Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 111.465 | EURUSD 1.13221 | AUDUSD 0.75914 | NZDUSD 0.68471 | USDCAD 1.25992 | USDCHF 0.97113 | GBPUSD 1.45431 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.13446 | 1.12965

USDJPY                 111.889 | 108.747

GBPUSD               1.45558 | 1.45233

AUDUSD              0.76198 | 0.75787

USDCHF               0.97342 | 0.96999

USDCAD               1.26027 | 1.25774

NZDUSD               0.69437 | 0.68688

EURGBP               0.77999 | 0.77767

EURJPY                 126.455 | 123.137

EURCHF                1.10061 | 1.09935

 

For Today

• EUR: Early trading saw the Euro dropping back from the early highs of 1.1330 areas to test the 1.1300 levels again, with the market in Asia dominated by the BoJ monetary policy today, the reaction to which saw the Euro rising quickly as USDJPY selling allowed EURJPY buying to effect the Euro leg and Euros tested again through the 1.1340 before finding sufficient offers to cap the movement, Topside offers remain through the 1.1340-60 levels before better offers move in around the 1.1380-1.1400 levels, even through the level offers continue to build with light offers increasing into the 1.1440-60 areas and then weak stops likely on an attempt towards the 1.1500 levels. Downside bids light through the 1.1300-1.1280 areas giving way to weak stops and the downside open to the stronger bids around the 1.1220-00 areas and likely through to 1.1170 levels with some stops likely through the level.
• GBP: Cable has been reasonably quiet and based around the opening levels of 1.4530 with only a brief move to test the 1.4550 levels on the back of the BoJ, Topside offers are a little thin until the market attempts to push through the 1.4600 levels again where the offers are likely to run to the 1.4650 areas, through the level will likely see some weak stops and the market finding some free movement only to the 1.4700 areas and likely stronger offers protecting a longer term push towards the 1.5000 areas if talk of Brexit stay as a side-line issue. Downside bids light into the 1.4500 levels however, those bids are likely to be a little stronger than yesterday and only a push through that level reverses the recent attempt above 1.4600, a push to the 1.4400 level will likely see stronger bids and the market struggling with stops likely to be light at best.
• JPY: A quiet rising session as the market opened around the 111.40 level and struggled into the Tokyo session testing above the 111.80 levels before the BoJ monetary policy release, when the release hit with no change the market reacted quickly, as it had been expecting some further easing this month and the USDJPY dropped quickly from towards those highs to hit the 109.00 level very quickly in strong volume, the market eventually traded through the 108.80 levels before bouncing a little as the ETF saw no change and the bounce was a meagre 65 pips before drifting again to the 109.20 levels, Topside offer have possibly moved into the 109.80-110.00 areas now with those offers light but possibly constant, downside bids limited into the 108.80 areas and a push through the 108.60 areas likely to see weak stops appearing and the market opening to the 108.00 level and possibly stronger bids from then until the 107.60 levels from earlier in the month a breach here would see stronger stops appearing in the market however, the fall today has already discounted the move higher in expectations of further easing which we didn’t see and so the while there is some room to the bottom and the other session to react nothing has really changed from the beginning of the month apart from those expectations. News wires are already talking of a flash crash however, all that has happened is that the market had expectations and reset to the original levels from a few weeks ago.
• AUD: The Oz has had a quiet session gaining a little from the opening with the help of a static NZ rate decision and pushing to the 76 cent range and holding around that level to late in the session, a stronger JPY saw the Oz rise a little to test into the 0.7620 levels and holding into the grey hour, Topside offers likely through the 0.7640-60 levels and then weak stops a possibility through the 0.7680 areas with only light offers between the previous levels of 0.7740 and stronger offers thereafter, Downside bids into the 0.7580 areas are likely to give way to stronger bids on any attempt through the 0.7550 levels with weak stops likely on a move down below the 0.7540 areas, and bids returning on a test of the 75 cent level.

Overnight News

JPY:

BOJ Keeps Policy Unchanged, Delays Timing for CPI Target

Japan March Core Consumer Prices Fall 0.3% Y/y; Est. -0.2%

Japanese Bought Net 984.7 Billion Yen Overseas Debt Last Week

Japan March Unemployment Rate at 3.2%; Est. 3.3%

Japan Mar. Industrial Production Rises 3.6% M/m; Est. +2.8%

Japan Mar. Retail Sales Rise 1.4% M/m; Est. +0.5%

NZD:

RBNZ Says Further Easing May Be Needed to Hit Inflation Goal

AUD:

Australian 1Q Export Prices Fall 4.7% Q/Q; Est. 1.5% Drop

CNY:

Yuan Transactions Rose in Swift RMB Internationalisation Tracker

EUR:

Draghi Says Euro Region Reforms Moving Too Slowly: Bild

SGD:

Singapore’s Unemployment Rate Unchanged at 1.9% in First Quarter

CHF:

SNB Reports 1Q Profit of CHF5.7b as Value of Gold Holdings Rose

 

