Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 97.547 | EURUSD 1.31759 | EURJPY 128.533 | AUDUSD 1.0391 | NZDUSD 0.84974 | USDCAD 1.02116 | EURCHF 1.21567 | USDCHF 0.9226 | GBPUSD 1.5362 | EURGBP 0.85775 |

 

Harry Hindsight

·         EUR: The Euro opened in Asia around the 1.3040 area and struggled during the early part of the session eventually seeing EURJPY buying half way through taking us to the 1.3080 areas where offers capped the market, It wasn’t until into the London market that we saw any real movement and we initially drifted down towards the lows breaching the 1.3040 opening briefly and the Euro’s took comfort in a pretty much unchanged batch of inflation numbers for the Eurozone, the market moved up steadily from this point with EURJPY playing a major factor in the move trading to the 1.3140 area as NYK came in. With USD numbers better than expected you would have imagined a firmer USD however, as usual we saw better Euro buying as risk was back on after the previous 24hrs of selling and we saw stops triggered in the EUR/USD, EUR/AUD and EURGBP all helping to take the Euro briefly above the 1.3200 before settling back to trade around the 1.3180 level into the close.

·         GBP: Cable traded quietly and in a tight range throughout the Asian session pushing from the opening lows of 1.5275 to just below the 1.5310 level as we moved towards the London session, during the London session we saw similar movements to that of the Euro however, the numbers while broadly in line with expectations still persist on being above the targeted 2.00% inflation and with comments from the IMF which again downgraded the GDP expectations for the UK from 1.00% to 0.70% for the year again raised the prospect of the triple dip inflation however, even before the IMF comments it was always going to be a close called thing and one has to wonder if the negative comments from the IMF are warranted, we bounced back to trade around the 1.5310 level and it was not until we moved into the NYK session that we started to push higher moving from the 1.5290 area in rapid move to just short of the 1.5380 level, while this was happening the GBP was losing ground against the Euro, with the pair moving from the 0.8520 areas to peak above 0.8600 as stops were triggered, having peaked we drifted into the NYK close to around the 1.5360 area.

·         JPY: We saw some quick selling into the close in NYK however the recovery from below the 95.80 level was no less quick moving to the Tokyo opening above 97.00, with what the Asian market perceived to be a rejection of the downside the market went from strength to strength moving steadily higher through Asia and into the opening of NYK topping out just shy of the 98.20 level, once we moved into the NYK session a general weakness in the USD moved the market back to trade around the 97.60 levels where we headed into the close, with the same names that were seen selling not 24hrs earlier in the market moving the other way.

·         AUD: A choppy day for the Oz however, generally in a northerly direction, we opened around the 1.0310 area and steadily rose to the 1.0340 as we moved into Tokyo, a passive RBA minutes did little to excite the market and the currency played second fiddle to initially the USDJPY as we saw AUDJPY buying from Japanese retail players, once we moved into the London market we saw EURAUD buying helping to lift Euro but set the AUD lower as minor stops were triggered in the pair, once the stops were cleared the dip was reversed and we once again moved back to trade above the 1.0380 level into the NYK session peaking above 1.0390 and holding into the close.

Yesterday’s premiership results

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

CHF        Producer and import prices MoM Mar A 0.00% | C 0.00% | P 0.10%

CHF        Producer and import prices YoY Mar A -030% | C -0.20% | P 0.10%

GBP       PPI Input MoM Mar A -0.1% | C -0.5% | P 3.20% | R 2.80%

GBP       PPI Input YoY Mar A 0.40% | C 0.40% | P 2.50% | R 2.10%

GBP       PPI Output MoM Mar A 0.30% | C 0.30% | P 0.80%

GBP       PPI Output YoY Mar A 2.00% | C 2.00% | P 2.30%

GBP       PPI Output Core MoM Mar A 0.10% | C 0.20% | P 0.30%

GBP       PPI Output Core YoY Mar A 1.30% | C 1.50% | P 1.30%

GBP       CPI MoM Mar A 0.30% | C 0.30% | P 0.70%

GBP       CPI YoY Mar A 2.80% | C 2.80% | P 2.80%

GBP       Core CPI YoY Mar A 2.40% | C 2.30% | P 2.30%

GBP       RPI MoM Mar A 0.40% | C 0.40% | P 0.70%

GBP       RPI YoY Mar A 3.30% | C 3.30% | P 3.20%

EUR        Eurozone CPI MoM Mar A 1.20% | C 1.20% | P 0.40%

EUR        Eurozone CPI YoY Mar A 1.70% | C 1.70% | P 1.70%

EUR        Eurozone CPI Core YoY Mar A 1.50% | C 1.40% | P 1.30%

EUR        German ZEW (economic sentiment) Apr A 36.3 | C 41 | P 48.5

EUR        German ZEW (Current situation) Apr A 9.2 | C 14 | P 13.6

EUR        Eurozone ZEW (Economic situation) Apr A 24.9 | C 31.5 | P 33.4

CAD       International securities transactions (CAD) Feb A -6.31B | C 7.28B | P 13.34B

