Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 101.734 | EURUSD 1.36557 | EURJPY 138.927 | AUDUSD 0.92256 | NZDUSD 0.85602 | USDCAD 1.08906 | EURCHF 1.22109 | USDCHF 0.89412 | GBPUSD 1.68696 | EURGBP 0.80948 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               101.86 | 101.72

EUR/USD             1.3658 | 1.3641

EUR/JPY               139.035 | 138.87

AUD/USD            0.9250 | 0.9216

NZD/USD             0.8575 | 0.8556

USD/CAD             1.0898 | 1.0891

EUR/CHF              1.22145 | 1.2210

USD/CHF             0.89505 | 0.89415

GBP/USD             1.6872 | 1.6854

EUR/GBP             0.8096 | 0.80905

 

For today

  • EUR: The Euro faced uncertain movement as speculation and exit polls turned the market one way and then the other however, all said and done the market remained in a reasonably tight range with the 200 DMA holding just below the 1.3640 level. Apart from a brief move to below 1.3645 the market has stayed centred around the 1.3650 level for the session but looks to be perilously close to the level, saying that the market still sees bids from the lows onwards and into the 1.3630 levels, a push through the level will see some breakout sellers appear in the market and 1.3600 is then opened up and the range from earlier in the year. Topside offers have slowly drifted lower and are more centred around the 1.3700/10 areas with weak stops above that level, more light selling then appears and all though it’s a bit of  a distance now 1.3800 has stronger offers.
  • GBP: Cable moved lower with the Euro, with some strong selling as the vote counting continues early exit polls in the south originally showed little gains by the independence party however, as the counting in the north of England started to impact, local elections as you would expect sees large gains by the opposition as is the normal. The Cable dipped from the opening 1.6870 levels into the mid 1.6850’s before a slow recovery and a push slightly above the opening as the EURGBP continues to slide. Topside has offers above the 1.6910 areas which were reached yesterday but not really pushed; these offers extend into the mid and upper 1.69 with very little in the way of stops showing until the 1.70 areas are penetrated. Downside sees bids 1.6850 holding yesterday, better bids seen down around the 1.6820 levels and then patchy until deep into the 1.6700 levels.
  • JPY: The USDJPY was dead in the water with little movement over the session moving higher from the opening 101.73/74 areas to the mid 101.80’s and into offers too strong for a Friday session. The market since then has held around the 101.75/80 levels into the grey hours. Offers from the highs to 102.10 levels before the market sees light stops and then patchy with offers dominating until the market gets close to 103.00 where better offers appear. Downside sees light biding around the 101.40 area and stronger bids down from 101.00 into the 100.80 levels suspected stops on a break below the level but again limited to the 100.50 areas.
  • AUD: The market opened around the 0.9225 level, so very little different to yesterday’s opening, the market dipped to just below the 0.9220 levels before rising steadily to touch the 0.9250 levels as the carry trade became the focus of a dull local market. As we move into the grey hours there is little change holding around the 0.9240 levels. Downside bids from the 0.9210 levels with the 92 cent level the break up area from March, light stops below 0.9180 and opening up the 91 cent level. The topside has limited offers above the 0.9250 levels and better ones showing above the 0.9275, light mixtures from that point on with range players likely to fade any rallies.

Overnight News

JPY:

Japan Q1 output gap narrows to -0.3% as domestic demand improves

EUR:

Greece Rating Raised to B at Fitch; Outlook Stable

Spain Credit Rating Raised to BBB from BBB- at S&P

CHF:

Switzerland Affirmed at AAA/A-1+ at S&P; Outlook Remains Stable

TRY:

Turkey Ratings Affirmed at S&P; Outlook Remains Negative

NZD:

N.Z. Consumer Confidence Fell to a Seven-Month Low in May: ANZ

 

Today’s data

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

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

06:00     EUR        German GDP Q/Q Q1 (F) C 0.80% | P 0.80%

08:00     EUR        German IFO – Business Climate May C 110.9 | P 111.2

08:00     EUR        German IFO – Current Assessment May C 115.4 | P 115.3

08:00     EUR        German IFO – Expectations May C 106.5 | P 107.3

12:30     CAD       CPI M/M Apr C 0.30% | P 0.60%

12:30     CAD       CPI Y/Y Apr C 2.00% | P 1.50%

12:30     CAD       BoC CPI Core M/M Apr C 0.20% | P 0.30%

12:30     CAD       BoC CPI Core Y/Y Apr C 1.40% | P 1.30%

14:00     USD       New Home Sales Apr C 425K | P 384K

 

