Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 99.529 | EURUSD 1.30764 | EURJPY 130.166 | AUDUSD 0.97688 | NZDUSD 0.8083 | USDCAD 1.02784 | EURCHF 1.2384 | USDCHF 0.94717 | GBPUSD 1.53203 | EURGBP 0.85357 |

 

Harry Hindsight

  • EUR: We started in Asia just below Fridays close around the 1.3000 moving slowly higher over the session in what was the quietest session this year and I include the bank holidays, one assumes the market is a little delicate after a few weeks of decent moves, the market moved into the London session quietly trading higher on the Eurozone PMI better than expected number to touching above the 1.3040 with news buyers jumping on the number, having touched the highs we soon started drifting lower as Draghi made comments on OMT which is designed to keep yields below panic levels and not Government solvency, yeh right and this guy is in charge, the market reacted to it and started a deep decline into the NYK session touching below 1.2960 as the US data was released and all change, with a poor ISM manufacturing number the market jumped higher with everybody and his dog seen buying with a small short squeeze to above the 1.3100 level before dropping back below and a steady drift into the close around 1.3075.
  • GBP: As with the Euro we saw a steady rise in Cable as the market moved slowly from the 1.5200 area of the opening, with the markets remained quiet in Asia and we had to wait for the London session to see some movement, as we approached the opening the market started to move steadily higher pushing to the 1.5260 area before the figures were released peaking just short of 1.5290 after the GBP PMI better than expected. We drifted from this point and dropped back a little on the drag of the Euro which the GBP performed better against during this period with the pair dropping back from the 0.8550 area to below 0.8505 before the Euro started to recover, as with the Euro on the US data we saw a smart move higher taking the market through the 1.5370 level before dropping back and drifting into the close as the market became bigger sellers of USD’s across the board.
  • JPY: As with the Euro and Cable the Yen strengthened over the day Opening around the 100.50 level in line with Friday’s close and moved slightly higher to test above 100.70 before drifting off into the later session with Macro sellers predominating, we dipped to just above the 100.00 level before rising as EURJPY buying moved in with the good Eurozone number pushing the market back to the 100.50 area before the US numbers put paid to the rally and we fell quickly triggering a stop loss run to below 99.00 since early May and the move up we recovered a little towards the close but never looked like moving back through 100.00 as USD bulls disappeared.
  • AUD: The market gapped higher on the opening from Friday’s close opening some 35 pips above the close and trading slowly higher as with the other currencies against the USD, unlike the others it was a steady plod with the market shot having dropped so dramatically over the past week or so and buyers seemed reluctant to join the USD selling and any meaningful amounts, by London we’d moved to above the 0.9640 area and continued the steady rise until the US numbers and we had a big jump triggering some light stops but as noted no real liquidity to stop it rising to just short of the 0.9800 level into late NYK, not real tell on buyers and seemed a mixture with IMM doing a lot of work before settling back a little into the close in NYK to the 0.9760 area.

Yesterday’s premiership results

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

JPY         Capital Spending Q1 A -3.90% | C -5.50% | P -8.70%

AUD       TD Securities Inflation M/M May A 0.20% | P 0.30%

CNY        Non-manufacturing PMI May A 54.3 | P 54.5

AUD       Retail Sales M/M Apr A 0.20% | C 0.30% | P -0.40%

CNY        HSBC Manufacturing PMI May (F) A 49.2 | C 49.6 | P 50.4

CHF        SVME-PMI May A 52.2 | C 50.9 | P 50.2

EUR        Eurozone PMI Manufacturing May (F) A 48.3 | C 47.8 | P 47.8

GBP       PMI Manufacturing May A 51.3 | C 50.1 | P 49.8

USD       Construction Spending M/M Apr A 0.40% | C 1.00% | P -1.70%

USD       ISM Manufacturing May A 49 | C 50.5 | P 50.7

USD       ISM Prices Paid May A 49.5 | C 49.5 | P 50

 

For today

USDJPY
Topside: 99.80-99.90 light offers 100.00-100.30 light offers
Downside: 99.00-99.30 medium bids 98.70-99.00 mix to medium bids 98.40-98.70 light bids

EURUSD
Topside: 1.3080-1.3110 light offers 1.3120-1.3150 light buy stops
Downside: 1.3020-1.3050 light bids 1.2980-1.3010 light bids

EURJPY
Topside: 130.50-130.70 light offers
Downside: 129.20-129.50 light bids 128.70-129.00 light sell stops

