Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close Wellington open

USDJPY 101.30 101.45-49 | EURUSD 1.29345 1.2926-40 | EURJPY 131.012 130.995 -131.465 | AUDUSD 0.96516 0.9625-85 | NZDUSD 0.80946 0.8080-0.8119 | USDCAD 1.03184 1.0311-20 | EURCHF 1.24298 1.2435-45 | USDCHF 0.9610 0.9615-24 | GBPUSD 1.51252 1.5118-44 | EURGBP 0.85513 0.85335-60 |

 

Weekend News

JPY:

BOJ’s Kuroda Sees No Sign Investors Too Bullish on Japan Economy
BOJ’s Kuroda Doesn’t See Big Problem With Japan Financial System
Japan Opposition Says Stock Market Fluctuations Signal ‘Bubble’
Japan Manufacturers Plan to Boost Bonuses, Survey Says: Nikkei
Japan Agrees to Give Myanmar Development Loans as Abe Visits
Japan’s Abe Says No Prospect for Reviving 6-Party Talks: Asahi
More Than 50 May Be Exposed to Radiation in Japan Leak: Kyodo
CNY:

China May Levy Taxes on More Luxury Goods, China Daily Says
China’s Xi Says Country Won’t Sacrifice Environment for Growth
China Plan Cuts The State’s Role In the Economy
China Energy Demand To Peak in 2030-2035, Xinhua Says
CNY/KRW:

China’s Xi Urges N.Korea to Return to 6-Party Nuclear Talks
NZD/CNY:

New Zealand, China Discuss Allowing Direct Currency Conversion
GBP/SGD:

Singapore Citizens Boost U.K. Property Purchases: Straits Times
EUR:

Germany Plans Loan Program for Spanish, Portuguese SMEs: Spiegel
Merkel Says Opposes Any Further Debt Write-down for Greece
New Democracy Gains Support Over Syriza, Greek Poll Shows
Portugal Plan Won’t Be Renegotiated, Dijsselbloem Tells Expresso
Letta Says Youth Unemployment Needs Extraordinary Measures
AUD:

Swan Urges Non-Miners to Pick Up Slack as Australian Boom Peaks
Emerson Says Weaker Aussie Will Aid Carmakers After Ford Closure
AUD/CNY:

Australia to Boost Farm Exports 45% by 2025 to Help Feed China
SEK:

Swedish Rioters Torch Cars, Target Schools as Violence Spreads

 

Harry Hindsight

  • EUR: The Euro opened in Asia with minor selling in JPY crosses and the Euro moved from the opening levels of 1.2933 to below 1.2910 as we moved into early Tokyo, we based around the area for the majority of the session with very little occurring once we’d made the lows in the Euro, as we moved towards London we started to see early Middle Eastern buyers impacting the market taking the Euro back to the opening levels in a busy period and we moved into London with a buy tone appearing for the first time in the session. Good confidence numbers in both Germany and the rest of the Eurozone helped the Euro rally quickly to above the 1.2990 level and although we saw a bit of a drop once we hit there we held above the 1.2960 as we moved into NYK. Durable goods was the big number for the day and a better than expected number saw the USD rally across the board with Euro moving swiftly to below the opening areas, we based for the rest of the session of the 1.2910 area and slowly recovered to the opening levels into the close.
  • GBP: Cable was no different to the Euro during the Asian session trading from the opening levels around 1.5110 to touch the 1.5065 area during the first half of the Tokyo session, seeing a recovery only as the Euro started to move off its lows and USDJPY was in full decline, we held for a the few hours before London open around the 1.5100 level before the market started to move up with the movement of the Euro, we had the same dip as the Euro on the release of the Durable goods number however, unlike the Euro the market in Cable again rose to make highs above the 1.5135 level and held between 1.5120-30 into the close as EURGBP selling materialized in the later part of the NYK session.
  • JPY: Early buying into the pre-Tokyo session saw the USDJPY move from 102.00 area to touch just below 102.60 however, the buying seemed more to do with late USD buying before the Long weekend and once we moved into Tokyo we again started to fall away slowly at first before gathering pace to push down below 101.20 , buying in Euro and GBP helped stabilize the market as the crosses held the market up and we moved into the London session only 20 pips below the opening levels after a steady rise, once we moved into London it was a steady sell and although USD rose against everything else it had no impact on the JPY strength and we moved below 101.00 in the later part of NYK trading below 100.70 before finding some profit taking in the later part of the session from Macro players to take the market back above the 101.00 level.
  • AUD: The unwinding of the carry trade continued through the session taking the market from the opening levels above 0.9740 to below 0.9670 as we moved into the Tokyo session, once we reached the initial low the selling slowed to a trickle however, the Oz was unable to convincingly move back above the 0.9700 level and moved between the 0.9690-70 levels for the balance of the Asian session and into the London session with only one attempt higher. NYK was not that much different and again we saw the Oz move in tandem with the USDJPY dropping this time to below 0.9640 before recovering slightly into the close.

