Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 108.33 | EURUSD 1.13815 | AUDUSD 0.73155 | NZDUSD 0.67794 | USDCAD 1.29619 | USDCHF 0.97115 | GBPUSD 1.44064 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.13924 | 1.13705

USDJPY                 108.876 | 108.275

GBPUSD               1.44227 | 1.43949

AUDUSD              0.73386 | 0.72999

USDCHF               0.97242 | 0.97007

USDCAD               1.29774 | 1.29513

NZDUSD               0.67750 | 0.67336

EURGBP               0.79034 | 0.78942

EURJPY                 123.852 | 123.297

EURCHF                1.10556 | 1.10510

 

For Today

• EUR: A quiet range with the market dipping towards the 1.1370 levels and unable to push much beyond the 1.1390 levels with the movement mostly derived from the EURJPY cross selling into the 123.80 levels pushing on the Euro leg. Topside offers are likely to be building into the 1.1440-60 levels now with light offers just before the levels, weak stops likely on a push through the 1.1460 levels however, offers into the 1.1480 and continuing into 1.1500 levels are likely to be a little stubborn before the topside again opens up for a test to the 1.1600 area. Downside bids in the current areas and while there may be some light stops on a push through the 1.1370 areas bids are likely to reappear into the 1.1360-40 areas and then very open to the 1.1300 levels and stronger congestion through those levels.
• GBP: A very quiet session for the Cable and the market tested the 1.4420 levels however, having tested the level it gave ground as USDJPY pushed against topside offers and Cable was forced against the 1.4400 areas for a good portion of the session, Topside offers into the 1.4480 levels are likely to be light with possibly those light offers extending into the 1.4500-30 areas before the market opening just a little to the 1.4550 areas and then congestion onwards to 1.4600. Downside bids into the 1.4370 areas with 100 DMA in the area providing the support, however a break here will likely see some stops and then light bids into the 1.4350 areas opening to the 1.4300 levels and the market opening to a deeper move possibly to 1.4200.
• JPY: The USDJPY opened quietly around the 108.40 areas and only deep into the session did the market start to see stronger interest through to the 108.80 levels which has seen plenty of two way interest holding the market in check, comments from Aso about means available to intervene was behind most of the Yen selling through the session, Topside offers likely to continue through to the 109.00 levels however, technically the market is likely to be very weak on the move through the levels and the possibility of short squeeze through the 110.00, Downside bids light into the 108.20 areas with weak stops likely below the level and the market opening up to the 107.40 areas before some bids appear.
• AUD: A weak start to the day saw the Oz drifted to test the 73 cent levels before strong AUDJPY buying moved into the market and helped the Oz to gradually rise away from the leve to the 0.7340 areas before the USDJPY was contained on the topside and the Oz then held the 0.7330 levels into the London session, Topside offers into the 0.7350 areas with limited stops through the 0.7360 areas before stronger offers start to appear above the 0.7380 areas and possibly through to 74 cents, Downside bids into the 73 cent level protects the ranges from earlier in the year and in particular the 70-72 cent levels with weak stops likely to appear through the 0.7280-90 levels and then the market will likely test to the 7230-00 areas before congestion moves into the market.

Overnight News

USD:

Williams Says Fed Should Re-Examine 2% Inflation Goal in Future

Williams Says U.S. Economy Is in ‘Good Shape’ Due to Fed Action

Treasury’s Lew Declines to Comment on Trump’s U.S. Debt Remarks

USD/CNY:

Fed’s Williams Says Yuan Won’t Dislodge USD as Reserve Currency

U.S. Warship Said to Have Sailed Near China-Claimed Island: WSJ

JPY:

Japan’s Aso Says Can Intervene to Stabilize Currencies if Needed

Japan National Debt Rises to 1049.4t Yen at End-March, MOF Says

Japan to Scrutinize Banks’ Stress Tests, Stopping Short of Fed

CNY:

China April Consumer Prices +2.3% Y/y; Matching Estimate

CNY:

China Liabilities Could Rise if SOEs Aren’t Reformed: Moody’s

GBP:

U.K. LFL April Retail Sales Fall 0.9% Y/y, BRC Says

NZD:

N.Z. Posts Nine-Month Budget Surplus After Forecasting Deficit

English Expects RBNZ to Signal Housing Plan: Interest.co

NZ Agency Says 3% of Property Buyers Were Foreign Tax Residents

AUD:

Australia ANZ Weekly Consumer Confidence Unchanged at 113.9

SGD:

IMF Says Singapore’s MAS Must Be Vigilant to Deflation Signs

 

Today’s data

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

GBP       BRC Sales Like-For-Like Y/Y Apr A -0.90% | P -0.70%

CNY        CPI Y/Y Apr A 2.30% | C 2.30% | P 2.30%

CNY        PPI Y/Y Apr A -3.40% | C -3.80% | P -4.30%

05:45     CHF        Unemployment Rate Apr C 3.50% | P 3.60%

06:00     EUR        German Industrial Production M/M Mar C -0.20% | P -0.50%

06:00     EUR        German Trade Balance (EUR) Mar C 20.4B | P 19.8B

08:30     GBP       Visible Trade Balance (GBP) Mar C -11.2B | P -12.0B

14:00     USD       Wholesale Inventories Mar C 0.20% | P -0.50%

Harry Hindsight              

• EUR: The Euro continued to consolidate through the day around the 1.1400 levels before testing back into the 1.1380 supportive areas late in the session, a better German factory order number helped the early London session set the highs for the day however, broadly speaking the market was contained in the 1.1380-1.1420 levels throughout the very light session.
• GBP: The Asian session remained quiet with the Cable trading around the 1.4420 levels for the most part and staying in a very tight range, the move into the London session saw limited buying before the strong German factory order numbers saw the EURGBP cross rising to the 0.7925 areas and the Cable forced to its lows and onto the 100 DMA, the rejection of the level saw the Cable moving steadily higher and testing to the 1.4480 in a fairly strong move in an otherwise quiet day for the European area, the move into the NYK session saw the gains slowly eroded and the market again settling back to the 1.4400 levels and holding just above there to the close.
• JPY: A steady rise into the early part of Asia saw the market in USDJPY testing to the 107.60 levels before drifting back asleep, several comments from the BoJ officials helped the rise over the session to hold those highs into the London session, London were steady buyers taking heed of the those early comments triggering weak stops on the move through the 108.00 levels eventually saw the market testing to the 108.60 levels before running out of steam and settling into a tight trading range around the 108.40 to the close.
• AUD: With the USDJPY rising the pressure to the downside on the Oz increased as the AUDJPY carry trade remained a little quiet, trading from the opening 0.7360 levels the market slowly pushed into the 0.7380 areas and traded the 0.7370-80 areas for the Asian session before London selling moved in to take the market to the 0.7340 levels, the market stalled at the level and it wasn’t until the NYK session moved in and the continuation of USDJPY buying that the Oz again started to slip steadily lower trading through to the 0.7310 areas and trading for several hours around that level to the close.

Yesterday’s premiership results

JPY         Labour Cash Earnings Y/Y Mar A 1.40% | C 0.60% | P 1.00% | R 0.70%

JPY         Consumer Confidence Index Apr A 40.8 | C 40.8 | P 41.7

EUR        German Factory Orders M/M Mar A 1.90% | C 0.70% | P -1.20%

CHF        CPI M/M Apr A 0.30% | C 0.10% | P 0.30%

CHF        CPI Y/Y Apr A -0.40% | C -0.70% | P -0.90%

EUR        Eurozone Sentix Investor Confidence May A 6.2 | C 6.1 | P 5.7

CAD       Housing Starts Apr A 192K | C 195K | P 204.3K | R 205K

USD        Labour Market Conditions Index Change Apr A -0.9 | P -2.1

Good Luck,

Andy

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