Daily FX Market Commentary

Good morning,

LMAX Close

USDJPY 109.838 | EURUSD 1.19503 | AUDUSD 0.74923 | NZDUSD 0.7008 | USDCAD 1.28835 | USDCHF 0.99932 | GBPUSD 1.35716 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.19888 | 1.19477

USDJPY                 109.875 | 109.571

GBPUSD               1.35999 | 1.35697

USDCHF               0.99951 | 0.99697

AUDUSD              0.75275 | 0.74859

USDCAD               1.28866 | 1.28448

NZDUSD               0.70202 | 0.69928

EURCHF                1.19521 | 1.19411

EURGBP               0.88171 | 0.88043

EURJPY                 131.467 | 131.237

For today

• EUR: A slow rise through the Tokyo session having tested the 1.1950 levels initially, the market rose on the back of CNY/USD with commentary suggesting a deteriorating situation between the two, and the USD drifted, Euro’s managed to push through to the 1.1985 areas into the grey hours with limited volume through the day, downside bids remain into the 1.1940 level with some light stops possible through the level and the market then seeing congestive bids into the 1.1900-1.1880 level with stops possibly through that level contesting with limited congestion into the 1.1840 areas, topside offers weak through to the 1.2000 level with some congestive offers from the 1.2030 level onwards with weak stops on a push through the 1.2060 areas and the market opening quickly to the 1.2100 level with weakness likely on that move and the topside opening quickly to the stronger levels some distance away around the 1.2200.
• GBP: The move into the Tokyo session was limited before starting a slow rise from the 1.3570 areas to test the 1.3600 level through mid-session and holding in the area through to the grey hour, light congestion through the 1.3600 level will possibly see weak stops on a push through the 1.3620-25 levels and opening the market to the 1.3685 areas again, and possibly stronger offers from there into the 1.3700-50 level, downside bids into the 1.3550 level are likely to be a little bit more formidable having failed the level yesterday
• JPY: Concern with the USD/CNY rivalry and the two countries set to meet in Beijing to discuss the disagreement, the market drifted off through the Tokyo session to hold in a quiet range around the 109.60-70 areas to the grey hours in quiet trading, downside bids into the 109.30-60 levels likely to be congestive in nature with the market opening a little to the 109.00 areas, weak stops on a move through the 108.80 areas and possibly moving quickly if no buying is seen on a dip through the level and the 108.50 quickly exposing the 108.00 level and light bids through the level and increasing possibility of stronger stops appearing. Topside offers into the 110.00 levels with the market having briefly tested into and through the level one suspects that strong selling remains in the area with weak stops on a push through the 110.20 areas limited.
• AUD: Moving off the lows around the 0.7485 area the Oz slowly pushed through to the 0.7525 areas in quiet trading and into the grey hours, Downside bids in and through the 75 cent level with strong bids into the 0.7480 level with limited potential for stops with stronger congestion likely through the 0.7450 areas with the possibility of the congestion continuing through on the downside, topside offers light through to the 0.7540-60 areas with the market then opening quickly to the 76 cent areas and only light offers through the level and potential for more movement to the topside.

Overnight News

GBP:

PM May is said to be outnumbered in Brexit cabinet on customs plan

Home Sec. Joins hard Brexiters to derail PM on Customs plan

30 people injured following an explosion in North London no details

CNY/KRW:

1. Korea says China’s Wang Yi met with Norths foreign minister Ri Yong Ho Wednesday

They discussed ties, matters regarding Korean peninsula

NZD:

NZ job ads decline points to slower employment growth ANZ

CNY/USD:

Xi’s hands are tied in trade talks with US WSJ

TRY:

S&P downgrades sovereign rating to two levels below investment grade

AUD:

Australia April services index falls 1.7pts MoM to 55.2

USD:

Giuliani says Trump repaid Michael Cohen for 130K payment

CNY:

PBoC bans use of RQDII scheme to buy foreign exchange overseas

China’s Handan mayor says city will phase out 1.51M tonnes iron making capacity and 300K tonnes of steel by end of Aug

Today’s data

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

AUD       Trade Balance Mar A 1.53B | C 0.68B | P 0.83B

AUD       Building Approvals M/M Mar A 2.60% | C 1.00% | P -6.20%

08:30     GBP       Services PMI Apr C 53.5 | P 51.7

09:00     EUR        Eurozone PPI M/M Mar C 0.10% | P 0.10%

09:00     EUR        Eurozone PPI Y/Y Mar C 2.10% | P 1.60%

09:00     EUR        Eurozone CPI Estimate Y/Y Apr C 1.30% | P 1.30%

09:00     EUR        Eurozone CPI Core Y/Y Apr (A) C 0.90% | P 1.00%

09:00     EUR        European Commission Economic Forecasts

11:30     USD       Challenger Job Cuts Y/Y Apr P 39.40%

12:30     CAD       International Merchandise Trade (CAD) Mar C -2.0B | P -2.7B

12:30     USD       Nonfarm Productivity Q1 (P) C 1.00% | P 0.00%

12:30     USD       Unit Labour Costs Q1 (P) C 3.00% | P 2.50%

12:30     USD       Initial Jobless Claims (APR 28) C 225K | P 209K

12:30     USD       Trade Balance Mar C -55.6B | P -57.6B

13:45     USD       US Services PMI Apr (F) C 54.4 | P 54.4

14:00     USD       ISM Non-Manufacturing/Services Composite Apr C 58.1 | P 58.8

14:00     USD       Factory Orders Mar C 1.40% | P 1.20%

14:30     USD       Natural Gas Storage P -18B

 

