Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 109.01 | EURUSD 1.13772 | AUDUSD 0.73246 | NZDUSD 0.68228 | USDCAD 1.28463 | USDCHF 0.97052 | GBPUSD 1.44521 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.13799 | 1.13665

USDJPY                 109.134 | 108.708

GBPUSD               1.44582 | 1.44240

AUDUSD              0.73233 | 0.72863

USDCHF               0.97145 | 0.97047

USDCAD               1.28694 | 1.28371

NZDUSD               0.68297 | 0.67927

EURGBP               0.78825 | 0.78733

EURJPY                 124.122 | 123.658

EURCHF                1.10844 | 1.10442

 

For Today

EUR: As with pretty much the rest of the week the Asian saw very little movement in the Euro with the market slowly testing through to post lows in the high 1.1360’s before returning to the opening 1.1375 areas, Topside offers light through the 1.1400 areas and likely to increase only if the market moves to the 1.1440-60 areas where better offers are likely to be for the moment and then stronger offers into the 1.1480 areas and through to the 1.1510-30 areas. Downside bids likely through the current areas with little in the way of stops likely and the market possibly increasing in strength as the market pushes the 1.1350 areas, then congestion likely to see the market struggling into the 1.1300 areas and better bids again, and likely to continue through to the 1.1280 areas before stops appear.

GBP: Cable drifted a little lower from the opening 1.4450 areas and testing lightly to the 1.4430 levels before moving back to the mid-range areas and holding into the London session, Topside offers are very light with a push above the 1.4530 areas likely to see stronger offers beginning to push into the market, a strong push through the 1.4560 areas is likely to see some weak stops appearing in the market and then congestion then showing in the market and the move through the 1.4600 levels likely to see offers appearing. Downside bids into the 1.4400 have been fairly resilient over the last week or so and the bids are likely to continue to appear however, a break here will likely see weak stops appearing and the market limited to the 1.4350 levels and opening the 1.4300 quiet quickly.

JPY: USDJPY made a minor attempt to push higher into the early part of the session before dropping back quickly and testing through to the 108.80 areas to trade quietly through the session, Topside offers into the 109.40 levels again seem to be limiting any further gains and the market is likely to see weak stops building in the 109.50 levels before the stronger 109.80-110.00 level appears vulnerable however, through the 110.00 room is likely to appear and the USDJPY has the potential to move into the Mar/Apr higher range. Downside bids light through to the 108.00 levels and possibly limited for the moment however, a weak retail sales number later in the day could see the USD dropping back a little and the downside could come under threat.

AUD: A quiet test lower from the opening 0.7320 areas to push lightly through the 73 cent level with light stops cleared to the 0.7290 areas before the market started to strengthen a little sufficiently to return to straddle the 73 cent levels for the balance of the session, Downside bids light with possibly better bids into the 0.7240-60 areas and then stops possibly appearing for a return to the 70-72 cent range from the beginning of the year, Topside offer into the 0.7350 are light at best with the strength on the offer side not likely to appear until closer to the 74cent levels.

Overnight News

NZD:

Retail sales weaken slightly for the first Qtr at 0.80% vs. 1.10% previously

Today’s data

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

22:45     NZD       Retail Sales Ex Inflation Q/Q Q1 A 0.80% | C 1.00% | P 1.20% | R 1.10%

4:30        JPY         Tertiary Industry Index M/M Mar A -0.70% | C -0.20% | P -0.10%

