Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 109.401 | EURUSD 1.12674 | AUDUSD 0.76949 | NZDUSD 0.68625 | USDCAD 1.28462 | USDCHF 0.96691 | GBPUSD 1.41533 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.12685 | 1.12500

USDJPY                 109.725 | 109.293

GBPUSD               1.41587 | 1.41328

AUDUSD              0.77270 | 0.76817

USDCHF               0.96799 | 0.96645

USDCAD               1.28497 | 1.28064

NZDUSD               0.68882 | 0.68429

EURGBP               0.79675 | 0.79528

EURJPY                 123.573 | 123.155

EURCHF                1.08988 | 1.08898

 

For Today

• EUR: A very quiet session with early movement in the Tokyo session to push the Euro down to its lows around the 1.1250 levels before a steady move back to the opening levels, Topside offers likely to be light through the 1.1300 levels with better offers likely to appear on a move into the 1.1340 areas and building into the 1.1400 levels, stops are likely to be a bit light and only make an appearance really through the 1.1460 levels and the months highs. Downside bids into the 1.1220 areas and likely to protect the 1.1150 areas for the time being and with the Eurozone trade balance only for the day the US IP numbers are likely to be of more import.
• GBP: Cable made slight headway through the session with EURGBP drifting a little in the Tokyo session Cable moved from the opening to test through into the 1.4130’s before recovering and pushing through the Tokyo market and testing the 1.4160 levels. Topside offers light through the 1.4200 levels and likely to be stronger on any move to the 1.4250 areas, downside bids into the 1.4100 areas are likely to increase once the market moves below the area and into the 1.4050 with only a break through the 1.4000 likely to see any stronger movement.
• JPY: USDJPY drifted through the early part of the session with little movement until into the Tokyo session when the market ran from the 109.30 levels to test above the 109.70 areas before trading in a quiet 109.60-70 range through into the grey hours. Topside light offers likely through the 110.00 areas and limited through to the 110.50 areas with limited congestion, a break here will likely see stronger offers again into the 110.80-111.00 areas. Downside bids light into the 109.00 levels and likely to see only patchy supportive levels on a move to the 108.20 levels from that area onwards the market is likely to become stronger into the 107.60 levels with the potential of break out stops appearing and the potential for a deeper move into the low 106. Handle.
• AUD: With the rest of the market quiet the Oz drifted initially falling only into the 0.7680 levels before starting a rally with light AUDJPY buying moving in and then the CNY numbers saw the high made on an expected GDP number before drifting off the level through 0.7720 to head back to the opening 0.7680 areas. Topside offers into the 0.7740-60 areas are possibly fairly stronger with those offers likely to repeat on a move towards the 78 cent level and possible option barriers coming into play with a break of this level likely to see some break out stops and the market opening to the 80 cent level over the medium term. Downside bids likely to be reasonable on a move back to the 0.7640 areas and those bids likely to be in depth to the 76 cent levels before opening for a further dip towards 75 cents.

Overnight News

CNY:

China’s Economy Grows 6.7% in 1Q Y/y; Est. 6.7%

China March New Loans 1.37t Yuan; Est. 1.1t Yuan

China End-March Yuan Positions at PBOC Balance Sheet 23.8t Yuan

China Overcapacity Cut Has Little Impact on Overall Job Mkt: NBS

Investment in China High-Tech, Service Sectors Accelerating: NBS

China May Have $1.3 Trillion of Risky Loans, IMF Estimates

USD/JPY:

Lew, Aso Agree on Importance of Honouring FX Commitments

JPY:

Aso Said That G-20 Promise on FX Doesn’t Apply to Neg. Rates

At Least 9 Killed, Hundreds Injured in Southern Japan Quake

Japanese Cos. Check Damages After Magnitude 6.5 Quakes: Yomiuri

Kuroda’s Ally Ito Recommends That BOJ Add to Stimulus This Month

USD/CNY:

Lew, Lou Discuss Importance of China Having Clear Communication

IMF:

IMF’s Rhee: China’s Stimulus Could Boost Medium-Term Risk

FX Intervention OK Only to Avoid Disruptive Volatility: Lagarde

IMF Says Yuan’s Real Effective Value Little Changed in Past Yr

CNY/INR:

China Plans Increased Investment in India: Economic Times

AUD:

RBA: Risks Shift from Home Lending to Property Developer Debt

Today’s data

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

2:00        CNY        Industrial Production Y/Y Mar A 6.80% | C 6.00% | P 5.40%

2:00        CNY        Retail Sales Y/Y Mar A 10.70% | C 10.30% | P 10.20%

2:00        CNY        Fixed Assets Ex Rural YTD Y/Y Mar A 10.50% | C 10.40% | P 10.20%

