Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 102.535 | EURUSD 1.38174 | EURJPY 141.677 | AUDUSD 0.9291 | NZDUSD 0.85857 | USDCAD 1.10324 | EURCHF 1.22058 | USDCHF 0.88336 | GBPUSD 1.6782 | EURGBP 0.82336 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               102.60 | 102.245

EUR/USD             1.38255 | 1.3815

EUR/JPY               141.71 | 141.33

AUD/USD            0.9302 | 0.9283

NZD/USD             0.8638 | 0.8580

USD/CAD             1.1034 | 1.1025

EUR/CHF              1.2211 | 1.2202

USD/CHF             0.8836 | 0.88265

GBP/USD             1.6790 | 1.6777

EUR/GBP             0.8236 | 0.8231

 

 

For today

  • EUR: The Euro did very little over the course of the session rising slightly from the 1.3815 lows close to the opening level to just beyond the 1.3825 levels, volumes were low and the market remains on hold waiting for the action against defla…. Low interest to be laid out for the market to see, as it stands the rate of the Euro is likely to be the cause of any action as until they do the thing is likely to continue rising. Offers appear above yesterday’s highs and build to the 1.3900 levels, weak stops likely behind that level before fresh offers move in 1.3920/30 areas going back a little. Downside sees bids around the 1.3800 levels with stops through a break of 1.3780 with a mixture likely to better bids 1.3720/30 levels.
  • GBP: Cable slowly made its way higher as the tone remains broadly the same after yesterday’s minor shake out. No real showers as volumes fail to meet expectations again. With offers above the 1.6830 levels going back to 1.6850 before the market sees any stops these appear only briefly as stronger offers appear around the 1.6900 (notwithstanding M&A action). Downside has bids from the 1.6770 levels before a mixture is seen with specs still hanging on for the Pharma announcements, 1.6720 area sees the next support level before moving in to a congested area from there to  the 1.6600 levels.
  • JPY: USDJPY having done so much work into the NYK session was again unable to move much beyond the opening 102.55 levels and struggled to maintain the levels deep into the Tokyo session, slowly sliding lower over the course of the session to base off the 102.25 levels as agreements between the US and Japan continue fail in the Trans Pacific Partnership continue. Support for the moment remains in the 102.20 levels with stops appearing on a break through the 101.80 area with a light mixture in between. With stronger bids likely to appear sub 101.50. Topside still has offers around the 102.70 level back to 103.00, weak stops above the area may be thinning out and leaving only another set of offers around the 103.30 levels.
  • AUD: The Oz has remained in a very tight range with very little going through on a light data/news day, the market opened around the 0.9290 levels and has pushed through 93 cents briefly and only by a pip or two on two occasions. Offers area above the 0.9310 level however, they are light with weak stops behind the area, better offers are not seen till above the 94 cent levels however, technically there is a gap on the charts that needs filling and we all know what a tidy mind the market has. Downside is a little light with 0.9270 levels showing support and congested thereafter with a good mixture.

Overnight News

USD/JPY:

Abe Says Japan, U.S. Agree to Continue Talks on TPP Pact

Obama Says Senkaku Islands Covered by U.S.-Japan Defence Treaty

JPY:

BOJ to Cut Fiscal 2014 Growth Forecast on Weak Exports: Sankei

Yasuhiro Yonezawa Said to Be GPIF Investment Committee Head

Japanese Sold Net 463.9 Billion Yen Overseas Debt Last Week

JPY/CNY:

Agents for Japan’s Marubeni Detained in China

NZD:

NZ CB hikes 25 bps, signals more to come

N.Z. Home-Loan Approvals Fall 8.4% Y/Y, RBNZ Survey Shows

CNY:

China SAFE Official Says Capital Inflows Currently Slow: MNI

MSCI’s Plan Mocked as China Seen Unready for Global Status

 

Today’s data

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

NZD       RBNZ Rate Decision A 3.00% | C 3.00% | P 2.75%

JPY         Corporate Service Price Y/Y Mar A 0.70% | C 0.70% | P 0.70%

CNY        Conference Board Leading Index Mar A 1.20% | P 0.90%

06:00     CHF        Trade Balance (CHF) Mar C 2.79B | P 2.62B

08:00     EUR        German IFO – Business Climate Apr C 110.4 | P 110.7

08:00     EUR        German IFO – Current Assessment Apr C 115.6 | P 115.2

08:00     EUR        German IFO – Expectations Apr C 105.8 | P 106.4

10:00     GBP       CBI Reported Sales Apr C 17 | P 13

12:30     USD       Durable Goods Orders Mar C 2.00% | P 2.20%

12:30     USD       Durables Ex Transportation Mar C 0.60% | P 0.20%

12:30     USD       Initial Jobless Claims (APR 19) C 315K | P 304K

 

