Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 111.308 | EURUSD 1.12986 | AUDUSD 0.77486 | NZDUSD 0.68831 | USDCAD 1.26037 | USDCHF 0.97344 | GBPUSD 1.45812 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.13120 | 1.12941

USDJPY                 111.361 | 111.029

GBPUSD               1.45963 | 1.45671

AUDUSD              0.77660 | 0.76225

USDCHF               0.97394 | 0.97290

USDCAD               1.26168 | 1.25969

NZDUSD               0.69050 | 0.68682

EURGBP               0.77569 | 0.77469

EURJPY                 125.821 | 125.449

EURCHF                1.10039 | 1.09984

 

For Today

• EUR: The Euro’s moved into the Asian session holding around the 1.1300 levels and doing very little until the release of the CPI figures in Australia, a few rounds of EURAUD cross buying saw the market push through the 1.1300 level and test to the 1.1310 areas before ranging through to the London close in that area. Topside offers light through the 1.1340 levels and into the 1.1360 area, with some weakness as the market moves towards the congested 1.1400 areas with the market likely to slow and struggle into that area, with the offers likely to continue through to the 1.1460 levels with the chance of stronger offers moving into the 1.1480 areas and into the 1.1500 level, a strong push through the level is likely to open up the topside for a larger move and only a further dovish comment from the Fed is likely to open this movement, Downside bids light through the 1.1280 areas with some light bids likely through the 1.1260 level the better bids don’t really appear until the 1.1220 areas and weak stops on a push through the 1.1200 areas and the market opening for a test through light bids and into the 1.1100 areas.
• GBP: Cable moved into the Asian session holding the 1.4580 levels and struggled through the session holding that level, the Oz numbers saw a brief move towards the 1.4600 levels however, it was a half-hearted attempt at best and the market remains quiet before the FOMC this evening, Topside offers into the 1.4650 areas remain intact and this is likely to be followed by strong offers into the 1.4700 areas before longer term 1.5000 level opens as a target for the future, Downside bids light to the 1.4500 areas and even through that level are not likely to be earth shatteringly stubborn, and a move through will likely see weak stops appearing and the better bids into the 1.4400 areas.
• JPY: USDJPY seems to lack any drive during Asia this week with the market holding back to wait for any further sign of easing on Thursday, with this in mind we have seen the futures market dominating the market during the US session over the last few days and whether this continues remains to be seen with the FOMC likely to dominate later in the session, moving off the opening above the 111.30 levels the market has drifted steadily lower through the session rather the ramifications of a weaker Oz and the AUDJPY carry trade falling back and triggering those long of the carry to exit for the time being, with the USDJPY pushing to the 111.00 areas the market saw some light buying return and sufficient to hold USDJPY above that level leading into the grey hour. Topside offers into the 111.50 areas are likely to be light if the market attempts the levels with better offers moving into the 111.80-112.20 levels from there though the next big figure looks similar with some offers through the 112.50 areas before stronger offers reappear on any attempt through to the 113.00 areas. Downside bids light through the 111.00 levels and likely to see weak stops through 110.70-60 areas and the downside becoming vulnerable through to the 109.50 areas.
• AUD: The Oz saw a steady rise through into the Tokyo session from the opening around the 0.7740 areas, pushing into the 0.7760’s before the release of a weaker CPI set of numbers and the Oz collapsing back quickly to the 0.7670 as the market cut longs quickly, the numbers, the -0.2% headline figure bringing inflation to a 7yr low, the light bids into the 0.7660-40 areas were steadily removed and the market eventually traded down into the 0.7620’s before finding some weak support for the move into the grey hours, downside congestion around the 76 cent level is likely to be limited before the market opens to the 75 cent levels and only limited bids through the level however, we could see AUDJPY carry trade coming back into play after today’s selling and the move to those levels being slowed, Topside offers into the 0.7700 levels likely to be light with weak stops appearing just above the levels before better offers appear around the 0.7740-60 areas.

Overnight News

AUD:

Australian 1Q Trimmed Mean CPI Rose 0.2% Q/Q; Est. 0.5% Gain

Australia ANZ Weekly Consumer Confidence Falls 3.5% to 111.7

CNY/USD:

China Has Substantial Scope for Fiscal Stimulus, Sheets Says

CNY:

China Industrial Profit Rises Faster on Sales Growth, Price: NBS

China’s March Industrial Companies’ Profit Rises 11.1% Y/y

JPY:

Yen Too Strong at 110 vs USD: Ex Vice Economy Minister Nishimura

Japan Mulls Setting Aside 3t Yen to Develop Resources: Nikkei

Japan Feb. All Activity Index Falls 1.2% M/m; Est. -1.3%

NZD:

New Zealand Annual Trade Deficit Is Widest in Seven Years

IMF to Assess How N.Z. Financial Institutions Are Regulated

New Zealand March New Mortgage Lending Rises 4.1% Y/Y: RBNZ

SGD:

Singapore Central Bank Sees Company Margins Under Strain

USD:

Trump Sweeps Five Northeast Primaries, Clinton Wins Three

 

Today’s data

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

NZD       Trade Balance (NZD) Mar A 117M | C 405M | P 339M | R 367M

AUD       CPI Q/Q Q1 A -0.20% | C 0.20% | P 0.40%

AUD       CPI Y/Y Q1 A 1.30% | C 1.80% | P 1.70%

AUD       CPI RBA Trimmed Mean Q/Q Q1 A 0.20% | C 0.50% | P 0.60%

AUD       CPI RBA Trimmed Mean Y/Y Q1 A 1.70% | C 2.00% | P 2.10%

AUD       CPI RBA Weighted Median Q/Q Q1 A 0.10% | C 0.50% | P 0.50%

AUD       CPI RBA Weighted Median Y/Y Q1 A 1.70% | C 2.00% | P 1.90%

JPY         All Industry Activity Index M/M Feb A -1.20% | C -1.30% | P 2.00% | R 1.20%

06:00     EUR        German GfK Consumer Sentiment May C 9.5 | P 9.4

06:00     CHF        UBS Consumption Indicator Mar P 1.53

08:00     EUR        Eurozone M3 Y/Y Mar C 5.00% | P 5.00%

08:30     GBP       GDP Q/Q Q1 (A) C 0.40% | P 0.60%

08:30     GBP       Index of Services 3M/3M Feb C 0.20% | P 0.90%

10:00     GBP       CBI Retailing Reported Sales Apr C 15 | P 7

12:30     USD       Goods Trade Balance Mar C -62.5B | P -62.9B

14:00     USD       Pending Home Sales M/M Mar C 0.30% | P 3.50%

14:30     USD       Crude Oil Inventories P 2.1M

18:00     USD       FOMC Rate Decision C 0.50% | P 0.50%

21:00     NZD       RBNZ Rate Decision C 2.25% | P 2.25%

Harry Hindsight              

• EUR: Another quiet Asian session with the market holding around the 1.1270 levels through to the move into London, and a stronger GBP helped the Euro to ease steadily higher to the 1.1300 levels before finding sufficient offers to hold the market, the move into the NYK session saw the release of a weaker than expected durable goods number and the USD fell back across the board and Euro’s broke back above the 1.1300 levels and triggered weak stops for a run to the 1.1340 levels before offers moved in and turned the market again lower returning it to the 1.1290 ranges from the London session and holding in the area to the close.
• GBP: Cable made its way gradually through the Asian session to test through the 1.4500 levels but was unable to do much more than that through the session and into London, a slightly weaker Mortgage approvals number was a catalyst for the market to rise higher into the session in London and the draw of the previous higher saw buyers move into the market as the 1.4540 levels finally broker and weak stops took the market to the 1.4580 levels and light offers, NYK opening and a weak durable goods number saw Cable quickly test through the 1.4600 levels and while the initial 20 pips was quick the move through the 1.4600 level and to the 1.4640 areas was gradual grind through offers before dropping back to the 1.4580 levels once the market ran out of steam and the London session finished, the move to the close was steady and quiet for the most part maintaining the level only.
• JPY: USDJPY lost ground through the Asian session drifting from the highs around the 111.25 level and falling back on a lack of solid liquidity to the 110.70 areas as the market looked for the stops one suspects, however, once the London market swung fully into the session the market slowly started to recover and while the market moved to the 110.90 levels only once the US session started did the USDJPY start to improve, Durable good numbers sent the USDJPY back below the 111.00 levels however, the futures market seemed to support the USDJPY again and the rally back through the 111.00 levels saw the market gradually moving into the 111.45 areas into the close.
• AUD: Another quiet session for the Oz with little interest before the numbers on the 27^th, moving through the Asian session holding a tight range of 0.7700-0.7720 the market dipped into the opening before day traders into the London session took the market to the 0.7740 areas and although Durable goods numbers in the US extended the range to 0.7760 areas the market really remained in a 20 pip range having moved to those areas and quietly finished the day around that 0.7740 level.

Yesterday’s premiership results

GBP       BBA Mortgage Approvals Mar A 45.1K | C 46.1K | P 45.9K | R 45.6K

USD       Durable Goods Orders Mar (P) A 0.80% | C 1.90% | P -3.00%

USD       Durables Ex Transportation Mar (P) A -0.20% | C 0.60% | P -1.30%

USD       S&P/Case-Shiller Composite-20 Y/Y Feb A 5.40% | C 5.50% | P 5.80%

USD       Consumer Confidence Apr A 94.2 | C 95.8 | P 96.2

Good Luck,

Andy

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