CAD       Manufacturing shipments MoM Feb A 2.60% | C 0.50% | P -0.20%

USD       CPI MoM Mar A -0.20% | C 0.00% | P 0.70%

USD       CPI YoY Mar A 1.50% | C 1.60% | P 2.00%

USD       CPI Core MoM Mar A -0.20% | C 0.20% | P 0.20%

USD       CPI Core YoY Mar A 1.90% | C 2.00% | P 2.00%

USD       Housing Starts Mar A 1036K | C 930k | P 917k | R 939K

USD       Building Permits Mar A 902K | C 944K | P 946K | R 968K

USD       Industrial Production Mar A 0.40% | C 0.20% | 0.70%

USD       Capacity Utilization Mar A 78.50% | C 78.40% | P 79.60%

 

For today

USDJPY 
Topside: 98.35-98.50 light offers  98.70-99.00 light offers 
Downside: 97.30-97.60 light bids 97.00-97.30 decent bids 96.70-97.00 light sell stops 

EURUSD 
Topside: 1.3200-1.3230 light buy stops  1.3240-1.3270 medium buy stops 

Downside: 1.3140-1.3170 light sell stops 1.3100-1.3130 light bids  EURJPY 
Topside: nothing of note 
Downside: 128.30-128.50 light bids 127.90-128.20 medium sell stops 

AUDUSD 
Topside: 1.0400-1.0430 light buy stops 1.0430-1.0460 light buy stops 
Downside: 1.0320-1.0340 light sell stops 1.0280-1.0310 light bids

 

CNY:

PBOC Official Says China to Broaden Yuan Range: Daily

PBOC fixes yuan mid-point at record 6.2342/dollar

China’s bird flu death toll rises to 16, government warns of spread

JPY:

IMF Shinohara welcomes BOJ easing, warns of risks

JPY/KRW:

Japan, S. Korea Foreign Ministers May Meet This Month: Asahi

AUD:

Australia merchandise imports fall 1% in March

NZD:

New Zealand Inflation Remains Subdued, No Pressure For RBNZ

 

 

·         EUR: Euro traded in a narrow range during the Asian session as it takes a breather after 48hrs of gyrations we opened trading lower to set 1.3170 on the bottom side before gradually pushing back above the 1.3180 level peaking at 1.3183 on a very quiet session overall.

·         GBP: Opening around the 1.5365 area we spent the pre-Tokyo market moving quietly nowhere with probably 5 points in it, once we moved into the Tokyo session there was a little bit more movement but you could still count the points without taking your socks off, moving slightly lower to the low 1.5350’s before moving back to the starting area, we drifted for the rest of the session and are just holding the 1.5350 area as we move towards the London session.

·         JPY: Continues to rise albeit not as quickly opening around the 97.60 area we held the levels into the Tokyo opening, we again saw cross Yen buying however, a greater proportion of USDJPY went through today as a ratio giving the impression that yesterday’s race for yield has dropped off and we are trading for another test towards the top and the elusive 100 level, we moved firmly above the 98.00 level triggering some minor stops along the way topping around the 98.30 level before the market died in mid-session since then we’ve held the 98.20 level and look to be heading into London around the level.

·         AUD: Having done a fair amount of work over the past 24hrs to regain the losses Oz finds itself trading in a similar patter as we’ve seen over several months with JPY weakening and AUDJPY staying static forcing the Oz lower, we opened around the 1.0390 area and drifted towards the Tokyo opening before moving back on the opening with some limited AUDJPY buying moved in however, once that was over we spent the rest of the session steadily drifting lower, first to below 1.0370 and after a brief rally down to the 1.0340 areas before holding, we currently look to be moving into the London session just above the 1.0350 area after a reasonably quiet day for the Oz

 

Today’s data

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

NZD       CPI QoQ Q1 A 0.40% | C 0.50% | P -0.20%

AUD       Westpac Leading Index MoM Feb A 0.60% | P 0.30%

JPY         Consumer Confidence Mar A 44.8 | C 46.7 | P 44.3

08:30     GBP       BoE Minutes C 0-0-9 | P 0-0-9

08:30     GBP       Claimant Count Change Mar C 0.0k | P -1.5K

08:30     GBP       Claimant Count Rate Mar C 4.70% | P 4.70%

08:30     GBP       ILO Unemployment Rate 3M Feb C 7.80% | P 7.80%

09:00     CHF        ZEW (Expectations) Apr P 2.3

14:-00    CAD       BoC Rate Decision C 1.00% | P 1.00%

14:30     USD       Crude Oil Inventories P 0.3M

18:00     USD       Fed’s Beige Book            

 

Interbank Ranges as of 6am London time

                                Highs    Lows

USD/JPY               98.42 | 97.54
EUR/USD             1.3198 | 1.31705
EUR/JPY               129.705 | 128.55
AUD/USD            1.0394 | 1.0340
NZD/USD             0.8510 | 0.8457
USD/CAD             1.0229 | 1.0210
EUR/CHF              1.2165 | 1.2152
USD/CHF             0.9238 | 0.9219
GBP/USD             1.5370 | 1.5350
EUR/GBP             0.8584 | 0.8577

Good luck

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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