Daily FX Market Commentary

Andy Harrison

 

 

Good morning,

 

LMAX Close

USDJPY 102.486 | EURUSD 1.38515 | EURJPY 141.955 | AUDUSD 0.92579 | NZDUSD 0.85374 | USDCAD 1.10281 | EURCHF 1.21929 | USDCHF 0.88028 | GBPUSD 1.68069 | EURGBP 0.82416 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               102.54 | 102.475

EUR/USD             1.3865 | 1.3849

EUR/JPY               142.12 | 141.955

AUD/USD            0.9261 | 0.9227

NZD/USD             0.8544 | 0.8520

USD/CAD             1.1031 | 1.1019

EUR/CHF              1.2195 | 1.2190

USD/CHF             0.88035 | 0.8796

GBP/USD             1.6817 | 1.6807

EUR/GBP             0.8245 | 0.82405

 

For today

  • EUR: The Euro rose steadily through the session with the Japanese out for the day there was never likely to be much in the market and having already been close to the 1.3880 level the market found no problem getting to the 1.3865 levels where the market holds around as we move to the grey hours. Offers from above the highs going back to 1.3900 increasing in size the closer you get, stops likely to appear on a break above the 1.3910-20 level however, likely to see top pickers entering the market and verbal intervention from the ECB. Downside has light bids to the 1.3800 level with light stops immediately behind there with better bids running from the 1.3780 levels to 1.3750.
  • GBP: As with the Euro there was a steady rise in Cable without the Tokyo market volume has been light, moving from the opening 1.6805 areas we climbed to just below the 1.6820 level and have held in the 1.6810/18 range the whole session, the market tested the resolve of the offers around the 1.6850 level yesterday however, the offers go a little deeper and a break above the 1.6900 level will see the stops, with the market underpinned by the Pfizer/Zeneca story the downside sees light bids from the current levels deep into the 1.6700 handle and only a categoric no deal is likely to upset the applecart.
  • JPY: Dead in the water with no real money the speculators have stayed away and are playing pokemon or something instead. Opening around the 102.50 areas the market has been stuck in a very narrow range around 7 pips in all, topside sees offers to the 103.00 level from above the 102.60 areas with only weak stops behind the level before running into another set of offers around the 103.20 level onwards, Downside has light bids to the 102.00 level with stops appearing with a decent break through the 101.80 level however, from there it becomes a little mixed with bids not really dominating until the 101.30/20 area.
  • AUD: While the range has been better the AUD has been on its own with no carry trade buying to mention and very little going on apart from light AUD/NZD selling in light of a slightly better trade balance for the Kiwi’s, moving from the opening levels around the 0.9260 to the mid 0.9220’s with weak stops triggered along the way. The market held the lows for a time before trading steadily higher towards 0.9250 where the market sees offers holding the market for the moment. Topside holds very little in the way of surprises with 0.9300/20 holding light offers with stops not showing until a break above the 0.9330 levels then light offers all the way up thickening towards the 94cent level. Downside holds light bids until the 92 cent level then weak stops falling to the 0.9160 level and better support.

Overnight News

JPY/CNY/KRW:

Japan, China, S. Korea May Hold Central Bank Gov Meeting: NHK

JPY:

Amari Says Japan, U.S. Need to Meet Prior to TPP Meeting: Kyodo

JPY/RUB:

Japan Imposes Sanctions against Russia over Ukraine: Ministry

JPY/INR:

Japan’s Itochu in Talks to Buy Redington India for $500m: ToI

NZD:

New Zealand Trade Surplus Widens; Exports Exceed NZ$5 Billion for First Time

RBNZ Says March Low-Deposit Loans 4.8% of Total New Lending

NZ opposition, in election mode, proposes wider central bank remit

AUD:

Australia PM flags temporary tax to tackle swelling deficit

 

Today’s data

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

NZD       Trade Balance (NZD) Mar A 920M | C 900M | P 818M

06:00     EUR        German GfK Consumer Sentiment May C 8.5 | P 8.5

08:00     EUR        Eurozone M3 Y/Y Mar C 1.40% | P 1.30%

08:30     GBP       GDP Q/Q Q1 (A) C 0.90% | P 0.70%

08:30     GBP       Index of Services 3M/3M Feb C 0.90% | P 0.90%

09:00     EUR        Eurozone Consumer Confidence Apr (F) C -8.7 | P -8.7

09:00     EUR        Eurozone Economic Confidence Apr C 102.9 | P 102.4

09:00     EUR        Eurozone Industrial Confidence Apr C -3.1 | P -3.3

09:00     EUR        Eurozone Services Confidence Apr C 4.8 | P 4.2

12:00     EUR        German CPI M/M Apr (P) C -0.10% | P 0.30%

12:00     EUR        German CPI Y/Y Apr (P) C 1.40% | P 1.00%

13:00     USD       S&P/Case-Shiller Composite-20 Y/Y Feb C 12.90% | P 13.24%

14:00     USD       Consumer Confidence Apr C 83 | P 82.3

 

