Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 100.061 | EURUSD 1.30808 | EURJPY 130.892 | AUDUSD 0.96482 | NZDUSD 0.79986 | USDCAD 1.0342 | EURCHF 1.23863 | USDCHF 0.94694 | GBPUSD 1.53128 | EURGBP 0.85424 |

 

Harry Hindsight

  • EUR: The Euro drifted from the opening 1.3075 in Asia moving steadily lower with a brief spike above 1.3080 however, in a somewhat limited action with good volumes changing hands towards the lows the market traded to just below the 1.3050 area before finding some respite on the opening in London, Macro sellers were seen selling into the supportive bids on the lows having failed the lows we saw a minor short squeeze on the opening in London and the market was taken quickly to above the previous high and from there with very little news we saw EURJPY buying effecting the early part of the session. The market seemed set at this point in pushing through the 1.3100 level and continued slowly to climb towards the area however, while we did break it briefly the sellers again seemed to be willing to short the common currency around the area and we ran out of time with the US trade balance being released slightly better than expected and USD became king for a couple of hours as the Euro moved back to test below 1.3045, while volumes were ok the tight range kept things in perspective and we finished the day only just above the opening levels.
  • GBP: We opened in Asia around the 1.5315 level and moved slightly higher into the Tokyo session as BRC sales kicked in with a good recovery from the previous month, which shouldn’t be all that surprising, we touched above the 1.5340 level before the gloss was removed and we moved back steadily to the opening area, from there it’s been a steady drift lower throughout the remainder of Asia and deep into the London session before tagging along for the steady climb back to nearly unchanged on the day, EURGBP moved from its lows in early Asia around the 0.8520 areas to above the 0.8555 highs before settling back for a modest gain on the day around the mid 40’s
  • JPY: USDJPY rose steadily from the opening levels below 99.60 moving quickly into the Tokyo opening to above the 99.80 before stalling and dropping back through the lows to trade below 99.40 on what seemed to be AUDJPY position squaring before the RBA announcement, from there it was a steady climb with EURJPY doing some work in the grey hours before London opened officially to touch above 100.40 for the high on the day, from that point we traded sideways with the market contained in the 99.80-100.40 range for most of the session with tight moves for the most part into the close in NYK around the 100.00 areas, with the Government calling on public pensions to increase targeted stock holdings according to government officials (unnamed of course).
  • AUD: The Oz had its moments we moved from the opening above 0.9770 steadily lower over the first few hours of trading as long positions were closed out in front of the RBA announcement, the current account did little to alleviate the selling and by the time we reached the hour we were trading slightly sub 0.9720 and as expected no change for the rate or the policy, as we come to expect with the Oz wild move down to 0.9690 and then up to just short of 0.9740 before settling to the 0.9720 area and trading up a little over the next hour or so into the grey hours where we saw the sellers reappear as the bias to cut remains it dropped to sub 0.9700 as we moved into the London session and apart from an hour or so remained weak and continued to trade lower down to the 0.9620 area as each session read the same reports and sold fresh shorts once we had hit the lows we some brief profit taking into the last few hours in NYK and the market closed around the 0.9650 area.

 

Yesterday’s premiership results

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

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%

GBP       PMI Construction May A 50.8 | C 49.6 | P 49.4

EUR        Eurozone PPI M/M Apr A -0.60% | C -0.20% | P -0.20%

EUR        Eurozone PPI Y/Y Apr A -0.20% | C 0.30% | P 0.70%

CAD       Trade Balance (CAD) Apr A -0.60B | C -0.60B | P 0.02B

USD       Trade Balance Apr A -40.3B | C -$41.0B | P -$38.8B

 

For today

USDJPY:
Topside: 100.60-100.90 light offers
Downside: 99.30-99.65 light mix 98.90-99.30 light bids

EURUSD:
Topside: 1.3110-1.3140 light offers 1.3140-1.3180 light buy stops 1.3200-1.3230 light mix
Downside: 1.3030-1.3060 light sell stops 1.2990-1.3020 light bids

EURJPY:
Topside: 131.60-131.95 light offers
Downside: 130.30-130.60 light sell stops

