Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close Wellington open

USDJPY 102.502 102.45-55 | EURUSD 1.36425 1.3642-47 | EURJPY 139.843 139.90-140.08 | AUDUSD 0.93333 0.9334-40 | NZDUSD 0.84977 0.8481-90 | USDCAD 1.0932 1.0918-33 | EURCHF 1.21912 1.21895-1.2194 | USDCHF 0.89358 0.8938-45 | GBPUSD 1.68015 1.6800-20 | EURGBP 0.81197 0.8117-20 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               102.65 | 102.45

EUR/USD             1.3648 | 1.36415

EUR/JPY               140.095 | 139.855

AUD/USD            0.9357 | 0.9330

NZD/USD             0.8518 | 0.8479

USD/CAD             1.0942 | 1.0875

EUR/CHF              1.2194 | 1.21895

USD/CHF             0.89375 | 0.8931

GBP/USD             1.6811 | 1.6803

EUR/GBP             0.8120 | 0.8117

 

For today

  • EUR: A very quiet session with very little movement in the market opening around the closing levels and trading sideways in a very tight range, as the market now looks for direction with the ECB fiddling doing little to inspire the market. Offers from the 1.3680 level into the 1.3700 level however, one suspect’s the market is less inclined than it was last week. Stops on a break above the 1.3720 level suspected before further offers following close behind all the way back to 1.3800. Downside strong bids remain around the 1.3600/20 area before weak stops through 1.3580 and the downside a little more exposed than it was pre ECB.
  • GBP: The same for Cable with the market trading just below 1.6810 for the session having opened in the area. Downside light bids into the 1.6780 levels before giving away to patchy orders to the 1.6720 level, a few bids then dominate those levels however while the market is dominated at that point to 1.6700 levels stops appear very quickly below that level. Topside has offers through the 1.6820 area and although light is constant over the next 50 pips or so with stronger offers above the 1.6900 levels.
  • JPY: The USDJPY started the day off stronger, opening above the 102.55 levels and pushing to the 102.65 in early trading however, although the numbers were slightly mixed the market eventually started to slip from the highs to move back to the closing levels from Friday in thin trading. The market is pinned for the moment between the 102.15/80 levels with very little indication for direction and little in the way of real money movement. Downside stops are building below the 101.80 levels however; one suspect’s that bids will appear throughout that handle building in size the closer you move to 101.00. Topside has offers from the 102.80 into the 103.00 levels and only through 103.20 does the market look to have any stops appearing.
  • AUD: At least the Oz moved, opening around the 0.9335 levels and inline with Friday’s close the market moved quietly into Tokyo before starting a steady rise as CNY trade balance numbers rose way above expectations, the Oz pushed to  above the 0.9355 levels as it did on Friday before stalling and then holding the levels for the rest of the session. Light offers from the highs back to the 94 cent level before suspected strong stops make an appearance on a break above the 0.9420/30 levels. Downside has light bids from 0.9310 level before giving away to weak stops below the 93 cent level, the market is a little mixed from there with patches of support appearing first around the 0.9290/80 levels and then every 20 pips or so.

Overnight News

CNY:

China Strengthens Yuan Fixing Most since October 2012

Li Keqiang Expresses Worry about Policy Implementation

China Needs to Cut Bank Reserve Ratio to Aid Economy–State Paper

CNY/USD:

China confirms attendance at U.S.-hosted naval exercises in June

JPY:

Abe: Said at G-7 Japan to Cut Corporate Tax Rate Next FY

Iwata: Bank of Japan’s Easing Is Having Intended Effect

Suga: Increase in Capital Investment Helping Improve Economy

Japan GDP Revised Higher on Capital Spending Surge

Japan Apr Current Acct Surplus Y187.4B; Expected Surplus Y320B

Japanese Banks Are Biggest Net Sellers of Global Debt in 9 Years

Japan May Consumer Confidence Rises to 39.3 from 37 in April

AUD/CAD:

Abbott Seeks Increased Investment From Canadian Pension Funds

NZD:

New Zealand Dairy Export Value Seen Falling in 2014-15

EUR:

Greece Privatization Exceeding Targets Credit Positive: Moody’s

 

 

Today’s data

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

CNY        Trade Balance May A $35.9B | C $22.60B | P $18.46B

JPY         GDP Q/Q Q1 (F) A 1.60% | C 1.40% | P 1.50%

JPY         GDP Deflator Y/Y Q1 (F) A -0.10% | C 0.00% | P 0.00%

JPY         Current Account (JPY) Apr A 0.13T | C 0.23T | P -0.78T

JPY         Consumer Confidence May A 39.3 | C 37.6 | P 37

06:00     JPY         Eco Watchers Survey: Current May C 45 | P 41.6

08:30     EUR        Eurozone Sentix Investor Confidence Jun C 13.3 | P 12.8

12:15     CAD       Housing Starts May C 185.0K | P 194.8K

 