6:00        EUR        German CPI M/M Apr (F) C-0.40% | P -0.20%

6:00        EUR        German CPI Y/Y Apr (F) C -0.10% | P 0.10%

6:00        EUR        German GDP Q/Q Q1 (P) C 0.60% | P 0.30%

8:30        GBP       Construction Output M/M Mar C -2.80% | P -0.30%

9:00        EUR        Eurozone GDP Q/Q Q1 (P) C 0.60% | P 0.60%

12:30     USD       Advance Retail Sales Apr C -0.30% | P -0.30%

12:30     USD       Retail Sales Less Autos Apr C 0.60% | P 0.20%

12:30     USD       Retail Sales Ex Auto and Gas Apr P 0.10%

12:30     USD       PPI M/M Apr C 0.30% | P -0.10%

12:30     USD       PPI Y/Y Apr C 0.30% | P -0.10%

12:30     USD       PPI Core M/M Apr C 0.10% | P -0.10%

12:30     USD       PPI Core Y/Y Apr P 1.00%

14:00     USD       Business Inventories Mar C 0.20% | P -0.10%

14:00     USD       U. of Michigan Confidence May (P) C89.9 | P 89

Harry Hindsight              

• EUR: Euro’s slid steadily lower through the session but Asia just held in a very quiet range with little independent movement with the market testing towards the 1.1430 levels before drifting through the opening 1.1420 areas and testing lower into the London session, testing towards the 1.1400 areas and then holding deep into the session and then dipping with the a quick move in EURGBP trading down through the 1.1400 levels for the first time in the day, The move to the NYK session saw the Euro steadily start to recover and trade lightly through the 1.1400 levels from the 1.1380 lows and pushing towards 1.1420 before, seeing the steady drift lower as the USD started a steady recovery through the session and leaving the Euro again on its lows around the 1.1375 levels.
• GBP: Cable had a slightly wider range than the Euro however, the pattern was the same over all with the market trading around the 1.4440 and just short of the opening levels, the move into London saw the market test through to the 1.4410 areas before recovering steadily into the release of the BoE decision with the market expecting and getting the no change and the market eventually rising on slightly better report for inflation however, this has to be tempered with weaker expectations for the GDP number which was again revised slightly lower and concerns of weakness in the GBP on a vote for Brexit, initially trading to the 1.4500 levels the market reversed into the NYK session before again rallying and pushing through to the 1.4530 levels and more solid selling moving in to the market, EURGBP pushed lower by the GBP gains saw lows through the 0.7850 areas having traded quietly in the Asian session around the 0.7910 levels however, once the highs were made the Cable saw the same USD buying moving in and the Cable trading back to the opening levels to finish the day little changed.
• JPY: USDJPY made initial lows into the Tokyo session to the 108.20’s before starting a steady recovery through to the London session with the market rising back to the 109.00 levels before triggering weak stops and a push to the 109.40 levels before slipping back quickly as the NYK session moved into the market, however, the dip was limited and the market touched through the 108.70 levels before finishing the day rising slowly to push through the 109.00 levels and into the close holding just above the level.
• AUD: The Oz saw very little movement over all with the market dipping from the opening 0.7380 areas early in the session and holding around the 0.7340 levels with the range downwards to the 0.7320 areas for the most part, NYK bought from the opening but the move higher was limited and soon returned to the 0.7320-40 range testing weakly to the 0.7310 with little independent movement after that point.

Yesterday’s premiership results

NZD       Business NZ Manufacturing Index Apr A 56.5 | P 54.7

GBP       RICS House Price Balance Apr A 41.00% | C 38.00% | P 42.00%

JPY         Current Account (JPY) Mar A 1.89T | C 1.90T | P 1.73T | R 1.69T

AUD       Consumer Inflation Expectation May A 3.20% | P 3.60%

JPY         Eco Watchers Survey: Current Apr A 43.5 | C 44.9 | P 45.4

EUR        Eurozone Industrial Production M/M Mar A -0.80% | C 0.10% | P -0.80% | R -1.20%

GBP       BoE Rate Decision A 0.50% | C 0.50% | P 0.50%

GBP       BoE Asset Purchase Target May A 375B | C 375B | P 375B

GBP       MPC Official Bank Rate Votes A 0–0—9 | C 0–0—9 | P 0–0–9

GBP       MPC Asset Purchase Facility Votes A 0–0—9 | C 0–0—9 | P 0–0–9

GBP       Bank of England Inflation Report

USD       Import Price Index M/M Apr A 0.30% | C 0.60% | P 0.20%

USD       Initial Jobless Claims (MAY 7) A 294K | C 277K | P 274K

CAD       New Housing Price Index M/M Mar A 0.20% | C 0.30% | P 0.20%

Good Luck,

Andy

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