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Andy Harrison

Good morning,

NYK Close

Harry Hindsight

Â·Â Â Â Â Â Â Â Â EUR: the steady decline in Asia was increased as Europe opened, Spanish bond auction 3mth bonds went for an avg of 0.846% vs. previous of 0.6345% in April, add to which an OECD report outlook for Spain was also causing problems for the Eurozone. The market dropped from above 1.2800 the opening area in London to the 1.2760 level it found some willing buyers mostly profit taking from last weeks sellers before finally pushing lower through NYK, towards the close comments by Greece’s EX PM Papademos that the risk of Greece leaving the Eurozone is real, while on the face of it this is nothing new one has to take this into context against an upcoming election have failed to get a satisfactory result previously, Euro’s dropped quick and hard bouncing off the 1.2660 level as initial protective bids appeared with talk of large option plays at both 1.2620 and 1.2600.

Â·Â Â Â Â Â Â Â Â GBP: A mixed day with a steady decline throughout, inflation figures were also mixed with CPI showing a small decline on the expected result, however RPI which generally lags the CPI still has upticks going through although against the previous month CPI becomes the lead story for the UK media on the usual slow news day. Cable moved from early London highs of 1.5848 down to 1.5768 on the figures the fall match’s the Euro decline to some extent as the NYK session kicked safe haven buying seemed to be the name of the game and Cable rallied back above 1.5800 peaking just above 1.5820 only to fall back to the 1.5760/80 area towards the close the Greek comments saw the cable drop to new lows for the day but only as far as 1.5740 area before bouncing slightly, over the course of the day the cross moved from the highs just above 0.8100 down to trade back through 0.8050 as Euro collapsed on the close.

Â·Â Â Â Â Â Â Â Â AUD: This one seemed to have Euro attached to its hip, moving from the highs of early London around the 0.9920 on a steady but steepening decline having looked as if it was stabilising rumours of IMM options surfaced just before the IMM close and selling kicked in, but once the selling started there was little else to stop it as margin calls in the carry trades started to kick in making life for the Oz very difficult, by the time the Greek comments kicked in we’d already dropped to 0.9840 however, a further drop to test below 0.9800 holding 0.9792 would suggest more option barriers just below the lows.

Â·Â Â Â Â Â Â Â Â JPY: As the major currencies all went on the back foot USD began to take over and USD/JPY put in a steady rise from the Asian lows of 79.24 moving to a peak around the 80.13 mark before slipping slightly towards the close to just below the 80.00 level.

Yesterday’s premiership results

ActualÂ = AÂ |Â Consensus = CÂ |Â Previous = PÂ |Â Revised = RÂ

NZDÂ Â Â Â Â Â RBNZ 2-Year Inflation Expectation Q2 A 2.40% | P 2.50%Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â

GBPÂ Â Â Â Â Â Public Sector Net Borrowing (GBP) Apr A -18.8B | C -22.8B | P 15.9B | R 14.6B

GBPÂ Â Â Â Â Â CPI M/M Apr A 0.60% | C 0.60% | P 0.30%Â Â Â Â Â Â Â Â Â Â Â

GBPÂ Â Â Â Â Â CPI Y/Y Apr A 3.00% | C Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 3.10% | P 3.50%Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â

GBPÂ Â Â Â Â Â Core CPI Y/Y Apr A 2.10% | C 2.00% | P 2.50%Â Â Â Â Â

GBPÂ Â Â Â Â Â RPI M/M Apr A 0.70% | C 0.60% | P 0.40%Â Â Â Â Â Â Â Â Â Â Â

GBPÂ Â Â Â Â Â RPI Y/Y Apr A 3.50% | C Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 3.40% | P 3.60%Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â

EURÂ Â Â Â Â Â Â Eurozone Consumer Confidence May (A) A -19 | C -20.5 | P -19.9Â Â Â Â Â Â Â Â Â Â Â Â Â

