Daily FX Market Commentary

Andy Harrison

Good Morning,

LMAX Close

USDJPY 112.036 | EURUSD 1.13036 | AUDUSD 0.71728 | NZDUSD 0.67609 | USDCAD 1.33673 | USDCHF 1.00412 | GBPUSD 1.30984 |

LMAX highs and Lows 05.00 GMT

                                Highs | Lows

EURUSD               1.13073 | 1.12925

USDJPY                 112.044 | 111.89

GBPUSD               1.31009 | 1.30787

USDCHF               1.00490 | 1.00372

AUDUSD              0.71750 | 0.71399

USDCAD               1.33927 | 1.33716

NZDUSD               0.67689 | 0.67416

EURCHF                1.13528 | 1.13445

EURGBP               0.86363 | 0.86279

EURJPY                 126.683 | 126.38

For Today

• GBP: Pushing back to the 1.3100 in early trading the market moved quietly through into the Tokyo session holding around that level before quickly dipping lower with cross Oz selling dragging the currencies a little lower after the RBA announcement and Cable testing to the 1.3080 levels before finding a little traction to move back to the 1.3090 level and holding quietly through to the grey hour, Topside congestion through to the 1.3140 levels and likely to increase on any push above the 1.3150 level with limited potential for a break through the 1.3200 areas, with stronger offers remaining above the level. downside bids light through to the 1.3050 areas with limited congestion and increasing into the 1.3000-1.2980 level with stronger bids not really expected until closer to the 1.2900 levels and strong stops on a break through the 1.2880 level.
• JPY: Very limited movement the market has moved through the session trading around the levels of yesterday holding below the 112.05 area and then dipping through in mid-Tokyo testing lightly through the 111.90 area to hold through to the grey hour, Topside offers remain on any push through to the 112.20 with possible weak stops through the level before further offers around the 1.1250 level absorb the move and slow the market on any push to the 1.1300 level, while there maybe stops on a break the market is likely to see stronger congestion through the level continuing through to the 1.1400 areas, downside bids light through to the 111.00 area with congestion in the area and through to the 110.50 level before any weakness appears and the 110.00 becomes susceptible to a test with strong congestion on any dips.
• AUD: Opening above the 0.7170 level the market held quietly through into the Tokyo session making the high just above the 0.7175 level before dipping on the RBA announcement through to the 0.7140 level before holding quietly through to the grey hour around the 0.7150 area. Topside offers through to the 0.7200-20 area before weak stops are likely to appear and the market seeing limited congestion on a move through to the 0.7250 areas limited congestion through to 0.7280 where the offers are likely to appear on any break through the 73cents area and increase on a move through to the 0.7350 areas. Downside bids likely to be congestive around the 71 cents level but limited withy better bids appearing closer to the 0.7000-20 areas increasing in size the low you go in that area, stronger stops possible on a break through the 0.6980-70 areas before congestion moves in around the 0.6950 areas.
• EUR: Euro dipped from the early highs just above the 1.1307 level and dripping through to the low 1.1290’s on the RBA announcement before recovering to the opening level just above the 1.1300 area for the move into the grey hour. Topside congestion through to the 1.1320 level and a solid push towards the 1.1350 level could see weak stops appearing and opening a test through to the 1.1400 area if 1.1360 is pushed through, congestion likely to appear around that 1.1400 areas and stronger offers possibly on a push through towards the 1.1450 level the highs of last month. Downside bids light but congestive through to the 1.1200 level with better bids likely in that area with weak stops on a break below the 1.1180 level opening a test into the 1.1140-60 areas and further congestion then appearing and increasing into the 1.1100 areas.

Overnight News

World:

Global trade suffers biggest collapse since Great recession Telegraph

Volatility explosion may lurk around corner as FX traders lulled – BBG

Metals:

Rio cuts Iron ore guidance as shipments plunge on cyclone, fires BBG

USD/CNY:

Trump on China trade spat, We’re going to win either way RTRS

As trade war simmers, US soybean shipments hit one year low BBG

China said to weigh US request to shift tariffs on farm goods BBG

CHF:

SNB ticks box for stocks BBG

USD:

In search for leverage, Trump may be undercutting his own trade deals NYT

Fed’s Rosengren doesn’t see recession but inflation under goal – BFW

CAD:

BoC sees demand for household borrowing falling next quarter BBG

BoC Some exporters reported China tensions now hurting sales BBG

Inflation expectations have declined, most firms see 1%-2% – BoC

Balance of opinion on output pressures turned negative BoC

Capacity pressures moved down to low level, BoC

Plans to hire continue to be widespread across regions BoC

BoC pressure on labour market less widespread across regions BOC

BoC firms tied to energy, housing, expect sales to remain weak

Trade headwinds, geopolitical tensions weigh on exporters BoC

BoC says BOS indicator turns negative for first time since 2016

BoC Business sentiment remained positive but has softened

NZD:

ASB bank says RBNZ capital plan may lift lending rates 50-75BPS

RBNZ’s Orr: Monetary policy easing bias remains in place for now

Orr: Softer economic conditions in US, Europe, China contributed to dovish tone

Orr: Possibility Q1 inflation undershooting forecasts already factored in to banks dovish bias

Orr: NZD currently around happy space

AUD:

Rate cut appropriate if jobless rate rises AFR

RBA: Not a strong case for near term adjustment in rates BBG

Discussed scenario where rate cut would be appropriate

Board recognized it was not possible to fin-time outcomes

Holding rates steady enable it to be source of stability

Forward indicators of labour demand mixed in recent months

RBA: Scenario where rate rise needed in near term was low

RBA: Low income growth, house price falls weighed on spending

RBA: Economic effect of lower rate cuts likely to be smaller than in past

RBA: Board agreed it was not possible to fine-tune policy outcomes

Board would monitor how tension between jobs strength, slow growth played out

Expected further gradual progress on unemployment and inflation

Marked slowdown in GDP growth at odds with improvement in labour market

Dwelling investment has passed its peak, large amount of work still in pipeline

Income based GDP weaker than expenditure noted faster growth in tax payments

Fall in house prices, home turnover had hit sales of vehicles, home furnishings

Global financial conditions had eased, China stimulus having an impact

Rate cut would be appropriate if jobless rate rose, inflation stayed low

USD/GBP/EUR:

Brexit jeopardy: Nancy Pelosi issues threat to PM May over Good Friday agreement and its link to UK/US trade agreement.

EUR/GBP:

German Foreign Minister says no Brexit extension beyond Oct FT

JPY:

BoJ’s Kuroda vows to patiently continue current monetary stimulus Singapore BT

Today’s Data

Actual A | Consensus C | Previous P | Revised R | all timings GMT/UTC

AUD       RBA Minutes

JPY         Tertiary Industry Index M/M Feb A -0.60% | C -0.20% | P 0.40% | R 0.60%

08:30     GBP       Jobless Claims Change Mar C 17.3K | P 27.0K

08:30     GBP       Claimant Count Rate Mar P 2.90%

08:30     GBP       ILO Unemployment Rate 3Mths Feb C 4.00% | P 3.90%

08:30     GBP       Average Weekly Earnings 3M/Y Feb C 3.50% | P 3.40%

08:30     GBP       Weekly Earnings ex Bonus 3M/Y Feb C 3.40% | P 3.40%

09:00     EUR        German ZEW Economic Sentiment Apr C 0.5 | P -3.6

09:00     EUR        German ZEW Current Situation Apr C 8.5 | P 11.1

09:00     EUR        Eurozone ZEW Economic Sentiment Apr P -2.5

12:30     CAD       International Securities Transactions (CAD) Feb P 28.40B

12:30     CAD       Manufacturing Sales M/M Feb P 1.00%

13:15     USD       Industrial Production M/M Mar C 0.30% | P 0.10%

13:15     USD       Capacity Utilization Mar C 79.20% | P 78.20%

14:00     USD       NAHB Housing Market Index Apr C 64 | P 62

22:45     NZD       CPI Q/Q Q1 C 0.30% | P 0.10%

22:45     NZD       CPI Y/Y Q1 C 1.70% | P 1.90%

23:50     JPY         Trade Balance (JPY) Mar C -0.30T | P 0.12T

Harry Hindsight

• GBP: Opening slightly higher the market saw a steady climb on the move through to the Tokyo session pushing to the 1.3080 areas and continuing the steady climb through to the 1.3100 level into mid Tokyo, the market held the area for a short period before moving into the Tokyo lunch period and slipping back to the grey hours testing through to the 1.3080 levels again but never quiet managing to push the opening levels around the 1.3075 area. The move into the London session saw the market rising quickly through the 1.3100 levels again and holding quietly through to midmorning before pushing through the 1.3110 level and moving around the level into the NYK session, early NYK took the Cable to its highs just short of the 1.3120 area before testing quickly back through the 1.3100 level on the US numbers before regaining some strength and holding through to the end of London around the 1.3110 level before drifting back slowly through to the close just below 1.3100 levels.
• JPY: USDJPY again traded in a quiet range through the day, opening a little lower the market pushed steadily through into the Tokyo fix pushing to the days highs holding just below the 112.10 levels before running out of steam and dropping quickly back to hold around the 111.95 levels and eventually pushing through to the 111.90 level and holding quietly through the London session, the move into the NYK session saw some light buying pushing the market back above the 112.00 areas and ranging through to the close around that level.
• AUD: The Oz was little different than the USDJPY with the market holding quietly through the day around the 0.7170 areas with light pushes above the 0.7180 area over the course of the day with similar light penetrations through the 0.7170 area dipping to the 0.7165 level to make lows in the Tokyo session, the market continued through the day gyrating quietly around the 0.7170 level and making the highs into the opening of NYK before finishing the day little changed.
• EUR: Quiet rise from the higher opening, trading around the 1.1300-05 levels and holding through deep into Tokyo before rising steadily through to the 1.1315 areas before drifting through to the grey hour and the London opening finding some stronger support to push the market to the official opening in London to test above the 1.1320 areas, the balance of the day saw the market drifting a little through to the NYK session and dipping away after the US numbers testing to the 1.1300 level and a little through before holding the figure area through to the close.

Yesterday’s Premiership results

GBP       Rightmove House Prices M/M Apr A 1.10% | P 0.40%

CHF        Producer & Import Prices M/M Mar A 0.30% | C 0.20% | P 0.20%

CHF        Producer & Import Prices Y/Y Mar A -0.20% | C -0.20% | P -0.70%

USD       Empire State Manufacturing Index Apr A 10.1 | C 8 | P 3.7

CAD       BoC Business Outlook Survey 1Q A -0.6 | P 2.2

USD       Net Long-term TIC Flows (USD Feb A 51.9B | C -18.2B | P -7.2B

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