Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close Wellington open

USDJPY 118.967 118.83-119.05 | EURUSD 1.08733 1.0855-76 | AUDUSD 0.78218 0.7805-30 | NZDUSD 0.76001 0.7575-0.7618 | USDCAD 1.21823 1.2170-95 | USDCHF 0.95384 0.95155-0.96185 | GBPUSD 1.51865 1.5163-80 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               119.08 | 118.77

EUR/USD             1.0878 | 1.0847

EUR/JPY               129.30 | 129.09

AUD/USD            0.7837 | 0.7810

NZD/USD             0.7626 | 0.7590

USD/CAD             1.2205 | 1.2150

EUR/CHF              1.0369 | 1.03575

USD/CHF             0.9550 | 0.9530

GBP/USD             1.5187 | 1.5142

EUR/GBP             0.7166 | 0.7151

For today

• EUR: A very quiet session with the market opening unchanged from Friday’s close and moving during the early part in a similar range, trading between the 1.0860-78 levels and never quiet pushing ahead, news of the weekend was less than encouraging however, the market ignored it for the most part and only into the last part of the session did the market drift lower, the market for the moment has pushed into the 1.0850’s and looks to be heading into the grey hours around there. Offers remain in the 1.0900 areas with only a strong push through the 1.0940 level will likely trigger some light stops and the market opens up for another test through the 1.1000 levels however, this is likely to be a weaker attempt and resistance is likely to build into the 1.1000 areas and beyond. Downside see’s light bids into the 1.0800 levels with stops likely to be light through the 1.0780 levels and into congestion through to the 1.0700 areas. Not a busy day for numbers so Greek commentary likely to dominate the market again.
• GBP: Cable more or less flat lined through the session moving from the opening 1.5180 areas and drifting for the most part 5 pips either side in a tight range, Topside offers into the 1.5200 level are likely to be strong however, a move through the level opens up a possible test to the 1.5500 in the longer term with initial offers likely through 1.5250 and then a possible minor squeeze through 1.5300. Downside bids are not particularly strong and a move through the 1.5100 levels opens up the 1.5000 levels quickly and below before strong bids are likely. For the moment the market is likely to be dominated by the Euro and Greek situation.
• JPY: A very quiet session for USDJPY with the market opening around the 118.90 levels and holding steady into the Tokyo session, a push to the 118.80 level early in Tokyo saw the market fail the downside and a push to the 119.00 levels and although it didn’t push through the first time the second attempt late in the session pushed lightly through. Topside offers are likely into the 119.20 areas before opening to mixed period until stronger offers into 119.50, a strong push through this level is likely to see the market again pushing to the 120.00 areas and strong offers. Downside bids currently rest around these 118.80 areas and possibly to the 118.60 levels, a break through the 118.50 levels will likely see weak stops opening a test lower however, at some stage the possibility of yield buyers is likely to occur and the downside from 118.00-117.50 is congested and supportive.
• AUD: As with the rest of the market Oz was just as quiet with a very narrow range moving from the opening 0.7825 areas to move into the mid 0.7830’s before dropping to the 0.7810 level as the USDJPY pushed through the 119.00 levels. Topside offers into the 0.7840 area with a push through the 0.7850 level not likely to see too much difference with possibly only minor stops appearing, a move to the 79 cent level is likely to be a struggle unless the USD can find some movement however, through the 79 cent level will initially see a mixture before opening for a test to the 80 cent level. Downside bids are light into the 0.7750 levels with a mixture from that point onwards until the market moves below 77 cents and bids start to appear in earnest.

