Daily FX Market Commentary

Andy Harrison

Good morning,

Asian opening and NYK Close

USDJPY 78.352 | EURUSD 1.24995 | EURJPY 97.942 | AUDUSD 0.9728 | NZDUSD 0.75706 | USDCAD 1.03932 | EURCHF 1.20104 | USDCHF 0.9608 | GBPUSD 1.53827 | EURGBP 0.81256 |

Harry Hindsight

·         EUR: A reversal of fortunes for the Euro, having declined and recovered somewhat in Asia the rally continued moving up from its lows below 1.2390, moving steadily higher through the London session with PPI helping it however, when the US factory order numbers hit the market USD dropped against most other currencies the Euro heading up above 1.2500 over the next hour as a small short squeeze forced the issue then trending 1.2480/1.2500 into the closing.

·         GBP: Cable moved up slightly but continued pressure through M&A supplies continued to hamper the market seen in the move in EUR/GBP from a low of 0.8066 to 0.8127 on the day, cable moved from the Asian low around 1.5343 to head to a peak of 1.5415 but slipped back to a more comfortable 1.5380 area for the run into the close, again GBPCAD cross was a major player in holding the market in check.

·         AUD: With that flat inflation number hitting the market the AUD looked in trouble during the Asian session moving quickly lower from just above the 0.9700 level down to the 0.9630’s before finding some support from there it struggled to make headway and it wasn’t really until the London session started to pick up that it moved back to its starting area, having already regained much of its losses when the US data hit the leap up was only a mere 20 tics or so moving just above 0.9740 before dropping back on a good days recovery ranging 0.9700/0.9740 into the close.

·         JPY: Another quiet session with the market holding above 78.00 for the most part, as the US data came out what selling pressure in USDJPY evaporated as risk was back on and this was one of the currencies that the USD fared better with moving steadily up to close to 78.40 towards the end of the NYK session.

Yesterday’s premiership results

Actual = A | Consensus = C | Previous = P | Revised = R 

23:50     JPY         Monetary Base Y/Y May               A 2.40% | C 0.20% | P -0.30%    

00:30     AUD       TD Securities Inflation M/M May A 0.00% | P 0.30%        

08:30     EUR        Eurozone Sentix Investor Confidence Jun A -28.9 | C -30 | P -24.5            

09:00     EUR        Eurozone PPI M/M Apr A 0.00% | C 0.20% | P 0.50%       

09:00     EUR        Eurozone PPI Y/Y Apr A 2.60% | C 2.70% | P 3.30% | R 3.50%

14:00     USD       Factory Orders Apr A -0.60% | C 0.30% | P -1.50%

For today

USDJPY
Topside: 78.50-78.80 (light buy stops) 78.90-79.20 (light buy stops) 79.30-79.60 (light buy stops) 79.70-80.00 (light offers)
Downside: 77.80-78.10 (medium bids) 77.40-77.70 (medium bids) 77.00-77.30 (decent bids) 

EURUSD
Topside: 1.2540-1.2570 (light offers) 1.2580-1.2610 (light buy stops)
Downside: 1.2440-1.2470 (light bids) 1.2400-1.2430 (light bids) 1.2350-1.2380 (light sell stops)

EURJPY
Topside: 98.20-98.30 (light buy stops) 98.50-98.80 (light offers)

Downside: 97.30-97.60 (light sell stops) 96.80-97.10 (light bids)

 

AUDUSD
Topside: 0.9740-0.9770 (light offers) 0.9790-0.9820 (light buy stops)
Downside: Thin and nothing showing.  

 

1:30        AUD       Current Account Balance (AUD) Q1 A -14.9B | C -14.1B | P -8.4B | R -9.6B

4:30        AUD       RBA Rate Decision A 3.50% | C 3.50% | P 3.75% 

·         EUR: While Europe chatters on about greater fiscal union for both sovereign countries and the banks themselves one wonders how far they are willing to actually go and I doubt they have the willingness to go as far as Mr Soros suggests with Berlin ruling over the Hinterlands however, the double speak seems to have alleviated the situation for the moment and Euro’s gained a foothold above the 1.2500 moving from just below the level to take out some more weak stop losses to a high around 1.2540,

·         GBP: Another quiet session as the Cable remains subdued flirting with the 1.5400 level but never really pushing to far either side.

·         AUD: A steady move up on the back of no bad news saw the Oz move from the lows of 0.9715 area steadily up to plateau for a couple of hours around the 0.9765 area, a dip before the rate announcement as clever money sold for expectations, on the release these sellers were seen buying back their shorts were the market started from at the beginning of the session however, in a quiet market I’m sure some of them struggled to get them in forcing the market to move up quicker than it came off causing a mini short squeeze to make the high of the day at 0.9790 before drifting back slightly to 0.9770-80.

·         JPY: A sideways market for a change (not) moving between 78.28/78940 on no real news and barely a mutter from the usual interventionists  

AUD:

Australia CB cut rates to 3.50% 

Australia 1Q Current Account Deficit A$14.89B 

Australia Vulnerable To External Economic Shocks -Moody’s Exec 

JPY/G7:

Japan Azumi: no comment on G7 conference call 

Japan Fin Min Azumi: G-7 Concerned Over Global Econ, Must Share Views 

JPY:

Fin Min Azumi: Caution Needed When Thinking About BOJ’s Independence 

WSJ (6/5) Japan Lawmakers Push To Curb Central Bank 

CNY:

China’s big 4 banks new loans up 253 bln yuan in May-paper 

China HSBC May services PMI jumps to 19-month high 

GBP:

UK needs new accounting rules for banks – BoE’s Haldane 

NZD:

NZ Treasury: Global Sentiment has Deteriorated, Greek Debt Crisis More Serious

 

Today’s data

Consensus = C  Previous = P

7:45        EUR        Italian PMI Services May C 42 | P 42.3    

8:00        EUR        Eurozone PMI Services May (F) C 46.5 | P 46.5   

9:00        EUR        Eurozone Retail Sales M/M Apr C -0.10% | P 0.30%          

10:00     EUR        German Factory Orders M/M Apr C -1.10% | P 2.20%     

12:30     CAD       Building Permits M/M Apr P 4.70%          

13:00     CAD       BoC Rate Decision C 1.00% | P 1.00%      

14:00     USD       ISM Non-Manufacturing Composite May C 53.5 | P 53.5               

 

Ranges as of 6am London time

                                Highs   Lows

USD/JPY               78.40 | 78.28

EUR/USD             1.25429 | 1.24923

EUR/JPY               98.27 | 97.87

AUD/USD            0.9790 | 0.9715

NZD/USD             0.7605 | 0.7555

USD/CAD             1.0397 | 1.0362

EUR/CHF              1.2014 | 1.201

USD/CHF             0.96143 | 0.95771

GBP/USD             1.5409 | 1.5376

EUR/GBP             0.81405 | 0.81225

 

Good luck

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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