Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 119.142 | EURUSD 1.06838 | AUDUSD 0.76804 | NZDUSD 0.75926 | USDCAD 1.22917 | USDCHF 0.96441 | GBPUSD 1.48418 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               119.33 | 118.795

EUR/USD             1.0748 | 1.0673

EUR/JPY               127.85 | 127.15

AUD/USD            0.7782 | 0.7673

NZD/USD             0.7640 | 0.7581

USD/CAD             1.2308 | 1.2251

EUR/CHF              1.03335 | 1.0298

USD/CHF             0.96545 | 0.96075

GBP/USD             1.4880 | 1.4825

EUR/GBP             0.7231 | 0.71985
For today

• EUR: The market traded quietly moving through Sydney and into the Tokyo session, that was until the Tokyo fix saw large EURJPY demand and the market leapt higher with Euros trading up quickly through the 1.0700 level triggering weak stops through the 1.0720 and pushing just above the 1.0740 areas. The end of the demand saw the market start a steady drive lower pushing gradually over the course of the session to the 1.0700 areas and testing below as we move towards the grey hours. Light bids into the 1.0650 areas and then stronger ones into the 1.0600 levels a move through the 1.0580 levels sees a little mixture in the market however, the bids are likely to dominate and those bids are likely to continue through the 1.0550 level getting stronger as the market moves towards the previous lows, 1.0500 for the moment is likely to hold option barriers before opening up the downside. Topside offers into the 1.0750 levels and likely to be reasonably strong to the 1.0800 areas a move through that level opens up a test for the 1.0900 with limited interest into the 1.0850 levels.
• GBP: Cable drifted a little in early trading from the opening levels with EURGBP cross gaining slowly, fixing demand in Tokyo saw the Euro move quickly higher Cable followed however, the cross lost ground and Cable ran out of movement around the 1.4880 levels and started the drift lower regaining slightly in the cross against the Euro, for the moment the market holds just above the opening levels and trades around the 1.4840 areas. Topside offers are likely to be reasonable into the 1.4900 for the Cable that is before opening up to steady offers to the 1.4950 areas where the offers start to increase into the 1.5000 areas, a push through the level is likely to hit stops quickly followed by stronger offers.
• JPY: Early trading however, when the market moved into the Tokyo fix EURJPY demand and USDJPY supply left the Euro climbing quickly as the USDJPY did less work, USDJPY dropped to the 11.890 levels then having made its way there was forced lower again as the Oz moved on the release of employment numbers, unable to move through the 118.80 areas the market bounced and steadily rose to above the opening and into the 119.30 areas late into the session. Topside offers into the 119.50 levels are likely to be the start of stronger offers increasing in size as the market moves towards the 119.70-120.00 areas. A push through the level will still see offers continuing after a brief spurt of stops and the 121.00 level probably has larger offers. Downside for the moment sees bids into the 118.80 areas and a push through the 118.40 area will open up some downside pressure, yield plays are likely to move in on any break through the level and 118.20-117.80, even through the level the market has further bids probably lining up.
• AUD: While cross buying and USDJPY selling was the name of the game the Oz move was again on a large change to the employment numbers however an increase in consumer inflation expectations was sufficient sending the market through 77 cents and then breaking higher as the employment numbers came through better than expected with Oz rising quickly to above the 0.7780 level before starting a steady drift towards the grey hours. Topside offers into 78 cent light and then start to increase just beyond the level with a mixture of stops, with congestion through 78 cents and into the 0.7850 areas the market struggles before opening to larger offers into 79 cent. Downside bids are light through the 77 cent level and opens the 0.7650 areas for further testing and steady bids every few pips with the odd cluster of stops.

Overnight News

AUD:

Australia Mar. Employment Rose 37700 M/m; Est. 15000

Australia’s Jobs Data Reflect New Seasonal Adjustments

USD: Fed’s Lacker Sees Rate Increase This Year, GDP Growth Near 2.5%

Former Fed Chief Bernanke Agrees to Advise Citadel: NY Times

USD/KRW:

Lew Reiterated S. Korea Should Reduce FX Market Intervention

U.S. Said to Want South Korea to Delay Joining Trade Group: Post

JPY:

Japanese Stocks See Biggest Two-Week Net Inflows Since 2013

CNY:

China’s March FDI Rises 2.2% Y/y in Yuan Terms

China’s Consumption to Rise Steadily in 2Q: MoFcom Spokesman

EUR:

Schaeuble Says He Supports Czech Republic, Poland Joining Euro

Schaeuble Says Debt Ratio in Euro Area Higher Than Ever

IMF’s Blanchard: Euro at $0.80 Would Mean Serious Talks: Figaro

NZD:

N.Z. Will Be Able to Ride Through Low Dairy Prices, English Says

New Zealand Manufacturing Growth Slowed in March, PMI Shows

New Zealand Job Advertisements Declined in March, ANZ Says

Westpac Lowers Forecast for Fonterra 2015-16 Milk Pay out

Today’s data

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

NZD       Business Performance of Manufacturing Index Mar A 54.5 | P 55.9 | R 56.1

