Andy Harrison
Good morning,
NYK Close
USDJPY 79.285 | EURUSD 1.26981 | EURJPY 100.679 | AUDUSD 0.98895 | NZDUSD 0.76596 | USDCAD 1.01941 | EURCHF 1.20104 | USDCHF 0.94586 | GBPUSD 1.57972 | EURGBP 0.80378
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Harry Hindsight
·        EUR: Yields in Spain went out to 4.876% from a previous 2.89% on the 3yr Auction on the back of the already pre-warned announcement of downgrades to Spanish banks left the market moving lower over the early part of the London session with the ECB’s decision to stop providing liquidity to some of the Greek banks, by the time we reached NYK we had made the lows, a set of indifferent numbers out of the US lent some support to the Euro, but even so the buyers were sporadic at best and the market moved higher but ranged in a 40 tic range having dipped down below 1.2670 it moved back up to between 1.2690-1.2740 on the wide for the rest of the session drifting off into the close.
·        GBP: Safe haven movement seems to have disappeared again as the media ran the previous days Cameron comments on the effects that the collapse of the Eurozone may have on the UK economy and Fisher BoE stating continued appreciation would be uncomfortable, Cable moved down from above the 1.5900 level pushing through 1.5800 and opening up the downside ranges from the first quarter. There seemed to be plenty of real money flows moving back to Europe probably to cover cash commitments EURGBP moved up strongly from just after the NYK open taking the market 40 tics higher to 0.8042 having started the day around the 0.7982 level so a big day on the cross.
·        AUD: Continued its selloff into London moving back down to 0.9900 from the Asian highs above 0.9960 however, it stayed with the Euro as the indifferent numbers in the US turned the USD weaker against pretty much everything, from there on there seemed to be patches of liquidity and the market ranged in a 50 tic range, the market moved into the close on the same footing as it had been in early London and it finally moved below the 0.9900 level in a sharp decline.
·        JPY: The indifferent numbers in the US put paid to the recent rallies in USDJPY having held its own in London above 80.20 the NYK market had no compunctions and sold it off fairly sharply nothing concrete on what triggered it but yesterday’s FOMC todays GDP and then the Philly number had it dropping from the 80.20 down a big figure to 79.13 before finding some support and holding for the remainder of the day.
Yesterday’s premiership results
Actual = A | Consensus = C | Previous = P | Revised = RÂ
NZDÂ Â Â Â PPI – Inputs Q/Q Q1 A 0.30% | C 0.00% | P 0.50%Â Â Â Â Â Â Â Â Â Â
NZDÂ Â Â Â PPI – Outputs Q/Q Q1 A -0.10% | C 0.20% | P 0.10%Â Â Â Â Â Â
JPYÂ Â Â Â Â GDP Q/Q Q1 (P) A 1.00% | C 0.90% | P -0.20%Â
JPYÂ Â Â Â Â GDP Deflator Y/Y Q1 (P) A -1.20% | C -1.40% | P -1.80%Â Â Â Â Â Â Â Â Â Â Â
AUDÂ Â Â Â Consumer Inflation Expectation May A 3.10% | P 3.30%Â
JPYÂ Â Â Â Â Industrial Production M/M Mar (F) A 1.30% | C 1.10% | P 1.00%Â Â
CAD    International Securities Transactions (CAD) Mar  A -2.08B | C 9.34B | P 12.49B   Â
CADÂ Â Â Â Wholesale Sales M/M Mar A 0.40% | C 0.40% | P 1.60%Â
USDÂ Â Â Â Initial Jobless Claims A 370K | C 375K | P 367KÂ
USDÂ Â Â Â Philly Fed Survey May A -5.8 | C 12 | P 8.5Â Â Â Â Â Â Â Â
USDÂ Â Â Â Leading Indicators Apr A -0.10% | C 0.10% | P 0.30%Â Â Â Â Â
USDÂ Â Â Â Natural Gas Storage A 61B | C 25B | P 30B
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For today
JPY
Topside: 79.55-75 (light stops), 80.10-50 (light staggered offers), 80.60-90 (light 2-way)
Downside: 79.10-25 (light bids), 78.75-79.05 (light-medium stop sellers), 78.40-60 (light bids) EUR
Topside: 1.2730-50 (light-medium offers), 1.2755-75 (series of medium stops), 1.1.2795-1.2815 (light stops)
Downside: 1.2645-65 (2-way interest, medium stop sell bias), 1.2605-35 (medium bids), 1.2570-90 (medium stop sellers)
EURJPY
Topside: Not much above till 101.90-102.20 (light offers), 102.50-70 (light offers)
Downside: 100.35-55 (light stop sellers), then a gap toll 99.00-20 (light-medium bids) AUD
Topside: 0.9990-1.0020 (light stop buyers), 1.0080-1.0100 (medium stop buyers)
Downside: 0.9795-15 (medium bids)
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·        EUR: Moved out of NYK just below 1.2700 and looking fairly week, just before Tokyo opened a large French bank was seen entering the market in a big way dumping the Euro from 1.2689 to 1.26661 in the space of about 2 seconds taking out all the liquidity as would be expected some interbank players were then caught short and the market bounced back quickly to where it started reminiscent of the days of paper and pen, the market then moved up slowly as the shorts slowly chased the market pushing back above 1.2700 however, news that China’s GDP 2Q expected growth is now 7.5% from 8.1% last forecast left AUD leading the way and dragging EUR lower again holding 1.2670 this time before moving into a sideways market to just before the 6am cut off for this Ramble where we saw fresh selling to the lows 1.2660 area.
