Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 109.268 | EURUSD 1.13722 | AUDUSD 0.73627 | NZDUSD 0.67559 | USDCAD 1.29096 | USDCHF 0.9760 | GBPUSD 1.44437 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.13918 | 1.13690

USDJPY                 109.372 | 108.615

GBPUSD               1.44670 | 1.44387

AUDUSD              0.73912 | 0.73446

USDCHF               0.97632 | 0.97372

USDCAD               1.29379 | 1.29016

NZDUSD               0.68242 | 0.67827

EURGBP               0.78853 | 0.78659

EURJPY                 124.395 | 123.716

EURCHF                1.10953 | 1.10879

 

For Today

• EUR: Euro’s steadily moved off the opening 1.1370 levels from the open to test towards the 1.1390 levels in slow trading through the session before drifting through the session to the 1.1380 levels for the move into the London session, Topside offers light through the 1.1400 levels with the light offers possibly extending into the 1.1440 areas before the market opening a little and the 1.1480-1.1500 levels are in sight and vulnerable with the likelihood of stronger offers, Downside bids through to the 1.1340 levels are likely to slow the market for the moment with very little from the Eurozone today and only the monthly budget statement of note in the US, a push through to the 1.1300 could see weak stops on a move through the 1.1280 areas however, we’d have to have something to talk about.
• GBP: Early gains into the Tokyo session were quickly eroded after making its way towards the 1.4470, the session from then on saw the opening levels slowly traded through and a test to the 1.4440 level before holding just off those lows through to the London session, Topside offers into the 1.4480-1.4500 levels with the possibility of weak stops of a push through the 1.4510 areas and possibly stronger offers moving in around the 1.4550 levels and likely to continue weakly through to 1.4600 level. Downside bids light through to the 1.4400 levels and likely to increase a little on a move through to the 1.4370-80 areas with the 100DMA supporting those levels however, a push through on weak IP numbers could see the market quickly drop to the 1.4300 areas and further if the bids there fail.
• JPY: After a flat start to the day the failure of the usual commentaries to appear saw the USJPY slip slowly lower and moving back to the 109.10 areas before holding steadily for a short period, the move lower was sharp when it came and weak stops on the move down through the 109.00 levels saw the 108.70 level tested quickly before holding and trading around the 108.80 areas for the remainder into London, Topside offers likely through to the 109.50 areas before seeing a little movement available to the 109.80-110.00 from here there is the likelihood of some patchy offers however, the market has the potential to move strongly higher from that point. Downside bids into the 108.20-00 areas are likely to be reasonably strong and a failure here could see the market again heading for the ranges from the beginning of the month however, as with the rest of the market today is likely to be fairly quiet with little news available.
• AUD: The stronger Oz saw the market dipping quickly into the Tokyo session having made slow gains to the 0.7390 levels from the opening 0.7370 areas, Moody’s comments on Oz bank asests weakening over the course of the year was sufficient to push the Oz and the market quickly dropped back to the 0.7350 areas to hold quietly through to London, Topside offers into any run towards the 74 cent level with a strong push here likely to open up to the 0.7450 levels before offers reappear and stronger topside offers likely to continue through to 75 cents, downside bids through the current levels and increasing to the 73 cent levels with weak stops and possible breakout stops appearing for a move back to the Jan-Feb ranges.

Overnight News

JPY:

Abe Adviser Hamada Says Japan Retains Right for FX Intervention

Abe Adviser Says Japan Govt. Should Adopt Income-Target Policy

Suga: Japan Govt. Is Not Considering Abe Visit to Pearl Harbor

NZD:

RBNZ’s Wheeler Says No Timetable for Any New Housing Measures

RBNZ to Assess If Further Housing Policy Measures are Needed

N.Z. April Home Sales Rise 18.4% Y/y, REINZ Says

RBNZ Assumes Dairy Prices Will Recover Only Slowly in 2016

AUD:

