Daily FX Market Commentary

Good morning,

LMAX Close

USDJPY 109.395 | EURUSD 1.19157 | AUDUSD 0.7533 | NZDUSD 0.69662 | USDCAD 1.27682 | USDCHF 1.00293 | GBPUSD 1.35166 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.19251 | 1.19112

USDJPY                 109.569 | 109.192

GBPUSD               1.35346 | 1.35138

USDCHF               1.00386 | 1.00216

AUDUSD              0.75422 | 075232

USDCAD               1.27731 | 1.2760

NZDUSD               0.69774 | 0.6955

EURCHF                1.19602 | 1.19459

EURGBP               0.88177 | 0.88065

EURJPY                 130.549 | 130.228

For today

• EUR: A slow day for the Euro with the bulk of Europe out for the day in observance of ascension day, opening around the 1.1915 levels the market had a single test to the 1.1925 level but generally holding quietly around the opening level, topside offers into the 1.1940 areas with congestion through to the 1.1960 area and stronger offers then appearing into the 1.1980-1.2000 level however, stops likely to be close behind the level and the market opening to weakness through to just above the 1.2050 areas where stronger offers are likely appear increasing into the 1.2100 area, downside bids light through to the 1.1880 areas then congestive bids start to move in and continue to the stronger bids hanging around the 1.1840-20 level and possibly into 1.1800, a push through that level leaves the downside vulnerable to a deeper move however, limited data and bank holidays across Europe leave the market looking quiet.
• GBP: A slow rise through the Asian session to the 1.3535 areas before drifting around the 1.3525 area in a slow day for Cable, Bids to the downside into and through the 1.3500 levels and a base beginning to form for the market however, a lack of data and limited market for the London session is possibly a double edged sword with the market still not comfortable and a break through the 1.3480 areas could see stops appearing and the 1.3430-50 area key to holding the market from a deeper move through to the 1.3300 areas, Topside offers light through to the 1.3600 level having tested through the level yesterday the market is likely to have very little resistance to a strong push through the level, limited expectations for stops on a move through the level but if there is any they are likely to be just behind the 1.3620 area and the market likely to be limited until a push through the 1.3650 breaks and the market opening quickly to further gains.
• JPY: USDJPY opened around the 109.40 areas and the move into the Asian session saw some demand for the fix and the market moving quietly to the 109.55 levels before dropping quickly back once the buying was exhausted, the market quickly tested to the 109.20 areas as paring back of longs seemed to be the name of the game from Japanese longs and then a slow climb back to the opening levels and a long run to the London session holding just above the open. Topside offers into the 110.00 having been strongly tested twice this month now shows a double top formation and while I’m not a purist and rely more on economics and what can be seen moving in the market the area has to be respected for the moment, with possibly strong stops on a push through the 110.20-30 areas and a quick test to the 110.50 areas with congestion through the level slowing any further gains, Downside bids light through to the 109.00 level with congestion through the level, a test through the 108.80-70 areas could see weak stops appearing and the market opening for a test through to the 108.00 areas if the yield buyers have finished for the time being however, don’t hold your breath for the move and possibly the same range we’ve seen for the week.
• AUD: A quiet range for the Oz today with the market opening around the 0.7535 area and gyrating around the level through the session with the market testing to the 0.7525 areas on several occasion before pushing at the 0.7540 level and the highs from yesterday, the run to the grey hour saw the market holding quietly just below the highs. Topside offers weak through the 0.7560 areas and the market opening then to stronger offers as the market approaches the 0.7580 levels with some limited congestion likely to continue through to the 0.7620 level, weak stops on a break here and possibly joined by stronger opening positions as the market opens to the 0.7660 level and limited congestion through to the stronger 0.7680-0.7700 level. Downside bids light through the 75 cent level and the market strengthens only on a dip through the 0.7450 areas and into the 0.7420 level, possibly strong stops on a push through the 74 cent level and the market could see a deeper move over an extended period.

Overnight News

RUB:

Putin wants to break with the USD but dumps Euro instead BBG

NZD:

RBNZ Gov Orr: Move lower in NZD after Thursday MPS a good thing

Orr: Inflation being impacted by backward looking price setting behaviour

Orr: Biggest hope for next week’s national budget is further investment expenditure

Orr: Market seemed finally to listen to message that rates will remain low for considerable period of time

EUR:

EU officials braced for nightmare scenario as anti-Brussels radicals prepare to govern in Italy

Italian populists signal progress toward forming government

AUD:

Australian March owner occupied home loan values fall 1.9% MoM

Today’s data

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

NZD       Business NZ Manufacturing PMI Apr A 58.9 | P 52.2 | R 53.1

JPY         Japan Money Stock M2+CD Y/Y Apr A 3.30% | C 3.20% | P 3.20% | R 3.10%

