Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close SYD open

USDJPY 99.536 99.72-75 | EURUSD 1.30527 1.3080-82 | EURJPY 129.903 1.3050-695 | AUDUSD 1.0276 1.0275-85 | NZDUSD 0.84189 0.8411-23 | USDCAD 1.02674 1.0252-60 | EURCHF 1.21873 1.2173-80 | USDCHF 0.93377 0.9308-385 | GBPUSD 1.52298 1.5226-49 | EURGBP 0.85696 0.8580-845 |

 

Weekend News

JPY:

G-20 Gives Japan Stimulus Green Light as Yen Extends Fall 
Aso Says Cheaper Yen Is By product Not Goal of Abe’s Policies
Japan’s Abe Sends Offering to Shrine Without Visiting: Kyodo
JPY/CNY:

Toyota Predicts China Sales Won’t Fully Recover Before Autumn
EUR/JPY:

Weidmann Says Japan’s Monetary Policy No Substitute for Reforms
CNY:

PBOC’s Zhou Says Slower Growth Needed as China Restructures
PBOC’s Zhou Says China to Further Exchange Rate Reform
PBOC Adviser: China 1Q Growth Slowdown Not a Concern
PBOC Adviser Song Guoqing Sees China 2Q GDP Rising 8.1% Y/y
China Researcher Says Hot-Money Inflows Add to Yuan Pressure
China’s Premier Li Urges Focus on Rescue as Quake Toll Mounts
EUR:

Draghi Says Euro Economy Hasn’t Improved Since Last ECB Meeting
IMF’s Vinals Says Italy’s Banks Adequately Capitalized: Corriere
ECB’s Nowotny Says There’s No Problem With Euro’s Exchange Rate
Dijsselbloem Says Portugal May Get More Time to Meet EU Targets
Dijsselbloem Says EU Resolution Agency May Require Treaty Change
ECB’s Asmussen Says Rate Cut Possible If Justified by Data
Schaeuble Says Unrealistic to Expect High European Growth Rates
Italy President Napolitano Re-Elected in Bid to Resolve Crisis
GBP:

Osborne Suggests an Independent Scotland Wouldn’t Keep Pound
CHF:

SNB President Jordan Says Cap on Swiss Franc Is ‘Indispensable’
Switzerland May Discuss Tax-Information Exchange, Minister Says
AUD:

Australia Sees Wider Deficit as Currency Hits Revenue, Swan Says
USD:

Bernanke to Skip Jackson Hole on ‘Scheduling Conflict’: Reuters

Harry Hindsight

·         EUR: After a quiet start in Asia the market finally started to move some 4hrs into the session opening around the 1.3050 area pushing to above the 1.3075 level with Middle eastern buyers making a mark for the second day on the trot, we moved into the London market off from the highs however, after a jittery start we started to move higher moving to 1.3090 area where we held before the NYK market opened, with the 4th vote on the Presidency in Italy the same as the previous 3 which put paid to the comments from Schaeuble on the subject of the ECB reducing liquidity, which had the market above the 1.3110 level, comments from Draghi  again took the market higher to above 1.3120 areas, adding that Schaeuble should bear in mind the independence of the ECB, with Fitch’s downgrade of the UK by a notch to AA+ GBP acted as a drag on the Euro in late trading and we saw the market move away from the highs to drop quickly to the opening levels as we moved into the close.

·         GBP: Cable opened around the 1.5280 level and in the Asian session struggled with some early GBPJPY buying in the early part of the session the only play we really saw, as we moved into the grey hours, we saw some buying enter the market from East Europeans breaking through 1.5300 to just below the 1.5330 level before pausing and before a push to above 1.5360 into the London open, we stalled on the topside and then started a long decline from that point with a steady decline increasing in speed once Fitch downgraded the UK taking us from the 1.5320 level to just above the 1.5220 area we stabilised just above the level and held into the close.

·         JPY: USDJPY moved from the 98.20 level to above the 98.60 level during the early part of the Tokyo session with comments from an IMF official about where USDJPY would be by May, I was rather cynical about the idea however, you can see by Mondays opening who they listen too. As we moved into the grey hours pre London we saw fresh interest to buy GBPJPY and EURJPY taking the USDJPY back above the 99.00 level peaking just short of the 99.40 level and so we held for several hours trading around the 99.20 level into late into NYK with FinMin Aso making comments about criticism about the weak Yen being groundless given Japan’s huge trade deficit however, that would have to be taken into some context whether you look at it as the Yen has been to above 140 or below 76.00 you would have to decide. With the comment USDJPY managed another leg up to the 99.60 area where we continued to range into the close in NYK.

