Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 107.947 | EURUSD 1.14077 | AUDUSD 0.75959 | NZDUSD 0.68693 | USDCAD 1.29978 | USDCHF 0.95432 | GBPUSD 1.42386 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.14169 | 1.14006

USDJPY                 108.270 | 107.872

GBPUSD               1.42465 | 1.42263

AUDUSD              0.76462 | 0.75836

USDCHF               0.95499 | 0.95389

USDCAD               1.29179 | 1.28903

NZDUSD               0.68929 | 0.68512

EURGBP               0.80208 | 0.80076

EURJPY                 123.510 | 123.078

EURCHF                1.08942 | 1.08844

 

For Today

• EUR: A very tight range with the market again trading around the 1.1410 areas through the session on light volumes, Topside offers through the 1.1440-60 levels with a little space before stronger offers are likely to make an appearance into the 1.1480-1.1520 levels, A push through would likely see strong stops appearing and the market possibly making a quick move higher, Downside through to the 1.1350 level is likely to see limited bids, and a push through the 1.1320 levels lighter still with weak stops possibly just below there and the market turning completely on that weakness and opening a deeper move to 1.1200 levels, CPI numbers in Germany are expected to be in line however, any weakness will likely see the discontent increasing between the German central bank and ECB.
• GBP: Nothing different for the Cable with a steady range around the 1.4240 levels through the session with the market becalmed for the moment, Topside offers through the 1.4280 areas and into the 1.4300 then likely some weak stops before offers move in again quickly as the market approaches the 1.4350 levels to continue through to 1.4400. Downside bids are likely to be light through the 1.4200 levels and the market quickly opening to the 1.4100 levels and better bids below that area into 1.4050 areas, mixed expectations on the inflation point however, given the stability over the previous few months and the rise possible filtering in they could surprise.
• JPY: Mr Sakakibara seemed to dominate the market today, with his title of Mr Yen having been the Finance Minister during the intervention periods of the 1990’s, however, while the market bounced a little around the period the opening 107.90’s were generally left behind with the market trading to the 1.0820’s and remaining in the area for a move into the grey hours, his expectations are for the Yen to continue to strengthen against the possible wishes of the MoF and BoJ. Topside offers light through to the 108.40 before opening up for a test towards the 109.00 levels and the direction those erstwhile departments would like, downside bids into the 107.60 areas have now seen two attempts and held, and while technically this could be adjudged as a bullish signal likelihood is that any further attempts will open the market to a deeper move and the 106.80 providing only minor support before the 106.00 areas.
• AUD: The market was dominated in quiet trading with the NAB confidence number with the early trading seeing the Oz slipping from the 76 cent levels to touch into the mid 0.7580’s before the release, a better number saw the market quickly see the early shorts revising their view and the market quickly moving back to the 0.7620 levels of yesterday, and after a pause continuing towards the 0.7650 area with AUDJPY carry and the Oz in general seeing some volume, Topside offers are likely to continue into the 0.7680 area where the offers are likely to increase in size through to the 0.7700 areas, having seen the market through the level at the end of last month and the beginning of this the option barriers could be lighter and reducing the offers to extent if the move was strong enough however, the level still has to be respected, a push through the level though opening a test of congestion through the 0.7740-60 areas and the 80cent level becoming a goal. Downside bids light through 76 cents and the 0.7510-20 areas likely to provide a strong base for the market for the moment and limited data to disturb the level.

Overnight News

USD/CNY:

Clinton Says She’ll Target China on Trade, Impose ‘Consequences’

USD: Obama Is `Pleased’ With Yellen Amid Signs of Slowing Economy

JPY:

Aso: Will Take Action as Needed If There Are One-Sided FX Moves

LDP Maintains Lead in Japan Upper House Election: Asahi Poll

Japan March bank loans rise 2.0 vs. year ago

KRW/CNY:

South Korea, China Agree to Extend Bilateral Currency Swap

CNY:

China to Step Up Crackdown on Underground Banking This Yr: Daily

Large Yuan Depreciation Isn’t Expected, Fitch’s Fennell Says

TWD:

Taiwan Fin. Minister Says Unlikely to Join AIIB: China Times

NZD:

New Zealand Housing Market Buoyed by Regions, REINZ Says

GBP:

U.K. LFL March Retail Sales Fall 0.7% Y/y, BRC Says

EUR:

Greece, EU/IMF Lenders Adjourn Bailout Review Talks: Reuters

Bank of France Governor Villeroy Says French Growth Insufficient

AUD:

Australia March Business Confidence Rises 3 Pts M/m to 6

Australia ANZ Weekly Consumer Confidence Falls 1.2% to 112

Today’s data

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

GBP       BRC Retail Sales Monitor Y/Y Mar A -0.70% | P 0.10%

AUD       NAB Business Confidence Mar A 6 | P 3

06:00     EUR        German CPI M/M Mar (F) C 0.80% | P 0.80%

06:00     EUR        German CPI Y/Y Mar (F) C 0.30% | P 0.30%

08:30     GBP       CPI M/M Mar P 0.20%

08:30     GBP       CPI Y/Y Mar C 0.30% | P 0.30%

08:30     GBP       Core CPI Y/Y Mar C 1.30% | P 1.20%

08:30     GBP       RPI M/M Mar C 0.30% | P 0.50%

08:30     GBP       RPI Y/Y Mar C 1.50% | P 1.30%

08:30     GBP       PPI Input M/M Mar C 2.10% | P 0.10%

08:30     GBP       PPI Input Y/Y Mar P -8.10%

08:30     GBP       PPI Output M/M Mar C 0.20% | P 0.10%

08:30     GBP       PPI Output Y/Y Mar C -1.00% | P -1.10%

08:30     GBP       PPI Output Core M/M Mar P 0.20%

08:30     GBP       PPI Output Core Y/Y Mar P 0.20%

12:30     USD       Import Price Index M/M Mar C 1.20% | P -0.30%

18:00     USD       Monthly Budget Statement Mar C -88.5B | P -192.6B

Harry Hindsight              

• EUR: A limited range for the day with the market opening around the 1.1410 and generally remaining in that area through the day, Asia saw a steady climb to test the 1.1430 levels through into the London session with Euro’s dropping back from the opening to test the downside support through the 1.1380 levels however, market failed to reach any significant stops and eventually recovered into the NYK session again around the 1.1400 levels The London session saw an equity rally and once the market moved into NYK the Euro started to make its way steadily to the highs again breaking through the 1.1430 levels and triggering some light stops through to just below the 1.1450 areas in mixed trading before settling back to trade around the 1.1410 areas to the close.
• GBP: Cable traded quietly from the opening moving around the 1.4120 levels and eventually trading into the grey hours pushing against the 1.4140 levels, Euro weakness dragged Cable a little lower testing through the 1.4110 levels before finding solid buying in Cable and strong EURGBP selling providing a strong push to the 1.4220 levels in early London, triggering stops along the way and pausing only for a short period before moving to test through 1.4250 and the 1.4280-1.4300 offers, the movement through the NYK session saw a quiet range around the 1.4240 levels to the close.
• JPY: With talk of increased hedging but funds, the USDJPY was sold off from the Asian highs above 108.30 level and dropping steadily to the 107.70 areas before slowing and holding sub 108.00 into the London session, the market again pushed back to the opening levels and tested eventually to the 108.40 levels into the NYK session with the market settling back to trade around the 1.0800 levels to the close.
• AUD: A reasonable range for the Oz with early carry trade buying quickly wiped out with the USDJPY selling on the hedge story, and taking the market to its lows just below the 0.7530 levels, figures released saw an increase of 32.9% investment in Australia by the Chinese and the market quickly recovered to move back through the opening 0.7550 areas and testing to new highs late in the session above 0.7570, grey hour selling and a lacklustre start in London saw the market holding the 0.7550-60 areas before the NYK session saw fresh buying through the early part of the session and a push above the 0.7600 areas triggering weak stops and the market spiking to the 0.7630 before matching the rest of the market and trading quietly to the close.

Yesterday’s premiership results

JPY         Machine Orders M/M Feb A -9.20% | C -11.80% | P 15.00%

AUD       Home Loans Feb A 1.50% | C 2.10% | P -3.90%

CNY        CPI Y/Y Mar A 2.30% | C 2.40% | P 2.30%

CNY        PPI Y/Y Mar A -4.30% | C -4.60% | P -4.90%

Good Luck,

Andy

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