.2630 level, downside bids light through to the 1.2400 level and possible weak stops on a dip through the level before increasing bids into the 1.2350 areas, congestion on any move through the level to the 1.2300  areas before opening the downside 1.2250 area for a test and possibly the key level for the short term.
  • JPY: Opening around the 107.20 level the market slid slowly through into the Tokyo session testing the 107.10 area before quickly snapping back to the opening level before drifting around the 107.20-15 area through to the grey hour, Downside bids into the 106.20 area through to 105.80 possible weak stops through here 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: Initially rising through to the Tokyo session pushing the 0.6895 level but finding a little to much in the way the market slumped quickly through to the low 0.6860 area before bouncing and slowly rising through to the opening areas again, 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: Rising a little from the opening 1.1215 area to push a little higher through into the Tokyo session before dropping back on the Tokyo fix eventually drift through the 1.1210 area and just below, the balance of the session saw the market slowly rising through to push the 1.1225 area for the move into the grey hour, downside congestion through the 1.1200  level with weak stops likely on a strong move through the 1.1170 area opening up a quick test through the 1.1150 level before hitting stronger congestion through to the 1.1100 level from the beginning of the month and vulnerable to a stronger move through to 1.1050 before the market starts thickening for the sentimental 1.1000, Topside congestions through the 1.1350 level with increasing offers likely through to the 1.1400 level with strong stops likely on a move through the 1.1420 area to open up a quick move through  to the 1.1450 area before slowing as the market moves to the sentimental 1.1480-1.1520 area and possibly a bid tone.

 

 

Overnight News

 

EUR:

Minutes suggest QE exit door has been slammed shut – BI

USD:

COVID 19 cases in Texas up 4.8% US cases rise at fastest pace of June – BBG

Verizon is pulling advertising from Facebook and Instagram – CNBC

Banks get easier Volcker rule and $40b break on swaps – BBG

Fed suspends share buybacks and limits dividends for big banks – BBG

US may have 10x more Covid cases than known, CDC – BBG

GBP:

Keir Starmer (Labour Leader) sacks Rebecca Long-Bailey after reportedly sharing antisemitic material

AUD/CNY:

Mutual trust between Australia and China at all time low – Global Times

NSW Labour MP’s Sydney home raided as ASIO probes China links – SMH

AUD:

Panic buying spreads amid second wave fears – AFR

NZD:

RBNZ has limited scope to increase QE under existing indemnity – BBG

 

Today’s Data

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

JPY         Tokyo Core CPI YoY (JUN) A 0.2% | C 0.2% | P 0.2%

0700      EUR       ECB President Lagarde Speaks

1230      USD       Core PCE Price Index YoY (MAY) A | C 0.9% | P 1.0%

1230      USD       Core PCE Price Index MoM (MAY) A | C 0.2% | P -0.4%

1230      USD       PCE Price Index YoY (MAY) A | P 0.5%

1230      USD       PCE Price Index MoM A | P -0.5%

1230      USD       Personal Spending MoM (MAY) A | C 9.0% | P -13.6%

1400      USD       Michigan Consumer Expectations (JUN) A | C 73.1 | P 73.1

1400      USD       Michigan Consumer Sentiment (JUN) A | C 79.0 | P 78.9

1700      USD       US Baker Hughes Total Rig Count A | P 266

 

 

Harry Hindsight

 

  • GBP: A very quiet day for the Cable with the only scandal of the day is the sacking of a Labour MP, must be something about Labour MP’s see the Ozzie news, opening around the 1.2420 level the market struggled to maintain the level through the run into the Tokyo session slipping to the 1.2410 area before showing some light buying to push back towards the Asian high of 1.2440, the move through to the London session with the market slipping back and holding around the 1.2405 area in a very quiet session, London came in buying through the grey hour and pushed the market through to the high of the day into the first hour of London testing through to the 1.2465 area possibly as the market reads the late comments from Barnier on EU/UK negotiations, the move through to the NYK session saw the market adrift and really very little moving through the market to test to the lows on a dip through the 1.2400 level, the run to the close was a long dull move with the market steadily rising to the 1.2425 area.
  • JPY: Opening around the 107.00 level the market struggled higher through the course of the first half of Tokyo to test the 107.25 area before drifting through to the London session holding the opening level London initially were steady buyers through to the NYK opening to test the 107.45 area for the high of the day before slipping back and running through to a quiet close. Around the 107.20 area.
  • AUD: Limited and choppy Ozzie with the market opening the 0.6870 area before slowly dipping through into the Tokyo session testing the 0.6850 area, quick move back to the opening level on the end of the Tokyo fix saw the market again dropping back towards the lows, the move through to the London session with another drop quickly through to the 0.6845 level before bouncing and quickly touching the 0.6870 area and then pushing on a second run to the 0.6880, a slow rise towards the 0.6890 area but unable to challenge the level this time and the run to the NYK session again saw a quick dip back to the 0.6855 area, once the London session was out of the way the market pushed one last time higher testing to the 0.6890 level for the high before the close.
  • EUR: A steady decline through the day, opening around the 1.1250 level the market limited attempts to extend the high through the session however, it failed to push beyond the 1.1260 level and the rallies decreased on every attempt to recover lost ground, possibility that German closing down local government area because of fears of second wave of viruses, much the same as has been seen in some of the southern US states, the move into the London session saw the losses deepening initially on the opening to the 1.1220 area and then after a brief recovery testing through to the 1.1190 level for the low of the day and slowly recovering to the 1.1220 level to range around the area to the close.

 

Yesterday’s Premiership Results

NZD       Trade Balance MoM (MAY) A 1,253m | P 1.267m | R 1339m

NZD       Trade Balance YoY (MAY) A -1,330m | P -2,500m | R -2,410m

EUR       GfK German Consumer Climate (JUL) A -9.6 | C -12.0 | P -18.9 | R -18.6

USD       Core Durable Goods MoM (MAY) A 4.0% | C 2.5% | P -7.7% | R -8.2%

USD       Durable Goods Orders MoM (MAY) A 15.8% | C 10.9% | -17.7% | R -18.1%

USD       GDP QoQ (Q1) A -5.0% | C -5.0% | P -5.0%

USD       GDP Price Index QoQ (Q1) A 1.6% | C 1.4% | P 1.6%

USD       Goods Trade Balance (MAY) A -74.34b | P -70.73b

USD       Initial Jobless Claims A 1,480k | C 1,300k | P 1,508k | R 1,540k

USD       Retail inventories Ex-Auto (MAY) A -1.5% | P -1.1%

EUR       ECB’s Schnabel Speaks

USD       FOMC Member Kaplan Speaks

USD       FOMC Member Bostic Speaks

USD       FOMC Member Mester Speaks

GBP        BoE MPC Member Haldane Speaks

 

Best Regards

Andy

 

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