Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close Wellington open

USDJPY 108.648 108.53-60 | EURUSD 1.13077 1.1300-20 | AUDUSD 0.72682 0.7250-60 | NZDUSD 0.67665 0.6760-75 | USDCAD 1.29372 1.2910-40 | USDCHF 0.9756 0.7540-60 | GBPUSD 1.43608 1.4340-65 |

 

LMAX Ranges 6am London time

Highs    Lows

EURUSD               1.13197 | 1.13021

USDJPY                 108.986 | 108.468

GBPUSD               1.43704 | 1.43453

USDCHF               0.97668 | 0.97425

AUDUSD              0.72932 | 0.72489
USDCAD               1.29633 | 1.29278

NZDUSD               0.67756 | 0.67462

EURCHF                1.10422 | 1.10316

EURGBP               0.78888 | 0.78683

EURJPY                 123.222 | 122.616

For today

• EUR: Euro’s traded through the session quietly around the 1.1310 levels with brief attempts to push through the 1.1320 levels and pushing to the 1.1300 levels with neither side being breeched during the Asian session in limited volume, light offers through the 1.1350 levels will likely see those offers increasing a little through to the 1.1400 areas and weak stops not likely until above the 1.1420 area and are likely not to be that strong, with stronger offers likely to appear on the move through that area, Downside bids into the 1.1300 levels are likely to be limited increasing into the 1.1280 areas, and those bids likely to continue through to the 1.1240 areas before any weakness is likely to be seen and the market then runs into possibly limited bids through the 1.1200 areas and likely to increase as the market makes its way into the 1.11 lower levels.
• GBP: Cable saw some limited movement higher into the Tokyo session having drifted through the 1.4350 levels only to run into light offers around the 1.4370 areas and holding into the London session, Topside offer likely into the 1.4400 areas with those offers likely to continue through to the 1.4420 levels, with possible weak stops just before the 1.4400 level as the market fills the gap on the chart from Friday, however, those topside offers are likely to increase as the market moves to the 1.4450 areas with plenty of congestion in the area to suggest the market will possibly struggle with little data available. Downside bids into the current lows however, the market has pushed through the 100DMA and could see further pressure on the pair down to the 1.4300 levels with those limited bids possibly protecting another test to the lows in April.
• JPY: USDJPY saw steady gains from the opening with the market initially dipping through the 108.50 levels to make the lows for the day before slowly rising through the session to test to the 109.00 levels again before running into late Tokyo still unable to push through the level and slipping back to the 108.75 areas as the market heads towards the grey hour, Topside offers likely to be light through the 109.00 levels and the offers only appearing on a push to the 109.50 areas and increasing as the market rises to 109.80-110.00 levels with possible weak stops on a push through the 110.10-20 areas and an opening for larger gains. Downside bids light through to the 108.20 areas and likely to be support on a move through to the 107.80 areas before weakness reappears and the 107.00 remains the stronger point in that area.
• AUD: The Oz regained some composure through the session moving off the low opening just above the 0.7250 levels to push steadily towards the 0.7290 areas before drifting a little into the grey hour, Topside offers likely to be light through the 0.7300 areas and only likely to increase as the market moves towards the 0.7350 areas with possible weak stops through the 0.7360 areas, Downside bids into the 0.7240 areas will see the market move into a stronger area of 72 cent however, through the level the downside range from the earlier part of the year is likely to be open and 72-70 range is likely to come into play.

Overnight News                                                                  

JPY:

Asakawa Says Intervention an Option If FX Moves Abrupt: Nikkei

Japan’s Abe Says Fiscal Policy May Be Needed to Create Demand

Japan Quake Response Boosts Abe’s Approval Rating: Yomiuri Poll

CNY: China End-April Yuan Positions at PBOC Balance Sheet 23.78t Yuan

CNY/ZAR:

China Said to Start Yuan-Rand Direct Trading as Early as May

NZD:

N.Z. Government Will Consider Tax Cuts in Budget 2017 Or Later

New Zealand Services Post Fastest Growth in Four Months in April

GBP:

U.K. May House Prices Rise 0.4% M/m, Rightmove Says

PLN:

Poland Sees No Need to Change Debt Sale Plan After Moody’s: Puls

Today’s data

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

23:01     GBP       Rightmove House Prices M/M May A 0.40% | P 1.30%

23:50     JPY         Domestic Corporate Goods Price Index Y/Y Apr A -4.20% | C -3.70% | P -3.80%

6:00        JPY         Machine Tool Orders Y/Y Apr P -21.20%

12:30     USD       Empire State Manufacturing Index May C 7 | P 9.56

14:00     USD       NAHB Housing Market Index May C 59 | P 58

20:00     USD       Net Long-term TIC Flows Mar C 36.5B | P 72.0B

Weekend News

CNY:

China April Credit Slowdown Temporary, Money Supply Steady: PBOC
China April Industrial Output Rises 6.0% Y/y; Est. +6.5%
China Jan.-Apr. Property Development Investment Rises 7.2% Y/y
PBOC’s Ma Says Monetary Policy Must Consider Prices, Fin. Risks
China Said to Ask Banks to Clear Hurdles on Pvt Lending: Reuters
CNY/USD:

China Objects to Pentagon Report on Its Defence Policy
JPY:

Abe to Delay Raising Sales Tax as Economy Struggles, Nikkei Says
LDP Policy Chief Inada Denies Report of Tax Increase Delay
Japanese PM Abe Held Talks With BOJ Governor Kuroda: Reuters
Japan to Revise Labour Laws to Boost Temporary Pay, Asahi Says
USD:

Fed’s Williams Says 2-3 Hikes in 2016 Might Still Make Sense
Williams Says ‘Highly Unlikely’ Fed Will Deploy Negative Rates
Republicans Attempt to Draft Independent Candidate: Wash. Post
EUR:

Greece Could Return to Markets in 2017, Tsipras Tells Real News
Greece Needs Economic Stability, Dombrovskis Tells Kathimerini
German Professors Sue ECB for QE, Corporate Bond Program: Welt
PLN:

Poland Outlook to Negative by Moody’s, Rating Affirmed
Poland Is Taking Steps to Cut Deficit, Finance Ministry Says
HKD:

Hong Kong’s Economy to Face Difficult Year, John Tsang Says
ZAR:

1. Africa Police Send Gordhan Probe Docket to Prosecutors: Times
   NZD:

New Zealand Urges Councils to Sell Land to Ease Housing Problem
RUB:

Russia Finance Minister Says Economy to Pick Up by Yr. End: Vesti

Harry Hindsight

• EUR: A quiet session through Asia saw the market moving in a narrow range barely breaking the 1.1370-80 levels throughout until the opening in London saw the market dipped through triggering weak stops and touching through the 1.1350 levels slowly to eventually touch the 1.1330 areas before bouncing back to hold the 1.1350 areas, retail sales numbers rose a in the US and the USD started a small movement higher and the Euro gapped to the lows and then started a gradual movement to test the 1.1280’s before holding and quietly moving back above the 1.1300 levels to the close.
• GBP: Cable was a little more active in Asia with the market opening around the 1.4450 areas and slowly drifting into the 1.4420’s, the move into the London session saw the market dip through the 1.4400 levels and the market traded down to the 1.4380 levels before quickly returning to the 1.4400 and basing off the level into the NYK session and the release of the retail sales numbers saw the Cable dip quickly through the lows and then dropping steadily through the session to the 1.4340 levels before finding sufficient interest to turn the market back to the 1.4370 levels and trading slowly to the close just below the level.
• JPY: Early trading in Asia saw the market in USDJPY test to the 109.10 levels before steadily slipping further lower through to the London session, the opening in London saw the market test to the 108.50 areas before returning to the 108.70 levels and slowly rising from there into the NYK session to test the 108.90 levels and the retail sales numbers. The market spiked to the 109.40 levels before dipping back and taking a second run higher through the 109.50 levels and holding briefly through to the London close above the 109.00 levels, the fall back the level saw the market drop steadily back towards the lows and held the 108.60 areas to the close in quiet trading.
• AUD: The Oz lost ground throughout the day drifting from the 0.7325 opening areas to slip down through the 73 cent level early in the session with some reasonable AUDJPY selling moving in, the market traded to the 0.7280 areas before finding some support, the recovery was limited and the move into the London session again saw the market testing lower and extending just slightly below those lows before moving into the NYK session, the release of the US retail sales numbers had limited impact on the Oz however, ti did dip to the 0.7250 areas before holding quietly to the close around the 0.7270 areas.

Friday’s premiership results

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

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

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

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

EUR        German CPI Y/Y Apr (F) A -0.10% | C -0.10% | R 0.10%

EUR        German GDP Q/Q Q1 (P) A 0.70% | C 0.60% | P 0.30%

GBP       Construction Output M/M Mar A -3.60% | C -2.80% | P -0.30% | R -0.90%

EUR        Eurozone GDP Q/Q Q1 (P) A 0.50% | C 0.60% | P 0.60%

USD       Advance Retail Sales Apr A 1.30% | C -0.30% | P -0.30%

USD       Retail Sales Less Autos Apr A 0.80% | C 0.60% | P 0.20%

USD       PPI M/M Apr A 0.20% | C 0.30% | P -0.10%

USD       PPI Y/Y Apr A 0.00% | C 0.30% | P -0.10%

USD       PPI Core M/M Apr A 0.10% | C 0.10% | P -0.10%

USD       PPI Core Y/Y Apr A 0.90% | C 1.00% | P 1.00%

USD       Business Inventories Mar A 0.40% | C 0.20% | P -0.10%

USD       U. of Michigan Confidence May (P) A 95.8 | C 89.9 | P 89

Stay lucky

Andy

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