GBP       RICS House Price Balance Mar A 21% | C 15% | P 14% | R 15%

AUD       Consumer Inflation Expectation Apr A 3.40% | P 3.20%

AUD       Employment Change Mar A 37.7K | C 15.0K | P 15.6K | R 42K

AUD       Unemployment Rate Mar A 6.10% | C 6.30% | P 6.30%

07:15     CHF        Producer & Import Prices M/M Mar P -1.40%

07:15     CHF        Producer & Import Prices Y/Y Mar P -3.60%

12:30     USD       Housing Starts Mar C 1.05M | P 0.90M

12:30     USD       Building Permits Mar C 1.08M | P 1.09M

12:30     USD       Initial Jobless Claims (APR 11) C 284K | P 281K

14:00    USD       Philadelphia Fed. Survey Apr C 5 | P 5

Harry Hindsight              

• EUR: The market drifted in Asia steadily lower drifting through the session with cross JPY selling moving through the market and keeping the Euro on the back foot. The market opened around the 1.0655 level and pushed to the 1.0620 levels into the grey hours before seeing early Europeans driving the market through the opening and touching 1.0660, London were quick sellers as CPI numbers for Germany came in unchanged and Greek issues, the market remained nervous with the ECB rate decision still to come. The market then traded for several hours between the 1.0580-1.0620 levels until the market moved into the NYK session, the rate decision was excited only by the demonstrator, who managed to get all the way to Draghi’s table and managed to jump on to the table before being unceremoniously dragged away. The commentary was bland with platitudes about QE working and continuing until Sept 2016, whether it does remains to be seen and the stabilization of the oil price has probably been of more benefit to inflation. NYK saw the market spike higher on poor IP numbers and then quickly reversed the move as the market read into poor weather and other mitigating circumstances. The close in London saw the market holding the 1.0600 level and then once London had removed itself the market moved quickly up to test the 1.0700 levels with the USD suffering across the board. The market then consolidated around the 1.0680 trading quietly to the close.
• GBP: Cable moved quietly through the Asian session opening around the 1.4780 levels and then seeing a similar pattern of cross Yen selling early in Tokyo, the market dipped to the 1.4750 level late into the session before moving steadily towards the opening levels through the grey hours. The drop of the Euro dragged on the GBP in early trading and while the Cable fared a little better with the cross EURGBP dipping through 0.7200 and pushing to 0.7170 again before finding support, Cable was forced steadily higher and the move into NYK saw the market peaking above the 1.4800 level for the first time, having made it to above the 1.4810 levels the market slipped back into the 1.4750 areas before seeing solid buying with a weak USD leaving the market free to test to the 1.4850 areas.
• JPY: USDJPY opened around the 119.40 levels and slowly moved to the 119.70 areas through Asia in an uninspiring move, holding the area until London when the market started to drift off to the opening levels in a dull market, US market saw the market dip and that started steady selling through the session to push to the 118.80 levels taking out reasonable bids before holding, late into the session the market bounced to the 119.10 areas before finishing the day in the area.
• AUD: The Oz traded during Asia in a reasonably tight range, drifting from the opening 0.7625 levels and dipping to 76 cents, CNY numbers saw a quick flurry of action however, the action remained the same with a reasonable tight range drifting slowly lower and trading down to the 0.7580 level, light profit taking into the grey hours took the market back above 76 cents but the market was unable to move through to far and ranged for several hours into the NYK session. Poor US figures helped the Oz rise however it wasn’t until late in the session with lower Oil inventories spurred commodity currencies in particular higher and the Oz touched the 77cent and then sat back to trade around the 0.7680 levels.

Yesterday’s premiership results

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

AUD       Westpac Consumer Confidence Apr A -3.20% | P -1.20%

CNY        Retail Sales YTD Y/Y Mar A 10.20% | C 10.80% | P 10.70%

CNY        Industrial Production YTD Y/Y Mar A 5.60% | C 6.90% | P 6.80%

CNY        Fixed Assets Ex Rural YTD Y/Y Mar A 13.50% | C 13.90% | P 13.90%

CNY        GDP Y/Y Q1 A 7.00% | C 7.00% | P 7.30%

JPY         Industrial Production M/M Feb (F) A -3.10% | C -3.10% | P -3.40%

EUR        German CPI M/M Mar (F) A 0.50% | C 0.50% | P 0.50%

EUR        German CPI Y/Y Mar (F) A 0.30% | C 0.30% | P 0.30%

EUR        Eurozone Trade Balance (EUR) Feb A 22.0B | P 21.6B

EUR        ECB Rate Decision A 0.05% | C 0.05% | P 0.05%

USD       Empire State Manufacturing Apr A -1.2 | C 6.5 | P 6.9

CAD       Manufacturing Shipments M/M Feb A -1.70% | C -0.20% | P -1.70%

USD       Industrial Production Mar A -0.60% | C -0.20% | P 0.10%

USD       Capacity Utilization Mar A 78.40% | C 78.70% | P 78.90%

USD       NAHB Housing Market Index Apr A 56 | C 55 | P 53

CAD       BoC Rate Decision A 0.75% | C 0.75% | P 0.75%

USD       Crude Oil Inventories A 1.3M | C 3.5M | P 10.9M

USD       Net Long-term TIC Flows Feb A 23.4B | P -$27.2B

Good Luck,

Andy

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