Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 106.602 | EURUSD 1.14963 | AUDUSD 0.74841 | NZDUSD 0.69128 | USDCAD 1.27237 | USDCHF 0.95446 | GBPUSD 1.45353 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.15090 | 1.14763

USDJPY                 107.487 | 106.523

GBPUSD               1.45527 | 1.45198

AUDUSD              0.75100 | 0.74674

USDCHF               0.95702 | 0.95375

USDCAD               1.27502 | 1.26980

NZDUSD               0.69400 | 0.68763

EURGBP               0.79183 | 0.78983

EURJPY                 123.490 | 122.593

EURCHF                1.09888 | 1.09696

 

For Today

• EUR: Another quiet session for the Euro through the Asian session not helped by the Bank Holiday in Tokyo, and the market eventually giving ground from the opening around the 1.1500 level, before trading around the 1.1480 levels through the balance of the session, Topside offers cleared for the most part to the 1.1600 levels and technically weak through the to the 1.1660 areas. Downside bids weak through to better bids in the 1.1450 areas, with the likelihood of weak stops appearing and the market opening to test 1.1380-1.1400 areas.
• GBP: As with the Euro a slow opening and the market holding above the 1.4540 levels before slipping a little as the USDJPY moved quickly higher and USD firmed across the board, the market then held on the 1.4520 areas to deep into the session beginning a slow rise back to the opening levels as the market moved towards London, Topside offers light through the 1.4580-1.4600 areas and really nothing of note likely until the market again pushes through the 1.4660 areas and further gains a possibility into the 1.4700 levels before stronger offers are likely to appear. Downside bids into the congested 1.4500 areas and likely to cause some two way flows around the area before the market breaks back into the range from past couple of months with interest particularly in the 1.4400 areas.
• JPY: The opening of the days session saw quick buying from the start with the USDJPY quickly move through the 107.00 levels triggering weak stops and very little liquidity to stop the movement, spiking towards the 107.50 levels the sellers eventually turned the market back towards the opening levels and the market held through deeper into the session however, the market again pushed back above the 107.00 levels with a quick move from what looked like a single ticket buyer and then remained above the 107.00 levels with the early rally having cleared the market, the market topped after an extended period around the 107.40 levels before drifting through to the London session, Downside bids light through to the 106.60 levels however the market has now done a lot around the current range and the downside is fairly weak until the 106.00-105.80 areas and only a push through the 105.50 areas is likely to see stops appearing.
• AUD: A quiet day for the Oz with Fitch commenting on the budget being in line with the current AAA rating, the market dipped a little to test through the 0.7480 levels before again returning to the 75 cent level in quiet trading for the pair. Topside offers light into the 0.7540-60 areas and limited possibility of a short squeeze in the market however, the Downside bids through 0.7440-60 levels is possibly stubborn however, if the market pushes through we are likely to see sellers appear quickly on a move to the 74 cent level and the market opening to the downside for a larger move.

Overnight News

USD:

Fed’s Lockhart Says Brexit on His Radar Screen for June FOMC

Fed’s Lockhart Says Rate Hike to Hinge on How Conditions Evolve

Lockhart Says His Outlook Supports Very Gradually Rising Rates

Cruz Says He’s Ending Presidential Campaign

USD/JPY:

Lew: Japan Abiding by FX Pledges, Needs to Use All Policy Tools

JPY:

Abe Aide Says Japan Likely to Delay Sales Tax Increase: Fuji TV

Japan Lacks G-7 Support on Yen, Ex-Finance Official Says: Nikkei

NZD:

New Zealand Labour Force Rises Most in 11 Years

New Zealand House-Price Inflation Accelerates: Quotable Value

GBP:

U.K. April BRC Shop Price Index -1.7% Y/y vs March -1.7% Y/y

AUD:

Australia April Services Index Rises 0.2 Pt M/m to 49.7

 

