Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 97.942 | EURUSD 1.30646 | EURJPY 127.956 | AUDUSD 1.02482 | NZDUSD 0.84982 | USDCAD 1.0104 | EURCHF 1.22146 | USDCHF 0.93493 | GBPUSD 1.55336 | EURGBP 0.8410 |

Harry Hindsight

  • EUR: A quiet session in Asia with a balance of position cuttings before the expected 25 bps was all we saw and not much of that as the holidays continue rolling on, we opened just below the 1.3190 area and trade slowly down over the course of the session once we moved into the grey hours we saw early Europeans selling however, as before it was limited moving to just above the 1.3150 area, the release of the rate cut caused some minor gyrations with the market touching below 1.3120 and above 1.3210 in a very short period of time, it held above the 1.3200 area for about an hour before comments from Draghi started to impact the market, with comments of negative rates seeming to do the most damage dropping the market quickly to below 1.3080 and then a slower decline to below 1.3040 to make the low, it then stopped moving slowly rising into the close around the 1.3065 levels.
  • GBP: Cable rose from the opening levels of 1.5555 to just above the 1.5570 level until the opening of Tokyo, at which point the market started a slow drift lower into the mid 1.5540’s and holding the level until we moved into the London market. Good PMI construction numbers higher than expected helped the Cable rally over the session to above 1.5590, EURGBP cross initially weakened before jumping higher from 0.8450 levels to 0.8480 as the Euro rallied however, as with the Euro it dropped quickly to touch the 0.8410 level as Euro dropped the action also dragged on Cable sending it dropping from the highs to below 1.5500 at one point although the decline was a little more orderly than the Euro, it bounced back to above 1.5530 but once the market settled down there seemed to be less inclination to do anything as with the Euro and it drifted sideways into the close in NYK at 1.5534 area.
  • JPY: USDJPY was very quiet throughout the Asian session moving from 97.30 opening levels to the 97.10 on the Tokyo opening and rising to just above 97.40 during the early part of the session to set the tone for the rest of the Asian session, only when we moved towards the NYK session did we start to see any movement with Europe having very little impact, US data with a healthier negative trade balance than expected and jobless claims number again better than expected helped the USD rise quickly against the JPY moving from the 97.20’s to touch close to 98.40 before dropping back a little to below the 98.00 level, as with the other markets once the movement was over with the market went to sleep keeping to a 20 point range around the 98.00 level into a close just below 98.00
  • AUD: The Oz opened around the 1.0280 level and stayed in a tight range into the Tokyo opening however, on the release of the Oz data we saw some heavy selling appearing in the market taking it initially to 1.0240 area before we found some support, it was short lived and the market only managed to rally to 1.0260 before again setting lower this time dropping to 1.0225 area as we moved into the London session the market started to find buyers willing to pick up the Oz, then we had the ECB release and the Oz was dragged higher with the Euro, only to collapse quickly to the 1.0222 area on the Draghi comments, it recovered again because people seemed willing to buy after the fact one would surmise now that the ADM deal is fully in the open, we moved up to the 1.0260 area before a slow drift into the close just below 1.0250.

Yesterday’s premiership results

Actual = A | Consensus = C | Previous = P | Revised = R
JPY         Monetary Base YoY Apr A 23.10% | P 19.80%
AUD       Building Approvals MoM Mar A -5.50% | C 1.30% | P 3.10% | R 3.00%
AUD       Import Price Index Q/Q Q1 A 0.00% | C -0.50% | P 0.30%
CNY        HSBC Manufacturing PMI Apr A 50.4 | C 50.6 | P 51.6
CHF        SVME-PMI Apr A 50.2 | C 49 | P 48.3
EUR        Eurozone PMI Manufacturing Apr (F) A 46.7 | C 46.5 | P 46.5
GBP       PMI Construction Apr A 49.4 | C 48 | P 47.2
USD       Challenger Job Cuts YoY Apr A -6.00% | P 30.00%
EUR        ECB Rate Decision A 0.50% | C 0.50% | P 0.75%
CAD       International Merchandise Trade (CAD) Mar A 0.0B | C -0.70B | P -1.02B
USD       Trade Balance Mar A -$38.8B | C -$42.0B | P -$43.0B | R -$43.6B
USD       Non-Farm Productivity Q1 (P) A 0.70% | C 1.80% | P -1.90%
USD       Unit Labour Costs Q1 (P) 0.80% | C 0.00% | P 4.60%
USD       Initial Jobless Claims C 324K | 345K | P 339K