 

AUDUSD

Topside: 0.9800-0.9850 light offers

Downside: Nothing showing

 

JPY:

Abe to urge review of Japan’s public fund strategy sources

Govt Suga: Expect Yen Fluctuations After Recent ‘Rapid Weakening’

Aso Says Not So Easy for Japan to Achieve 2% Inflation

Japan EconMin Amari: market adjustment natural after rapid moves

Amari: Dollar/Yen Moves Related To Weaker Than Expected US ISM

JPY/IDR:

Japan’s Dai-ichi agrees to buy 40% in Indonesia’s Panin Life

AUD:

Australia central bank stand pat on rates

Australia government spending fell 3.3% in Q1

Australia’s Current Account Deficit Narrows

KRW/JPY:

S.Korea says near-term surge in yen carry trade unlikely

KRW:

U.S. Institute Says N. Korea Set to Restart Reactor: Yonhap

NZD:

N.Z. Treasury Says Drought Will Reduce GDP by 0.7 points in 2013

GBP:

UK retail sales rebound in May BRC

CNY:

China to Reduce Intervention in Some Foreign-Investment Projects

China Yuan Forex Positions May Fall in May: Securities Journal

  • EUR: A more interesting day than yesterday however, the ranges are nothing to write home about on a bluey, opening just below the 1.3080 mark we drifted initially lower into the Tokyo opening and once the market tightened up we saw the first moves with EURJPY buying from the opening in Tokyo a little after the fact but it did enough to take the market to its highs above 1.3080 were we ran into the first of the offers and the demand disappeared and dropped off quickly to trade down into the 1.3050’s with good amounts changing hands as break sellers ran into the bids, we now hold around the 1.3060 area as we move to the London session.
  • GBP: Cable has held steady for the most part rising from the opening levels of 1.5320 to above 1.5340 before drifting back to the opening levels on light trading in line with the Euro for the most of the session, with EURGBP drifting some 10 pips lower from the opening.
  • JPY: USDJPY opened just short of the 99.60 level holding steady until Tokyo opening where we saw some EURJPY buying from Johnny come lately who managed to push the level to above the 99.80 area without ruffling too many feathers however, once that demand was over with the AUD current account number hit and the AUDJPY came under pressure with USDJPY dropping to below the 99.40 before recovering over the course of the remainder of the session to hold around the 99.70 area.
  • AUD: The market rose quickly on the close moving to above 0.9770 from the 60 area this was the high and since its drifted steadily lower as we moved towards the RBA announcement, dropping to the 0.9750 area and then dropping off a bit quicker once the Current account balance was released which to be honest was a little better than expected and obviously a forewarning of an unchanged rate when the announcement came, at this point we’d moved down to the 0.9710 bid area and holding, when the release hit the market as usual moved down, up and then held really in the area we started, everyone expected no change and no change they got, we touched close to 0.9690 and 0.9740 in the space of a minute as the market in Oz always does, and continues to hold close to the lows. With no surprises in policy.

 

Today’s data

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

GBP       BRC Sales Like-For-Like May A 1.80% | P -2.20%

JPY         Monetary Base Y/Y May  A 31.60% | C 24.30% | P 23.10%

AUD       Current Account Balance (AUD) Q1 A -8.5B | C -8.9B | P -14.7B

JPY         Labour Cash Earnings Y/Y Apr A 0.30% | C 0.60% | P -0.60%

AUD       RBA Rate Decision A 2.75% | C 2.75% | P 2.75%

08:30     GBP       PMI Construction May C 49.6 | P 49.4

09:00     EUR        Eurozone PPI M/M Apr C -0.20% | P -0.20%

09:00     EUR        Eurozone PPI Y/Y Apr C 0.30% | P 0.70%

12:30     CAD       Trade Balance (CAD) Apr C -0.60B | P 0.02B

12:30     USD       Trade Balance Apr C -$41.0B | P -$38.8B

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               99.87 | 99.33

EUR/USD             1.30805 | 1.3056

EUR/JPY               130.465 | 129.94

AUD/USD            0.9765 | 0.9690

NZD/USD             0.8105 | 0.8040

USD/CAD             1.0298 | 1.0278

EUR/CHF              1.2395 | 1.2380

USD/CHF             0.9494 | 0.9464

GBP/USD             1.5343 | 1.5312

EUR/GBP             0.85345 | 0.85225

 

Good luck

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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