Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 98.121 | EURUSD 1.30317 | EURJPY 127.87 | AUDUSD 1.02975 | NZDUSD 0.84378 | USDCAD 1.02641 | EURCHF 1.21559 | USDCHF 0.93272 | GBPUSD 1.52412 | EURGBP 0.85511 |

 

Harry Hindsight

·         EUR: The Euro traded quietly throughout the Asian session trading around the 1.3180 level in no more than a 10 point range, as we moved towards London the activity started to pick up a little moving down to below 1.3160 in the grey hour and then back up from the London opening to touch the 1.3200 level. First we had poor unemployment numbers in the UK sending GBP lower and dragging on the Euro for a change and then comments from ECB’s Widemann saying the ECB will cut interest rates if new information warrants a cut, while for the market this seemed a catalyst for the selling that followed one has to wonder if 0.25% if they cut that much is a big deal in the whole. We moved steadily down from the high pausing before the NYK opening around the 1.3120 level, before dropping a little more dramatically once NYK sat down hitting just above the 1.3000 level by mid NYK while there was a bounce of sorts the market barely broke the 1.3040 area before steadying around the 1.3030 for the remainder of the session in a bit of an anti-climax to the day.

·         GBP: Cable opened just below the 1.5370 that being close to the high, from there we struggled in Asia to do anything slowly drifting lower to a pre London low of all of 1.5360, once we moved into the couple of hours before London where the East Europeans come to the market, the grey hours, things started to bubble a little and we dropped to just above the 1.5330 area before the UK data hit and led the market lower, we fell throughout London and into the NYK session before finding a base in mid NYK around the 1.5220 level however, like the Euro the bounce was like a soggy cat barely moving above the 1.5260 level before settling into a sideways market around the 1.5240 areas into the close. The bottom line number of 70k further unemployed would sort of cast a doubt on previous employment numbers and maybe we have the same people or company counting as the Ozzies.

·         JPY: Talk about choppy the chart looks like a panoramic view of the Alps. To put it into context though the market during Asia was dominated by JPY selling with crosses doing a lot of the work as the retail market in Japan reset positions cut in the previous 24hrs, driving the USDJPY from the 97.50 levels to trade above the 98.40 levels into the end of the session on good volume, Having put in such a good move it was of course vulnerable to any cross selling that might appear with first GBPJPY causing problems as that dropped and then the EURJPY cross triggering weak stops and unfortunately the USDJPY was too fragile to hold up in the light of this week’s hectic trading and we saw USDJPY moving down to 97.60 before NYK entered the fray and a fresh leg selling it to 97.20 areas into the late session, one would be surprised though if there was not some option play going on as we saw a bounce in there around the NYK option cut and probably some gamma flattening going on, having seen the lows the market turned on a pin and started to move back towards the 98.00 level over the next 4hrs to the close eventually settling around the 98.20 areas.

·         AUD: The market in the Oz opened quietly and traded generally lower over the course of the day, as JPY weakened so did the Oz and AUDJPY remained in a tighter range than the legs, by London open we were only just shy of the opening 1.0390 levels however, as the Euro and GBP dropped the market became a USD rally and the Oz followed the rest lower to trade to the 1.0280 level before finding a base and a slow rise into the close around the 1.0300 level.

Yesterday’s premiership results

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

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

GBP       BoE Minutes A 0-0-9 | C 0-0-9 | P 0-0-9

GBP       Claimant Count Change Mar A -7.0k | C 0.0k | P -1.5K

GBP       Claimant Count Rate Mar A 4.60% | C 4.70% | P 4.70%

GBP       ILO Unemployment Rate 3M Feb A 7.90% | C 7.80% | P 7.80%

CHF        ZEW (Expectations) Apr A 20 | P 2.3

CAD       BoC Rate Decision A 1.00% | C 1.00% | P 1.00%

USD       Crude Oil Inventories A -1.2M | C 1.2M | P 0.3M

 

For today

USDJPY:
Topside: 98.40-98.70 light buy stops 98.70-99.00 light offers 99.00-99.30 light offers
Downside: 97.60-97.90 medium sell stops 97.20-97.55 light mix