·         AUD: The Oz struggled during the Asian session with weak number out of CNY and still struggling from the GDP number in China early on in the week, we opened just above the 1.0300 level and moved steadily lower to just above the 1.0280 level however, moves in USDJPY and conversely the AUDJPY helped to push the AUD higher to just shy of the 1.0360 level, before European factors started to kick in taking us slowly lower over the London and NYK session to finish the day below 1.0280.

Friday’s premiership results

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

CNY        Conference Board Leading Index Mar A 0.00% | P 1.30%              

EUR        German PPI M/M Mar A -0.20% | C 0.10% | P -0.10%     

EUR        German PPI Y/Y Mar A 0.40% | C 0.70% | P 1.20%             

EUR        Eurozone Current Account (EUR) Feb 16.3B | C 13.9B | P 14.8B  

CAD       Wholesale Sales M/M Feb A 0.00% | C 0.50% | P 0.30% 

CAD       CPI M/M Mar A 0.20% | C 0.50% | P 1.20%          

CAD       CPI Y/Y Mar A 1.00% | C 1.10% | P 1.20%              

CAD       BoC CPI Core M/M Mar A 0.20% | C 0.30% | P 0.80%       

CAD       BoC CPI Core Y/Y Mar A 1.40% | C 1.40% | P 1.40%

For today

USDJPY 
Topside: 99.90-100.20 decent offers  100.30-100.60 medium offers 100.70-101.00 decent offers 
Downside: 99.50-99.70 light bids 99.00-99.30 light bids 

EURUSD 
Topside: 1.3080-1.3100 light offers  1.3100-1.3130 medium buy stops 
Downside1.3020-1.3050 light sell stops 1.2980-1.3010 light sell stops 

EURJPY 
Topside: 130.70-131.00 light buy stops 
Downside: 130.00-130.20 light bids  AUDUSD 
Topside: 1.0310-1.0320 light offers  1.0330-1.0360 light offers 
Downside: 1.0240-1.0265 light sell stops 1.0200-1.0230 light sell stops

 

JPY:

BOJ’s Kuroda: gained understanding of Japan’s policies at G20

Japan Finance Minister Aso Says Policy Won G-20’s understanding

JPY/CNY:

Japan Lawmakers Group Cancels Plans to Visit China in May: Kyodo

KRW/JPY:

Sth Korean minister cancels Japan visit over war shrine – Yonhap

NZD:

NZ migration gains highest in 3 yrs. in March – Stats NZ

·         EUR: Euro opened stronger than the NYK close on weekend news, dipping in early trading from the 1.3070 areas to below 1.3055 to fill the gap on the charts, once we moved into the Tokyo session we started to see some strength in the EURJPY appear as buyers attempted to push the USDJPY higher having failed in the straight USDJPY however, they were met with the same type of resistance and Euro moved higher before holding around the top of the opening areas.

·         GBP: Cable opened in line with Fridays close and traded around the 1.5230 area until we saw a round of selling appear from a French bank taking the market down to test the 1.5200 level in what looked like an over exaggerated move, it held the level and moved quickly back to above the opening triggering some minor weak stops from spec selling touching above the 1.5245 level before settling back to the opening areas we currently look to be moving into London around the 1.5225 area.

·         JPY: Opened higher on the back of G20 apparent green light to the easing plan, which was probably more of a no comment by everybody but the Japanese, needless to say having opened around the 99.80 level we struggled to push higher and at the moment have yet to penetrate 99.90 let alone 100.00 however, unlike previous attempts higher we’ve not backed off from the level and the lowest we’ve moved has been to the 99.70 areas

·         AUD: The Oz opened in line with Fridays close in NYK and moved steadily lower for the first few hours in slow trading, we eventually saw the market rising as we dipped a little in the USDJPY moving to above 1.0305 however, the market remained quiet for the most part and we currently see the market adrift of those highs holding around the 1.0285 level as AUDJPY selling appears late in the session as speculators cut their positions in the carry trade having not seen the USDJPY push through 100.

 

Today’s data

Actual = A Consensus = C  Previous = P Timings GMT

14:00     EUR        Eurozone Consumer Confidence Apr (A) C -24 | P -23.5 

14:00     USD       Existing Home Sales Mar C 5.02M | P 4.98M

 

Ranges as of 6am London time including Sydney open

                                Highs    Lows

USD/JPY               99.90 | 99.70

EUR/USD             1.3094 | 1.3036

EUR/JPY               130.735 | 130.24

AUD/USD            1.0308 | 1.0266

NZD/USD             0.8462 | 0.8383

USD/CAD             1.0261 | 1.0248

EUR/CHF              1.21905 | 1.2180

USD/CHF             0.93355 | 0.9308

GBP/USD             1.5250 | 1.5202

EUR/GBP             0.8592 | 0.85785

 

Stay lucky

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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