Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 99.799 | EURUSD 1.30708 | EURJPY 130.426 | AUDUSD 1.05224 | NZDUSD 0.85747 | USDCAD 1.01428 | EURCHF 1.21896 | USDCHF 0.93261 | GBPUSD 1.53288 | EURGBP 0.85262 |

 

Harry Hindsight

·         EUR: The Euro was quiet throughout the Asian period moving from the opening area of 1.3085 to trade to 1.3077 level and as just above the 1.3090 area in very quiet trading, once we moved into the grey hour early Europeans initially sold the Euro to below the 1.3075 area but it slowly rose into the London opening and once opened moved quickly to above the 1.3120 level to make the high on the day with industrial figures in France showing an above expected increase, the market having made the highs then dropped on successive legs first back to the 1.3100 level and then to the opening areas, with QE on the back burner with some FOMC players calling for it to finish the USD started to improve over the remainder of the session finally moving down to the 1.3055 area we eventually closed around the 1.3075 area for the day.

·         GBP: Cable struggled throughout the day with very little direction, we opened in Asia around the 1.5320 area and held for the most part in a 1.5315-25 level for most of the session before breaking higher late on as GBPAUD cross was seen being bought into the AUD rally and the market topped just below the 1.5340 level, early Europeans selling Euro had the effect of dragging Cable down having peaked above 1.5340 just after the London opening, we moved steadily lower over the course of early London and into the NYK session touching below 1.5295 before steadily moving back to above the opening but only just into the close in NYK. EURGBP slipped back a little moving to below 0.8520 having peaked above the 0.8560 in early trading.

·         JPY: USDJPY was on hold during Asia with very little going through we opened around the 99.00 area and rose to just above 99.30 in early trading before slipping back below the figure and trading around that level for most of the session, we began to rise towards the highs as we moved towards London, and once London opened traded quickly to above 99.50, having moved to those highs we heard of large macro selling of USDJPY going through which took the market from the highs to below the 99.00 level before bouncing back almost as quickly as it had dropped to extend the highs, there didn’t seem to be any reason for the move and while one person tells me it was a move out of long positions into other currencies there doesn’t seem to be a corresponding move elsewhere apart from in the Euro, either way the market continued its move higher after the blip trading to just below the 99.90 level again but failing to break through the 100 barrier for the moment closing around 99.80.

·         AUD: With the good news out of China for the Oz’s the market continued its slow move higher, opened just below the 1.0500 area we stayed below well into the Asian session until the Chinese trade balance was released a poor figure for the Chinese however, in the breakdown Australia were the imports of choice and was a sizeable chunk, so the Oz rose quickly touching above the 1.0515 and from there it was a steady rise to above the 1.0550 level throughout the London session, once we moved into the NYK arena the market stayed around the 1.0540 level all the way to the close.

Yesterday’s premiership results

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

CNY        Trade Balance (USD) Mar A -0.9B | C 15.2B | P 15.3B       

AUD       Westpac Consumer Confidence Apr A -5.10% | P 2.00%

USD       Crude Oil Inventories A 250K | C 1.5M | P 2.7M 

USD       Monthly Budget Statement Mar A -$106.5B | C -107.0B | P -$198.2B

 

For today

USDJPY:
Topside: 99.90-100.30 decent mix 100.30-100.60 large buy stops 100.60-100.90 large offers
Downside: 99.00-99.35 light sell stops

EURUSD:
Topside: 1.3100-1.3130 light buy stops 1.3130-1.3160 light offers 1.3160-1.3190 light offers 1.3190-1.3220 light mix
Downside: 1.3020-1.3050 medium sell stops 1.2980-1.3020 light bids

EURJPY:
Topside: Nothing of note
Downside: 129.20-129.50 light sell stops AUDUSD:
Topside: 1.0570-1.0610 medium offers 1.0610-1.0640 light offers
Downside: 1.0460-1.0480 light mix

 

AUD:

Australia employment falls, jobless at 3yr high

AUD/CNY:

RBA’s Stevens Says Yuan Likely to Become Dominant Asia Currency

CNY:

China End-March M2 +15.7% on Year; Economists Expected +14.6%

China regulator questions aggressive RQFII applications -report

JPY:

Fitch: Japan’s QE Should Temporarily Boost Banks’ Profits

Japan to Announce Pre-TPP Agreement With US on Friday -Kyodo

Japan machinery orders up, capex recovery expected

NZD:

NZ FinMin: Budget 2013 Will Confirm A Surplus In FY15

English Says Sustained House Price Rises May Prompt Rate Rise

New Zealand house prices hit record in March – REINZ

 

 

·         EUR: We opened quietly in the Euro around the 1.3070 area before a slow drift down into resting bids in the 1.3050 area, again JPY seemed to dominate the market for the most part through cross trading and the Euro didn’t seem to have any direction, having touched the 1.3045 level we slowly rose in a tight channel but still remain below the opening levels as we move to the London opening.

·         GBP: A similar pattern for Cable as the Euro with very little momentum in the market and overall quiet session, the market opened around the 1.5328 area and dipped to the 1.5320 before slowly rising to above the 1.5330 in a very tight range.

·         JPY: The charts don’t really do justice to the amounts traded pre Tokyo, the market having tested higher in NYK again tried to push through the upper levels however we could hardly penetrate the 99.85 level before the buyers gave up, on suspects that there is a large option barrier around this 100.00 level and for the moment everyone is struggling to push through which is why we drift off slowly from the levels as the protection is bought back and placed back on top, we dropped to below the 99.40 level before slowly moving back to the 99.60 level which is where we look to be entering the London session.

·         AUD: The Oz opened around the 1.0540 area and traded sideways for the most part touching above 1.0550 briefly before the release of employment numbers one has to point out that in the world there are three types of people, those that can count and those that cannot and I suspect that the latter is the case for whomever correlates the employment numbers, last month was revised 74k up a massive number and today’s release was -36.1k, the rise of 74k changed the unemployment by 0.1% however, a swing the other way of -36.1k moves it 0.2% the other way, hmm, going to have to take my socks and shoes off for this one.  The market dropped quickly to trade around the 1.0500 level, we stabilised around the level and managed to move back to the 1.0520 level however, one has to wonder.

 

Today’s data

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

JPY         Japan Money Stock M2+CD Y/Y Mar A 3.00% | C 2.90% | P 2.90%              

JPY         Domestic CGPI Y/Y Mar A -0.50% | C -0.20% | P -0.10%  

JPY         Machine Orders M/M Feb A 7.50% | C 6.90% | P -13.10%             

AUD       Consumer Inflation Expectation Apr A 2.20% | P 2.30%  

AUD       Employment Change Mar A -36.1k | C -7.2K | P 71.5K | R 74.0k

AUD       Unemployment Rate Mar A 5.60% | C 5.40% | P 5.40%  

06:00     EUR        German CPI M/M Mar (F) C 0.50% | P 0.60%      

06:00     EUR        German CPI Y/Y Mar (F) C 1.40% | P 1.50%          

12:30     USD       Import Price Index M/M Mar C -0.40% | P 1.10%              

12:30     CAD       New Housing Price Index M/M Feb C 0.30% | P 0.10%   

12:30     USD       Initial Jobless Claims (APR 6) C 362K | P 385K      

 

Interbank Ranges as of 6am London time

                                Highs    Lows

USD/JPY               99.87 | 99.355

EUR/USD             1.3073 | 1.3043

EUR/JPY               130.42 | 129.72

AUD/USD            1.0552 | 1.0500

NZD/USD             0.8601 | 0.8574

USD/CAD             1.0157 | 1.0143

EUR/CHF              1.2188 | 1.2181

USD/CHF             0.9340 | 0.93245

GBP/USD             1.5332 | 1.5319

EUR/GBP             0.85235 | 0.8515

 

Good luck

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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