Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 119.038 | EURUSD 1.08909 | AUDUSD 0.78585 | NZDUSD 0.76427 | USDCAD 1.20876 | USDCHF 0.95496 | GBPUSD 1.52372 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               119.20 | 119.02

EUR/USD             1.0895 | 1.08665

EUR/JPY               129.74 | 129.48

AUD/USD            0.7874 | 0.7834

NZD/USD             0.7645 | 0.7621

USD/CAD             1.2109 | 1.2085

EUR/CHF              1.0398 | 1.03835

USD/CHF             0.9566 | 0.9543

GBP/USD             1.5239 | 1.5220

EUR/GBP             0.71515 | 0.71385

For today

• EUR: Another quiet session with the market drifting off in early trading from the 1.0890’s opening levels and pushing lightly through 1.0870 before slowly recovering a little through the session and trading around the 1.0880 level. The market now awaits the next pieces from the extended negotiations for Greece and little in the way of data. Topside offers remain around the 1.0920-30 areas with the likelihood of weak stops through the level, offers build into the 1.1000 areas however, stops are not likely to make an appearance until through the 1.1050’s where a breakout to the 1.1200 opens probably not today but a possibility for the coming weeks and so the news overtakes the QE. Downside bids are weak into the 1.0850 levels and the sentimental levels appear to have patches before stronger bids into the 1.0750’s. However, with the current sentiments on the US GDP one would suspect ever increasing profit taking.
• GBP: Another day in paradise for the Cable with the market trading quietly around the 1.5230 levels never quiet making its way through the opening levels and unable for the moment to push through the 1.5220 levels. Topside offers light into the 1.5270 levels before stronger offers from 1.5290-1.5300 and the opening higher with very little likely over the next big figure or so. Downside bids light through the 1.5100 level with a possibility of weak stops through the level and then 1.5050 provides the strongest level over a weak downside movement of 2 big figures, strongest support is likely to around the 1.4950’s.
• JPY: Downgrade of the JGB rating by Fitch has seen little change to the market and the market opened around the 119.05 areas and traded in a narrow range over the Asian session pushing towards the 119.20 areas before dipping back to the 119.05 levels and continuing in the range through the session. Topside offers into the 119.50 areas for the moment with weak stops likely through those areas and an opening only to the 119.80-120.00 areas before finding further resistance, through the 120.00 level the topside offers are likely to be patchy at best but I doubt they are weak and will build as the market moves higher, downside has a similar set up with the 118.80 level showing good signs of support a push through will likely see bids start to appear quickly and in depth from the 118.50 levels and through to the 118.00 areas. FOMC and US GDP are likely to dominate the market.
• AUD: The Oz moved down from the opening levels dipping down into the mid 0.7835’s before recovering a little from the release of the leading index, quickly pushing through the 0.7860’s level holding the level and then gradually moving to the 0.7870 level and trading in the area for the remainder of the session and regaining the highs from yesterday as the market continues to talk about the stabilization of commodity markets most importantly Iron. For the moment the current levels moving into the 79 cent level holds offers, a push through will likely see weak stops before better offers start to appear around the 0.7940 areas and likely moving back to 0.7960-70 before the market opens for a test of 80 cent. Downside bids are likely through to 78 cents before weak stops are likely and quickly followed with a congested areas likely to extend down into the 0.7750 areas before opening for a further test lower.