Australia May Consumer Confidence Rises 8.5% M/m to 103.2

Australia March Home-Loan Approvals Fell 0.9% M/M; Est. 1.5% Fall

 

Today’s data

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

AUD       Westpac Consumer Confidence May A 8.50% | P -4.00%

AUD       Home Loans Mar A -0.90% | C -1.40% | P 1.50%

JPY         Leading Index Mar (P) A 98.4 | C 96.4 | P 96.8

08:30     GBP       Industrial Production M/M Mar C 0.40% | P -0.30%

08:30     GBP       Industrial Production Y/Y Mar C -0.40% | P -0.50%

08:30     GBP       Manufacturing Production M/M Mar C 0.30% | P -1.10%

08:30     GBP       Manufacturing Production Y/Y Mar C -1.90% | P -1.80%

14:00     GBP       NIESR GDP Estimate Apr P 0.30%

14:30     USD       Crude Oil Inventories P 2.8M

18:00    USD      Monthly Budget Statement Apr C 116.2B | P -108.0B

Harry Hindsight              

• EUR: Quiet through the Asian session for the Euro with the market trading around the 1.1380 opening levels into the Tokyo session before a stronger USD turned the market lower from above the 1.1390 areas, the market moved into the London session testing down to the 1.1370 areas and slowly moved to the 1.1400 levels once the German numbers were released, not a particularly strong rally with IP numbers somewhat countering the better German trade numbers, the Euro struggled to the 1.1400 before stalling and then drifting through the session into NYK and a test lower through to the 1.1360 levels with weak stops cleared on the move, NYK were light bidders in a very quiet session and although the market made new highs there seemed to be only light trading on the move through the 1.1400 levels to make the high around 1.1410 before again slipping slowly lower the session and finishing the day holding the 1.1370 areas.
• GBP: Cable was quietly through the Asian session hedging a little higher in early trading to test through the 1.4420 levels before struggling through to the London session again holding around the 1.4400 areas, EURGBP selling through into the London session saw Cable start a steady rise as the GBP found support from the market against most of the other pairs however, the movement was still limited and the move through the morning session in London saw the market slowly push to the 1.4460 levels before slowing and then trading sideways into the NYK session, NYK saw the same pattern however, the movement was slower and only just posted better highs late into the session testing towards the 1.4480 areas before the same failure as the Euro and the market drifting back to close around the 1.4440 levels.
• JPY: Onwards and upwards goes the USDJPY with for comments this time from Aso who stated there is the ability to intervene in the markets if necessary and the market moved off the opening levels to push to the 108.80 and offers that slowed the move and held into the London session, even once the level broke the market could only gradually move through the 109.00 levels before stalling at the 109.20 levels until the London session closed and the market was deep into the NYK session the highs were extended to the 109.30 areas in lacklustre trading to the close.
• AUD: The early failure at the 73 cent level saw the market moving steadily away from the lows and back through the opening 0.7315 area to test to the 0.7340 levels in the Asian session the pair moving as a consequence of stronger AUDJPY buying through the session and eventually pushing into the London session, the buying continued steadily through the day with nothing more than AUD/cross buying moving through the market and the market eventually testing to the 0.7370 areas with light stops triggered through the 0.7360 and the market then ranging over the balance of the session in a 40 pip range to the close only just short of those highs.

Yesterday’s premiership results

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%

CHF        Unemployment Rate Apr A 3.50% | C 3.50% | P 3.60% | R 3.40%

EUR        German Industrial Production M/M Mar A -1.30% | C -0.20% | P -0.50%

EUR        German Trade Balance (EUR) Mar A 23.6B | C 20.4B | P 19.8B

GBP       Visible Trade Balance (GBP) Mar A -11.2B | C -11.2B | P -12.0B

USD       Wholesale Inventories Mar A 0.10% | C 0.20% | P -0.50% | R -0.60%

Good Luck,

Andy

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