Harry Hindsight

  • EUR: Euro’s steadily drifted lower through the Asian session, opening around the 1.3685 areas and heading steadily through to the grey hours and a low into the 1.3665 level with reasonable volumes going through given the moves in AUD. London bought from the open form early lows around the 1.3655 level and back to the opening levels as the PMI numbers came out mixed with Services showing up better. Move into NYK saw USD strengthening until the movement was halted by the release of the US data, unimpressive stopped the strength but was unable to reverse the earlier losses in the Euro, the market touched 1.3645 into midsession as London left for the day and the market drifted into a quiet close around the 1.3655 levels.
  • GBP: Cable was not as vulnerable to the USD buying and the move from 1.6900 was limited to the 1.6885 support levels in the Asian session, the opening in London saw a reversal of the losses and moved quickly away from the early buying area to the 1.6915 as the EURGBP moved on the French PMI numbers before correcting with the release of German figures. The follow through on the move lower took the market straight through the 1.6880 before finding a base around the 1.6865 levels and running out of impetus. USD strength again played a small part in a further drop to the 1.6855 and again support appeared holding for the rest of the session before heading to the 1.6870 close.
  • JPY: USDJPY moved quietly in early trading from the opening 101.45 area into the Tokyo session dipping to below the 101.40 level before rising as AUDJPY buying increased with the CNY release and AUD rally. The market made its way over the course of a couple of hours to the mid 101.70’s and into the grey hours, drifting quietly into the London session to 101.50 levels. Renewed interest in USD moving into the NYK session had the USDJPY in a quiet channel rising back to the highs and peaking and holding the 101.80 levels for a few hours before profit taking moved in on the close for the market to finish just off its highs.
  • AUD: After a recovery in late NYK the market in Sydney started steadily to reverse the number as the previous tone to the market took over, pushing from the 0.9250 area to the 0.9220 levels with light carry trade selling, that is until the CNY release, the AUD jumped quickly from the 0.9225 level leaving a gap from there to the 0.9245 area and then running quickly to the 0.9265. The market slowly touched above the 0.9270 area into the grey hours and then we started to see selling move into the market as profit taking moved in and then day traders. The market into London fully continued drifting and only slowed once the market had more or less filled that gap on the charts. While the market stalled in the early part of NYK the market again started to drift and triggered weak stops through the 0.9230 level and pushed to set the day’s lows around the 0.9215 finishing around the 0.9225.

Yesterday’s premiership results

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

AUD       Consumer Inflation Expectations May A 4.40% | P 2.40% | R 4.20%

CNY        HSBC Manufacturing PMI May (P) A 49.7 | C 48.3 | P 48.1

EUR        French Manufacturing PMI May (P) A 49.3 | C 51 | P 51.2

EUR        French Services PMI May (P) A 49.2 | C 50.2 | P 50.4

EUR        German Manufacturing PMI May (P) A 52.9 | C 54 | P 54.1

EUR        German Services PMI May (P) A 56.4 | C 54.5 | P 54.7

EUR        Eurozone Manufacturing PMI May (P) A 52.5 | C 53.2 | P 53.4

EUR        Eurozone Services PMI May (P) A 53.5 | C 53 | P 53.1

GBP       GDP Q/Q Q1 (P) A 0.80% | C 0.80% | P 0.80%

GBP       GDP Y/Y Q1 (P) A 3.10% | C 3.10% | P 3.10%

GBP       Index of Services 3M/3M Mar A 0.90% | C 0.90% | P 0.90% | R 0.80%

GBP       Public Sector Net Borrowing (GBP) Apr A 9.6B | C 3.4B | P 4.9B | R 6.1B

GBP       CBI Trends Total Orders May A 0 | C 3 | P -1

CAD       Retail Sales M/M Mar A -0.10% | C 0.30% | P 0.50%

CAD       Retail Sales Less Autos M/M Mar A 0.10% | C 0.30% | P 0.60%

USD       Initial Jobless Claims (May 17) A 326K | C 310K | P 297K | R 298K

USD       Existing Home Sales Apr A 4.65M | C 4.68M | P 4.59M

USD       Leading Indicators Apr A 0.40% | C 0.30% | P 0.80% | R 1.00%

 

Good Luck,

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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