Overnight News

JPY:

Abe’s Congress Speech to Rivet Audience 7,000 Miles Away

BOJ Signals Concern on Japan Banks’ Overseas Lending Rise: Times

CNY:

China Strong Stimulus Not Needed, PBOC’s Ma Says: People’s Daily

China March Industrial Companies’ Profit Falls 0.4% Y/y

PBOC Discusses Direct Purchases of Local Govt. Bonds: MNI

AUD/SGD:

RBA Reaches MOU with MAS on Access to Derivatives Information

Today’s data

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

06:00     EUR        German Import Prices M/M C 0.50% | P 1.40%

10:00     GBP       CBI Trends Total Orders Apr C 4 | P 0

Weekend News

EUR:

Euro Ministers Alarmed as Bloc Stops Talk of Greece Plan B
Weidmann: ECB Haircuts on Greek Funding Depend on Deal Progress
EU’s Dombrovskis Says Greece Lacks Will to Reform: Tagesspiegel
Guindos Says Structure of Work on Greece Not Functioning
Germany’s Schaeuble Refuses to Be Drawn on ‘Plan B’ for Greece
Sapin Says the Euro Area Has ‘No Plan B, C, D or E’ on Greece
Greece’s Syriza Party Has 15.2 Point Lead in Kappa Poll: Vima
Syriza Party Gets 33.3% Vs 20.2% for New Democracy: Alco Survey
Italy’s Padoan Says Grexit Would Show Euro Isn’t Irreversible
Portugal’s Coelho, Portas Propose Keeping Coalition for Election
IMF Predicts Greek Hyperinflation in Event of Euro Exit: Spiegel
USD:

U.S. Commerce’s Pritzker: TPP Trade Deal ‘Good for Workers’
JPY:

Japan’s Police Arrest Man for Landing Drone on Abe’s Office Roof
PHP/CNY:

Philippines Says Threats Posed by China’s Reclamation Are Real

Harry Hindsight

• EUR: A steady drift lower in the Asian session moving from the opening above the 1.0820 and pressing into the 1.0780’s late into the session, the move into the grey hours saw the market rally quickly as the announcement that previous news on funds raised by calling in funds from local governments was in the region of €450mio, the market hit the 1.0860 level and then continued to push for the 1.0900 levels over the next few hours into the London session, the market eventually drifted off and back to the opening levels as the London market saw the news as nothing special. NYK were steady buyers and although the highs for the day had been made they did manage to move the market to the 1.0860’s with weak durable good numbers apart from trains, planes and automobiles, the run to the close the market stalled and held in a narrow range moving around the 1.0860 level but never able to move through 1.0880.
• GBP: The Asian market saw Cable move in line with the Euro, with less impetus initially than the Euro the move through 1.5100 levels forced by the rise in the Euro’s stops were triggered however, the market ran into resistance in several areas stalling in the 1.5120-40 level a push to 1.5160 and then a move to the 1.5180 levels and holding the area into the close.
• JPY: Asia was quiet in the USDJPY with the market moving around the 119.50 areas for most of the session remaining in a narrow range until the move in the Euro this forced the USD lower and USDJPY was no exception dipping to the 119.20 levels before bouncing back into the London session, the 119.50 level again saw the bulk of the trading before the NYK session and the drop back in the USD saw the USDJPY moving steadily down through the 119.00 areas before finishing the day around the 118.90 levels.
• AUD: Oz was reasonable quiet with the market trading quietly around the 0.7780 areas dipping from that opening level to the 0.7770 before reacting to the Euro move and following that pattern throughout the day with a general move to the topside to touch 0.7840 level, before holding the 0.7820 levels into the close.

Friday’s premiership results

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

JPY         Corporate Service Price Y/Y Mar A 3.20% | C 3.30% | P 3.30%

JPY         All Industry Activity Index M/M Feb A 0.10% | C -0.90% | P 1.90% | R 0.50%

EUR        German IFO – Business Climate Apr A 108.6 | C 108.4 | P 107.9

EUR        German IFO – Current Assessment Apr A 113.9 | C 112.4 | P 112

EUR        German IFO – Expectations Apr A 103.5 | C 104.5 | P 103.9

USD       Durable Goods Orders Mar A 4.00% | C 0.80% | P -1.40% | R -1.10%

USD       Durables Ex Transportation Mar  A -0.20% | C 0.70% | P -0.40% | R -0.60%

Stay lucky

Andy

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