Weekend News

JPY:

Abe Says Japan to Cut Corporate Tax in Next Fiscal Year: Kyodo
Japan Corporate Tax Revenue May Top Estimate by JPY1t: Nikkei
Kuroda: BOJ’s Policy Having Intended Effect on Markets, Economy
EUR:

Coeure: Euro Area Rates to Stay Low as Increases Begin Elsewhere
ECB’s Coeure Says BNP Case Shows Reserve Currency Issue for G-20
CNY:

China’s Stronger Exports to Cushion Growth as Imports Slump 

China’s Xi Says Fiscal Reforms Will Be Difficult, Xinhua Says
China Plans to Make Disputed Reef Artificial Island: SCMP
China’s Daily Crude Oil Imports Fall From Record on Maintenance
USD:

U.S. to Hold Direct Talks With Iran in Push for Nuclear Accord
UAH:

Poroshenko Pledges ‘Peace Dialogue’ Over Eastern Ukraine
Ukraine Wants to Sign EU Agreement by June 27, Poroshenko Says
RUB/UAH:

Russia Says Received Ukraine’s Note on Closing 8 Border Points
GBP:

U.K. Homebuyers Ill-Prepared for Interest Rate Rises: FT Reports
VND/CNY:

Vietnam Sends Second Letter Protesting China Rig to UN, WTO

 

Harry Hindsight

  • EUR: A quiet day after the ECB and with the NFP to come, opening around the 1.3660 areas the market remained in that area for much of the Asian session. The move into Europe saw better German trade numbers only to see IP figures below expectations and the market moved down towards the 1.3620 levels. The market started to pick up from the lows with expectations for the NFP figures likely to disappoint given other numbers we’ve seen over the last few weeks. Having made its way to above the 1.3640 levels as the numbers were released the market moved quickly towards the 1.3680 level with the weaker number not being so bad the market moved lower again once the HFT’s had initially sparked the market higher, again the market trended to the lows stopping for the second time just above the 1.3620 levels before moving back to 1.3640 and a very quiet afternoon session in NYK with the market holding just above those levels.
  • GBP: Cable was little different to the Euro during Asia and into the London session, the deviation came in London with barely any movement through into NYK. The market held around the 1.6810 area for the period. The move into NYK saw an initial rally to above 1.6840 into the NFP release however, EURGBP had been sold through the London session and the recovery in the Euro helped to rebalance Cable with the buying in the cross taking Cable back through the opening levels and down through 1.6800 to stop only just above the 1.6780 level, the market attempted the move a couple of times but having failed drift slowly higher to just below the market opening.
  • JPY: Opening around the 102.40 area the market struggled into early Tokyo with light selling from the fix onwards pushing the market down to the 102.25 in quiet trading, the market moved around the 102.25/35 levels for the rest part of the session and into London, light buying from the early hours in London pushed the market to just below the opening before the NFP sent the market lower to trade to the 102.15 levels before bouncing back smartly and triggering a small short squeeze to above 102.60, the market went quiet from that point and the market remained above the 102.50 levels for the balance of the session pushing to the highs steadily before drifting into the close.
  • AUD: The AUD opened around the 0.9340 areas and traded slightly lower moving into Tokyo to rest just above the 0.9325 levels for the whole of the Asian session, strong buying in London took the market to above the 0.9355, it failed to push through the level to far and although the market attempted 3 times it was unable to get any further. The market drifted as profit taking moved into the market before NFP however, after the 3rd attempt to the topside the market dropped back quickly to touch the 0.9320 level before stabilising and rising into the close around the opening levels.

Friday’s premiership results

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

JPY         Leading Index Apr (P) A 106.6 | C 106.2 | P 107.1

EUR        German Trade Balance (EUR) Apr A 17.7B | C 14.3B | P 14.8B

EUR        German Industrial Production M/M Apr A 0.20% | C 0.40% | P -0.50%

CHF        CPI M/M May A 0.30% | C 0.20% | P 0.10%

CHF        CPI Y/Y May A 0.20% | C 0.10% | P 0.00%

GBP       Visible Trade Balance (GBP) Apr A -9.6B | C -8.7B | P -8.5B | R -8.3B

CAD       Net Change in Employment May A 25.8K | C 21.5K | P -28.9K

CAD       Unemployment Rate May A 7.00% | C 6.90% | P 6.90%

USD       Change in Non-farm Payrolls May A 217K | C 219K | P 288K | R 282K

USD       Unemployment Rate May A 6.30% | C 6.40% | P 6.30%

 

Stay lucky

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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