Andy Harrison
Good morning,
LMAX Close
USDJPY 124.798 | EURUSD 1.0926 | AUDUSD 0.76065 | NZDUSD 0.70905 | USDCAD 1.2523 | USDCHF 0.94598 | GBPUSD 1.52014 |
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Interbank Ranges as of 6am London time
Highs   Lows
USD/JPYÂ Â Â Â Â Â Â Â Â Â Â Â Â Â 125.07 | 124.59
EUR/USDÂ Â Â Â Â Â Â Â Â Â Â Â 1.0938 | 1.0915
EUR/JPYÂ Â Â Â Â Â Â Â Â Â Â Â Â Â 136.62 | 136.21
AUD/USDÂ Â Â Â Â Â Â Â Â Â Â 0.7685 | 0.7604
NZD/USDÂ Â Â Â Â Â Â Â Â Â Â Â 0.7122 | 0.7093
USD/CADÂ Â Â Â Â Â Â Â Â Â Â Â 1.2535 | 1.2509
EUR/CHFÂ Â Â Â Â Â Â Â Â Â Â Â Â 1.0345 | 1.0321
USD/CHFÂ Â Â Â Â Â Â Â Â Â Â Â 0.9466 | 0.9443
GBP/USDÂ Â Â Â Â Â Â Â Â Â Â Â 1.5212 | 1.5195
EUR/GBPÂ Â Â Â Â Â Â Â Â Â Â Â 0.71895 | 0.7185
For today
- EUR: A very quiet session with the market on hold for the only event of the session that of the RBA announcement, opening around the 1.0925 areas the market traded quietly dipping a little below 1.0920 and touching briefly above the 1.0930 levels, the market remained in a tight range on the RBA announcement pushing back above the 1.0930 levels and holding quietly into the grey hours. Light offers likely through the 1.0960 levels and into 1.1000 possibly growing in strength into the area, a push through the 1.1040-50 areas again opens up a test of the 1.1100 level and further congestion thereafter. Downside bids are possibly limited to the 1.0880 areas and a clear break through the 1.0870 levels are likely to see the market moving into the 1.0820-00 areas with light stops triggered through that 1.0870 level. A push on the 1.0800 level could open up the market to retracement into the previous ranges in March/April but for the moment this will depend on the outcome of the never ending Greek saga.
- GBP: As with the Euro the market traded quietly moving from the 1.5200 level to push above the 1.5210 areas, the RBA announcement had little impact on the Cable and the market remained centred around the 1.5200 levels for the most part of the session. Topside offers are light through to the 1.5300 areas where interest is likely to increase with only minor numbers today the market is more likely to be dragged around by the Euro inflationary data and US factory order numbers, downside bids into the 1.5150 levels open up a fresh test of the 1.5100 stronger support and a break here has the potential to open up a further test lower and into the 1.5000 areas.
- JPY: USDJPY opened around the 124.80 levels and pushed into the Tokyo session pushing up to the 124.90 levels before easing back, comments from an Abe advisor saw the market quickly rush higher pushing to the 125.07 levels before the selling subdued the market and returned it back to the 124.80 level, the comments of a weaker Yen encourages more Japan based production when taken into context is half the equation to the reason that most of the major car manufacturers set up in the different time zones to smooth out the costs of FX, so is not likely to bring the large manufacturers back but does improve productivity however, the downside is the cost of servicing foreign currency bond issues (Uridashi) of course the weaker the currency the more it costs to pay interest in USD’s, AUD, and any other foreign currency so not really a good payoff. With that said the first of possibly many attempts to stem the weakness in Yen appeared with Kuroda and Aso making comments on stability, and watching FX movements carefully appeared in the market. Weak stops through the 124.70 sent the market to the 124.60 levels before holding 124.70 into the RBA announcement. The RBA announcement pushed the USDJPY to its lows however, the market saw limited buying into those lows and the market eventually steadied down to the levels of action we’d seen before the announcement by the RBA. Topside offers remain in play through the 125.00 level albeit lighter than before and while we’ve made new highs not seen since 2002 a push through the 125.30 levels are likely to open the market up a little to further gains for the USDJPY. Downside bids really thicken on a move back to the 124.30-00 areas however a push through the level and at test through the 123.80 level could possibly see those longs being squeezed out and the market opening further through 123.50 for a test of the 123.00 levels.
