Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 100.944 | EURUSD 1.29299 | EURJPY 130.519 | AUDUSD 0.96342 | NZDUSD 0.80854 | USDCAD 1.03399 | EURCHF 1.24555 | USDCHF 0.96319 | GBPUSD 1.51023 | EURGBP 0.85619 |

 

Harry Hindsight

  • 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. With both the UK and US away, the markets were contained in a tight market for the rest of the day rising slightly during the London session to just below the 1.2950 level with only the meetings between China and Germany of any significance, once we moved into the afternoon session and into NYK USD took more prominence in the market and the Euro moved towards its lows holding around the 1.2925 areas and into a close around 1.2930.
  • 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. Cable rose in early closed London to above the 1.5155 levels however, dropped off as EURGBP buying entered the market seen as a real money flows moved the cross some 20 pips higher, Cable fell to below the 1.5100 area into the NYK hours and struggled slowly to above the 1.5100 area in late trading.
  • 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. London market continued the Asian selling taking the market to new lows of 100.75 however, once the NYK session opened we saw light buying creeping in to take the market back above the 101.00 level and hold there for several hours before some Macro selling crept in at the end to send the pair back below 101.00 to finish down on the day.
  • 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. London opening saw some day traders taking long positions and the market followed through taking it over the course of a few hours to hit above the 0.9665 where profit taking was seen and the market began to drift back to the starting levels for a finish around the 0.9630 levels.

 

Yesterday’s premiership results

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

No data

 

For today

USDJPY
Topside: 102.00-102.30 medium offers
Downside: 100.70-101.00 light sell stops 100.30-100.60 medium sell stops 100.00-100.30 light bids

EURUSD
Topside: 1.2950-1.2980 light offers  1.2980-1.3010 medium buy stops
Downside: 1.2860 1.2885 light bids 1.2830-1.2860 light bids 1.2790-1.2820 light bids

EURJPY
Topside: Nothing of note
Downside: 130.00-130.30 light bids 129.70-130.00 light bids

AUDUSD
Topside: 0.9670-0.9700 light offers 0.9710-0.9730 light buy stops
Downside: 0.9570-0.9600 light sell stops 0.9550-0.9570 medium sell stops

 

JPY:

BOJ Has Taken All Necessary Easing Steps for Now: Miyao

BOJ’s Miyao: Vital to keep bond yields on stable path

Upper House Election Slated For July 21

Japan World’s Largest Creditor Nation for 22nd Straight Year

Abe Adviser Hamada: People Shouldn’t Worry Too Much Over 2% Goal

Amari: Think Stocks in Adjustment Phase From Recent Sharp Gains

JPY/CNY:

China Hikes Japan Debt Holdings, Remains No. 1 Foreign Owner

JPY/INR:

Japan, India to Announce 71b Yen Loan for Mumbai Subway: Yomiuri

CNY:

China to Discuss Convertible Capital Account in June: Info Daily

China Should Expand Yuan Trading Band: Securities Journal

Moody’s May Downgrade China Rating If GDP Growth Below 6%: MNI

AUD/IDR:

Indonesia relaxes limits on Australian beef imports – Australian gov’t

 

  • EUR: The market opened quietly in Sydney touching above the 1.2935 level to make a high and quietly moving into Tokyo, a strong opening in the Nikkei helped USDJPY higher and the move became a USD move with Euro’s dropping off from the 1.2930 level to test the supporting bids just below 1.2990, once the Nikkei had slowed its ascent the market in Euro’s also started to climb with EURJPY cross buying entering the market, The Euro moved back above the 1.2915 level and currently holds the level in some moderate volumes.
  • GBP: A similar picture for the Cable with a peak around the 1.5114 area just after the pre-market open before moving quickly lower as USD became King for a time forcing GBP to the 1.5065 level before rebounding smartly with a little short squeeze to above the opening levels and above the 1.5100 level where we currently hold.
  • JPY: It was all about the JPY with differing comments and analyse abounding the market, with some quarters seeing yields in the bonds increasing thus increasing the debt mountain the Japanese government currently runs while others rather than see this in a negative light see it as a success for the aggressive nature of the stimulus package put together, for me its mythical numbers that when converted to money means they’ll print it and thus devalue the currency in line with the amount required each time, whichever way they go about it, it weakens the Yen and as long as they control costs to some extent it’s not going to be a problem to my mind. Anyway the market in USDJPY rallied as the Nikkei rose from the opening and we saw the USDJPY touch 102.00 briefly before slipping back to trade around the 101.90 level with plenty of interest for the carry trades after the past two weeks of selling, dare I mention a reversal. We also saw a new Toshin launch with the bund aimed at the Mexican bond and equity markets with around $560mio taken up.
  • AUD: As with the other currencies the market started weakly with USD rising in line with the USDJPY move across all currencies however, after a few hours looking as if it wanted to break even lower having hit an 11mth low below 0.9600, we started to see retail buying of the carry trade, so maybe there is life in the old horse yet, we moved up in the Oz pushing through the opening 0.9630 area to touch above 0.9650 before running into some light selling and the failure of USDJPY to push through the 102.00 level, we currently hold just off the highs as we look to the London open.

Today’s data

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

JPY         Corporate Service Price Y/Y Apr A -0.40% | C -0.20% | P -0.20%

06:00     CHF        Trade Balance (CHF) Apr C 2.02B | P 1.89B

13:00     USD       S&P/Case-Shiller Composite-20 Y/Y Mar C 10.05% | P 9.32%

14:00     USD       Consumer Confidence May C 69.8 | P 68.1

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               102.06 | 101.00

EUR/USD             1.29395 | 1.2884

EUR/JPY               131.81 | 130.70

AUD/USD            0.9654 | 0.9597

NZD/USD             0.8097 | 0.8060

USD/CAD             1.0368 | 1.0336

EUR/CHF              1.24935 | 1.2448

USD/CHF             0.96865 | 0.96245

GBP/USD             1.5112 | 1.5064

EUR/GBP             0.85605 | 0.8548

 

 

Good luck

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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