Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close Wellington open

USDJPY 101.621 101.505-715 | EURUSD 1.38849 1.3840-42 | EURJPY 141.112 140.60-70 | AUDUSD 0.93947 0.9385-95 | NZDUSD 0.86882 0.8667-0.8700 | USDCAD 1.09803 1.0957-75 | EURCHF 1.21624 1.2150-565 | USDCHF 0.87595 0.87755-80 | GBPUSD 1.67306 1.6702-41 | EURGBP 0.82987 0.8283-0.83175 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               101.72 | 101.42

EUR/USD             1.3861 | 1.383

EUR/JPY               140.86 | 140.43

AUD/USD            0.9409 | 0.9377

NZD/USD             0.8699 | 0.8672

USD/CAD             1.0993 | 1.0958

EUR/CHF              1.21585 | 1.2143

USD/CHF             0.87865 | 0.8765

GBP/USD             1.6745 | 1.6709

EUR/GBP             0.8285 | 0.8272

 

Overnight News

JPY:

Suga: Not Aware of Any Abe, Kuroda Meeting for This Month

USD/RUB/UAH:

Russia ’Spreading Fiction; We Must Stop This Tonight,’ Power

UN/UAH:

Situation in Ukraine Now ‘More Combustible than Ever,’ UN Says

UAH/RUB:

Ukraine Govt ‘Severely Challenged’ by East Situation: Sergeyev

GBP:

UK House Prices Hit Fresh Highs Again In April-Rightmove

U.K. GDP to Rise 2.9% This Yr. Led by Consumer: EY Item Club

NZD:

New Zealand services activity at 6 1/2-yr high in March – survey

 

For today

  • EUR: The weekend news that Draghi will unleash a fresh wave of stimulus if the currency continues to rise caught the market a little by surprise however, it still remains to be seen, added to which fresh unrest in the Ukraine continue to raise tensions in the area and a slight unrest in the markets. The market opened gapped open around the 1.3750 area dipping in the first couple of hours to the low 1.3740’s before moving back to the open with 1.3760 highs. Offers are now scattered on the way to the 1.3900 level where strong offers remain, even with a move through the level offers continue to the 1.3930 level not so strong but consistent around the market. The downside is a little more patchy and thinner than previous however; bids remain towards the 1.3830 level before stops start to make an appearance with light bids through the 1.3800 levels. The pre-opening found the bids around the mix 1.3825 areas with the market moving back to the 1.3850’s areas for the opening.
  • GBP: Cable seemed to be less reactive to the weekend news on the Draghi comments and the Ukraine situation. The market opened only slightly lower than the close on Friday. The market held the 1.6730’s for much of the day dipping to test the support levels again around 1.6720 area before bouncing to the opening levels around 1.6735. With the bids still remaining on the lows and down to the 1.6710 level before we start to see weak stops, more stops appear below the 1.6700 and then a light mixture over the next 50 pips or so. The topside remains fairly weak however, sentiment is for a lower GBP because of the disparities in the economic recovery showing a white underbelly. Offers around the 1.6780 levels and into the 1.6810 areas, before we start to see some stops appearing. With a light mixture to the 1.6650 areas.
  • JPY: USDJPY remained fairly quiet for the most part with early selling of EURJPY sellers entering the market played catch up to the pre-market levels. The USDJPY moved down to the 101.45 area from the opening 101.60 areas, it held the lows for a good period before rising towards the opening levels in what was a quiet session for the USDJPY. The topside sees light stops appearing above the 101.80 areas and into the 102.00 levels, some light mix from there until better stops appear above the 102.20 levels however, this is short lived as offers come in quickly from the 102.30 levels. Downside sees light bids through the 101.40 levels continuing and getting a little stronger to the 101.20 area where stops now make and appearance, below this level more stops start to move into the market with better bids to the 100.70 level. Large stops below the level are now rumoured.
  • AUD: With EURJPY sellers the market dropped in the Oz as AUDJPY selling was triggered moving the Oz lower from the opening in line with Fridays close, the market stabilized around the 0.9380 levels before moving quickly back to above the opening level to trade just below the 94 cent levels. Offers make an appearance in the run to the 0.9430 area again however; through the level stops make an appearance with a mixture thereafter. The downside has little showing with stops below the lows around the 0.9360 levels.

