Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 118.872 | EURUSD 1.09812 | AUDUSD 0.80229 | NZDUSD 0.77254 | USDCAD 1.20316 | USDCHF 0.95569 | GBPUSD 1.53397 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               118.89 | 118.76

EUR/USD             1.09815 | 1.09595

EUR/JPY               130.595 | 130.28

AUD/USD            0.8026 | 0.7980

NZD/USD             0.7737 | 0.7688

USD/CAD             1.2045 | 1.2020

EUR/CHF              1.0491 | 1.04745

USD/CHF             0.9568 | 0.9540

GBP/USD             1.5345 | 1.5329

EUR/GBP             0.7158 | 0.7149

For today

• EUR: Another slow day, I bet you’re beginning to become bored with that start, in Asia, the Euro struggled to maintain the 1.0980 levels through the session and slowly drifted lower into the 1.0960 levels with little interest in the market with the FOMC rate decision to come in the later part of the day. With flat trading and little in direction the downside looks particularly weak for the moment having moved easily higher yesterday and bids are likely to be congregated around the 1.0880 levels for the moment with weak stops likely through the 1.0860 levels light bids continue through to the lightly congested 1.0800 areas before the market is likely to give ground for a deeper move on any surprises, Topside offers from the 1.0980 level are likely to be reasonably strong with confidence numbers for Europe and CPI for Germany to be released, these offers without any surprises are not likely to be truly tested however, the US numbers are the important ones to watch for the day with the market consensus on the GDP number already expected to be weak. A push through the 1.1000 areas are likely to see more offers into the 1.1050 levels with a break through the level opening up the 1.1200-50 areas for a larger move.
• GBP: Cable held its levels and traded quietly around the 1.5340 levels for the session with only about 10 pips in the range as the market quietly prepares for the FOMC and GDP numbers from the US with consensus being marked down considerably from the previous reading, with Euro’s leading the way the market dipped into the final hour before the grey hours. Downside bids into the 1.5250 areas are likely to be light and the movements lower are likely to run into the same type of bids with little strength likely to show until the 1.5050 areas and then the market starts to look stronger, a push through the level will see light stops and the market opens to the 1.4900 levels and a possible test there.
• JPY: As with the other two major pairings the market found liquidity impaired as it awaits for the announcements later today, moving from the opening in the 118.80’s the market dipped towards the 118.75 level before rising back to those opening levels as the market moved towards the grey hours. Topside offers through the 119.00 have thickened a little have failed to push to the 119.50 over the past 24hrs or so, a move through 11930 will see a test of the 119.50 and light stops triggered, through the 119.60 areas the offers remain constant before again strengthening into the 120.00 levels and strong offers onwards. Downside bids into the 118.50 levels have seen a few attempts over the month and a push through the 118.40 level the market is likely to see weak stops and an opening to test below 118.00.
• AUD: The mover of the day with 40+pips to the range and a steady downward trend over the course of the Asian session, drifting initially through the 80 cent level from the opening above the 0.8020 levels the market saw a slight recovery before again heading lower and pushing towards the 0.7980 levels into the final hours before London. The Oz has come a fair distance over the past 24hrs and really on the back of strengthening commodity prices, which will take time to kick into the economy for the moment, in the immediate the market see’s concerns with losing its triple AAA rating coming just after the last review where it was rated as stable. Topside offers through the 0.8020 level and into the 0.8040 levels before the market opens a little with offers likely every 20 pips or so before running into possible option plays around the 81 cent levels and congestion likely from then on. Downside bids are light into the 79 cent level and strong bids start to appear through the 0.7850 areas and into 0.7800, with the next 50 pips likely to see a mixture with little direction and the 0.7750 level with light support.

Overnight News

EUR:

IMF’s Demekas Says Risk of Greek Exit From Euro Is Very Low

AUD/NZD/CNY:

Australia Replaces China as N.Z. Biggest Export Customer

KRW/JPY:

S. Korea, Japan Finance Ministers to Meet on May 23: Yonhap News

EUR/GBP:

Juncker Open to Treaty Change to Keep U.K. in EU: Telegraph

CNY:

China May Let Shanghai FTZ People Invest Abroad in 1H: Reuters

CHF:

SNB’s Danthine: Real Estate Imbalances Stopped Rising: Temps

NZD/IDR:

N.Z. Dismayed at Indonesian Decision to Execute Bali 9 Members

NZD:

New Zealand Business Confidence Declined in April, ANZ Says

New Zealand Central Bank Says It Bought Net NZ$7 Mln in March

Today’s data

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

NZD       Trade Balance (NZD) Mar A 631M | C 312M | P 50M | R 83M

NZD       NBNZ Business Confidence Apr A 30.2 | P 35.8

06:00     CHF        UBS Consumption Indicator Mar P 1.19

06:00     EUR        German GfK Consumer Sentiment May P 10

08:00     EUR        Eurozone M3 Y/Y Mar C 4.30% | P 4.00%

09:00     EUR        Eurozone Business Climate Indicator Apr P 0.23

09:00     EUR        Eurozone Industrial Confidence Apr P -2.9

09:00     EUR        Eurozone Consumer Confidence Apr (F) P -4.6

09:00     EUR        Eurozone Economic Confidence Apr P 103.9

09:00     EUR        Eurozone Services Confidence Apr P 6

10:00     GBP       CBI Reported Sales Apr C 26 | P 18

12:00     EUR        German CPI M/M Apr (P) C -0.10% | P 0.50%

12:00     EUR        German CPI Y/Y Apr (P) P 0.30%

12:30     CAD       Industrial Product Price M/M Mar C -0.10% | P 1.80%

12:30     CAD       Raw Materials Price Index M/M Mar C -1.80% | P 6.10%

12:30     USD       GDP (Annualized) Q1 (A) C 1.00% | P 2.20%

12:30     USD       GDP Price Index Q1 (A) C 0.40% | P 0.10%

14:00     USD       Pending Home Sales M/M Mar C 1.00% | P 3.10%

14:30     USD       Crude Oil Inventories P 5.3M

18:00    USD       FOMC Rate Decision C 0.25% | P 0.25%

Harry Hindsight              

• EUR: Another quiet session through the Asian session saw the market move around the 1.0880 levels into the London session with the range eventually growing to test the 1.0860 level and set the low to the 1.0900 level to fail on the first attempt. For once the Euro movement was secondary to the GBP and while Cable broke initially lower the Euro started to rally strongly as cross buying moved into the market pushing through the 1.0900 level and trading steadily over the next few hours to push the 1.0940 levels, a weaker consumer confidence number in the US saw further movement for the Euro and the market moved quickly to the 1.0980 levels before finding strong resistance and holding the market in place to the close.
• GBP: A quiet session for the Cable through Asia and into the London session, the release of a weaker GDP kick started the market moving Cable quickly lower through to the 1.5180 levels from the opening 1.5240 levels before quickly recovering as the EURGBP buying forced Euro’s through the 1.0900 level and Cable caught the drag and followed the move, EURGBP moved off the lows around the 0.7135 level and too the 0.7170 in a swift move, Cable quickly moved through the highs after hitting 1.5180 and was a big figure higher within an hour 1.5300 levels was tested and although it took a while the market did break through the level only to stall at the 1.5340 areas and stalling all the way to the close.
• JPY: USDJPY was active through the Asian session however, it was a tight one at best with the range within 15 pips until the move into the London session saw stronger selling appearing in the market and the market dipped through the 119.00 level and as the Euro rallied dipped into the 118.80 level and held the downside for several hours into a quiet close.
• AUD: The Oz climbed very slowly in the Asian session lifting off the lows around the 0.7840 level to move into the London session just above 0.7880 with the Leading index number and rising commodity prices helping underpin the Oz pushing to those highs, with the rally in Euro’s and GBP starting from the release of the UK GDP number the Oz continued to rise being pulled higher by the cross trades inability to break to far, the rise was steady taking several hours before running out of steam and trading quietly through the 80 cent level into the close as early Sydney entered the buying.

Yesterday’s premiership results

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

JPY         Retail Trade Y/Y Mar A -9.70% | C -7.40% | P -1.80% | R -1.70%

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

GBP       BBA Mortgage Approvals Mar A 38.8K | C 37.9K | P 37.3K | R 37.5K

GBP       GDP Q/Q Q1 (A) A 0.30% | C 0.50% | P 0.60%

GBP       Index of Services 3M/3M Feb A 0.70% | C 0.70% | P 0.80%

USD       S&P/Case-Shiller Composite-20 Y/Y Feb A 5.00% | C 4.70% | P 4.60%

USD       Consumer Confidence Apr A 95.2 | C 102.5 | P 101.3

Good Luck,

Andy

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