 

For today

USDJPY:
Topside: 98.10-98.30 light mix 98.30-98.70 light offers
Downside: 97.50-97.80 light sell stops 97.20-97.50 light bids

EURUSD:
Topside: 1.3100-1.3135 light mix 1.3140-1.3170 light offers 1.3170-1.3200 light offers
Downside: 1.3010-1.3040 light sell stops 1.2970-1.3010 light bids

EURJPY:
Topside: 128.30-128.70 light offers
Downside: 126.90-127.30 light sell stops

AUDUSD:
Topside: 1.0300-1.0340 light offers
Downside: 1.0170-1.0200 light mix

 

CNY:
China April official services PMI at 54.5 vs March 55.6
EUR:
ECB’s Nowotny Says Rate Cut Reaction to ‘Very Weak’ Economy
ECB’s Nowotny says wants to keep rates low ORF
Asia:
Asia Manufacturers Need to Evolve to Serve Domestic Markets: ADB

 

  • EUR: A continuation of the whole week for Asia with the market very quiet, Euro’s opened around the 1.3064 area and dipped initially to below 1.3060 before spending the rest of the session rising to above 1.3077 before running into some offers and we currently hold around the 1.3075 area as we run to London.
  • GBP: Cable opened around the 1.5530 area and traded in a very narrow range for the session only beginning to drop off towards the end moving from the highs just above 1.5540 to drop down to 1.5520 areas where we currently hold going towards London open.
  • JPY: As would be expected on a bank holiday the USDJPY was contained inside a 15 point range with early sellers taking the market to the 97.90 level and Tokyo buying it back to just above 98.05 no real showing on the day and we look to be moving towards London around the 98.00 area where we initially started.
  • AUD: The Oz opened around the 1.0247 area and traded slowly higher the release of data helped underpin the move taking the market from the 1.0260 level quickly above 1.0270 and then holding the area for another push to just below 1.0280 in what was the biggest range in the majors, we currently hold around the 1.0265 level as we move to London.

 

Today’s data

Actual = A | Consensus = C | Previous = P | Revised = R | All GMT
CNY        Non-manufacturing PMI Apr A 54.5 | P 55.6
AUD       PPI Q/Q Q1 A 0.30% | C 0.30% | P 0.20%
AUD       PPI Y/Y Q1 A 1.60%| C 1.60% | P 1.00%
08:30    GBP       PMI Services Apr C 52.3 | P 52.4
09:00    EUR      Eurozone PPI MoM Mar C -0.20% | P 0.20%
09:00    EUR     urozone PPI YoY Mar C 0.60% | P 1.30%
12:30     USD       Change in Non-farm Payrolls Apr C 155K | P 88K
12:30     USD       Unemployment Rate Apr C 7.60% | P 7.60%
14:00     USD       Factory Orders Mar C -2.40% | P 3.00%
14:00     USD       ISM Non-Manufacturing Composite Apr C 54 | P 54.4

Interbank Ranges as of 6am London time

                                  Highs    Lows
USD/JPY               98.05 | 97.90
EUR/USD             1.30775 | 1.3051
EUR/JPY               128.20 | 127.9
AUD/USD            1.0280 | 1.0250
NZD/USD             0.8533 | 0.8492
USD/CAD             1.0115 | 1.0101
EUR/CHF              1.22195 | 1.2210
USD/CHF             0.9353 | 0.93425
GBP/USD             1.5541 | 1.5521
EUR/GBP             0.8423 | 0.84085

Good luck

Andy

 

 

 

 

 

 

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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