• Japan July PMI Output Index 54.7.
  • Japan June unemployment rate, 5.4%.
  • Japan June CPI down 1.7%.
  • Australia July Inflation gauge +0.9%.
  • Asian Stockmarkets run hard, Nikkei at 10 month highs.
  • Gold higher at 937.30.
  • US govermant to extend “clunker” car program.
  • Wall St Journal: Bond Worry, will China continue to buy.

End of month flows dominated proceeding in Asia today. Good interest to buy Yen crosses into the fix were seen, which continued post fix. A Wall St Journal article “Bond Worry”, about the US government’s concern on whether China will continue to buy, resulted in some USD weakness as well. There is talk that the market is positioning itself for USD sales against EUR, CAD, GBP, AUD at the London Fix later tonight. A slew of Toshin related issuances may see a bounce in demand later tonight with ZAR and BRL the highlighed currencies.

There was good demand for EURJPY into the fix today which found on going support via stops triggered in EURUSD above 1.4100. EURJPY ran to 134.65, then rested above 134.50 for an afternoon push higher to where we are now. Not even a drift off in USDJPY could deter the buyers. The gains in the Nikkei(10 month highs)were also very supportive to EURJPY. Exporters gained on a weker yen and others gained on good earning reports. There were no pullbacks in EURUSD either, once above 1.4100, the demand continued, as a short market chased it higher.

USDJPY drifted off to test buyers at the 95.20 area but held firm. There is talk of some massive bids above 95.00 which scared the market from taking it lower.

AUDUSD traded higher on good AUDJPY demand. The AUDUSD seems to be bid as data continues to support expectations for a rate rise. Good bids are seen above 82c with resistance still sighted above the previous high, 8340. The RBA meets 4th August, expectations are for a rates to be kept on hold, with analysts predicting the RBA might drop its easing bias.

Ranges:

EURUSD1.4062 – 1.4135

GBPUSD 1.6483 – 1.6547

USDJPY 95.23 – 95.61

EURJPY 134.27 – 134.83

AUDUSD 8235 – 8289

Goodluck,

Sam