Daily FX Market Commentary

LMAX Exchange

Good morning,

 

LMAX Close

USDJPY 100.729 | EURUSD 1.30476 | EURJPY 131.428 | AUDUSD 0.96619 | NZDUSD 0.80808 | USDCAD 1.0297 | EURCHF 1.24363 | USDCHF 0.95316 | GBPUSD 1.52321 | EURGBP 0.85658 |

 

Harry Hindsight

  • EUR: The Euro started a steady climb higher from the opening in Asia, from the 1.2940 we gradually climbed to above 1.2980 into the grey hours, early retail selling was met with medium term types and real money selling USD into the Tokyo session, Early Europeans tried to reverse the trend but once their supply was done the market returned to the drive higher with the first peace of data being a surprise jump in CHF GDP it helped underpin the move and confidence numbers for the Eurozone were a little more optimistic and we moved to the NYK session having broken the 1.3000 level, really the only thing that held the Euro back was a quick rise in the USDJPY into the hour before NYK with EURJPY offers appearing in the market the Euro was forced down into the 1.2950 levels and to the USD data, a weaker than expected GDP number had the market scurrying for cover and Euro quickly rallied back through its highs and onwards triggering minor stops along the way, the market topped out above the 1.3060 area, while the number in GDP was not overly worrying the fact that we had a rising initial jobless number at the same time just helped the Euro which had been looking for a shakeout having stalled at the 1.2850/40 level. Once the quick move was over the market died a death holding the 1.3050 area and unable to push high and no will for people to sell so the market traded in a tight range for a good 5hrs.
  • GBP: Cable opened quietly and did very little slowly being dragged around with the Euro with the EURGBP cross moving quickly higher but as we’ve seen in previous session content to move back to this 0.8570/50 level. Cable having opened around the 1.5130 struggled to maintain the levels and it was only once we moved into the London session did we start to see some movement in the market rising to above 1.5170 on the CHF data and attempting 1.5200 some couple of hours later, the squeeze lower caused by the JPY weakness was reflected in the Cable and the market made its lows around 1.5110 only to rally sharply with the Euro on the US numbers, while the Euro then stalled Cable continued to rise slowly as the EURGBP came back to previous levels and Cable moved into the close above 1.5230 with no news of note for the day from the UK.
  • JPY: USDJPY opened around 101.10 areas and traded quietly into the Tokyo session where we saw good selling appear in the early part of the session, which I know believe was fix related. Having quickly hit 100.60 the market was caught as a mini short squeeze occurred and the market quickly triggered stops trading to above 101.50 in a short period of time, the market slowed and we started a long drift lower with tentative selling appearing from retail and real money. By the time we moved into the London session the market had traded down through the 100.50 level before holding for a few hours, comments made during the Asian session seemed to set the market alight some several hours later as decent fund money started to buy and again we had a short squeeze taking the market quickly higher and touching 101.80 as with the previous short squeeze in Asia once the buying disappeared the market started to move down again and having rallied through the US numbers the decline was a little more precipitous, while we didn’t see fresh lows it wasn’t for the want of trying and we eventually touched the 100.60 level before moving to the 100.80 into the close. Macros were seen as sellers while real money seemed to be buyers.
  • AUD: The Oz drifted into the Asian opening slowly sliding with the market seemingly looking at a poor building approval number, when the number was released we saw the usual confusion as sellers hit the market to take it below 0.9590 only to rebound quickly to above 0.9670, the market from there seemed to be dominated by JPY strength and the resultant rally in the Oz saw the pair move slowly to just shy of the 0.9700 level, as we moved towards London we started to see some profit taking from early Europeans and the market moved slowly lower to 0.9660, into London properly and the USDJPY movements dominated the flows with the Oz dropping quickly as the JPY weakened the Oz touching the same levels as the previous spike lower however, the US data saved the Oz from any further damage and the market rallied over the next couple of hours back to the previous levels just above 0.9690 before drifting back into the close in NYK around the 0.9660.

Yesterday’s premiership results

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

NZD Building Permits M/M Apr A 18.50% | C -9.10% | P -8.30%

AUD Building Approvals M/M Apr A 9.10% | C 4.10% | P -5.50%

CHF GDP Q/Q Q1 A 0.60% | C 0.20% | P 0.20% | R 0.30%

EUR Eurozone Economic Confidence May A 89.4 | C 89 | P 88.6

EUR Eurozone Industrial Confidence May A -13 | C -13.1 | P -13.8

EUR Eurozone Consumer Confidence (MAY (F)) A -21.9 | C -21.9 | P -22.30

EUR Eurozone Services Confidence May A -9.3 | C -10.6 | P -11.1

USD GDP (Annualized) Q1 (S) A 2.40% | C 2.50% | P 2.50%

USD GDP Price Index Q1 (S) A 1.10% | C 1.20% | P 1.20%

CAD Industrial Product Price M/M Apr A -0.80% | C -0.20% | P 0.10%

CAD Raw Materials Price Index M/M Apr A -2.20% | C -0.90% | P -1.70%

USD Initial Jobless Claims (MAY 24) A 354K | C 342K | P 340K

USD Pending Home Sales M/M Apr A 0.30% | C 1.70% | P 1.50%

USD Crude Oil Inventories A 3.0M | C -0.8M | P -0.3M

 

For today

USDJPY
Topside: 101.40-101.70 medium offers 101.80-102.10 light offers
Downside: 100.40-100.70 medium sell stops 100.00-100.30 light bids 99.70-100.00 light sell stops