USDÂ Â Â Â Â Â Existing Home Sales Apr A 4.62M | C 4.60M | P 4.48MÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â

For today

USDJPY
Topside : 80.20-80.40 (light buy stops) 80.70-81.00 (medium buy stops) 81.10-81.40 (light offers)
Downside : 79.50-79.60 (light bids) 79.00-79.30 (light sell stops) 78.70-79.00 (light bids) 78.20-78.50 (decent bids)Â EURUSD
Topside : 1.2700-1.2750 (medium offers) 1.2770-1.2800 (light offers) 1.2820-1.2850 (light offers)
Downside : 1.2600-1.2650 (large bids) 1.2570-1.2600 (decent sell stops) 1.2500-1.2530 (medium sell stops)

EURJPY
Topside : 102.00-102.30 (light buy stops) 102.40-102.70 (light offers)Â
Downside : 100.50-101.00 (light sell stops)Â AUDUSD
Topside : 0.9800-0.9830 (light buy stops) 0.9870-0.9900 (light offers)Â
Downside : 0.9720-0.9750 (light bids) 0.9650-0.9680 (light bids) 0.9580-0.9620 (decent sell stops)Â

Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â JPYÂ Â Â Â Â Â Â Â BoJ Rate Decision A 0.10% | C 0.10% | P 0.10%Â Â Â

23:50Â Â Â Â JPYÂ Â Â Â Â Â Â Â Trade Balance (JPY) Apr A -0.48T | C -0.60T | P -0.62TÂ Â Â Â Â

0:00Â Â Â Â Â Â Â AUDÂ Â Â Â Â Â Conference Board Leading Index Mar A 0.20% | P 0.00%Â Â Â Â Â Â Â Â Â Â Â Â Â Â

0:30Â Â Â Â Â Â Â AUDÂ Â Â Â Â Â Westpac Leading Index M/M Mar A 0.40% | P 0.20% | R 0.00%

Â·Â Â Â Â Â Â Â Â EUR: Euro’s moved into Asia with nowhere to go other than down having taken out the support area of 1.2680 on the close it found it difficult to move back above the area with any conviction and when Tokyo officially opened the market continued downwards to test just below the 1.2650 level dipping to 1.2643 before running into some stiff bids, while Greece’s EX PM Papademos came back onto the wires some 4hrs later to clarify his comments saying he had no knowledge of any attempt to drop from the Eurozone, he did add that it doesn’t mean his comments are not correct, the market attempted to recover some of the losses however, that 1.2680 area seemed to be the new resistance, one suspects the buyers of protection down below 1.2650 were willing to sell it back to the market above that 1.2680 level. For the rest of the session the market held around the 1.2670/80 area. Today keep an eye out for the rumour mill as the EU summit goes ahead.

Â·Â Â Â Â Â Â Â Â GBP: A reasonably quiet day for GBP on the cable having pushed down with the Euro, cable went its own way staying a tight 20 point range for the most part with 1.5771/1.5742 at the widest for the day.

Â·Â Â Â Â Â Â Â Â AUD: The Oz took no joy in the leading indicator numbers and traded for the most part in line with the Euro, with carry trade stops and margin calls being hit the market struggled to hold above the 0.9800 where it closed in NYK and moved lower down to the 0.9744 level before the Greek news turned it northwards however, any rally was tempered by continual cross selling peaking at just above 0.9776 and settling into a 52/76 range for the remained of the Asia session.

Â·Â Â Â Â Â Â Â Â JPY: With cross JPY selling going through the market JPY was on the ascendency, USD/JPY held during the initial part of the session but JPY buying against all currencies picked up a couple of hours into the session moving USDJPY from 80.08 top down in increasing measures to hold just above the 79.50 level and then trade in a 10 tic range with that level as a base.