 

Friday’s premiership results

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

22:45     NZD       Trade Balance (NZD) Apr A 157M | C 480M | P 718M | R 732M

06:00     EUR        German GDP Q/Q Q1 (F) A 0.10% | C 0.10% | P 0.10%

06:00     EUR        German GfK Consumer Sentiment Jun A 6.5 | C 6.2 | P 6.2

08:00     EUR        German IFO – Business Climate May A 105.7 | C 104.4 | P 104.4

08:00     EUR        German IFO – Current Assessment May A 110 | C 107.2 | P 107.2 | R 107.3

08:00     EUR        German IFO – Expectations May A 101.6 | C 101.6 | P 101.6

08:30     GBP       BBA Mortgage Approvals Apr A 32.2K | C 32.7K | P 31.2K

12:30     USD       Durable Goods Orders Apr A 3.30% | C 1.70% | P -5.70%

12:30     USD       Durables Ex Transportation Apr A 1.30% | C 0.50% | P -1.40%

 

For today

USDJPY
Topside: 101.50-101.80 medium offers  101.80-102.10 light offers  102.20-102.50 light offers
Downside: 100.30-100.60 medium bids 100.00-100.30 light sell stops

EURUSD
Topside: 1.2950-1.2980 light offers  1.2990-1.3020 light buy stops  1.3030-1.3060 medium offers
Downside: 1.2900-1.2930 light bids 1.2870-1.2900 light bids

AUDUSD
Topside: 0.9650-0.9680 light offers
Downside: 0.9580-0.9610 light bids 0.9550-0.9580 light bids 0.9520-0.9550 medium sell stops

 

JPY:

BOJ Minutes: Few: BOJ Should Continue To Mull Ways To Prevent JGB Liquidity Decrease

BOJ minutes: A few members saw 2 pct inflation hard to reach by March 2016

Japan PM Abe Cabinet’s Approval Rating Drops To 68% – Nikkei Poll

Japan’s Suga Says Stocks Probably in An Adjustment Phase

JPY/INR:

Japan To Discuss Seaplane Exports To India -Nikkei

CNY:

PBOC fixes yuan mid-point at record 6.1811/dollar

China CB adviser sees RMB supplant U.S. dollar in 30 yrs.-paper

China Jan-April industrial profits up 11.4% on year

CNY/EUR:

China’s Li Relying on Merkel to Resolve Crisis and Boost Growth

CNY/TWD:

Taiwan, China May Sign Services Trade Pact in June: Econ. Daily

NZD/CNY:

N.Z.’s Key Seeking Fast Outcome on China Currency Conversion

 

  • EUR: While moderate volume passed through the Asian session the lack of UK and US players showed up, and it was reasonably quiet throughout, weekend news impacted on the early session, opening almost unchanged the market topped just after the opening around the 1.2545 level and traded lower from that point on, touching the 1.2915 level and holding there in slow trading throughout the session, as we move to the London holiday session the market holds just off the lows with little interest now going through.
  • GBP: Cable opened just slightly higher from the Friday close rallying to 1.5137 area before starting a steady fall back to trade down to the 1.5120 area in quiet trading we currently hold just off the lows as we head towards London.
  • JPY: USDJPY had a wide opening before starting the slide lower once we moved into the Tokyo session, opening around the 101.25 level we held the areas and then moved steadily lower in Tokyo with the Nikkei dropping some 2.5% on the opening to drag the pair down into the 100.80 areas before recovering to hold the 101.00 for the greater part of the session, where we currently hold. BoJ minutes showed no surprises for the market when it was released.
  • AUD: The Oz traded lower quickly from the opening having moved from 0.9645 to above 0.9655, we saw AUDJPY carry trade again being sold from the start and as we moved into the Tokyo session it only slowed never really stopping and the Oz was forced to below 0.9620 before holding and remaining stuck around the 0.9625 level for the majority of the session.

 

Today’s data

Actual = A Consensus = C  Previous = P Timings GMT

UK and US holidays no data today.

 

Ranges as of 6am London time including Sydney open

Highs    Lows

USD/JPY               101.82 | 100.79

EUR/USD             1.2945 | 1.29155

EUR/JPY               131.58 | 130.26

AUD/USD            0.9670 | 0.9615

NZD/USD             0.8119 | 0.8064

USD/CAD             1.0331 | 1.0301

EUR/CHF              1.2451 | 1.24245

USD/CHF             0.9635 | 0.9609

GBP/USD             1.5149 | 1.5119

EUR/GBP             0.85515 | 0.8536

 

Stay lucky

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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