Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close Wellington open

USDJPY 101.963 101.85-102.00 | EURUSD 1.36311 1.3620-34 | EURJPY 138.975 138.72-139.067 | AUDUSD 0.92311 0.9232-40 | NZDUSD 0.85441 0.8532-47 | USDCAD 1.08676 1.0864-76 | EURCHF 1.22093 1.2206-16 | USDCHF 0.8956 0.8951-73 | GBPUSD 1.68304 1.6813-53 | EURGBP 0.80994 0.8090-0.81045 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               102.05 | 101.87

EUR/USD             1.3641 | 1.3615

EUR/JPY               138.99 | 138.735

AUD/USD            0.9245 | 0.9231

NZD/USD             0.8550 | 0.8527

USD/CAD             1.0881 | 1.0866

EUR/CHF              1.2214 | 1.2206

USD/CHF             0.89655 | 0.8955

GBP/USD             1.6840 | 1.6828

EUR/GBP             0.80965 | 0.80895

 

For today

  • EUR: The Euro as you’d expect has been very quiet, with the market dipping a few pips each time the European elections and in particular the anti’s win another seat. However, the market has remained in the 1.3615/30 areas for most of the session and in particular the last 4hrs having moved to below 1.3620. Light bids from here into the 1.3590 levels and then a clear break of 1.3580 likely to see weak stops and then supportive again to the 1.3500 levels, offers light all the way back to 1.3700 and no real stops are likely until above 1.3800 with the topside well and truly used and abused.
  • GBP: A slow day with Cable opening around the 1.6835 levels and holding in the area throughout the session with only a minor dip into the upper 1.6820’s. With the results in the election pretty much what was expected with the UKIP party grabbing the headlines after the French far right winning 20 seats. Chances of the market either breaking up through 1.6855 or below Fridays 1.6815 is doubtful with the UK side-lined and NYK observing Veterans Day.
  • JPY: USDJPY kept to a tight range pushing early in the session from the opening 101.95 areas to above the 102.05 levels before dipping back in mid-session once the demand was over. Late session saw further weakness to below 101.90 and we hold just above the levels in a very quiet session. Offers from the highs going back to 102.30 levels and unlikely to be truly tested, and downside opening to the 101.10 areas but again doubtful.
  • AUD: 10 pip ranges seems to be prevalent today with the Oz initially rising to 0.9245 areas with AUDJPY playing its part before drifting back to the opening 0.9235 levels and a light dip to just below that area. Downside sees light bids from the 0.9215 levels and weak stops on a break through the 92 cent level; topside offers make an appearance above the 0.9250 levels and are likely to contain the market for the day.

Overnight News

JPY:

BOJ Members: Economy Likely to Grow Above Potential From Summer

Japan to Continue Surveillance after China Confrontation: Suga

EUR:

Greece’s Syriza Party Leads in European Elections

French far right in “earthquake” win as Europe votes

PLN:

Poland’s Law & Justice Leads Ruling Party 32%-31% in EU Vote

NZD:

NZ Apr Goods Trade Surplus below Expectations at NZ$534 Mln

GBP:

UK finance ministry warns on Scottish independence costs

 

Today’s data

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

NZD       Trade Balance (NZD) Apr A 534M | C 636M | P 920M

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

08:00     EUR        ECB President Draghi Speaks

 

Weekend News

JPY:

Abe Must Make Deeper Structural Changes, Kuroda Tells WSJ
Japan Summer Bonuses May Rise Almost 6%, Survey Says: Nikkei
Japanese Reject Nuclear Power in Comments on Energy Plan: Asahi
EUR:

ECB’s Coeure Sees Very Low Risk of Euro Area Deflation: Gazeta
Europe Goes to the Polls With EU Sceptics Poised to Make Gains
ECB Defends Stress Test From Erste Charge of Political Bias
UAH:

Ukraine Votes in Presidential Election as Unrest Roils East
RUB/UAH:

Russia Invasion Risk Remains Amid Unrest, Ukraine Envoy Says
EUR/RUB:

Merkel Says Extended Hand to Russia Needed in Ukraine Conflict
RUB/CNY:

China, Russia Should Work to Invest Reserves Safely: Putin
JPY/THB:

Japan Retailers in Thailand Close Early After Coup: Yomiuri
USD:

Obama to Detail Last-Term Foreign Policy in West Point Address
GBP:

U.K. Labour Party Has 12 Point Lead over Cameron’s Tories: Poll
CNY:

China Begins Anti-Terror Campaign in Xinjiang after New Attack
CNY/JPY:

China Urged Japan to Stop Interference in Exercise: Ministry
China Jets Buzz Japan Military Planes in E.China Sea: Yomiuri
Shanghai’s Japanese Resident Numbers Plunge 17% in First Drop
KRW/JPY:

North Korea, Japan to Hold Talks in Sweden Tomorrow, Yonhap Says
AUD/XAU:

Australian Gold Output Declines after Heavy Rains Lash Mines
AUD:

Australia’s Hockey Says Budget Opponents May Face Backlash
NZD:

New Zealand National Party Support Exceeds 50%, TV3 Poll Shows

Harry Hindsight

  • EUR: With a long weekend to look forward to for the London/NYK session and weekend results into Monday for the European elections the market was slightly nervous and sold steadily throughout the day, opening around the 1.3655 levels the market drifted to the 1.3645/50 areas through Asia before dropping sharply on the release of the IFO numbers for Germany. The market held the 1.3620 levels roughly before heading into a quiet NYK session holding the 1.3630 areas till the close on a quiet day.
  • GBP: Cable was little different to the Euro and if anything reacted a little more to the European election predictions and general USD strength. Moving down from the 1.6870 levels in Asia as cross buying of EURGBP turned a little but the Cable recovered in the later part of the session to move to 1.6875, results from local elections showing a defeat for the incumbent parties left Cable around the 1.6850 levels and the steady selling continued as the market cut positions into the weekend, the market touched the 1.6815 levels however late profit taking saw the market move back to the 1.6830 areas for the close.
  • JPY: As European politics dominated for the most part the day’s trading USDJPY was left broadly to its own devices until the USD was forced into taking a broad based strength into the London/NYK sessions. Opening around the 101.70 levels the market initially struggled to above the 101.85 levels through fixing demand, from that point it was steadily sideways through the Asian session into the grey hours where EURJPY selling dominated the market moving USDJPY down to the 101.60 levels for the low on the day. The move into London proper started to see broad based USD strength moving in and the USDJPY recovered from the London opening and into NYK to trade around the 101.95 area, although there were slight dips the market held up pushing through the 102.00 levels just before finishing the day just short of the level.
  • AUD: A reasonably tight range overall with some choppy actions from day traders, the market opened around the 0.9230 and traded a little higher before drifting from the 0.9235 levels to below the 0.9220’s as limited volume pressurised the AUD in front of CNY numbers, the release saw the market pushing higher for some reason ignoring the poor number, but then the market over the day was contained within 35 pips. Sellers appeared in front of 0.9250 and that became the resistance for the day trading to the 45/50 areas on several occasions with very little conviction, the downside did make fresh lows just below the 0.9215 levels but it was brief and NYK pushed it back the 0.9235 levels from the opening and the market ran out quietly just above the opening levels.

Friday’s premiership results

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

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

EUR        German GDP Q/Q Q1 (F) A 0.80% | C 0.80% | P 0.80%

EUR        German IFO – Business Climate May A 110.4 | C 110.9 | P 111.2

EUR        German IFO – Current Assessment May A 114.8 | C 115.4 | P 115.3

EUR        German IFO – Expectations May A 106.2 | C 106.5 | P 107.3

CAD       CPI M/M Apr A 0.30% | C 0.30% | P 0.60%

CAD       CPI Y/Y Apr A 2.00% | C 2.00% | P 1.50%

CAD       BoC CPI Core M/M Apr A 0.20% | C 0.20% | P 0.30%

CAD       BoC CPI Core Y/Y Apr A 1.40% | C 1.40% | P 1.30%

USD       New Home Sales Apr A 433K | C 425K | P 384K

 

Stay lucky

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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