Today’s data

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

09:00     EUR        Eurozone Industrial Production M/M Feb C 0.30% | P -0.20%

12:30     USD       Advance Retail Sales Mar C 0.80% | P 0.30%

12:30     USD       Retail Sales Less Autos Mar C 0.50% | P 0.30%

14:00     USD       Business Inventories Feb C 0.50% | P 0.40%

 

Weekend News

UAH:

Ukraine Tensions Mount as Gunmen Fire on Police Stations in East
G20:

G-20 Central Banks Vow Better Guidance on Monetary-Policy Shifts
G-20 Nations Fall Short of Meeting Growth Pledge, Hockey Says
EUR:

Draghi: ECB Will Unleash Stimulus If Euro Strengthens Further
Noyer Says ECB Ready to Use All Instruments If Necessary
Germany Warns European Markets Not to Celebrate Prematurely
CNY:

PBOC’s Yi Says China’s Growth Rate Is Within ‘Reasonable Range’
China Capable of 7%-8% Annual Growth in Next Decade, Zhu Says
JPY:

Abe Said Planning to Discuss Monetary Policy with Kuroda: WSJ
Japan’s Aso Says Companies Aren’t Sure Deflation Is Over: WSJ
Orix Said to Consider Bid for StanChart Consumer Credit Unit
Sharp Considering Selling 200 Billion Yen of New Shares: Asahi
CHF:

SNB’s Jordan Says Minimum Exchange Rate Is Extremely Important
GBP:

U.K. Homeowners Grow More Positive on Selling as Prices Increase

 

Harry Hindsight

  • EUR: From the opening of 1.3885/88 areas the market limped into the Tokyo session with EURJPY dominating the play and a push to above the 1.3895 levels however, it wasn’t until the grey hours that the market attempted the push through the 1.3900 level, it briefly pushed through and then pushed harder on the London opening rising to just above the 1.3905 levels. German CPI final levels were unchanged and did little for the market place, before the market began to reject the levels. The market fell back steadily over the next hour to the 1.3880 levels. A brief attempt higher before the NYK session began ended just below the 1.3900 level and the move into NYK saw the pair dropping quickly with stronger inflationary news in the US helping the market to the day’s lows around the 1.3865 levels so overall not a great range. The market made its final attempt higher over the majority of the NYK session moving to the 1.3900 level for the third and final time during the day and staying in touch with the level for over an hour before giving up for a second time and easing back to the 1.3885 levels for a not far from unchanged day.
  • GBP: Cable faired less favourably than the Euro, on the back foot from the start of the session the market drifted from the opening 1.6780 levels slowly dropping into the 1.6760’s in mid Tokyo and again during the grey hours, there was an early recovery into the London session to post the highs around the 1.6787 levels however, it was short lived and the move towards NYK saw strong buying in the EURGBP which lifted from the 0.8280 levels to the 0.8310 level in late NYK with the Cable being pushed lower in the early part of the NYK session to the 1.6720 levels and the support area. While the market pushed off from the levels and moved back to the 1.6750 level it was slow going and was out performed by the Euro for most of the day.
  • JPY: Having seen a dip from the opening 101.55 area the market moved away from the lows of 101.33 to push higher as Japanese banks moved into the early part of the session, taking the market to above the 101.70 levels before holding into the grey hours around the 101.60 and unable to push any higher once the demand finished. London picked up the mantle and ran quickly higher to above the 101.85 which was likely to be a late piece of work from Tokyo going through. The market held above the 101.70 level then for a few hours before beginning to fall back and then quickly hitting the previous levels, having failed the topside and returned to the holding levels in Tokyo the market then made a move to the downside squeezing out many of the short term longs and although the market never extended the lows the rest of the day struggled to recapture the gains making it back to the 101.60 levels into the close. Several real money and medium term buyers were seen in the market taking advantage of the low rate during the day.
  • AUD: The Oz had its own woes most notably the release of the China numbers, sending the market quickly lower from what had been a stable market just above the 0.9410 levels, we dropped quickly to below 0.9380 and continuing slowly to the mid 0.9360’s, the market remained around the 60/80’s for a good portion of the Asian session and only once the market moved into London did the market start to recover moving steadily higher and pushing through the 94 cent level and causing a mini short squeeze to above the 0.9425 levels as the shorts were quickly removed, having hit the highs the market as you would expect then collapsed back to just below the 94 cent level and traded around the level for much of the NYK session and into the close.

 

Friday’s premiership results

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

JPY         Japan Money Stock M2+CD Y/Y Mar A 3.50% | C 4.00% | P 4.00%

JPY         Domestic CGPI Y/Y Mar A 1.70% | C 1.70% | P 1.80%

CNY        CPI Y/Y Mar A -2.30% | C -2.20% | P -2.00%

CNY        PPI Y/Y Mar A 2.40% | C 2.40% | P 2.00%

EUR        German CPI M/M Mar (F) A 0.30% | C 0.30% | P 0.30%

EUR        German CPI Y/Y Mar (F) A 1.00% | C 1.00% | P 1.00%

USD       PPI M/M Mar A 0.50% | C 0.10% | P -0.10%

USD       PPI Y/Y Mar A 1.40% | C 1.20% | P 0.90%

USD       PPI Core M/M Mar A 0.60% | C 0.20% | P -0.20%

USD       PPI Core Y/Y Mar A 1.40% | C 1.10% | P 1.10%

USD       U. of Michigan Confidence Apr (P) A 82.6 | C 81.5 | P 80

 

Stay lucky

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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