EURUSD:
Topside: 1.3070-1.3100 light buy stops 1.3110-1.3140 light offers 1.3140-1.3170 light offers
Downside: 1.3000-1.3030 light sell stops 1.2970-1.3000 light bids 1.2940-1.2970 light sell stops

EURJPY:
Topside: 128.20-128.50 light buy stops
Downside: 127.30-127.70 light bids AUDUSD:
Topside: 1.0350-1.0380 light buy stops
Downside: 1.0260-1.0290 light sell stops

 

G20:

G-20 Draft Affirms Commitment to Avoid Competitive Devaluations

JPY:

BOJ Miyao: Expect CPI Inflation Rate To Top 1% Within Fiscal 2014

BOJ’s Miyao: QE not without risks but needed to end deflation

Japan March Trade Deficit Y362.4B; Expected Deficit Y430B

Japan firms’ mood up for fifth straight month-Reuters Tankan

JPY/IDR:

Indonesia overcharging on Japanese car imports – Nikkei

CNY:

China March Foreign Direct Investment +5.65% on Year at $12.4 Bln

China March home prices rise 3.6% YoY -Reuters

China Near-Term Trade Outlook Not Optimistic -Commerce Ministry

PBOC Researcher Urges Caution on Yuan Reform amid Liquidity: MNI

China says investigating human-to-human spread of bird flu

USD/KRW:

North Korea demands end of sanctions if U.S. wants dialogue

NZD:

NZ Rural Property Prices Higher Despite Drought – Reinz

NZ consumer confidence rises in April – ANZ survey

 

 

·         EUR: The Euro market seemed to be quiet content to sit around the opening levels of 1.3030 trading in a tight less than 10 point range from the opening until 3hrs or so into the session then we started to see some Middle eastern flows impacting the market and triggering weak stops to the 1.3060 level before dropping back to the 1.3050 area as we move towards London.

·         GBP: Cable was as impressive as the Euro opening around the 1.5240 area and trading down into the mid 1.5230’s in early trading only to be dragged higher with the Euro to touch above 1.5256 with very little interest going through as we move to London around the 1.5250 level.

·         JPY: USDJPY moved up from the opening 98.00 levels in pre Tokyo trading touching above the 98.25 level before Tokyo entered the market as net sellers for the fix, news that the Chinese have seen cases of human to human transmission of the new strain of bird flu sent jitters through the Asian market and also for some reason the commodity markets sending gold down $40 or so before bouncing back to just $10 off at the moment. USDJPY dropped from the 98.15 level to below 97.67 on the same information before recovering to make a new high for the day above 98.35 triggering weak stops from the selloff, we are currently holding around the 98.00 area as we start to move towards the London session.

·         AUD: You could cross the USDJPY off the Chart and place AUDUSD apart from the actual numbers the picture is exactly the same with early buyers taking the market above 1.0315 only for the China news to impact and send the Oz to below the 1.0270 level in a quick movement with Gold and USDJPY, we moved back in a similar fashion again trading above the 1.0315 level but drift lower as we move to the London session.

 

 

Today’s data

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

JPY         Trade Balance (JPY) Mar  A -0.92T | C -0.92T | P -1.09T   

AUD       NAB Business Confidence Q1 A 2 | P -5 

08:30     GBP       Retail Sales M/M Mar C -0.50% | P 2.10%             

12:30     USD       Initial Jobless Claims (APR 13) C 347K | P 346K    

14:00     USD       Philly Fed Survey Apr C 3 | P 2   

14:00     USD       Leading Indicators Mar C 0.10% | P 0.50%            

Interbank Ranges as of 6am London time

                                Highs    Lows

USD/JPY               98.38 | 97.62

EUR/USD             1.30615 | 1.30215

EUR/JPY               128.43 | 127.15

AUD/USD            1.0316 | 1.0269

NZD/USD             0.8456 | 0.8421

USD/CAD             1.0277 | 1.0253

EUR/CHF              1.2160 | 1.2151

USD/CHF             0.9335 | 0.93105

GBP/USD             1.5256 | 1.5233

EUR/GBP             0.8562 | 0.8548

Good luck

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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