Andy Harrison
Good morning,
LMAX Close
USDJPY 123.432 | EURUSD 1.12578 | AUDUSD 0.77541 | NZDUSD 0.70105 | USDCAD 1.22948 | USDCHF 0.9334 | GBPUSD 1.55175 |
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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 123.68 | 123.33
EUR/USDÂ Â Â Â Â Â Â Â Â Â Â Â 1.1267 | 1.1224
EUR/JPYÂ Â Â Â Â Â Â Â Â Â Â Â Â Â 139.12 | 138.51
AUD/USDÂ Â Â Â Â Â Â Â Â Â Â 0.7758 | 0.7736
NZD/USDÂ Â Â Â Â Â Â Â Â Â Â Â 0.7026 | 0.7003
USD/CADÂ Â Â Â Â Â Â Â Â Â Â Â 1.2299 | 1.2279
EUR/CHFÂ Â Â Â Â Â Â Â Â Â Â Â Â 1.0506 | 1.04905
USD/CHFÂ Â Â Â Â Â Â Â Â Â Â Â 0.9345 | 0.9325
GBP/USDÂ Â Â Â Â Â Â Â Â Â Â Â 1.5527 | 1.5501
EUR/GBPÂ Â Â Â Â Â Â Â Â Â Â Â 0.7258 | 0.72425
For today
- EUR: A very quiet session for the Euro with the Euro dipping from the opening around the 1.1260 levels to touch briefly through the 1.1240 area and then into the Tokyo session, steady EURJPY buying through the early part of the session saw the Euro again pushing back to the opening levels however, the market for the moment seems reluctant to push through with any conviction and EURJPY offers above the 139.10 while light contain the topside for the Euro, a rerelease of a story running in the German Bild newspaper led to a mini collapse of the Euro as the market moved towards the Tokyo lunch period with the market not willing to leave there desks with long positions, the market dropped from the 1.1260 levels and quickly touched into the 1.1220’s before finding the bids in sufficient size. Offers to the topside from the 1.1380 are likely to be light with the better sizes through the 1.1420-40 levels before the market opens slightly for a test to 1.1480-1.1500. Downside has light bids into the 1.1220-00 with much probably cleared out on the move yesterday on Retails sales numbers, through the area though the bids are likely to increase into the 1.1180 levels and a clear push through the 1.1170 areas are likely to stops appearing in the market and a test into the 1.1120 levels open however, Greece still holds centre stage with time running out for the Greeks to accept terms or come to some compromise which is a mile away as it stands however, if they were to agree time is short for the agreements to be ratified and then legislated for in the various areas. IP numbers of some importance however, these are taking second place to inflationary numbers for the moment so only limited impact unless there is a major change.
- GBP: Cable dipped in the early part of the session in very quiet trading with a rising USDJPY and limited interest in pushing the GBPJPY through to the 192.00 areas forcing the Cable into the 1.5510 levels for a period before pushing back to trade around the 1.5520 for the bulk of the session. Topside offer into the 1.5550 levels are beginning look stronger however, as strong push through the area will quickly expose the topside and opening the market to a return to the 1.56-1.58 range from early last month, offers are likely to continue into the 1.5600 lightly before better offers to a run to 1.5700. Downside bids light into the 1.5450 before opening to test the 1.5400 and likely stops through the level from weak longs. Better bids are likely to start appearing with congestion from the 1.5350 onwards. Downside potential is for the moment limited unless the market has some clear indication that the UK has drifted East and run solidly into Europe.
- JPY: A dull day for the USDJPY as you’d expect for a Friday, with the market moving slightly higher into the Tokyo session and the Fix period to push above the 123.60 levels however, for the moment the cross/JPY dominated the markets with the rising USDJPY taking the crosses into offering areas and stopping any further gains, the early gains were slowly eroded and the market dipped back to the opening levels, the rehash of a news item that Germany was preparing for the Greek exit from the Eurozone sent the market in Euro’s sharply lower and EURJPY selling quickly followed suit and too the USDJPY from the 123.50-40 areas it had spent several hours trading in to test into the mid 123.30’s before holding quietly to the grey hours. Topside offers from the 123.80 areas while thinner than they were are still likely to be there and building into the 124.20 levels, a clear break through the level will still find strong offers building to the topside and into the 124.50-125.00 areas and the potential for further commentary from BoJ/MoF. Downside is potentially very weak until the market attempts to push through the 122.80 levels and rather than weak stops the market could see bottom pickers lining up however, a dangerous game to play, but a push through the 122.50 is likely to see stops appearing and an opening to push through 121.50 and a deeper move to the previous 118.50/120.50 ranges.
