Daily FX Market Commentary

Andy Harrison

Andy Harrison

Good morning,

LMAX Close
USDJPY 107.934 | EURUSD 1.12331 | AUDUSD 0.69032 | NZDUSD 0.64558 | USDCAD 1.35758 | USDCHF 0.94734 | GBPUSD 1.24007 |

LMAX Highs and Lows 0500 GMT
Highs | Lows
EURUSD 1.12404 | 1.12224
USDJPY 108.159 | 107.603
GBPUSD 1.24031 | 1.23659
USDCHF 0.94770 | 0.94652
AUDUSD 0.69168 | 0.6894
NZDUSD 0.64635 | 0.64461
USDCAD 1.35774 | 1.35602
EURCHF 1.06414 | 1.06288
EURGBP 0.90778 | 0.90571
EURJPY 121.483 | 120.791

For Today

• GBP: Opening around the 1.2395 area and testing to the 1.2400 level before moving through into the Tokyo session slowly drifting through to the 1.2380 area and then trading quietly around the 1.2385 area through to late on the session before again starting to drift late in the session to the 1.2370 for the move into the grey hour, Limited offers through the 1.2400 level and weak stops could see the market move a little higher however, given yesterdays move higher and the fact the 1.2400 was pushed through late in the session weak stops may have been traded out of and the market is open through to the sentimental level around the 1.2450 area with light offers possibly in the area, with stronger offers then building through to the 1.2500 levels. Downside bids light through to the 1.2300 area limited bids likely through the area and the market only finding stronger bids on a push through to the 1.2250 level where it’s likely to be stronger now having failed the level and continuing through to the 1.2200 before weak stops appear and the market opens only a limited amount.
• JPY: Quiet opening with the market holding in its 107.95 opening level before popping higher on the Tokyo fix to just above the 108.15 level on a good CAPEX number only to collapse as the Big/Large numbers fell short of being called good, dropping quickly back after the expectant fix the market tested through to the 107.70 level before finding some limited buyers and then continuing through to the 107.60 area for the move into the grey hour, topside offers continue through to the 108.20-25 area before weak stops are likely to appear and the possibility of pushing through to the 108.50 area before hitting some congestion, weak congestion through to the 108.80 level and stronger offers likely to appear for any move through the 109.00-20 level. , Downside weak through the 107.00 level before opening for a fresh run at the 106.50 area and possible short term buying through to the 106.00 level where bids are likely to increase, a break through to the 105.90 areas is likely to see weak stops appearing, limited bids through to the 105.50 area and increasing through to the 104.80.
• AUD: A very quiet session for the Oz with the market dipping just below the 69 cents level then steadily rising through the 0.6915 are level to define the range for the Asian session with the market slowly drifting through to the grey hour holding around the opening level, Topside offers light through the 69 cents level and opening only a little on a break above the 0.6920 area and light stops pushing to the 0.6950 area, 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: A slow range for the Euro with the market holding the 1.1230 level for much of the session and challenging the 1.1240 area several times through to late in the session before starting a slow steady drift through to the 1.1225 level for the run to 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 congestion into the 1.1280-1.1300 area building the longer it remains below with further offers through the 1.1350 level with increasing offers likely through to the 1.1400 level with strong stops possible 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

World:
Virus Labour market destruction is proving worse than anticipated – BBG
MXN:
Mexican Financial stability board: Sees uncertainty over the depth of recession in Mexico and speed of recovery
MFSB: Also flags risks over possible changes to PEMEX and Sovereign credit ratings
MFSB: Mexican financial system entered pandemic in a solid state
MFSB: Although system remains stable, risks persist that could intensify and affect its proper functioning
MFSB: Does not expect situation of Banco Ahorro Famsa to have significant impact on rest of Financial system
AUD:
Victorian state Premier Daniel Andrews warns entire state could go back into lockdown if cases continue to rise – ABC
May Building approvals fall 16.4% MoM – BBG
NZD:
RBNZ’s Orr: Nothing Magic about 50% QE ceiling – BBG
USD:
Fauci: US could reach 100k virus cases a day as warnings grow darker – NYT
TWD/HKD:
Taiwan mulls easing rules for HK citizens to work, invest – RTR’s

Today’s Data
Actual – A | Consensus – C | Previous – P | Revised – R | All timings GMT/UTC
AUD AiG Manufacturing Index (JUN) A 51.5 | P 41.6
NZD Building Consents MoM (MAY) A 35.6% | P -6.5% | R -9.9%
JPY Tankan all Big Industry CAPEX (Q2) A 3.2% | C 2.1% | P 1.8%
JPY Tankan Big Manufacturing Outlook Index (Q2) A -27 | C -24 | P -11
JPY Tankan Large Manufacturers Index (Q2) A -34 | C -31 | P -8
JPY Tankan Large Non-Manufacturers Index (Q2) A -17 | C -18 | P 8
CNY Caixin Manufacturing PMI (JUN) A 51.2 | C 50.5 | P 50.7
AUD Building Approvals MoM (MAY) A -16.4% | C -10.0% | P -1.8%
0600 GBP Nationwide HPI MoM (JUN) A | C -0.7% | P -1.7%
0600 GBP Nationwide HPI YoY (JUN) A | C 1.0% | P 1.8%
0600 EUR Germany Retail Sales MoM (MAY) A | C 3.9% | P -5.3%
0715 EUR Spanish Manufacturing PMI (JUN) A | C 45.1 | P 38.3
0730 CHF Procure ch PMI (JUN) A | C 48.3 | P 42.1
0745 EUR ECB’s Panetta Speaks
0755 EUR German Manufacturing PMI (JUN) A | C 44.6 | P 44.6
0755 EUR German Unemployment Change (JUN) A | C 120k | P 238k
0755 EUR German Unemployment Rate (JUN) A | C 6.6% | P 6.3%
0800 EUR Eurozone Manufacturing PMI (JUN) A | C 46.9 | P 46.9
0830 GBP Manufacturing PMI (JUN) A | C 50.1 | P 50.1
1100 GBP BoE MPC Member Hasket Speaks
1215 USD ADP Nonfarm Employment Change (JUN) A | C 3,000k | P -2,760k
1215 EUR German BuBa Mauderer Speaks
1345 USD Manufacturing PMI (JUN) A | C 49.6 | P 49.6
1400 USD ISM Manufacturing Employment (JUN) A | C 43 | P 42.1
1400 USD ISM Manufacturing PMI (JUN) A | C 49.5 | P 43.1
1430 USD Crude Oil Inventories A | C 0.710m | P 1.442m
1500 EUR German BuBa Wuermeling Speaks
1800 USD FOMC Meeting Minutes
2300 NZD NZIER Business Confidence (Q2) A | P -70%

