Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 119.908 | EURUSD 1.07248 | AUDUSD 0.77541 | NZDUSD 0.76717 | USDCAD 1.22378 | USDCHF 0.97146 | GBPUSD 1.5037 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               120.10 | 119.70

EUR/USD             1.0728 | 1.0691

EUR/JPY               128.675 | 128.145

AUD/USD            0.7760 | 0.7719

NZD/USD             0.7663 | 0.7569

USD/CAD             1.2269 | 1.2236

EUR/CHF              1.0415 | 1.0385

USD/CHF             0.97185 | 0.9692

GBP/USD             1.5042 | 1.5013

EUR/GBP             0.7132 | 0.71205

For today

• EUR: A choppy but limited session for the Euro, with the movement driven more by the USDJPY than anything else, opening around the 1.0725 levels the market dipped as end of week USDJPY buying moved into the fix and Euro’s quickly dipped down to the 1.0705 areas and held in the areas for an hour or so, eventually the USDJPY moved through the 120.00 level and Euro’s again dipped to the 1.0695 areas to make the lows, the market remained in the area for several hours before slowly beginning to rise and push back above the 1.0700 level and is moving towards the grey hours around the 1.0710 levels. Light bids into the 1.0680 levels hold the market for the moment, the bids are likely to continue through to the 1.0650 level before light stops appear and then solid buying on any move below the 1.0600 area will see bids increase as the market approaches the years lows and expected option barriers around the 1.0500 areas. Topside offers light into the 1.0760 areas and continuing into better offers above the 1.0800 levels a push through the 1.0840 levels are likely to see stops and an opening to the 1.0900 levels.
• GBP: Cable has traded reasonably quietly through the Asian session drifting through the 1.5020 areas from the mid 1.5030’s opening levels and then recovering as the GBP plays second fiddle to the Euro and USDJPY, Topside offers from the 1.5080 level increase as the market approaches the 1.5100 levels a push through 1.5110 is likely to see the market opening up for a better move and a test to the 1.5200 levels and further offers. Downside bids into the 1.5000 are likely to be light with weak stops through the level and then weak bids down to the 1.4950-30 level however, the market is likely to be moving quickly at this point and the downside bids are likely to buckle quickly and the Euro will be the dominant factor.
• JPY: Having steadily rallied over the previous session to the 119.90 level the opening in Asia saw weak attempts to push through the 120.00 level early and before the Tokyo session, these failed to move through and the market dipped back as the breakout players withdrew from the long side, the opening in Tokyo saw the market again at the 120.00 level and although it didn’t go through the market didn’t back off and then end of week USD buying saw the market quickly move through and test into those offers pushing towards the 120.10 levels, again the offers held and the market moved through the session holding the 120.00-05 areas for several hours, the lack of movement and the markets inability to break higher saw the weak longs trading out and the market drifted back into the 119.90 areas and then a break through the level triggering weak stops in a fall back to the low 119.70’s where the market for the moment seems to be holding into London. With the failure to the topside the downside has light offers into the 119.50-30 level and strong bids likely around the 119.00-118.80 levels however, weak stops are likely to open up the market from that point on and before 118.60-118.00 level opens with likely bids continuing and the possibility of yield buyers moving in. Topside offers are now obvious and only a strong push through the 120.30-40 levels is likely to open the market a little, offers then reappear from the 120.60 levels onwards and likely to become stronger into the 121.00 areas.
• AUD: The Oz slipped from the 0.7745 levels from the opening as the market moved into the Tokyo session, with USDJPY pushing through the 120.00 level the Oz was forced down to the 0.7720 areas holding in the area for several hours and basing there with brief moves to the opening levels in a tight choppy session, as the USDJPY rejected the topside Oz started to rally a little pushing from the 0.7720 again and this time moving through to touch close to 0.7760 as the market moved towards London. Light bids to the downside around the 0.7720 areas and likely to continue through to the 0.7690 area before weak stops are likely to make an appearance, through there the market again opens up a test to the 76 cent level and only slightly better bids, before slipping to the better defended levels from 0.7550 onwards and possible option barriers. Topside offers just above the 0.7800 level and into the 0.7830 level dominate the topside for the moment and look to be a strong level holding for this month at least a break above the 0.7850 level is likely to see stops appearing but not in any particular size and will only open to the 0.7880 areas and likely strong offers towards 79 cents.

Overnight News

CNY:

China Won’t Consider New Measures to Curb Outflow for Now

Chinese Manufacturing Gauge Drops to Lowest Level in 12 Months

JPY:

Kuroda: Timing of Reaching 2% Could Delay Slightly Into FY2016

Kuroda: Letting BOJ’s JGB Holdings Mature A Possible Exit Step

Japanese Bought Net 432 Billion Yen Overseas Debt Last Week

BOJ’s Kuroda: Japan’s Economy Continuing Gradual Recovery

KRW/JPY:

S. Korea Closely Monitoring JPY-KRW Rate: Finance Ministry

NZD:

RBNZ’s McDermott Says Monetary Policy to Remain Stimulatory

N.Z.’s Key Faces Harassment Complaint Over Waitress, TVNZ Says

Half of New Zealand Immigrants Destined for Auckland

New Zealand Consumer Confidence Rose in April, ANZ Bank Says

Today’s data

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

JPY         Manufacturing PMI Apr (P) A 49.7 | C 50.8 | P 50.3

CNY        HSBC Manufacturing PMI Apr (P) A 49.2 | C 49.4 | P 49.6

06:00     CHF        Trade Balance (CHF) Mar C 2.16B | P 2.47B

07:00     EUR        France Manufacturing PMI Apr (P) C 49.4 | P 48.8

07:00     EUR        France Services PMI Apr (P) C 52.5 | P 52.4

07:30     EUR        Germany Manufacturing PMI Apr (P) C 53.1 | P 52.8

07:30     EUR        Germany Services PMI Apr (P) C 55.6 | P 55.4

08:00     EUR        Eurozone Manufacturing PMI Apr (P) C 52.6 | P 52.2

08:00     EUR        Eurozone Services PMI Apr (P) C 54.5 | P 54.2

08:30     GBP       Public Sector Net Borrowing (GBP) Mar C 6.6B | P 6.2B

08:30     GBP       Retail Sales M/M Mar C 0.40% | P 0.70%

12:30     USD       Initial Jobless Claims (APR 18) C 290K | P 294K

14:00    USD       New Home Sales Mar C 510K | P 539K

Harry Hindsight              

• EUR: Opening around the 1.0740 levels and dipping lower into the Tokyo opening and spending much of the session moving off that level, the move into the grey hours saw the pair recovering and with the help of Cable a rally ensued into the grey hours with the market pushing to above the 1.0770 levels, by this time though Cable was on a mission and the EURGBP cross slumped back taking out the recent 0.7170 levels and dropping back into the 0.7120 levels, with the grey hours out of the way and Cable continuing the Euro was dragged higher to trade to the 1.0800 level before finding sufficient resistance to the move, the move to NYK saw the pair again falling away as the Euro lost ground against everything as the market again focused on Greece and Euro’s moved down a little quicker than it went up. By the time the market moved into the NYK session the moves were over and Euro’s traded almost unchanged over the next few hours to the close.
• GBP: The market moved steadily higher through Asia, moving from the opening 1.4930 level to touch into the 1.4950 levels late in the session, grey hours buying was particularly strong and pushed the market to the 1.4970 areas before seeing light selling and adjustments before the release, while the rates and purchase facility remained the same as expected the BoE minutes showed better expectations as Europe the UK’s biggest trading partner appears to be moving at last with better figures expected and thus Cable rallied quickly higher dragging the Euro with it and although EURGBP moved to fresh yearly lows it didn’t stop the Euro’s. Cable crashed through the offers around the 1.5000 level and although there was a brief pause the market hit weak stops and was quickly on the move again through to 1.5040 areas before again pausing as the market slowly eroded the 1.5050 area offers, in the end the market spent a couple of hours pushing at the 1.5080 areas however, the bids ran out and the resistance remained intact. The market fell back to the 1.5020 areas into the NYK session and held and then ranged around the 1.5040 levels for the balance of the session.
• JPY: Opening around the 119.70 levels the market spent a good amount of time bouncing off that level, it did dip to the 119.60 levels on a couple of occasions however the topside was just as stubborn and only once the market moved into Tokyo lunch did the downside open up with the market dropping down to the 119.45 areas, the move into London saw the market stable and a quick rally in Cable and Euro had limited impact with the lows into the 119.35 areas the limit of the downside, the rally when it came was a steady grind higher pushing in a tight channel to above the 119.95 levels but never managing to break through to the 120 areas.
• AUD: A quiet start to the session, moving from the opening 0.7715 areas the market held around the 0.7710 level until the release of the CPI numbers with the adjusted number showing a slight increase in inflation and the Oz quickly moved to above the 0.7760 levels, the move into the grey hours saw early buyers continuing and the market steadily moved to test above the 78 cent levels before finding the going hard and the move towards the NYK session set the Oz to recovery mode and the Oz slipped back slowly  over the session halting for a period in the US session and then drifting to a close below the 0.7750 levels.

Yesterday’s premiership results

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

JPY         Trade Balance (JPY) Mar  A 0.0T | C -0.41T | P -0.64T | R -0.57T

AUD       Westpac Leading Index M/M Mar A -0.30 | P 0.30% | R 0.10%

AUD       CPI Q/Q Q1 A 0.20% | C 0.20% | P 0.20%

AUD       CPI Y/Y Q1 A 1.30% | C 1.30% | P 1.70%

AUD       CPI RBA Trimmed Mean Q/Q Q1  A 0.60% | C 0.60% | P 0.70%

AUD       CPI RBA Trimmed Mean Y/Y Q1 A 2.30% | C 2.20% | P 2.20%

GBP       MPC Official Bank Rate Votes A 0—0—9 | C 0–0—9 | P 0–0–9

GBP       MPC Asset Purchase Facility Votes A 0—0—9 | C 0–0—9 | P 0–0–9

CHF        ZEW (Expectations) Apr A -23.2 | P -37.9

USD       House Price Index M/M Feb A 0.70% | C 0.60% | P 0.30%

USD       Existing Home Sales Mar A 5.19M | C 5.04M | P 4.88M | R 4.89M

EUR        Eurozone Consumer Confidence Apr (A) A -5 | C -3 | P -3.7

USD       Crude Oil Inventories A 5.3M | 2.7M | P 1.3M

Good Luck,

Andy

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