JPY:

BOJ holds off on easing policy as expected

Japan Fin Min Azumi: Expect Further BOJ Easing To Achieve 1% Inflation

Japan Apr Trade Deficit Y520.3B; Expected Deficit Y472.6B

Moody’s Byrne: View On Japan Hasn’t Changed, Concerns Remain, Tax Debate In Focus

Azumi: Need Fiscal, Monetary Policy Efforts To Maintain Solid Growth Seen In 1Q

PM Noda: No Change In Stance On BOJ, Expect Decisive Steps

Japan may offer insurance for Iranian oil imports-Nikkei

CNY/EUR:

China faces “invisible impediments” in Europe CIC

CNY:

China to stick to active fiscal policies for growth-paper

China Allows Small Businesses To Sell Bonds Via Private Placement

World Bank cuts China’s 2012 growth forecast

NZD:

NZ Finance Minister: Budget 2012 Will Show A Credible Path Back To Surplus

AUD:

Australia Rated Among Top 5 Safest Foreign Investment Destinations -D&B

GBP:

UK’s Clegg sounds shift from austerity to growth-FT

Today’s data

ConsensusÂ = CÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â PreviousÂ = P

8:00Â Â Â Â Â Â Â EURÂ Â Â Â Â Â Â Eurozone Current Account (EUR) Mar C 3.4B | P Â Â Â Â Â Â Â Â Â Â Â Â Â Â -1.3BÂ Â Â Â Â

8:30Â Â Â Â Â Â Â GBPÂ Â Â Â Â Â BoE MinutesÂ Â Â Â Â C 0â€”0—9 | P 0—0—9Â Â Â Â Â Â Â

10:00Â Â Â Â GBPÂ Â Â Â Â Â CBI Trends Total Orders May C -11 | P -8Â Â Â Â Â Â Â Â Â Â Â Â Â Â

12:30Â Â Â Â CADÂ Â Â Â Â Â Leading Indicators M/M Apr C 0.30% | P 0.40%Â Â

12:30Â Â Â Â CADÂ Â Â Â Â Â Retail Sales M/M Mar C Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 0.30% | P -0.20%Â Â Â Â Â Â Â Â Â Â Â Â Â

12:30Â Â Â Â CADÂ Â Â Â Â Â Retail Sales Less Autos M/M Mar C 0.50% | P 0.50%Â Â Â Â Â Â Â Â

14:00Â Â Â Â USDÂ Â Â Â Â Â House Price Index M/M Mar C 0.30% | P 0.30%Â

14:00Â Â Â Â USDÂ Â Â Â Â Â New Home Sales Apr C 335K | P 328KÂ Â Â Â

14:30Â Â Â USDÂ Â Â Â Crude Oil Inventories C 0.8M | P 2.1MÂ Â Â

Ranges as of 6am London time

Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â HighÂ | Low

USD/JPY Â Â Â Â Â Â Â Â Â Â Â 80.08 | 79.518

EUR/USDÂ Â Â Â Â Â Â Â Â Â Â Â 1.269 | 1.26432

EUR/JPYÂ Â Â Â Â Â Â Â Â Â Â Â 101.559 | 100.745

AUD/USDÂ Â Â Â Â Â Â Â Â Â Â Â 0.9800 | 0.9742

NZD/USDÂ Â Â Â Â Â Â Â Â Â Â Â 0.7551 | 0.749

USD/CADÂ Â Â Â Â Â Â Â Â Â Â Â 1.0234 | 1.0211

EUR/CHFÂ Â Â Â Â Â Â Â Â Â Â Â 1.20129 | 1.2009

USD/CHFÂ Â Â Â Â Â Â Â Â Â Â Â 0.9497 | 0.9466

GBP/USDÂ Â Â Â Â Â Â Â Â Â Â 1.5771 | 1.5743

EUR/GBPÂ Â Â Â Â Â Â Â Â Â Â 0.80445 | 0.8032

Good luck and have a good weekend

Andy

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