Daily FX Market Commentary

Good Morning,

LMAX Close

USDJPY 111.618 | EURUSD 1.11311 | AUDUSD 0.70161 | NZDUSD 0.65237 | USDCAD 1.34849 | USDCHF 1.02027 | GBPUSD 1.28982 |

LMAX highs and Lows 05.00 GMT

                                Highs | Lows

EURUSD               1.11413 | 1.1124

USDJPY                 111.786 | 111.45

GBPUSD               1.29061 | 1.28886

USDCHF               1.02060 | 1.01966

AUDUSD              0.70316 | 0.70075

USDCAD               1.34853 | 1.3469

NZDUSD               0.66454 | 0.66269

EURCHF                1.13631 | 1.13516

EURGBP               0.86363 | 0.86293

EURJPY                 124.542 | 124.089

For Today

  • GBP: Cable rose slightly into the Tokyo session holding around the 1.2900 level before dipping back to run along the 1.2890 level deep into the session, poor numbers saw the JPY weaken and cross buying moving in including GBPJPY and the market quickly pushing through to the 1.2905 area from the low before remaining above the 1.2900 area for the run to the grey hour, Topside light congestion through to the 1.3000 level and sentimental offers only through to the 1.3100 area, stronger congestion increasing into 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 into the 1.2900 areas likely to provide decent support before a break through the 1.2880 level triggering weak stops for a move through to the stronger bids around the 1.2800 level with limited sentimental bids in 1.2850. a push through the 1.2800 area likely to open the downside to a larger move with 1.2760 being the start of the year ranges and limited support.
  • JPY: Opening around the 111.60 level the market slowly drifted through into the Tokyo session testing to below the 111.50 area before running quickly up to the 111.80 level as the market absorbed the poor run of numbers, before drifting back to the opening level into the grey hour, Topside offers cleared through the 112.20 with further offers around the 112.50 level absorb the move and slow the market on any push to the 113.00 level, 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: Ranging in the 0.7010-0.7030 area through the session on the wide with the market slowly pushing through into the Tokyo session pushing the 0.7020 level before dipping off with slightly weaker numbers however, the market recovered pushing steadily through the 0.7030 area before sliding back to hold the 0.7020 area for the move into the grey hour, stops likely on a dip through the 0.6980 area and then stronger support on a mo0ve through to the 0.6950 area possible however, the support is dated to the slow ranges from 2016 and suspect at best, with a push through the sentimental levels open until possibly stronger bids into the 68 cents area, topside offers likely to be weak through the 0.7040-60 area and increasing only on a move through the 71 cents areas and increasing from there with stronger resistance increasing the further the market moves towards the 72 cents level.
  • EUR: Limited movement through the session and with Golden week in Japan starting the market saw jumpy movement in line with JPY movement for the most part with the market rising early through to the 1.1140 level with the market dropping back from the highs through to the 1.1125 area before recovering and running to the grey hour holding the opening levels, downside bids into the 1.1120-1.1080 level is likely to see stronger stops likely to appear with some minor stops on the run to that level although some support on a dip through to the 1.1050 area it is possibly weak and the market will likely to run into stronger bids around the 1.1020-00 areas with a deeper move through that level, topside offers light through to the 1.1200 area with weak stops on a push through to the 1.1220 levels however, congestion likely to continue through to the 1.1260 level with stronger offers around that level and a small gap to the 1.1280 areas where increasing offers are likely to appear.

 

Overnight News

CAD:

Bank of Canada’s Poloz: Needs time for data to prove negative forces temporary -BBG

Poloz: Time needed for housing slowdown to be sorted out – BBG

Poloz: Toronto housing supply not keeping up with demand – BBG

JPY:

BoJ announces to lend ETFs: Implications on liquidity –

BoJ considering facility to lend ETFs it holds to investors

Kuroda: expect ETF market function to improve with BoJ move

NZD:

RBNZ’s Orr Not particularly worried by slower GDP growth – BBG

Survey shows bank credit remains difficult to access – BBG

AUD:

RBA’s election rate cut not a done deal – AFR

Dangerous low interest rates need infrastructure boost – AFR

RBA history suggests May rate cut is on cards – AFR

JPY/USD:

FinMin Aso: agreed with treasury’s Mnuchin FX matters will be discussed among financial authorities – JIJI

Aso: Told Mnuchin Japan cannot accept discussions that link monetary policy to trade issues – JIJI

Aso: Should not talk about FX in context of trade debate – JIJI

Aso: wont comment on whether US made demand to include currency clause in bilateral trade deal – JIJI

Aso: Japan, US have never discussed currency policy in framework of trade deal – JIJI