Harry Hindsight

  • EUR: With weekend news pitting one ECB member against another whether QE is likely or even affective for Europe remains to be seen, the net effect is the market remains becalmed above the 1.3800 level and adding further pressure on the ECB to do something constructive. A strengthening USDJPY pushed the Euro lower in early Asia, moving from the 1.3843 opening to the 1.3815 level in a strong move in Tokyo, the market then held the 1.3825 level for the balance of the session in quiet trading. As the market talks about additional liquidity for the market the actual liquidity continues to drop hitting record lows of 86.6B and the market reacted with a quick strong buy to the 1.3875 levels and pushing through waiting offers, the market struggled a little as fresh two way trading held the levels into early NYK and the market topped just short of the 1.3880 levels before dipping as the day wore on. An increase in pending home sales helped the USD rally and the Euro dipped back below the 1.3850 level and held the area for the rest of the session in a quiet evening session once London left for the day.
  • GBP: In similar movements to the common currency GBP slipped only slightly against the Euro and gained the move in Cable, dipping in early trading as USDJPY firmness pushed Cable to below the 1.6780 from the opening above 1.6800 this was only temporary and the market slowly made its way over the course of the Asian session back towards the opening levels. With German import prices dropping again the market started to move quickly higher adding to which the liquidity problems showing in the Eurozone Euro’s dragged GBP with it and the market moved to above the 1.6850 levels into the London session proper. The market then stalled with no impetus to push higher through some weak offers and although we made a fresh high above the 1.6855 level the move into NYK saw a decent US pending home sales number and the USD rose quickly to offset the gains the majors had made in the earlier sessions. The market ended the day in a quiet session holding just above the opening levels and pretty much in line with Friday’s closes. EURGBP held for the most part with only minor gains lifting from the 0.8230 areas to just above the 0.8240’s, a brief stab lower during the early moves in Cable higher on the back of Pfizer/Zeneca took the pair to the 0.8218 levels before rebounding just as quickly to the previous levels in limited action.
  • JPY: After a slow star the USDJPY eventually started to move higher, dipping down from the opening 102.20 level the market hit 102.05 before the buyers appeared once they did it was a steady ride higher with the market pushing through cross selling and peaking in the grey hours above the 102.25 levels. London steadily bought the market and the move into NYK saw USD rally against the majors across the board to push USDJPY above the 102.60 levels to set the highs with mostly fund buying doing the damage. With the market closed tomorrow the market also saw decent weekend USD buying adding to the move, it did have a little set back along the way as the pair moved through the NYK option cut with gamma sellers however, this was quickly reversed and the market finished the day around the 102.50 areas.
  • AUD: During the Asian session AUDJPY buying was particularly strong, and as the USDJPY rose the AUD went with it in steps. Rising from the opening 0.9275 levels the market slowly pushed above the 0.9290 level holding around the levels for a great portion of the session before rising to the highs and triggering weak stops through the 93 cent level however, offers soon materialized in the market at the highs and it broke down in early London, reversing the moves in a similar fashion to the rises, holding for a period around the 0.9280 level before triggering weak stops from the earlier buyers as the US numbers were released dropping to 0.9265 and then drifting lower from that point. The market eventually came to rest just below the 0.9250 levels and held there for a couple of hours before rallying into the close to finish only slightly lower on the day.

Yesterday’s premiership results

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

JPY         Retail Trade Y/Y Mar A 11.00% | C 10.80% | P 3.60%

EUR        German Import Price Index M/M Mar A -0.60% | C -0.10% | P -0.10%

USD       Pending Home Sales M/M Mar A 3.40% | C 0.70% | P -0.80%

 

Good Luck,

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

Any opinions, news, research, analyses, prices or other information ("information") contained on this Blog, constitutes marketing communication and it has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Further, the information contained within this Blog does not contain (and should not be construed as containing) investment advice or an investment recommendation, or an offer of, or solicitation for, a transaction in any financial instrument. LMAX Group has not verified the accuracy or basis-in-fact of any claim or statement made by any third parties as comments for every Blog entry.

LMAX Group will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. No representation or warranty is given as to the accuracy or completeness of the above information. While the produced information was obtained from sources deemed to be reliable, LMAX Group does not provide any guarantees about the reliability of such sources. Consequently any person acting on it does so entirely at his or her own risk. It is not a place to slander, use unacceptable language or to promote LMAX Group or any other FX and CFD provider and any such postings, excessive or unjust comments and attacks will not be allowed and will be removed from the site immediately.