Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 99.676 | EURUSD 1.31015 | EURJPY 130.588 | AUDUSD 1.05458 | NZDUSD 0.86357 | USDCAD 1.01038 | EURCHF 1.2195 | USDCHF 0.93085 | GBPUSD 1.53853 | EURGBP 0.85157 |

 

Harry Hindsight

·         EUR: The Euro opened quietly in Asia ever the case at the moment, with the pair dropping from the opening 1.3070 area to a low just above the 1.3040 on EURJPY selling for the most part, this flow was actually reversed in the later stages of Tokyo’s session as yields on the JGB’s again started to drop and this movement of yield away from Asia towards Europe of all places remained a key factor for the day. Tokyo managed to regain the opening levels and as we moved into early London the market began to rise, with decent auction results out of Italy we saw further buying of EURJPY as the hunt for yield continues from Asia, this took the market to above the 1.3100 level topping out just below the 1.3140 level for the day and while the US initial jobless number pleased the USD buyers for a brief period the Euro reasserted itself after a dip below 1.3090 rising again to similar highs, we struggled in the back part of the NYK session slowly losing ground to the 1.3100 level before closing just above the level.

·         GBP: Cable opened around the 1.5330 level and struggled throughout the Asian session maintaining the opening levels broadly speaking with dips to the 1.5320 level, comments from the OECD think tank stating that they expected improvement to the UK’s GDP and general economic situation to improve over the coming months ahead and a GDP level of 2% was their call, Cable moved up and climbed steading to trade above the 1.5410 level into the NYK session with the same small dip around the initial claims numbers during the NYK session before drifting a little to finish the day around the 1.5370 area.

·         JPY: USDJPY again failed to breach the 100.00 line in early trading moving above the 99.80 level but running into solid wall of selling reminiscent of a large option protection play, having failed early on we started to move steadily lower to trade below 99.40 by mid session before beginning to rise again in the run to London, the London market was no different and ignored what was upstairs and as USD weakened against the G10 currencies we dropped back to just above 99.10, decent initial claim numbers helped the USD to rally and we found ourselves running into weak stops in a minor short squeeze pushing this time to above the 99.90 levels before again running into the same offers and settling back into the close around 99.65.

·         AUD: The Oz struggled today for the first time in 3 days, opening around the 1.0540 level it moved quietly into the Tokyo session touching the 1.0540 level when a shocking employment number dropped the pair quickly to the 1.0500 area, from there we limped towards the London session, London saw early rises against the USD across the board and for once the Oz was no exception rising quickly to above the 1.0580 in the first couple of hours trading, helped a little by carry trade buying entering the market although once we attained the highs we saw successive rounds of EURAUD buying to cap the market and a steady slide over the course of the NYK session left the Oz pretty much unchanged on the day.

Yesterday’s premiership results

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

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%  

EUR        German CPI M/M Mar (F) A 0.50% | C 0.50% | P 0.60%  

EUR        German CPI Y/Y Mar (F) A 1.40% | C 1.40% | P 1.50%      

USD       Import Price Index M/M Mar A -0.50% | C -0.40% | P 1.10%        

CAD       New Housing Price Index M/M Feb A 0.20% | C 0.30% | P 0.10%               

USD       Initial Jobless Claims (APR 6) A 346K | C 362K | P 385K    

 

For today

USDJPY:
Topside: 99.90-100.30 good offers 100.30-100.60 good mix 100.60-100.90 good offers
Downside: 99.30-99.40 light mix 98.90-99.30 light sell stops

EURUSD:
Topside: 1.3140-1.3170 light offers 1.3170-1.3200 light buy stops 1.3200-1.3230 light mix
Downside: 1.3030-1.3060 light sell stops 1.3000-1.3030 light bids

EURJPY:
Topside: 131.20-131.60 light buy stops 131.90-132.20 light offers
Downside: 130.00-130.30 light bids AUDUSD:
Topside: 1.0570-1.0610 light offers 1.0610-1.0640 medium buy stops
Downside: 1.0500-1.0530 light sell stops 1.0470-1.0500 light sell stops