- AUD: General malaise in the Oz saw the market drifting lower in a quiet session moving from the opening levels above the 0.7750 to push repeatedly below 0.7740 but with very little conviction as the Oz market looks for the exit door for the day. Topside offers into the 78 cent level are likely to continue through to the stronger 0.7820 levels before the market opens a little however, a push through the level is likely to run into offers holding around the 0.7840-60 levels and even if those are cleared weak stops are likely to run into the next offering level and tough going. Downside bids are light but congestion into the 77 cent levels could see profit taking and bottom picking in a quiet market, a push through the level though will start to see the stronger bids appearing on any attempt through the 0.7650 levels and continuing a long way down without some earth shattering Oz news.
Overnight News                                                                                                                        Â
EUR:
German Government Prepares for Greek Default, Bild Reports
EU Officials Said to Demand Greece Present Plan Immediately
USD/JPY:
U.S. passage of “fast-track” bill will be welcome move for Japan-Amari – RTRS
JPY: GPIF Hiring for Alternative Asset Investment Team, Nikkei Says
Former Currency Chief Shinohara Sees Yen Reflecting Fundamentals
JPY/NZD:
Japanese Cut N.Z. Bond Holdings in May; U.S. Investors Buy
NZD:
New Zealand Manufacturing Growth Slows for a Third Month: PMI
CNY:
China Can Absorb Local Govt. Contingent Liabilities: Moody’s
Today’s data
Actual = A | Consensus = C | Previous = P | Revised = R All timings GMT
NZDÂ Â Â Â Â Â Business NZ Manufacturing Index May A 51.5 | P 51.8 | R 51.7
JPYÂ Â Â Â Â Â Â Â Industrial Production M/M Apr (F) A 1.20% | C 1.00% | P 1.00%
JPYÂ Â Â Â Â Â Â Â Tertiary Industry Index M/M Apr A -0.20% | C 0.40% | P -1.00%
08:30Â Â Â Â GBPÂ Â Â Â Â Â Construction Output M/M Apr C 0.10% | P 3.90%
09:00Â Â Â Â EURÂ Â Â Â Â Â Â Eurozone Industrial Production M/M Apr C 0.40% | P -0.30%
12:30Â Â Â Â USDÂ Â Â Â Â Â PPI M/M May C 0.40% | P -0.40%
12:30Â Â Â Â USDÂ Â Â Â Â Â PPI Y/Y May P -1.30%
12:30Â Â Â Â USDÂ Â Â Â Â Â PPI Core M/M May C 0.10% | P -0.20%
12:30Â Â Â Â USDÂ Â Â Â Â Â PPI Core Y/Y May P 0.80%
14:00Â Â Â USDÂ Â Â Â Â Â U. of Michigan Confidence Jun 8 C 91.5 | P 90.7
Harry Hindsight                  Â
- EUR: The market opened around the 1.1325 areas before starting a steady decline from the opening in Tokyo sliding to the 1.1285 areas before finding a little respite from the selling, the move towards the grey hours and London opening saw the Euro reverse its losses and spike higher to make the day’s highs trading to 1.1330 then the London market took over fully and it was all selling, with the analysts out there questioning the rise in yields for the bunds and trying to equate that to the Euro today’s action more or less confirms the link is tenuous at best and one wouldn’t be surprised if all the original buyers of bunds back just before QE kicked in are now exiting with their tails between their legs and so the yield has moved sharply higher over the past week if you can call 0.50% increase in yield sharp however, in Japan they could give you all the secrets of 0.01% yields and 100% move is really nothing to write home about. So the London opening saw the Euro’s being sold from the 1.1320 as the previous day’s euphoria over potential settlement between the Eurogroup and Greece disappeared and the discussions with Greece and the IMF take over for a short period, it was brief, with the negotiators called back to Washington, with continuing issues such as pension and labour reforms still a major stumbling block for Greece. Euros dipped to the 1.1260 areas in the opening hour in London before renewing the move into the NYK session with the market dropping sharply to below the 1.1200 level when the US retail numbers appeared in the market and USD rallied a little on the better news however, the market did bounce with one supposes a slip up by some of the traders caught short on the move and the market quickly pushed 60 pips higher before settling down to a quiet rise from 1.1220 to the close around the early London areas.
