Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 108.91 | EURUSD 1.06431 | AUDUSD 0.75896 | NZDUSD 0.70054 | USDCAD 1.33158 | USDCHF 1.00448 | GBPUSD 1.25641 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.06529 | 1.06376

USDJPY                 109.225 | 108.902

GBPUSD               1.25756 | 1.25505

USDCHF               1.00477 | 1.00306

AUDUSD              0.75959 | 0.75553

USDCAD               1.33346 | 1.33187

NZDUSD               0.70160 | 0.70000

EURCHF                1.06916 | 1.06845

EURGBP               0.84801 | 0.84658

EURJPY                 116.207 | 115.936

For Today

• EUR: Another quiet range for the Euro with the market opening around the 1.0645 levels and drifting down through the 1.0640 areas before slowly rising after the RBA speech to test above the 1.0650 level, the market has drifted since that point through into the grey hour trading around the 1.0645 level. Topside offer into the 1.0680 continuing through the 1.0700 areas with congestive offers likely into the 1.0750 areas before a return of stronger offers into the 1.0800 levels. Downside bids light through to below the 1.0600 areas with stronger bids on a move through the area to the 1.0550 and likely stops on a move through that level with the 1.0500 areas then becoming vulnerable to further testing, a push through the 1.0480 areas is likely to see stronger stops hitting the market and the downside opening quickly to the 1.0400 levels.
• GBP: A stronger range than the Euro the market slipped to the 1.2550 levels on the move through into the Tokyo session, the market held the level before again rising with GBPAUD buying doing most of the work, weak stops from early sellers saw the market push through the 1.2575 levels briefly before steadying down to range around the opening level. Topside offers not so strong as before with the offers into the 1.2600 levels thinned out a little yesterday, a push through the level will likely see offers continuing through to the 1.2650 areas however, the market opens to a test of the stronger 1.2700 levels and the ranges from post Brexit voting. Downside bids light through to the 1.2500 areas with some congestion likely into the level and through seeing increasing bids into the 1.2450 sentimental region however, a test of the 1.2400 level is likely to see weak stops appearing with possibly limited bids, with better support likely into the 1.2350 areas.
• JPY: USDJPY remaining contained through the session with the market pushing through the 109.00 levels from the close and testing slightly through the 109.20 areas at the highs in limited buying, having hit the highs the market drifted through to the grey hour ranging around the 109.00 areas, Topside offers likely to continue through the 109.30 areas with weak stops then appearing into the 109.50 sentimental offers with light congestion through the level the market then faces a stronger set of offers through the 110.00 levels and likely to do a lot of work to push through the 110.50 areas. Downside bids light through the 108.50 areas and then they start to thicken with the bids increasing into the 108.30-00 areas with weak stops on a push through the level with possible stop entries joining in a push towards the 107.50 areas and sentimental bids likely before the market opens for a test through the 107.00 levels and new ranges towards the 106.00 area.
• AUD: Opening around the 0.7590 levels the market moved through into the Tokyo session testing through the 0.7595 levels before the RBA minutes were released, a slightly dovish tone with concerns about employment and the housing bubble showing the worry of the RBA, the Oz dropped from the 0.7590 levels quickly through to 0.7575 and then continuing in a steady slide to test the 0.75505 areas through into the grey hour, Downside bids into the 0.7540 levels are likely to be weaker than usual and the market is likely to see weak stops on a push through the 0.7480 areas with reasonably strong bids into the 75 cent areas however, even with the stops the market is still likely to see insufficient interest to push it too quickly once each session opening is over with 74 cents possibly only slightly weaker than the 75 cent level. Topside offers into the 76 cent levels weak with a move through the level seeing possibly plenty of congestive offers on any attempt to push towards the 77 cent areas.

Overnight News

CNY:

China March home prices rise 0.6% MoM, 11.3% YoY

USD/KRW:

Pence says S.Korea-US free trade agreement to be reviewed, reformed

Pyongyang should not test Trumps resolve Pence

CNY/KRW:

N.Korea said to snub Chinese diplomats as tensions rise

AUD:

RBA dovish comment sees a limited fall for the Oz

USD:

Mnuchin says USD strength is a good thing: FT

Moody’s:

Japan economic momentum building

Today’s data

Actual = A | Consensus = C | Previous = P | Revised = R All timings GMT

AUD       RBA Minutes Apr

12:30     CAD       International Securities Transactions (CAD) Feb P 6.20B

12:30     USD       Housing Starts Mar C 1.28M | P 1.29M

12:30     USD       Building Permits Mar C 1260K | P 1213K

13:15     USD       Industrial Production Mar C 0.50% | P 0.00%

13:15     USD       Capacity Utilization Mar C 76.00% | P 75.40%

Harry Hindsight

• EUR: Geopolitical movements throughout the day for the most part with the Asian session while seeing some volume still struggling through the session, opening around the 1.0615 levels the market tested to the downside initially before moving into the Tokyo session fulling however, holding the 1.0605 areas on the move the market then started a steady climb into mid-session pushing towards the 1.0625 level and then holding through into the London session around the 1.0620 areas, London still away for the Easter bank holiday was limited and the market initially pushed to the 1.0650 areas on the opening before slipping back through early morning to the 1.0620 areas again, and then a steadier rise on the move into the NYK session with the US back, N.Korea, Syria still dominate the news channels with the failed missile test in the face of warnings from the US seeing the chattering media speculating, the market continued to push through the session to the 1.0670 level on a stretch before drifting back through the session to finish below the 1.0650 areas as the USD recovered a little once the TIC flows were released.
• GBP: Opening slightly higher than Fridays close the market quickly filled the gap on the charts before rising from the 1.2525 level lows through the Asian session to hold around the 1.2540 areas, the move through London saw the range increase a little however, it remained reasonably tight testing towards the 1.2550 areas before lifting steadily from the NYK opening to push to the 1.2595 areas and some offers into the figure area holding the market for a period in the 1.2580-85 level, the release of US numbers saw a small recovery for the USD and the market moved back to finish the day around the 1.2570 areas with some mixed movement into the close.
• JPY: USDJPY dropped back from the opening and by the mid-session touched through to lows around the 108.15 areas before starting a slow recovery to trade around the 108.30-40 areas, the market moved quietly through the London session and the market only started to lift once the market moved into the NYK session, while the geopolitical issues for the USD possibly saw Yen buying as not the smartest idea and we started to see a gradual uptick in the market with the USDJPY rising back to the 109 areas through to the close.
• AUD: A steady rise from the opening around the 0.7580 areas after an early dip to the 0.7575 areas saw the market testing to the 0.7595 levels with that level holding through into the NYK session, the market did eventually push through the 76 cent level late into the session pushing through to the 0.7610 areas before drifting back to close around the 0.7590 areas, more of a consequence of JPY movements and AUD crosses than direct trading.

Yesterday’s premiership results

CNY        GDP Y/Y Q1 A 6.90% | C 6.80% | P 6.80%

CNY        Retail Sales YTD Y/Y Mar A 10.90% | P 9.50%

CNY        Fixed Assets Ex Rural YTD Y/Y Mar A 9.20% | C 8.80% | P 8.90%

CNY        Industrial Production YTD Y/Y Mar A 7.60% | C 6.20% | P 6.30%

USD       Empire State Manufacturing Apr A 5.2 | C 15.5 | P 16.4

USD       NAHB Housing Market Index Apr A 68 | C 70 | P 71

USD       Net Long-term TIC Flows Feb A $53.4B| P $6.3B | R 5.9B

Good Luck,

Andy

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