Harry Hindsight

  • EUR: The Euro caught the move with the AUD numbers rallying to above the 1.3815 level from close to the figure opening as EURAUD buying moved into the market, this was really the only thing going on in the market for the Euro and it remained dead in the water. The move into the grey hours saw the market move to above the 1.3835 levels and into the waiting offers, as the market lightened its short positioning into the numbers. French PMI sent the market quickly lower as they hit worse than expected and the market moved back to its lows, German numbers 30mins later sent the market back higher to push to the 1.3855 level with a mini short squeeze as the market whipped around. From the London on though the market settled into a slow drift through the session to drop back to the 1.3815 levels and a quiet evening session once London had left for the day. With analysts continuing to speculate on what form any measures to fend off deflation may be, with Draghi slipping twice in a speech today getting as far as Defla… before correcting himself for low inflation, however, both Draghi and Weidmann, head of Germany’s Bundesbank continue to insist that there is no such pressure on the economy.
  • GBP: Cable moved steadily lower from the early rises triggered by the AUD numbers, having moved to just above the 1.6835 levels from the opening 1.6825, having reached the highs the market stalled and flat lined into the grey hours where decent German numbers sent EURGBP higher with Cable slipping as the weak side of the equation, the market moved steadily into the London session slowly moving lower with little interest and the Pharma mergers and acquisitions seemingly going off the boil and so too the support for the Cable. Triggering weak stops through the 1.6800 level and another set below 1.6780 the market bottomed out just below the 1.6765 level into the early part of the NYK session; from there it remained very quiet as the US market moved through to the close holding the 1.6780 area for the finish.  Minor gyrations around the numbers and while PSBR was a little better than expected CBI trends balanced that later in the session.
  • JPY: The market opened around the 102.60 levels and slowly made its way to the 102.70 areas and the waiting offers, again the market was unable to find the impetus to push through the levels and after a couple of hours found itself on the back foot as the AUD data release sent AUDJPY carry trade longs scuttling for safety as the AUD dropped dragging the USDJPY less dramatically lower, once the damage was done the market settled into a steady rise once again basing off the 102.50 level to attempt to recapture the losses. The move into London saw the market avid sellers of the USDJPY and the market quickly moved lower triggering weak stops as the market dropped to the 102.20 levels in the early morning session before steadying and holding the area for a good portion of the day. Late NYK started to see fresh buying enter the market and the pair slowly started to make its way higher again steadily rising to its previous levels into the close around the 102.55 levels.
  • AUD: It was all about the inflation numbers, the market opened around the 0.9365 levels and slowly moved to the mid 70’s as the market perceived very little, the numbers when they hit, better than expected left the market scrambling to cover longs as the market dropped quickly gapping from the highs to below 0.9350 and continuing to drop quickly to 93 cent before catching its breath, the market seemed to absorb the selling at this point and we held for an hour or so around the levels before it broke lower for the second time and analyst released their slant on the market and the ability now for the RBA to cut interest rates more readily if the strong currency continues. The markets moves were over and done with from that point and although we made a new low just below 0.9270 the market traded around the 0.9280 levels from late in Asia all the way through to the close in NYK rising slightly to the 0.9290 on the close as some light profit taking appeared.

 

Yesterday’s premiership results

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

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

AUD       CPI Y/Y Q1 A 2.90% | C 3.20% | P 2.70%

AUD       CPI RBA Trimmed Mean Q/Q Q1 A 0.50% | C 0.70% | P 0.90%

AUD       CPI RBA Trimmed Mean Y/Y Q1 A 2.60% | C 2.90% | P 2.60%

AUD       CPI RBA Weighted Median Q/Q Q1 A 0.60% | C 0.70% | P 0.90%

AUD       CPI RBA Weighted Median Y/Y Q1 A 2.70% | C 2.90% | P 2.60%

CNY        HSBC China Manufacturing PMI Apr (P) A 48.3 | C 48.3 | P 48

EUR        French Manufacturing PMI Apr (P) A 50.9 | C 51.9 | P 52.1 | R 51.8

EUR        French Services PMI Apr (P) A 50.3 | C 51.3 | P 51.5

EUR        German Manufacturing PMI Apr (P) A 54.2 | C 53.8 | P 53.7 | R 53.7

EUR        German Services PMI Apr (P) A 55 | C 53.3 | P 53

EUR        Eurozone Manufacturing PMI Apr (P) A 53.3 | C 53 | P 53

EUR        Eurozone Services PMI Apr (P) A 53.1 | C 52.5 | P 52.2

GBP       BoE Minutes A 0–0—9 | C 0–0—9 | P 0–0–9

GBP       Public Sector Net Borrowing (GBP) Mar A 4.9B | C 8.5B | P 7.5B | R 7.0B

GBP       CBI Trends Total Orders Apr A -1 | C 7 | P 6

CAD       Retail Sales M/M Feb A 0.50% | C 0.50% | P 1.30% | R 0.90%

CAD       Retail Sales Less Autos M/M Feb A 0.60% | C 0.50% | P 1.00% | R 0.50%

USD       New Home Sales Mar A 384K | C 450K | P 440K | R 449K

USD       Crude Oil Inventories A 3.5M | C 2.6M | P 10.0M

 

Good Luck,

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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