2:00        CNY        GDP Y/Y Q1 A 6.70% | C 6.70% | P 6.80%

4:30        JPY         Industrial Production M/M Feb (F) A -5.20% | C -6.20% | P -6.20%

9:00        EUR        Eurozone Trade Balance (EUR) Feb C 21.9B | P 21.2B

12:30     CAD       Manufacturing Shipments M/M Feb C -1.50% | P 2.30%

12:30     USD       Empire State Manufacturing Apr C 0 | P 0.62

13:15     USD       Industrial Production Mar C -0.20% | P -0.50%

13:15     USD       Capacity Utilization Mar C 75.30% | P 76.70%

14:00    USD       U. of Michigan Sentiment Apr (P) C 91.8 | P 91

Harry Hindsight              

• EUR: A rangy day with the move through the Asian session seeing the market slowly trade down to the 1.1250 levels from the opening around 1.1280 with USD slowly progressing against most currencies. The move into the London session saw some limited selling and the market testing to the 1.1230 levels before recovering once the Eurozone CPI was released, the market steadily rose then through into the NYK session and stronger buying once the session began with the Euro squeezing to the 1.1295 levels as the US CPI numbers disappointed before running out of room and energy, the market dropped back to the 1.1270 levels and then drifted through the session to hold a 1.1250-75 range through to the close.
• GBP: The GBP lost ground through the Asian session both against the USD and the Euro with the market steadily drifting in early trading and possibly impacting on the Euro for a change, EURGBP opened around the 0.7935 areas and gradually pushed into the grey hours testing the 0.7975 levels, this through the session led to the Cable falling from the opening around 1.4210 to drift to the 1.4120 levels and the London opening saw a brief stab to below the 1.4100 levels before recovering and any weak stops removed, the recovery was a little quicker with the market managing to move to the 1.4180 levels before the release of the BoE decision which was very little different to last months and the market settled into a mid-range move through the NYK session and too the close trading around the 1.4150 levels for the most part.
• JPY: Early trading saw the market move gradually to the 109.50 levels before ranging quietly in the 109.40 areas through to the London session, USD selling in early London as the Euro rose saw the USDJPY tip back towards the 109.00 levels but with very little conviction and although the NYK session again tested the level the move through was not particularly strong and within the hour the market was again pushing back to settle the day just short of the highs.
• AUD: A weak start to the day saw the market initially push to the 0.7660 areas before dropping back as the market ran towards the employment data, the release saw the initial spike higher on a good number before the details were seen and the numbers effected by the composition and the market quickly dropping to its lows to test the 0.7620 levels, the move into London saw the market again returning to the opening 0.7660 areas and starting a steady rally as Oz buying against the GBP and Euro moved into the market with the steady movement taking the market up through the 77 cent levels and triggering weak stops on a move through 0.7720 and holding just short of the 0.7740 and better offers, NYK saw the run however, from that point the Oz drifted through the session slowly with a declining range and ending the day below 77 cents.

Yesterday’s premiership results

NZD       Business NZ Manufacturing Index Mar A 54.7 | P 56 | R 55.9

GBP       RICS House Price Balance Mar A 42% | C 51% | P 50%

AUD       Consumer Inflation Expectation Apr A 3.60% | P 3.40%

AUD       Employment Change Mar A 26.1K | C 18.6K | P 0.3K

AUD       Unemployment Rate Mar A 5.70% | C 5.90% | P 5.80%

CHF        Producer & Import Prices M/M Mar A 0.00% | C -0.20% | P -0.60%

CHF        Producer & Import Prices Y/Y Mar A -4.70% | P -4.60%

EUR        Eurozone CPI M/M Mar A 1.20% | C 1.20% | P 0.20%

EUR        Eurozone CPI Y/Y Mar (F) A 0.00% | C 0.10% | P -0.10%

EUR        Eurozone CPI – Core Y/Y Mar (F) A 1.00% | C 1.00% | P 1.00%

GBP       BoE Rate Decision A 0.50% | C 0.50% | P 0.50%

GBP       BoE Asset Purchase Target Apr A 375B | C 375B | P 375B

GBP       MPC Official Bank Rate Votes A 0–0—9 | C 0–0—9 | P 0–0–9

GBP       MPC Asset Purchase Facility Votes A 0–0—9 | C 0–0—9 | P 0–0–9

CAD       New Housing Price Index M/M Feb A 0.20% | C 0.20% | P 0.10%

USD       Initial Jobless Claims (APR 9) A 253K | C 270K | P 267K | R 266K

USD       CPI M/M Mar A 0.10% | C 0.20% | P -0.20%

USD       CPI Y/Y Mar A 0.90% | C 1.10% | P 1.00%

USD       CPI Core M/M Mar A 0.10% | C 0.20% | P 0.30%

USD       CPI Core Y/Y Mar A 2.20% | C 2.20% | P 2.30%

Good Luck,

Andy

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