Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close Wellington open

USDJPY 120.19 120.10-25 | EURUSD 1.11974 1.1190-20 | AUDUSD 0.7849 0.7840-55 | NZDUSD 0.75407 0.7537-47 | USDCAD 1.21593 1.2152-65 | USDCHF 0.93277 0.9300-80 | GBPUSD 1.51374 1.5140-55 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               120.25 | 120.00

EUR/USD             1.1200 | 1.1177

EUR/JPY               134.63 | 134.25

AUD/USD            0.7845 | 0.7803

NZD/USD             0.7540 | 0.7510

USD/CAD             1.2180 | 1.2152

EUR/CHF              1.04555 | 1.0440

USD/CHF             0.9341 | 0.93055

GBP/USD             1.5165 | 1.5136

EUR/GBP             0.7390 | 0.73805

For today

• EUR: As you would expect the market was particularly quiet with Euro’s drifting back from Friday’s close, with the opening wide the move into the official opening saw the market drifting back from the 1.1190’s to test below the 1.1880’s before stabilizing and moving back to the opening areas. Topside offers appear through the 1.1200 areas however, they are likely to be very light and the stronger offers are above the 1.1280 level and into the 1.1300 areas with possible option protection in the area, a push through the figure will see a mixed balance before opening up to a test to 1.1320’s. Downside bids around the lows however, they are limited to some degree and the better bids appear into the 1.1120 areas with those bids likely to continue to the 1.1080 areas.
• GBP: Very quiet in the Cable moving from the 1.5140 levels pushing quietly to above the 1.5160 areas and then trading through the session around that area. Downside see’s reasonable bids into the 1.5100 areas before giving way to downside stronger bids into the 1.5000 areas, not likely to see too much of stops having already cleared out a good proportion on Friday. Topside offers are weak at best and the market is open to retest the 1.5400 levels.
• JPY: USDJPY slowly slipped back from the opening above the 120.20 areas and slipping back slowly to test the 120.00 before holding, with London and Tokyo out for the day the trading has been limited at best. Topside offers are likely to continue through Friday’s highs and strengthening into the 120.80 levels, a push through the 121.00 will open the topside for a limited period with possible stops matched against the offers. Downside bids light into the 120.00 areas and to the 119.80-70 areas, a move through will see light stops opening up a move back to the 119.20-40’s.
• AUD: The Oz opened around the 0.7840 levels with the market moving steadily lower and with the best range of the major pairings, to trade to the 0.7805 areas before moving back once the data was over with. Downside bids into the 0.7800 and congestion over the next 50 pips to the 0.7750 level before any likelihood of stops however, they are likely to be part of a mixture and bids again start to appear into the 77 cent areas. Topside offers into the 0.7850 open up the market for another run higher to the lightly protected 79 cents and then through to better offers from then on.

Overnight News

CNY:

HSBC China April Manufacturing PMI 48.9; Est. 49.4

China GDP May Grow About 6.8% in 2Q: China Securities Journal

IMF Close to Declaring China’s Yuan Fairly Valued, WSJ Says

KRW/JPY:

South Korea Has Its Eye on Won-Yen Movement, Says Song

AUD:

Australia March Building Approvals Rose 2.8% M/M; Est 1.5% Fall

Low Liquidity Caused A$ Swings Pre-RBA Decision, ASIC Says

Abbott: Stronger Border Control Results in A$500m Budget Savings

Australia’s Apr. TD Monthly Inflation Gauge Rises 0.3% M/m

Australia April ANZ Job Ads Rise 2.3% vs -1.3% in March

NZD:

N.Z. Treasury Says Annual Inflation Will Be Less Than 1% in 2015

Key Says Getting to N.Z. Budget Surplus May Take Longer

N.Z. Officials Reduce Fruit Fly High-Risk Zone in Auckland

NZ Export Commodity Prices Drop the Most in More Than Six Years

Today’s data

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

AUD       TD Securities Inflation M/M Apr A 0.30% | P 0.40%

NZD       ANZ Commodity Price Apr A -7.40% | P 4.60%

AUD       Building Approvals M/M Mar A 2.80% | C -1.50% | P -3.20% | R -1.60%

CNY        HSBC China Manufacturing PMI Apr (F) A 48.9 | C 49.4 | P 49.2

07:30     CHF        SVME-PMI Apr C 48.2 | P 47.9

08:00     EUR        Eurozone Manufacturing PMI Apr (F) C 51.9 | P 51.9

08:30     EUR        Eurozone Sentix Investor Confidence May C 19.1 | P 20

14:00     USD       Factory Orders M/M Mar C 2.10% | P 0.20%

Weekend News

USD:

Mester, Williams Say Fed Could Lift Rates at Any FOMC Meeting

JPY:

BOJ Kuroda: Underlying Inflation Trend Quite Clear

Japanese Automakers to Bring Some Production Home: Nikkei

Toyota, Honda to Return Some Overseas Output to Japan: Nikkei

Prime Minister Abe Says Risk-Averse Culture Stifles Innovation

Abe to Maintain Previous Japan WWII Position in Speech: Kyodo

Japan’s Aso Says Quality Infrastructure Has Long-Term Benefits

Japan’s Aso Says China Has Failed to Explain AIIB Governance

SMFG, Mizuho Profits Likely Exceed Forecasts, Nikkei Reports

JPY/RUB:

Japan, Russia to Discuss Energy, Farming Cooperation: Yomiuri

EUR:

Greece Races to Bridge Gap with Creditors before Debt Bill

Greece Unlikely to See Aid Payments by May 12: Handelsblatt

Greece Needs Quick Deal with Creditors: Govt. Spokesman

Greece Willing to Consider Single VAT Rate in Debt Talks: FAS

CNY:

China Plans Reforms in Next 2 Yrs. to Restructure Economy

Talks to Include Chinese Yuan into SDR at Early Stage, IMF Says

China April New Home Prices Almost Unchanged From March: Soufun

CNY/TWD:

China Political Adviser Suggests Taiwan Take AIIB Role: Xinhua

AUD:

IMF to Study Australia House Market Risks: Financial Review

Australia Plans Fines, Jail for Foreign Illegal House Purchases

TRY:

Turkey Central Bank to Start Paying Remuneration on $ Reserves

Harry Hindsight

• EUR: The market opened little different to Fridays close, opening around the 1.1220 areas and slowly slipping back to the opening levels before finding a little support moving into the London session. The market rallied through the early part of the session as it pushed to the weeks highs again, the market tested the levels s few times before giving up as the US numbers disappointed again however the market took the movement in its stride and with a limited market the market dropped back and pushed through the 1.1200 areas to make lows for the day.
• GBP: A quiet start to the day with the market trading in a quiet 1.5340-60 area and rising into the London session to push to just below the 1.5400 areas before the selling started to appear as the UK numbers disappointed, dropping quickly to the 1.5320 levels the market continued through the day to be sold back with early strength in EURGBP moving in from the 0.7300 areas and pushing to above the 0.7420 areas in steady buying, the numbers and the buying in the EURGBP eventually saw the Cable extend to the 1.5120 areas before finding some late buying to finish the day off its lows.
• JPY: Early trading from the opening 119.40 levels saw a steady stream of buying move into the market once Tokyo had opened and pushed to the 119.70 levels, the buying then continued through the session pushing the USDJPY higher with cross JPY buying moving in from the Euro, with liquidity limited the USDJPY pushed to the 120.00 level into the NYK session and the market saw limited stops triggered and the market push towards the 120.30 levels before running into sufficient offers before settling back a little to the close.
• AUD: As the USDJPY rose so the Oz slipped back as the cross JPY held in a reasonably tight range with the outside levels of 94.20 and 94.60 containing the market for the most part, the opening levels around the 0.7910 levels were never seen again and the market slowly moved to the 0.7860 levels into the grey hours and holding the lows until the NYK session saw the market drop off from the numbers and trade to the 0.7810 levels recovering into late NYK to the 0.7850.

Friday’s premiership results

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

JPY         National CPI Core Y/Y Mar A 2.20% | C 2.00% | P 2.00%

JPY         Tokyo CPI Core Y/Y Apr A 0.40% | C 0.50% | P 2.20%

JPY         Jobless Rate Mar A 3.40% | C 3.50% | P 3.50%

JPY         Household Spending Y/Y Mar A -10.60% | C -11.70% | P -2.90%

CNY        Manufacturing PMI Apr A 50.1 | C 50 | P 50.1

CNY        Non-manufacturing PMI Apr A 53.4 | P 53.7

JPY         Labour Cash Earnings Y/Y Mar A 0.10% | C 0.40% | P 0.50% | R 0.10%

AUD       PPI Q/Q Q1 A 0.50% | C 0.20% | P 0.10%

AUD       PPI Y/Y Q1 A 0.70% | P 1.10%

GBP       Mortgage Approvals Mar A 61K | C 63K | P 61.8K

GBP       M4 Money Supply M/M Mar A 0.30% | C 0.10% | P -0.20%

GBP       PMI Manufacturing Apr A 51.9 | C 54.6 | P 54.4 | R 54

USD       Construction Spending M/M Mar A -0.60% | C 0.50% | P -0.10%

USD       ISM Manufacturing Apr A 51.5 | C 52 | P 51.5

USD       ISM Prices Paid Apr A 40.5 | C 41.5 | P 39

USD       U. of Michigan Confidence Apr (F) A 95.9 | C 96 | P 95.9

Stay lucky

Andy

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