- AUD: The Oz rose steadily from the opening 0.7610 levels pushing through to the 0.7635 levels as shorts decided to move out of the market in front of the RBA announcement. A neutral commentary to the RBA announcement left the market rising quickly to the 0.7660 levels before struggling for a period to break through to 0.7680 and into the grey hours, with no dissenters to the vote the RBA’s announcement to remain at 2% left the market not overly surprised with the market being more stable than usual with the rise reasonably quick but less movement than you would normally expect on this type of occasion. Topside offer into the 77 cent level however, the offers are likely to be light and the market has a possibility of pushing further through the London session before the US numbers impact, however, the 78 cent level is likely to contain a little more resistance. Downside bids remain into the 76 cent level and extending to the lows from April/May time with option interest likely into the 75 cent levels.
Overnight News                                                                                                                        Â
JPY:
Kuroda: Desirable FX Is Stable, Reflects Economic Fundamentals
Japan’s Aso Says Will Carefully Watch FX Movements
Adviser to Japan PM Says Weak Yen Helps Exports, Overseas Income
Japan Must Avoid Deflation Relapse When Sales Tax Raised: Amari
EUR:
Merkel, Draghi Agree Greek Talks Must Step Up in Intensity
NZD:
New Zealand Terms of Trade Gain on Plunging Fuel Prices
NZ Property Tax Rule Changes to Have Small Impact, Treasury Says
AUD:
RBA’s Stevens Holds Benchmark Interest Rate at 2% (Full Text)
Australia 1Q Current Account Deficit A$10.7b; Est. A$10.8b Gap
Australia ANZ Weekly Consumer Sentiment Unchanged at 113.5
Today’s data
Actual = A | Consensus = C | Previous = P | Revised = R All timings GMT
NZDÂ Â Â Â Â Â Terms of Trade Index Q/Q Q1 A 1.50% | C 1.60% | P -1.90% | R -2.30%
JPYÂ Â Â Â Â Â Â Â Monetary Base Y/Y May A 5.60% | C 34.30% | P 35.20%
JPYÂ Â Â Â Â Â Â Â Labour Cash Earnings Y/Y Apr A 0.90% | C 0.40% | P 0.10% | R 0.00%
AUDÂ Â Â Â Â Â Current Account Balance (AUD) Q1 A -10.7B | C -10.8B | P -9.6B | R -10.2B
AUDÂ Â Â Â Â Â RBA Rate Decision A 2.00% | C 2.00% | P 2.00%
07:55Â Â Â Â EURÂ Â Â Â Â Â Â German Unemployment Change May C -10K | P -8K
07:55Â Â Â Â EURÂ Â Â Â Â Â Â German Unemployment Rate May C 6.40% | P 6.40%
08:30Â Â Â Â GBPÂ Â Â Â Â Â Mortgage Approvals Apr C 62.9K | P 61.3K
08:30Â Â Â Â GBPÂ Â Â Â Â Â M4 Money Supply M/M Apr C 0.40% | P 0.30%
08:30Â Â Â Â GBPÂ Â Â Â Â Â Construction PMI May C 55.1 | P 54.2
09:00Â Â Â Â EURÂ Â Â Â Â Â Â Eurozone PPI M/M Apr C 0.10% | P 0.20%
09:00Â Â Â Â EURÂ Â Â Â Â Â Â Eurozone PPI Y/Y Apr C 2.00% | P -2.30%
09:00Â Â Â Â EURÂ Â Â Â Â Â Â Eurozone CPI Estimate Y/Y May C 0.20% | P 0.00%
09:00Â Â Â Â EURÂ Â Â Â Â Â Â Eurozone CPI – Core Y/Y (MAY A) C 0.70% | P 0.60%
14:00Â Â Â USDÂ Â Â Â Â Â Factory Orders M/M Apr C -0.20% | P 2.10%
Harry Hindsight             Â
- EUR: Early pressure on the Euro after the weekends comments saw the market open in line with the close on Friday only to start a steady slide from the opening 1.0990 areas down to the 1.0930 areas, the early ranges then remained intact to the move into the London session before starting to move lower again as the early Europe and London came in as strong sellers. Eurozone numbers again remained week and the market headed to touch through to the 1.0890’s before the market held for the first time and recovered with the help of in line German numbers with the CPI numbers better than previous. The market again pushed towards the opening levels before US numbers put paid to the rally with ISM numbers hitting better than expected and quickly turning the market back to those 1.0890 levels to push slightly through, there was a light recovery pushing to the 1.0930 levels.