AUD       Home Loans M/M Mar A -2.20% | C -2.00% | P -0.20%

12:30     CAD       Net Change in Employment Apr C 20.5K | P 32.3K

12:30     CAD       Unemployment Rate Apr C 5.80% | P 5.80%

12:30     USD       Import Price Index M/M Apr C 0.50% | P 0.00%

14:00     USD       U. of Mich. Sentiment May (P) C 98.4 | P 98.8

Harry Hindsight

• EUR: A quiet rise through the Asian session from the lows around the 1.1845 level and pushing through to hold through to the London session trading around the 1.1860 levels testing to the 1.1880 level on the move to London opening the market then ranged into early morning before breaking through once the BoE announcement was out of the way, and moving into the NYK probing towards the 1.1890 levels, a weaker CPI reading in the US saw the USD dipping back against some currencies and the Euro broke quickly through the topside and pushed initially to the 1.1925 level before grinding through to the 1.1945 level after an hour or so, having hit the 1.1945 level and unable to push through to the 1.1950 the market suddenly turned and dropped quickly to the 1.1880 level again before starting a slow steadier rise through to the 1.1930 level and ranging quietly through to the close drifting just a little into the close.
• GBP: A quiet Asian session saw a similar pattern to the Euro with the opening around the 1.3550 and holding around that level through into the Tokyo session before moving up to test to the 1.3575 level and hold in a quiet range through into the London session, initially the market saw selling back through the lows of the day to test to the 1.3535 before running to the numbers uninspiring IP and MP numbers over all with the market on its lows the buyers appeared with some playing the risk of an interest rate hike and the market pushed through to the 1.3620 levels before dropping back on a no move and a rather dovish commentary and testing quickly back to the 1.3500 areas before finding some support, the market then held through a choppy early NYK period ranging between the 1.3510-40 areas before again dipping away this time pushing the lows to the 1.3460 as weak stops appeared on the break, the market ran out of steam and the move back through to the end of the session saw the market rising slowly back through the 1.3500 level to finish in a tight range for several hours around the 1.3520 level.
• JPY: A quiet start for the day and overall the market remained pinned below the 110 level, early Tokyo took the first run at the level with a push to above the 109.90 levels however, the BoJ summary had limited impact on the market and the highs made saw the market drop quickly back to tall below the opening 109.75 level and light stops taking the market to the 109.65 area before holding in a tight range through to the run for the grey hours and London, as the market moved towards London some light buying for the weekend started to move in and the market was rising steadily as London came in and gave it a good shove higher however, although the 110.00 level was breeched it was a stretch and the market again fell back from the high of the day and ran steadily to the 109.60 areas again, the move to NYK saw the market holding the level and the US numbers triggered a minor sell off down to the 109.35 level before basing along that line through to the close with the market never really looking comfortable pushing above the 109.65 area.
• AUD: Oz saw cross buying through the Asian session with AUDNZD doing a lot of work however, while the NZD dropped back the AUD remained fairly static rising eventually from the 0.7455 lows to range around the 0.7470-75 areas through to the London session, London did very little with the Oz testing back to the lows in light early trading before rising through to the 0.7485 areas into the mid-morning period and holding through to the NYK session in the area, the weaker US numbers saw the market move smartly through the 75 cent level triggering some weak stops along the way to the 0.7535 areas and apart from a dip back to the 75 cent area held through to the close around those highs.

Yesterday’s premiership results

NZD       RBNZ Official Cash Rate A 1.75% | C 1.75% | P 1.75%

GBP       RICS House Price Balance Apr A -8.00% | C -1.00% | P 0.00%

JPY         BoJ Summary of Opinions

JPY         Current Account (JPY) Mar A 1.77T | C 1.62T | P 1.02T | R 0.96T

CNY        CPI Y/Y Apr A 1.80% | C 1.90% | P 2.10%

CNY        PPI Y/Y Apr A 3.40% | C 3.40% | P 3.10%

EUR        ECB Monthly Economic Bulletin

GBP       Visible Trade Balance (GBP) Mar A -12.3B | C -11.4B | P -10.2B

GBP       Industrial Production M/M Mar A 0.10% | C 0.20% | P 0.10%

GBP       Industrial Production Y/Y Mar A 2.90% | C 3.10% | P 2.20% | R 2.10%

GBP       Manufacturing Production M/M Mar A -0.10% | C -0.20% | P -0.20%

GBP       Manufacturing Production Y/Y Mar A 2.90% | C 2.90% | P 2.50%

GBP       Construction Output M/M Mar A -2.30% | C -2.20% | P -1.60% | R -1.00%

GBP       BoE Bank Rate A 0.50% | C 0.50% | P 0.50%

GBP       BoE Asset Purchase Target May A 435B | C 435B | P 435B

GBP       MPC Official Bank Rate Votes A 20—7 | C 20—7 | P 207

GBP       MPC Asset Purchase Facility Votes A 00—9 | C 00—9 | P 009

GBP       BoE Quarterly Inflation Report

GBP       NIESR GDP Estimate Apr A 0.10% | C 0.20% | P 0.10%

CAD       New Housing Price Index M/M Mar A 0.00% | C 0.00% | P -0.20%

USD       CPI M/M Apr A 0.20% | C 0.30% | P -0.10%

USD       CPI Y/Y Apr A 2.50% | C 2.50% | P 2.40%

USD       CPI Core M/M Apr A 0.10% | C 0.20% | P 0.20%

USD       CPI Core Y/Y Apr A 2.10% | C 2.20% | P 2.10%

USD       Initial Jobless Claims (MAY 5) A 211K | C 219K | P 211K

USD       Natural Gas Storage A 89B | C 81B | P 62B

USD       Monthly Budget Statement Apr A 214.3B | C 212.0B | P -208.7B

 

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