Aso: Had bilateral with US treasury Sec Mnuchin

Aso: had wide ranging discussions including global economy – JIJI

Aso First bilateral since Bali meeting last year

Aso: Have said I’m against linking currency policy, trade talks

Aso: Have said that currency should not be part of trade talks – JIJI

Aso: Talked about currency for five minutes or so

Aso: Cannot say whether there was US request on including FX

Aso: Have confirmed each other’s stance on currency

Abe: Trump agreed to leave FX talks to FinMin

MoF official: communicated general Japan FX stance to Mnuchin

MoF official: Will continue to talk about, including FX in eventual trade deal

MoF official: talked for 45-50 minutes

MoF official: Originally were supposed to talk for an hour

MoF official: Aso-Mnuchin talks will continue

MoF official: My impression is that trade talks are central believe FX talks are secondary to Motegi-Lighthizer trade talks

MoF official: We are against linking trade to currency

MoF official: We don’t want to talk about FX if possible, key is content of FX talks but we didn’t have deep discussions

MoF official: Had also discussed Iran and N. Korea

MoF official: The mood of the talks we’re tranquil, calm

MoF official: Did not discuss global imbalances at this time, first time Mnuchin directly addressed FX in connection with trade

MoF official: Probably won’t be another bilateral until autumn

CNY:

Xi says China won’t pursue Yuan depreciation that harms others

Xi says will ensure that the Yuan remains within a stable and reasonable range

 

Today’s Data

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

NZD       Trade Balance Mar A 922M | C 131M | P 12M | R -68M

JPY         Unemployment Rate Mar A 2.50% | C 2.40% | P 2.30%

JPY         Tokyo CPI Core Y/Y Apr A 1.30% | C 1.10% | P 1.10%

JPY         Industrial Production M/M Mar (P) A -0.90% | C 0.00% | P 0.70%

JPY         Retail Trade Y/Y Mar A 1.00% | C 0.80% | P 0.40% | R 0.60%

AUD       PPI Q/Q Q1 A 0.40% | P 0.50%

AUD       PPI Y/Y Q1 A 1.90% | C 2.00% | P 2.00%

AUD       Import price index Q/Q Q1 A -0.50% | C 0.40% | P 0.50%

JPY         Housing Starts Y/Y Mar A 10.00% | C 5.50% | P 4.20%

08:30     GBP       BBA Loans for House Purchase Mar C 38675 | P 39083

10:00     GBP       CBI Reported Sales Apr C 0 | P -18

12:30     USD       GDP Annualized Q/Q Q1 (A) C 2.20% | P 2.20%

12:30     USD       GDP Price Index Q1 (A) C 1.30% | P 1.70%

14:00     USD       U. of Mich. Sentiment Apr (F) C 97 | P 96.9

 

Harry Hindsight

 

  • GBP: A reasonably quiet range through the Asian session with the market trading around the opening 1.2900 areas with a run to the 1.2915 areas before resettling to the opening levels only a minor dip through to the 1.2895 area a couple of times but holding through to the grey hour and a final run to the highs of the day, the market dropped off from the grey hour and into the London session slowly drifting through to the 1.2865 areas holding through into the NYK session before recovering the opening levels and a slow range between the 1.2900-1.2890 levels to the close.
  • JPY: USDJPY slowly drifted through the day opening a little lower before heading into the Tokyo session testing to the highs just short of the 112.25 level before falling steadily through to the 111.85 level and while the market did attempt the 112 level repeatedly tested but running into the grey hours pushing the low again and London taking it initially to the 111.75 level before ranging around the 111.85 level through to the NYK session, NYK dropped steadily through to the 111.50 level triggering a few little stops and the market tested through to the 111.40 areas before finding buyers and a slow move to the 111.65 level for the close.
  • AUD: Not a large range, opening around the 0.7012 areas the market dipped a little into the Tokyo session to probe towards the 0.7000 area before moving higher through to the 0.7020 area and holding steady around the level through to the grey hour, early London sellers went for the figure areas testing through to the 0.6990 area and bouncing quickly back above the figure towards the mid-teens before starting a slower push lower to probe the 0.6990 support to make the lows for the day, NYK were steady buyers on a move off the lows and pushing back to the opening levels and a slow rise again into the teens again for the run to the close.
  • EUR: A quiet range through the Asian session with the market slowly moving up to the 1.1160 level from the opening around the mid 1.1155 area, Tokyo saw the market dropping to its lows and basing for a few hours along the 1.1145 area before again pushing to the highs and holding quietly through to the London session and the doom and gloom merchants started a slow steady drift through to the 1.1120 levels, the support held and the market moved off the lows into the NYK session and pushing through to the early range before slipping slowly through to finish just off the lows.

 

Yesterday’s Premiership results

JPY         BOJ Rate Decision A -0.10% | C -0.10% | P -0.10%

GBP       CBI Trends Total Orders Apr A 13 | C 0 | P -18

USD       Durable Goods Orders Mar (P) A 2.70% | C 0.70% | P -1.60% | R -1.10%

USD       Durables Ex Transportation Mar (P) A 0.40% | C 0.20% | P -0.10% | R -0.20%

USD       Initial Jobless Claims (APR 20) A 230K | C 199K | P 192K | R 193K

USD       Natural Gas Storage A 92B | C 90B | P 92B

 

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