EURUSD
Topside: 1.3060-1.3080 medium buy stops 1.3090-1.3120 medium offers
Downside: 1.3000-1.3030 light bids 1.2970-1.3000 light sell stops

EURJPY
Topside: 132.20-132.50 light buy stops
Downside131.00-131.30 light bids 130.70-131.00 light bids

AUDUSD
Topside: Nothing much to mention
Downside: 0.9600-0.9630 light bids

 

JPY:

Major Japan banks’ JGB holdings plunge in April BOJ

IMF: Yen Fall Not Problematic

IMF Lipton: Some Volatility In JGB Market Inevitable

BOJ Nakaso: BOJ Action Will Suppress Heightened Volatility in Bond Market

Japan EconMin: Japan stocks to stabilise as foreign markets calm down

Aso Not Considering Delaying Japan Sales Tax Rise At The Moment

Japan Apr Indus Output +1.7% On Mo; Mkt Expected +0.5%

Japan Apr Core CPI -0.4% On Year; Mkt Expected -0.4%

Japan April household spending rises 1.5% vs. yr. ago

Japan jobless rate steady at 4.1% in April

Japan May manufacturing PMI rises to 51.5 from 51.1

RUB/JPY:

Russia proposes exporting power to Japan – Nikkei

NZD:

N.Z. 1Q Terms of Trade Rise 4.1% on Qtr.; Est. 1.5% Gain

NZ business confidence rebounds in May – ANZ Bank survey

 

  • EUR: Having suffered with a cold for the past couple of days, the market is looking as jaded as I feel, we opened just above the 1.3040 and struggled to just below the 1.3060 triggering some minor stops but finding reasonable amounts of supply to put a stop to the rise, having failed to really get amongst the stops the market reversed into the Tokyo opening and has drifted since then to touch 1.3032 in light volume.
  • GBP: Moving from the opening 1.5230 area to reach above 1.5240 in pre Tokyo we then watched the market slowly slip back into the mid-teens on light volumes with GBPJPY showing in early Tokyo but really nothing striking so far and we hold around the 1.5220 area.
  • JPY: USDJPY has been unusually subdued all session rising slowly into the Tokyo opening from 100.70 area to hover around the 101.00, light fixing demand saw the USDJPY pushing towards the 101.20 and we saw the market follow through for another 10 pips but really with all the data out you’d have expected more action however, the market obviously is taking a breather before the next whipping moves, we hold for the moment just above the 101.00 level as we move towards the London market.
  • AUD: As can be seen by the order board liquidity is a problem as players shy away from the volatility we’ve seen over the past week or so, we opened around the 0.9660, only to see the market move quickly higher to the 0.9685 level on the back of the NZD numbers from there it was a steady drift to the 0.9670 area, with Private sector credit in line with expectations, the market was caught by the CNY MNI business sentiment number coming in weaker than expected and again the Oz dropped quickly to the 0.9625 area before bouncing like a soggy cat, and now holding around the 0.9640 area as we head to the London market.

 

Today’s data

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

NZD Terms of Trade Index Q/Q Q1 A 4.10% | C 1.20% | P -1.30%

GBP GfK Consumer Sentiment May A -22 | C -25 | P -27

JPY Nomura/JMMA Manufacturing PMI May A 51.5 | P 51.1

JPY Household Spending Y/Y Apr A 1.50% | C 3.10% | P 5.20%

JPY Unemployment Rate Apr A 4.10% | C 4.10% | P 4.10%

JPY National CPI Core Y/Y Apr A -0.40% | C -0.40% | P -0.90%

JPY Tokyo CPI Core Y/Y May A 0.10% | C -0.20% | P -0.70%

JPY Industrial Production M/M Apr (P) A 1.70% | C 0.80% | P 0.20%

JPY Housing Starts Y/Y Apr A 5.80% | C 5.10% | P 7.30%

7:00 CHF KOF Leading Indicator May C 1.08 | P 1.02

8:30 GBP Mortgage Approvals Apr C 55K | P 53.5K

8:30 GBP M4 Money Supply M/M Apr C 0.10% | P -0.90%

9:00 EUR Eurozone CPI Estimate Y/Y May C 1.40% | P 1.20%

9:00 EUR Eurozone Unemployment Rate Apr C 12.20% | P 12.10%

12:30 CAD GDP M/M Mar C 0.10% | P 0.30%

12:30 USD Personal Income Apr C 0.10% | P 0.20%

12:30 USD Personal Spending Apr C 0.00% | P 0.20%

12:30 USD PCE Deflator Y/Y Apr P 1.00%

12:30 USD PCE Core M/M Apr C 0.10% | P 0.00%

12:30 USD PCE Core Y/Y Apr C 1.00% | P 1.10%

13:45 USD Chicago PMI May C 50 | P 49

13:55 USD U. of Michigan Confidence May (F) C 84 | P 83.7

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY 101.29 | 100.73

EUR/USD 1.3059 | 1.3032

EUR/JPY 132.085 | 131.50

AUD/USD 0.9685 | 0.9625

NZD/USD 0.8105 | 0.8067

USD/CAD 1.0316 | 1.0296

EUR/CHF 1.24575 | 1.2433

USD/CHF 0.9557 | 0.9526

GBP/USD 1.5240 | 1.5216

EUR/GBP 0.8570 | 0.8562

 

 

 

Good luck

Andy

 

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