Overnight News

CNY:

China Central Bank Said to Consider Expanding Lending Facility

PBOC Governor Says China to Ease Entry Into Banking Sector: News

China Finance Ministry Seeks Accelerated Local Govt. Bond Sales

PBOC Operations Can Give Ample Liquidity, Yi Gang Says: News

AUD:

RBA’s Stevens Remains Cautious on Bail-Ins to Absorb Bank Losses

Australia ANZ Weekly Consumer Sentiment Rises 2.8% to 111.8

JPY:

Japan’s Amari: No Intention to Respond to Credit Rating Firms

Aso: Not Planning to Argue With Rating Firms Over Debt Rating

Japan March Retail Sales Fall 1.9% M/M; Est. +0.6%

SGD:

Singapore 2015 Growth to Be Supported by Firmer G3 Recovery: MAS

EUR:

Greece Should Stay in Euro, and Follow Rules, Portugal’s Portas Says

Greece May Get EU3b from Russia Gas Pipeline Deal, Tsipras Says

Today’s data

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

JPY         Retail Trade Y/Y Mar A -9.40% | C -7.40% | P -1.80%

AUD       Conference Board Leading Index Feb A 0.50% | P 0.40%

08:30     GBP       BBA Mortgage Approvals Mar C 37.9K | P 37.3K

08:30     GBP       GDP Q/Q Q1 (A) C 0.50% | P 0.60%

08:30     GBP       Index of Services 3M/3M Feb C 0.70% | P 0.80%

13:00     USD       S&P/Case-Shiller Composite-20 Y/Y Feb C 4.70% | P 4.60%

14:00    USD       Consumer Confidence Apr C 102.5 | P 101.3

Harry Hindsight              

• EUR: Overall the Euro  finished the day with little change, moving from the opening 1.0870 levels the market moved slowly in the Asian session and dipping to the 1.0850 levels before starting a steady recovery into the grey hours and pushing to close to the 1.0890 levels into the London session before dropping back quickly on the opening as the London market took advantage with expectations of more negative commentary however, it didn’t appear and the market settled down with the belief that although the sides look so far apart the fact remains that a Grexit is politically not what they want and the Greeks know it. The release of German import prices gave the market a little jolt higher sending it back before again being resold and a drift lower too the 1.0830 areas and held for several hours touching to the 1.0820 level before moving into the NYK session and buyers moved in. A light short squeeze saw the Euro head in a tight channel and push above the 1.0920 areas over the next few hours before drifting off and settling down to trade in the 1.0880 levels to the close.  Of course the news that the Greek PM had overhauled the team negotiating with the Eurogroup probably helped the Euro along the way with Varoufakis out of the picture.
• GBP: A very quiet Asian period with the market moving around the 1.5180 level in a very tight range, the move into the London session saw light profit taking and a steady drift to the 1.5110 areas into the NYK session, with FOMC this week and expectations for the US GDP suspected to be on the weak side the market has started to worry that the expectations may be overstated so USD’s started a steady decline. Cable pushed to the 1.5190 levels where the market had spent much of the Asian session and eventually broke through and pushed quickly higher triggering breakout stops before stopping around the 1.5240, the expected fall back was shallower than expected and the market followed through and touched the 1.5260 levels before settling back to the 1.5230 levels for the close. EURGBP was a little choppy over the day however, the market again sold the cross back pushing from the highs around the 0.7170 levels and down to the 0.7140 levels into the NYK session.
• JPY: The USDJPY moved quietly higher through the Asian session dipping a little lower on fixing supply the market moved off the 118.80 levels and pushed slowly higher and into the London session pushing through the 119.00 levels and continuing through the London session higher pushing to the 119.40 areas before running into sufficient offers to hold the market and then NYK USD sellers moved in and the day was over for the rally, the move lower the market took less time to return to the opening levels although the market was not particularly convincing in its decline and remained just above the 119.00 level into the close.
• AUD: A very quiet day for the Oz with the market supported through the session but not convinced about the stabilization of commodity prices, and the Oz held around the opening 0.7820 levels through Asia and into the London session with brief dip to just below the 0.7800 level, the move into the NYK session saw the market move quickly higher squeezing through the 0.7840 level and some light stops to push to the 0.7870 levels before stalling and holding 0.7850 to the close.

Yesterday’s premiership results

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

EUR        German Import Prices M/M A 1.00% | C 0.50% | P 1.40%

GBP       CBI Trends Total Orders Apr A 1 | C 4 | P 0

Good Luck,

Andy

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