 

JPY:

BOJ Gov Kuroda: BOJ Easing Policy Not Targeting Exchange Rates

BOJ’s Kuroda: have taken steps needed for 2% price target

Japan Teachers Fund to Invest Abroad as J-REITs Become Expensive

AUD/JPY:

Australia debt agency sees no rush of Japanese inflows as yet

CNY:

PBOC fixes yuan mid-point at record 6.2506/dollar

NZD:

Non-residents holdings of NZ debt rise in March – RBNZ

New Zealand food prices fall sharply in March

AUD:

Australia House-Prices Expectations Rise to Near 3-Year High

 

·         EUR: With the weekend almost upon us the market in Asia remained reasonably quiet with the Euro rising slowly from the opening 1.3100 to just above the 1.3125 area over the course of several hours, with talk of increased flexibility on loans made to Ireland and Portugal later today helping the Euro to its highs however, with volumes less than impressive it’s been a long day, we’ve dipped away from the highs with some EURJPY selling from retail Japan driving the market after comments from Kuroda we hold around the 1.3115 area. 

·         GBP: Cable opened around the 1.5385 area and as with the Euro was initially bid moving up to trade just short of the 1.5410 level with a technical level just beyond the high, with EURGBP cross remaining static it was difficult to tell which was dragging which but one suspects the move higher in the Euro was the only reason Cable touched the same level as yesterday, from the high we’ve dipped back to below 1.5400 and seem to be struggling to hold the gains made in a thin market for the moment.

·         JPY: Having failed late in the NYK session to clear away above 99.90 to move to the much vaunted 100.00 level, we trade quietly into the Tokyo session around the 99.70 level and started to move lower after comments from Kuroda that what could be done has been done for the moment, which is so much like Greenspan talk one imagines he took lessons however the comment was sufficient for the market to start dropping steadily over the course of the session and we currently hold the 99.40 level having dipped just below there in quiet trading.

·         AUD: We opened up a few points lower from the NYK close around the 1.0540 area and traded only slightly higher into the Tokyo opening. We remained in the 1.0545 area for a great chunk of the session with very little occurring until we saw a minor move up triggering weak stops through the 1.0550 area and traded above the 1.0560 level, we’ve since drifted back off from there and hold around the 1.0550 level as we start the run into London.

 

 

Today’s data

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

JPY         Tertiary Industry Index M/M Feb A 1.10% | C 0.80% | P -1.10%  

09:00     EUR        Eurozone Industrial Production M/M Feb C 0.30% | P -0.40%      

12:30     USD       Advance Retail Sales Mar C 0.00% | P 1.10%        

12:30     USD       Retail Sales Less Autos Mar C 0.20% | P 1.00%    

12:30     USD       PPI M/M Mar C 0.00% | P 0.70%               

12:30     USD       PPI Y/Y Mar C 1.90% | P 1.70%   

12:30     USD       PPI Core M/M Mar C 0.20% | P 0.20%    

12:30     USD       PPI Core Y/Y Mar C 1.70% | P 1.70%        

13:55     USD       U. of Michigan Confidence Apr (P) C 78.8 | P 78.6             

14:00     USD       Business Inventories Feb C 0.40% | P 1.00%                      

 

Interbank Ranges as of 6am London time

                                Highs    Lows

USD/JPY               99.805 | 99.355

EUR/USD             1.3127 | 1.3100

EUR/JPY               130.77 | 130.31

AUD/USD            1.0561 | 1.0538

NZD/USD             0.8643 | 0.8620

USD/CAD             1.0106 | 1.0094

EUR/CHF              1.2200 | 1.21885

USD/CHF             0.93105 | 0.9287

GBP/USD             1.5410 | 1.5383

EUR/GBP             0.8520 | 0.8512

 

Good luck

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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