·        GBP: Followed Euro’s lower on the early selling not quiet recovering to its previous levels as the Asian market took in the PM and BoE speech’s and cross selling and general weakness against everything kicked in. the market managed to hold 1.5750 but came under pressure towards the end of the session as renewed worries kick in on Greece and Europe in general.
·        AUD: Started off ignoring the selloff in Euro and holding above the 0.9880 level however the China news on GDP put paid to that and it sold off quickly to 0.9860 and then over the next hour moved to high 30’s as carry trades against JPY kicked in. market stabilised for a few hours ANZ, Australia and New Zealand Banking Group said that current volatile conditions in global markets have seen wholesale funding market for Australian banks freeze again, at which point the Oz started to move lower quickly trading down from the 50 level into the mid-teens.
·        JPY: Exporter bids supported the market today holding a range of 79.29/79.46 however, cross AUD carry trade supply kept the market from moving off or too far away from yesterday’s lows.
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AUD:
Australia’s ANZ chief says funding markets closed
JPY:
Fin Min Azumi: Yen Volatile, Will Act Appropriately If Needed
Japan Govt Ups Econ View In May, But Warns On Europe Risks
Japan Furukawa: To work with BOJ to beat deflation
Japan seeks 15% summer power savings in western region
CNY: China Apr home prices fall 1.20% on year, seen softer
China Finance Ministry: To Provide Subsidies for Some Public Housing Projects
China Think Tank: GDP Likely To Grow By Around 7.5% in 2Q
China State Television Denounces US “Protectionist” Tariffs on Solar Panels
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Today’s data
Consensus = C                            Previous = P
06:00Â Â Â EURÂ Â Â Â German PPI M/M Apr C 0.40% | P 0.60%Â Â Â Â Â Â Â Â Â Â Â
06:00Â Â Â EURÂ Â Â Â German PPI Y/Y Apr P 3.30%Â Â Â
12:30Â Â Â CADÂ Â Â Â CPI M/M Apr C 0.30% | P 0.40%Â Â Â Â Â Â Â Â Â Â Â
12:30Â Â Â CADÂ Â Â Â CPI Y/Y Apr P 1.90%Â Â Â Â
12:30Â Â Â CADÂ Â Â Â BoC CPI Core M/M Apr C 0.30% | P 0.30%Â Â Â Â Â Â Â Â
12:30Â Â Â CADÂ Â Â Â BoC CPI Core Y/Y Apr P 1.90% Â Â Â Â Â Â Â Â Â Â Â
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Ranges as of 6am London time
               High | Low
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USD/JPYÂ Â Â Â Â Â Â Â Â Â Â Â Â Â 79.468 | 79.26
EUR/USDÂ Â Â Â Â Â Â Â Â Â Â Â 1.27082 | 1.2658
EUR/JPYÂ Â Â Â Â Â Â Â Â Â Â Â Â Â 100.872 | 100.463
AUD/USDÂ Â Â Â Â Â Â Â Â Â Â 0.9898 | 0.9815
NZD/USDÂ Â Â Â Â Â Â Â Â Â Â Â 0.765 | 0.7564
USD/CADÂ Â Â Â Â Â Â Â Â Â Â Â 1.0218 | 1.0189
EUR/CHFÂ Â Â Â Â Â Â Â Â Â Â Â Â 1.20127 | 1.201
USD/CHFÂ Â Â Â Â Â Â Â Â Â Â Â 0.94871 | 0.94521
GBP/USDÂ Â Â Â Â Â Â Â Â Â Â Â 1.5792 | 1.575
EUR/GBPÂ Â Â Â Â Â Â Â Â Â Â Â 0.80505 | 0.8036
Good luck and have a good weekend
Andy