Harry Hindsight

• GBP: early slow rise from just below the 1.2300 level to push quietly into the Tokyo session testing through the 1.2315 area before basing along the 1.2300 level through to the grey hour and steady selling through to the London opening testing the 1.2260 area basing around the level through into the NYK session before a reversal of fortunes as the deadline for an extension expired with the EU with a tight channelled rise through to just below the 1.2395 level before pausing for the end of the London session, the market continued to rise a little however, the push against the 1.2400 level was the last attempt of the session.
• JPY: Opening just below the 107.60 level and struggling around the level through into the Tokyo session testing through to the 107.55 area before early Tokyo took the market towards the 107.80 level and a quiet range between the 107.70-80 area through to the grey hour where early London tested back into the 107.60’s before returning to the 107.70-80 after a few hours for the move into the NYK session, initial US numbers like Chicago PMI saw the USD turning lower and the USDJPY quickly moved towards the 107.50 area before recovering quickly on the better than expected Consumer confidence number and a quick push through to the 107.90 level dipping back and then running from the 107.80 level in a steady rise through to hold around the 107.95 level through to the close.
• AUD: A slow climb through the Asian session from the 0.6860 area dipping back into Tokyo before spending the balance of the session ranging around the 0.6880 area only for early London to sell the market back to the 0.6830 level in two steps through to late morning in London, the move through to the NYK session saw the market beginning a steady tight channelled move through to The end of London as the increase in USDJPKY helped the Oz to push for the 0.6910 high of the day before drifting a little and holding around the 69 cents area.
• EUR: Limited range for the Euro with early buyers pushing the market through to the 1.1250 level into the Tokyo opening before drifting off and ranging around the 1.1240 level just above that opening through to late in the session, early Europeans sold the market lower through into the London session testing through to the 1.1210 area before holding for a short period after a brief rally towards the 1.1230 level, EURGBP selling saw the Euro again being forced lower and the market pushing the 1.1200 level recover and then test through to the day’s low just above the 1.1190 area and into the NYK session, the Euro saw a limited recovery more on the drag of the GBP than anything else and after a steady rise through to the 1.1230 area and then reaching quickly through the 1.1260 before dipping back to hold quietly around the 1.1250 and another step lower for the run to the close.

Yesterday’s Premiership Results
JPY Jobs/applications ratio (MAY) A 1.20 | C 1.23 | P 1.32
JPY Industrial Production MoM (MAY) A -8.4% | C -5.6% | P -9.8%
CNY Chinese Composite PMI (JUN) A 54.2 | P 53.4
CNY Manufacturing PMI (JUN) A 50.9 | C 50.4 | P 50.6
CNY Non-Manufacturing PMI (JUN) A 54.4 | P 53.6
NZD ANZ Business Confidence (JUN) A -34.4 | P -41.8
AUD Private Sector Credit MoM (MAY) A -0.1% | P 0.1%
AUD RBA Assist Gov Debelle Speaks
GBP Business Investment QoQ (Q1) A -0.3% | C 0.0% | -0.5%
GBP Current Account (Q1) A -21.1b | C -15.4b | P -5.6b | R -9.2b
GBP GDP QoQ (Q1) A -1.7% | C -2.0% | P 0.0%
GBP GDP YoY (Q1) A -2.2% | C -1.6% | P 1.1%
CHF Retail Sales YoY (MAY) A 6.6% | P -19.9%
CHF KOF Leading Indicators (JUN) A 59.4 | C 77 | P 53.2 | R 49.6
EUR Spanish GDP QoQ (Q1) A -5.2% | C -5.2% | P 0.4%
EUR Core CPI YoY A 0.8% | P 0.9%
EUR CPI MoM A 0.3% | P -0.1%
EUR CPI YoY (JUN) A 0.3% | C 0.1% | P 0.1%
GBP BoE MPC Member Haldane Speaks
CAD GDP MoM (APR) A -11.6% | C -13.0% | P -7.2% | R -7.5%
EUR ECB’s Schnabel speaks
USD Chicago PMI (JUN) A 36.6 | C 45.0 | P 32.3
GBP BoE MPC Member Cunliffe Speaks
USD Consumer Confidence A 98.1 | C 91.8 | P 86.6
USD FOMC Member Williams Speaks
EUR ECB’s De Guindos Speaks
USD FOMC Member Brainard Speaks
USD Fed Chair Powell Testifies
USD FOMC Member Kashkari Speaks
USD API Weekly Crude Oil Stocks A -8.156m | P 1,749m

Best Regards
Andy

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