- GBP: Cable held for the most part through the Asian session opening unchanged around the 1.5290 the market initially tested through to the 1.5260 areas before rallying to test the topside offers around the 1.5300 levels, the move into the London session saw the market dropping back as first the drag of the Euro and then the release of less than expected PMI numbers saw Cable touch the 1.5200 levels. The move through the early part of the NYK session saw the market pushing higher to the 1.5270 levels before the US data release saw the USD rallying strongly and the Cable touching down to the 1.5170 level before moving to hold around the 1.5200 level to the close.
- JPY: Having broken to the 124.00 areas the market struggled through the Asian session rising only 20 pips from the opening 124.10 levels before slipping back lower and testing lightly through the 124.00 areas for the first time, the market rejected the low and then the market held around the 124.10 levels for several hours through the London session and into NYK, initial US releases weakened the USD initially before the market rallied quickly on the ISM numbers to push through the 124.40 levels triggering weak stops and then struggling briefly before touching 124.80 areas and trading around the level.
- AUD: Mixed fortunes for the Oz with the market initially trading from the opening 0.7640 levels to trade to just below the 0.7670 into the grey hours before the London session saw the market selling into the new session to push the market through the opening and into the 0.7625 levels. The market then slowly rose back through the opening until the release of the ISM numbers from the US saw the market drop quickly pushing to the 76 cent level before a slow drift to the close.
Yesterday’s premiership results
Actual = A | Consensus = C | Previous = P | Revised = R All timings GMT
JPYÂ Â Â Â Â Â Â Â Capital Spending Q1 A 7.30% | C -0.10% | P 2.80%
AUDÂ Â Â Â Â Â TD Securities Inflation M/M May A 0.30% | P 0.30%
CNYÂ Â Â Â Â Â Â Manufacturing PMI May A 50.2 | C 50.2 | P 50.1
CNYÂ Â Â Â Â Â Â Non-manufacturing PMI May A 53.2 | C 53.4
AUDÂ Â Â Â Â Â Building Approvals M/M Apr A -4.40% | C -1.70% | P 2.80% | R 2.90%
CNYÂ Â Â Â Â Â Â HSBC Manufacturing PMI May (F) A 49.2 | C 49.3 | P 49.1
CHFÂ Â Â Â Â Â Â SVME-PMI May A 49.4 | C 48.4 | P 47.9
EURÂ Â Â Â Â Â Â Italy Manufacturing PMI May A 54.8 | C 53.1 | P 53.8
EURÂ Â Â Â Â Â Â Eurozone Manufacturing PMI May (F) A 52.2 | C 52.3 | P 52.3
GBPÂ Â Â Â Â Â PMI Manufacturing May A 52 | C 52.5 | P 51.9 | R 51.8
EURÂ Â Â Â Â Â Â German CPI M/M May (P) A 0.10% | C 0.10% | P 0.00%
EURÂ Â Â Â Â Â Â German CPI Y/Y May (P) A 0.70% | C 0.70% | P 0.50%
USDÂ Â Â Â Â Â Personal Income Apr A 0.70% | C 0.30% | P 0.00%
USDÂ Â Â Â Â Â Personal Spending Apr A 0.00% | C 0.10% | P 0.40%
USDÂ Â Â Â Â Â PCE Deflator M/M Apr A 0.00% | C 0.10% | P 0.20%
USDÂ Â Â Â Â Â PCE Deflator Y/Y Apr A 0.10% | P 0.30%
USDÂ Â Â Â Â Â PCE Core M/M Apr A 0.10% | C 0.10% | P 0.10%
USDÂ Â Â Â Â Â PCE Core Y/Y Apr A 1.20% | P 1.30%
USDÂ Â Â Â Â Â Construction Spending M/M Apr A 2.20% | C 0.70% | P -0.60%
USDÂ Â Â Â Â Â ISM Manufacturing May A 52.8 | C 52 | P 51.5
USDÂ Â Â Â Â Â ISM Prices Paid May A 49.5 | C 42.5 | P 40.5
Good Luck,
Andy
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