Harry Hindsight

• EUR: Opening around the 1.1990 levels the market struggled through the Asian session eventually pushing through the 1.2000 into the mid-session before slipping back through to the opening levels into the London opening, early numbers were not particularly inspiring however, the Eurozone PMI numbers saw growth and unemployment was steady with GDP growing 0.2% above expectations and the Euro pushed through to the 1.2030 levels before settling back to the 1.2000 levels for the move through into the NYK session, dropping back with USD buying from the opening to test back to the 1.1950 levels and holding around the 1.1960 level through to the FOMC, no change as expected saw a knee jerk reaction and the Euro again pushing quickly towards the highs before the limited commentary saw the Euro again dropping with weak stops triggering a move through the 1.1950 levels and making the lows of the day in the 1.1940 areas, no real bounce and the market finished just off those lows.
• GBP: A quiet day for Cable through the Asian session, the market held quietly around the 1.3615 opening areas until the move towards the grey hour with the market dropping back to hold the 1.3600 level into the opening of London, a quick drop as the day started and the market tested the 1.3580 level for the first time before starting a rise through to the NYK session initially a sharp bounce of the low triggering some weak stops on the move to the 1.3625 level and then a slower more drawn out rise through to the 1.3665 before running out of steam, the move into the NYK session saw a minor dip before moving to the US numbers and dipping back to range around the opening levels, as with the rest of the currencies the USD dipped initially and the Cable managed the 1.3650 level for the last time before dropping quickly back to test to the 1.3555 level and a quiet close to the day.
• JPY: USDJPY again saw a quiet range for the most part with the opening around the 109.85 level pushed to an early 109.90 areas before dipping back to base around the 109.70 through to mid-session, light cross buying through the balance of the session and into London saw the USDJPY pushing through to the opening areas and holding quietly then through to NYK around those levels, US numbers saw the market rising towards the 110.00 level and a quick stab through as London finished its day, however the move through to the FOMC saw the USDJPY quickly dip to the 109.60 level before regaining the 109.90’s almost as quick and finishing the day just off those opening levels.
• AUD: The Oz dipped into the Tokyo session trading from the opening around the 0.7490 level to test the 0.7475 areas, the market moved off those lows and slowly pushed through to the London session testing to just above the 75 cent level, holding the level into the London session the market again started a slow push through to the 0.7530 areas, the run then drifted through to the NYK session slipping slowly through to the opening levels and holding in that area into the FOMC with the same movement through the FOMC release with USD initially dipping and then recovering with the Oz dropping back to the opening levels for the close.

Yesterday’s premiership results

NZD       Unemployment Rate Q1 A 4.40% | C 4.50% | P 4.50%

NZD       Employment Change Q/Q Q1 A 0.60% | C 0.60% | P 0.50% | R 0.40%

GBP       BRC Shop Price Index Y/Y Apr A -1.00% | P -1.00%

JPY         Monetary Base Y/Y Apr A 7.80% | C 9.20% | P 9.10%

CNY        Caixin PMI Manufacturing Apr A 52.5 | C 50.9 | P 51

JPY         Consumer Confidence Apr A 43.6 | C 44.5 | P 44.3

CHF        SECO Consumer Confidence Apr A 2 | C 4 | P 5

CHF        Retail Sales Real Y/Y Mar A -1.80% | C 0.30% | P -0.20%

CHF        PMI Manufacturing Apr A 63.6 | C 59.8 | P 60.3

EUR        Italy Manufacturing PMI Apr A 53.5 | C 54.5 | P 55.1

EUR        France Manufacturing PMI Apr (F) A 53.8 | C 53.4 | P 53.4

EUR        Germany Manufacturing PMI Apr (F) A 58.1 | C 58.1 | P 58.1

EUR        Eurozone Manufacturing PMI Apr (F) A 56.2 | C 56 | P 56

GBP       Construction PMI Apr A 52.5 | C 50.5 | P 47

EUR        Eurozone Unemployment Rate Mar A 8.50% | C 8.50% | P 8.50%

EUR        Eurozone GDP Q/Q Q1 (A) A 0.60% | C 0.40% | P 0.60%

EUR        Italian GDP Q/Q Q1 (P) A 0.30% | C 0.30% | P 0.30%

USD       ADP Employment Change Apr A 204K | C 200K | P 241K | P 228K

USD       Crude Oil Inventories A 6.2M | C 1.0M | P 2.2M

USD       FOMC Rate Decision A 1.75% | C 1.75% | P 1.75%

 

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