Today’s data

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

NZD       Employment Change Q/Q Q1 A 1.20% | C 0.60% | P 0.90% | R 1.00%

NZD       Unemployment Rate Q1 A 5.70% | C 5.50% | P 5.30% | R 5.40%

07:55     EUR        Germany Services PMI Apr (F) C 50.5 | P 54.6

08:00     EUR        Eurozone Services PMI Apr (F) C 53.3 | P 53.2

08:30     GBP       Construction PMI Apr C 54.1 | P 54.2

09:00     EUR        Eurozone Retail Sales M/M Mar C 0.10% | P 0.20%

12:15     USD       ADP Employment Change Apr C 205K | P 200K

12:30     CAD       Trade Balance (CAD) Mar C -1.2B | P -1.9B

12:30     USD       Trade Balance Mar C -45.6B | P -47.1B

12:30     USD       Non-Farm Productivity Q1 (P) C -1.30% | P -2.20%

12:30     USD       Unit Labor Costs Q1 (P) C 2.90% | P 3.30%

14:00     USD       ISM Non-Manufacturing/Services Composite Apr C 54.9 | P 54.5

14:00     USD       Factory Orders Mar C 0.70% | P -1.70%

14:30     USD       Crude Oil Inventories P 2.0M

Harry Hindsight              

• EUR: A quiet session through Asian for the Euro with the market holding around the opening 1.1530 levels through into the London session, a little dip in early Tokyo to the 1.1520 areas before testing late into the session to the 1.1540 areas, RBA announcement saw a drag as the Oz collapsed, early London were quick buyers and the market pushed through the 1.1550 and weak stops triggered on the move to the 1.1560 level before pausing briefly, Eurozone PPI numbers improved slightly and the Euro eventually broke the 1.1560 levels and further stops were triggered as the market moved through the 1.1600 levels with 1.1620 areas holding the areas, the session slowed and the move through to the NYK session drifting through the session as the USD started to make inroads over the session, the Euro’s push through the 1.1550 levels was weak stops triggered and the market increasing its fall back to the 1.1500 before finding some support, the market saw a small bounce but remained around the 1.1500 to the close.
• GBP: A similar pattern to the Euro with early trading limited to the 1.4660-80 areas through the Asian session before running to the London session and strong EURGBP buying dragging the Cable higher through the London session with EURGBP moving from the 0.7840 levels to trade steadily through the 0.7900 levels and then holding in the 0.7910-15 areas through to the close, Cable initially moved with the movement to test the 1.4770 areas and topside offers into the area, worse than expected PMI Manufacturing numbers saw the Cable quickly drop and reverse steadily to trade through the 1.4660 levels and into the NYK session, stronger selling appeared from the NYK session and only the end of the London session saw the start of some support around the 1.4540 levels and the market holding those levels to the close.
• JPY: The opening around the 106.40 was quickly sold off as the market moved into the Tokyo session with mixed selling particularly in the AUDJPY cross in front of the RBA announcement and the USDJPY trading down towards the figure areas before holding around the 106.20 levels deep into the session, RBA announcement out and the USDJPY again dipped lower as the impact of a 25 bp cut was the 106.00 levels break and the move into the London session saw the 105.60 areas tested before holding and starting a steady climb higher through the session, the move into the NYK session saw the market still in a tight channel and climbing steadily into the later session to test into a close above the opening levels.
• AUD: A combination of early USDJPY selling left the Oz slowly rising and a steady push through the 77 cent levels and testing to 0.7720 into the final minute before the announcement, the market had been expecting the rate to remain steady at 2.00% however, the 25 bp cut surprised and the market quickly dropped to the 0.7580 before starting a steady decline to the 0.7560 levels and stronger bids, the limited profit taking and bounce saw the market move into the London session testing back to the 0.7620 areas before the focus on the day turned and the market started to see steady USD buying across the board and the move into the NYK session again saw the lows tested with a steady tight channelled sell off through to the 0.7500 levels before eventually drifting through to test the 0.7490 areas.

Yesterday’s premiership results

AUD       Building Approvals M/M Mar A 3.70% | C -1.80% | P 3.10% | R 2.90%

CNY        Caixin PMI Manufacturing Apr A 49.4 | C 49.9 | P 49.7

AUD       RBA Rate Decision A 1.75% | C 2.00% | P 2.00%

CHF        SECO Consumer Confidence Apr A -15 | C -12 | P -14

GBP       PMI Manufacturing Apr A 49.2 | C 51.3 | P 51 | R 50.7

EUR        Eurozone PPI M/M Mar A 0.30% | C 0.10% | P -0.70%

EUR       Eurozone PPI Y/Y Mar A -4.20% | C -4.30% | P -4.20%

Good Luck,

Andy

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