- GBP: Slipping from the opening 1.5520 levels the market for Cable dipped to the 1.5500 levels and then into a dull session in Tokyo holding around the figure level for much of the session before slipping back into the London session as the drag of the Euro pulled GBP with it with no tier 1 data for the day in Europe and the UK. The depth of the move was lessened by the weakening of the EURGBP cross moving from its highs into the London opening above the 0.7315 areas to touch 0.7235 into the NYK session, this helped the Cable to keep above the 1.5400 levels and even on the stab lower on the release of the retail sales numbers Cable hung in and the market was unable to push to the 1.5420 levels before rising steadily over the course of the session to finish the day almost unchanged.
- JPY: The market continues to absorb the comments that Kuroda made little more than 24hrs previously and then slowly starts to sell the Yen, moving from the 122.70 opening levels the market made steady gains in the USDJPY rising through the Asian session to the 123.30 levels, London joined the move and the market continued its rise pushing to the 123.80 levels and offers in front of 124.00 as you would expect. The move into the NYK session saw the market holding the levels and the release of the retail sales numbers saw a savage spike through to the 124.10 area and as with the Euro left people holding risk they didn’t want and the market quickly reversed to touch to the 123.30 levels with a thin market unable to contain the shift. The market eventually moved back to the 123.70 levels and then traded in a narrow band for much of the session, the lead up to the close saw profit taking moving in and the market drifted lower to a close around the 123.45 areas.
- AUD: RBNZ cut 0.25% from the interest rates leading to a quick move in the Kiwi and dragging on the Oz in early trading with the Oz dropping quickly from the closing 0.7760 levels to the low 0.7730’s as the market adjusted, the Oz continued to drift lower as the AUD/NZD cross continued to trade strongly but with the weakness in the NZD continuing to drag on the Oz the market bottomed around the 0.7710 and into the Oz employment numbers with another strong number seeing the Oz moving back higher and pushing from those lows to spike into the 0.7790 levels before backing away from the 78 cent levels and holding the session around the 0.7770 levels. London early sellers saw an opportunity to sell into a market already forewarned of the ability of the RBA to cut interest further if required and the market drifted ever lower over the course of the session, that is until the US retail sales numbers with the downside tipping through 77 cents before bouncing back again to trade around the 0.7730 levels, the end of the London session started to see a steady rise for the Oz and it slowly made its way back to the 0.7760 levels and closing with little change on the day as the market I assume has taken the numbers in the US as just a single silver line in the sky rather than lining.
Yesterday’s premiership results
Actual = A | Consensus = C | Previous = P | Revised = R All timings GMT
NZDÂ Â Â Â Â Â RBNZ Rate Decision A 3.25% | C 3.50% | P 3.50%
GBPÂ Â Â Â Â Â RICS House Price Balance May A 34% | C 35% | P 33%
JPYÂ Â Â Â Â Â Â Â BSI Large Manufacturing Q/Q Q2 A -6 | C 3.2 | P 2.4
AUDÂ Â Â Â Â Â Consumer Inflation Expectation Jun A 3.00% | P 3.60%
AUDÂ Â Â Â Â Â Employment Change May A 42.0K | C 15.2K | P -2.9K
AUDÂ Â Â Â Â Â Unemployment Rate May A 6.00% | C 6.20% | P 6.20%
CNYÂ Â Â Â Â Â Â Retail Sales Y/Y May A 10.10% | C 10.20% | P 10.00%
CNYÂ Â Â Â Â Â Â Industrial Production Y/Y May A 6.10% | C 6.10% | P 5.90%
CNYÂ Â Â Â Â Â Â Fixed Assets Ex Rural YTD Y/Y May A 11.40% | C 12.00% | P 12.00%
CADÂ Â Â Â Â Â New Housing Price Index M/M Apr A 0.10% | C 0.20% | P 0.00%
CADÂ Â Â Â Â Â Capacity Utilization Rate Q1 A 82.70% | C 83.60% | P 83.60% | R 83.50%
USDÂ Â Â Â Â Â Advance Retail Sales May A 1.20% | C 0.80% | P 0.00% | R 0.20%
USDÂ Â Â Â Â Â Retail Sales Less Autos May A 1.00% | C 0.70% | P 0.10%
USDÂ Â Â Â Â Â Import Price Index M/M May A 1.30% | C 0.80% | P -0.30% | R -0.20%
USDÂ Â Â Â Â Â Initial Jobless Claims (JUN 6) A 279K| C 277K | P 276K | R 277K
USDÂ Â Â Â Â Â Business Inventories Apr A 0.40% | C 0.10% | P 0.10%
Good Luck,
Andy
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