AUDUSD:
Topside: 0.9700-0.9730 light buy stops
Downside: 0.9570-0.9600 light bids

 

JPY:

Japan’s New Growth Strategy: Main Points

Japan Govt To Target 2% Average GDP Growth Through FY22 -Nikkei

Japan to issue up to Y300 bln inflation-linked bonds sources

AUD:

Australia’s Slowest Growth Since ’11 Spurs Rate-Cut Bet: Economy

CNY:

China services growth modest, adds to economy concerns

CNY/EUR:

China hits back at EU over solar panel duties: While FT reports that EU remove punitive tax

NZD:

NZ commodity prices fall in May – ANZ survey

New Zealand residential building rises most in 10 years in Q1

GBP:

UK shop prices fall for first time since 2009 -BRC

 

 

  • EUR: Another reasonably quiet session in Asia with the pair struggling to break through the 1.3100 level stalling just above 1.3090 and unable to break down through the bottom side holding in the mid 1.3060’s with lacklustre volumes changing hands unlike yesterday’s break attempts. For the moment we hold just above the opening 1.3080 area as we move towards the London session, with Eurozone preliminary GDP to be announced.
  • GBP: Cable opened around the 1.5315 area and struggled in the early part of the session with GBPJPY squeezing the Cable lower as USDJPY rose, having moved to below the 1.5295 area USDJPY began to drift lower into the middle of Tokyo and this allowed Cable to move higher again pushing up to above the 1.5330 area in a rather confined day. As we head towards London the market is holding just off its highs.
  • JPY: USDJPY opened around the 100.00 area and in early play moved steadily higher pushing initially to just below 100.40 before running into the first set of offers and some selling in the AUDJPY after the GDP figures for the first quarter were released, bouncing smartly off the 100.00 to move quickly to above the 100.40 level however, once the high was hit the market dropped quickly from that point and we started to see stops triggered as the market dropped through 100.00 with only a minor blip we ran to below the 99.70 level and triggered the bulk of the resting stop losses that could be seen in the market before holding the area and moving slowly back into the 99.80’s and as we head to London again we are testing through the low areas.
  • AUD: The Oz opened around the 0.9650 area and pottered around into the Tokyo open, as we got closer to the release the market started to fall away as if some already knew what was coming falling away to the 0.9630 area by the time the news came out we dropped quickly to 0.9605 and almost immediately bounced to the opening levels. While the market expected 0.80% given the strength of everyone’s economies you could be forgiven for the shortfall, once we’d recovered the market remained fairly static and one would suspect that strength in the Yen took over as the dominant factor for the day and the Oz remains around those opening levels as we move to London.

Today’s data

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

GBP       BRC Shop Price Index May A -0.10% | P 0.40%

AUD       GDP Q/Q Q1 A 0.60% | C 0.80% | P 0.60%

08:00     EUR        Eurozone PMI Services May (F) C 47.5 | P 47.5

08:30     GBP       PMI Services May C 53.2 | P 52.9

09:00     EUR        Eurozone GDP Q/Q Q1 (P) C -0.20% | P -0.20%

09:00     EUR        Eurozone Retail Sales M/M Apr C -0.20% | P -0.10%

12:15     USD       ADP Employment Change May C 170K | P 119K

12:30     CAD       Building Permits M/M Apr C -2.30% | P 8.60%

12:30     USD       Non-Farm Productivity Q1 (F) C 0.70% | P 0.70%

12:30     USD       Unit Labour Costs Q1 (F) C 0.50% | P 0.50%

14:00     USD       Factory Orders Apr C 1.40% | P -4.00%

14:00     USD       ISM Non-Manufacturing Composite May C 53.5 | P 53.1

14:30     USD       Crude Oil Inventories P 3.0M

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               100.47 | 99.615

EUR/USD             1.3097 | 1.3065

EUR/JPY               131.40 | 130.44

AUD/USD            0.9658 | 0.9605

NZD/USD             0.8061 | 0.8005

USD/CAD             1.0365 | 1.0332

EUR/CHF              1.24105 | 1.2386

USD/CHF             0.9493 | 0.9460

GBP/USD             1.5333 | 1.5290

EUR/GBP             0.8547 | 0.8540

 

Good luck

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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