Today’s data

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

NZD       RBNZ Rate Decision A 2.25% | C 2.25% | P 2.25%

JPY         Unemployment Rate Mar A 3.20% | C 3.30% | P 3.30%

JPY         Household Spending Y/Y Mar A -5.30% | C -4.00% | P 1.20%

JPY         National CPI Core Y/Y Mar A -0.30% | C -0.20% | P 0.00%

JPY         Tokyo CPI Core Y/Y Apr A -0.30% | C -0.30% | P -0.30%

JPY         Retail Trade Y/Y Mar A -1.10% | C -1.40% | P 0.50% | R 0.40%

JPY         Industrial Production M/M Mar (P) A 3.60% | C 2.90% | P -5.20%

AUD       Import Price Index Q/Q Q1 A -3.00% | C -0.90% | P -0.30%

JPY         Housing Starts Y/Y Mar A 8.4% | C -0.50% | P 7.80%

07:55     EUR        German Unemployment Change Apr C 1K | P 0K

07:55     EUR        German Unemployment Rate Apr P 6.20%

09:00     EUR        Eurozone Business Climate Indicator Apr P 0.11

09:00     EUR        Eurozone Economic Confidence Apr P 103

09:00     EUR        Eurozone Industrial Confidence Apr P -4.2

09:00     EUR        Eurozone Services Confidence Apr P 9.6

09:00     EUR        Eurozone Consumer Confidence Apr (F) P -9.3

12:00     EUR        German CPI M/M Apr (P) P -0.20%

12:00     EUR        German CPI Y/Y Apr (P) P 0.30%

12:30     USD       Initial Jobless Claims (APR 23) C 252K | P 247K

12:30     USD       GDP (Annualized) Q1 (A) C 0.70% | P 1.40%

12:30     USD       GDP Price Index Q1 (A) C 0.50% | P 0.90%

Harry Hindsight              

• EUR: A quiet session through Asia with the Euro moving off the 1.1290 levels and testing through into mid Tokyo to the 1.1310 levels before trading back to move into London little changed from the opening, a good Gfk number in Germany set the market moving higher from the London opening with Euro’s pushing to the 1.1330 levels before meeting resistance to the move and then a steady drift through the session with the 1.1300 level acting as a base line for the most part through into the NYK session and a steady rise to the 1.1340 as the market moved towards the FOMC decision, interest went unchanged and the market quickly reacted with a push to the 1.1270 levels before snapping back as details of the meeting filtered through, a more hawkish commentary with indications of a further rise in June however, while those impressions were left the continuing mixture of rising employment and while growth seems to be dipping left the market back into the London range again and slowly moving to a close only slightly above the opening levels.
• GBP: A quiet session for the Cable overall with Asia doing very little and drifting around the 1.4580 levels for the most part, a dip into the opening in London saw the Cable dragged a little higher to the 1.4620 levels before running out of steam and ranging between the low 1.4550 areas and back through into the NYK session, the move into mid NYK saw the Cable pushing through the lows and weak stops triggering to the 1.4530 levels before holding steady into the FOMC decision, early buying of EURGBP dominated the session in London with the German Gfk number surprising the market a little and sending the cross to the 0.7780 after a quiet range around the 0.7750 levels, the move into the NYK session saw some steady selling of the cross and the market returning to below 0.7750 level however, NYK were steady buyers from the opening as a little profit taking and rebalancing shaped the market, Cable then moved into the FOMC with a similar pattern to the Euro with the spike lower then bouncing from the 1.4470 lows back to the 1.4550 starting level and a quiet session to the close with the USD gaining only slightly in the market for Cable to finish around the 1.4530 levels.
• JPY: A very quiet day for the USDJPY with futures dominating the past few days however, today the market held a very tight range through to the FOMC with the market drifting off the 111.40 levels and holding the 111.00 all the way through with very little volume to speak of, the move into the FOMC saw the market initially rally to above the 111.70 levels before dropping quickly back towards the lows of the day and then range in the 111.60-40 areas to the close.
• AUD: A quiet move into the new session and then the release of the Oz CPI numbers, with the a shock decline leaving the market vulnerable to a quick fall and dropping from the 0.7760 levels to the 0.7660 and a steady drift lower from there into the London session, with the move into NYK pressing through the 76 cent levels and testing the 0.7580 areas before holding into the FOMC, the Oz saw the 0.7550 levels before gradually recovering to the 76 cent level into the close in slow trading for the pair.

Yesterday’s premiership results

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%

EUR        German GfK Consumer Sentiment May A 9.7 | C 9.5 | P 9.4

CHF        UBS Consumption Indicator Mar A 1.51 | P 1.53 | R 1.45

EUR        Eurozone M3 Y/Y Mar A 5.00% | C 5.00% | P 5.00% | R 4.90%

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

GBP       Index of Services 3M/3M Feb A 0.70% | C 0.20% | P 0.90%

GBP       CBI Retailing Reported Sales Apr A -13 | C 15 | P 7

USD       Goods Trade Balance Mar A -56.9B | C -62.5B | P -62.9B

USD       Pending Home Sales M/M Mar A 1.40% | C 0.30% | P 3.50% | R 3.40%

USD       Crude Oil Inventories A 2.0M | C 1.4M | P 2.1M

USD       FOMC Rate Decision A 0.50% | C    0.50% | P 0.50%

Good Luck,

Andy

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