Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 110.196 | EURUSD 1.1216 | AUDUSD 0.72296 | NZDUSD 0.67421 | USDCAD 1.30325 | USDCHF 0.98777 | GBPUSD 1.45986 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.12294 | 1.12113

USDJPY                 110.280 | 109.929

GBPUSD               1.46054 | 1.45650

AUDUSD              0.72416 | 0.71994

USDCHF               0.98845 | 0.98716

USDCAD               1.30716 | 1.30132

NZDUSD               0.67659 | 0.67249

EURGBP               0.77022 | 0.76840

EURJPY                 123.755 | 123.387

EURCHF                1.10895 | 1.10759

 

For Today

• EUR: A very quiet session again through the Asian session with the market holding quietly around the 1.1220 areas, Topside offers light through the 1.1240-60 areas and likely to be a little stronger on a move to the 1.1280-1.1300 areas and possibly into the 1.1320 areas before weak stops are suspected, and congestion from there into the 1.1400 areas. Downside bids into the 1.1200 areas and with possibly stronger bids on a move into the 1.1150 areas with the 1.1100 levels likely to see similar bids as the market moves back into the ranges from early part of the year.
• GBP: From the opening the market tested back the 1.46700 levels and holding the levels through into the Tokyo session before starting a steady drift lower as light profit taking moved into the market to test down through the 1.4570 levels before holding quietly into the London session. Topside offers are likely to be stronger on a move to the 1.4650 areas and although the congestion into the area is limited the market will see short term sellers likely to move in on a move through the level, downside bids into the 1.4500 areas with the market possibly finding stronger bids on any move through with initially a mixture of weak stops and bids likely to hold the market into the 1.4450 areas and stronger on the move through.
• JPY: The USDJPY tested the 110.20 levels repeatedly however the market struggled at the level for server all hours pushing lightly through before drifting back off to hold the 110.00 areas through to the London session, USDJPY sees light offers continuing through the topside to the 110.50 levels however, the possibility of weak stops and possibly light stops from short term buyers in a move through to the 111.00 areas and higher, Downside bids light through the 110.00 levels and the likelihood of stops on a break through the 109.70 levels and opening a retest of the 109.00 areas.
• AUD: The Oz drifted lower through the session with the employment numbers slight weaker than expected but holding generally and leaving the Oz testing to the 0.7220 opening areas after the brief flirtation with the 0.7240 areas and then late into the session the market did test the 72 cent levels lightly with less conviction. Downside bids into the 72 cent levels with those bids likely to be around through to the 0.7150 areas before weakness starts to appear in the market and the market into the previous ranges and the market likely to be light through to the 0.7050 areas and strong bids.

Overnight News

JPY:

Japanese Bought Net 1.1 Trillion Yen Overseas Debt Last Week

Japan March Core Machine Orders Rise 5.5% M/m; est. -2%

Japan Watching Market for Speculative Yen Trading: Nikkei

Japan Quake Insurance Payouts 2nd Highest on Record: Kyodo

AUD:

Australian April Employment Rose 10,800 M/M; Est. 12,000 Gain

CAD: Morneau: Canada Won’t Be Prescriptive on FX to Other Countries

Any ’Coherent’ G7 Growth Plan Challenging, Morneau Says

EUR:

Greece Submits Contingency Fiscal Mechanism Bill to Parliament

USD:

Moody’s Says U.S 2016 Growth Projection Lowered After Weak 1Q

Moody’s:

Global Growth Weakened, Brexit Is an Immediate Concern

CNY:

China CFETS Tests Standardized Yuan Option Contracts: Sec. News

NZD:

New Zealand Consumer Confidence Index Falls to 7-Month Low: ANZ

RBNZ Says Digital Disruption May Add Risks to Banking System

New Zealand Job Ads Increase Suggests Eventual Wage Growth: ANZ

Today’s data

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

JPY         Machine Orders M/M Mar A 5.50% | C -1.90% | P -9.20%

AUD       Employment Change Apr A 10.8K | C 12.3K | P 26.1K | R 25.7K

AUD       Unemployment Rate Apr A 5.70% | C 5.80% | P 5.70%

0600       JPY         All Industry Activity Index M/M Mar C 0.70% | P -1.20%

08:00     EUR        Eurozone Current Account (EUR) Mar C 19.6B | P 19.0B

08:30     GBP       Retail Sales M/M Apr C 0.70% | P -1.30%

11:30     EUR        ECB Monetary Policy Meeting Accounts

12:30     CAD       Wholesale Sales M/M Mar C 0.50% | P -2.20%

12:30     USD       Initial Jobless Claims (MAY 14) C 276K | P 294K

12:30     USD       Philly Fed Manufacturing Index May C 3 | P -1.6

14:00     USD       Leading Indicators Apr C 0.40% | P 0.20%

Harry Hindsight              

• EUR: A quiet drift lower through the Asian session with the help of Japanese GDP numbers seeing EURJPY selling enter the market and force the Euro down through the 1.1300 level into mid sessions, the move into the London session saw the market holding the 1.1280 levels before holding the 1.1260 levels after the release of the CPI numbers for the Eurozone with no change and the market slowly rising to the 1.1290 levels before the FOMC, comments on the Financial markets not accurately assessing the chance of a June rise significantly altering the day and the Euro dropped quickly from its recovering levels to the 1.1220 areas and holding through to the close.
• GBP: A slow drift through the Asian session saw the market opening around the 1.4460 levels and moving into the London session around the 1.4440 levels limited impact from the employment news however, once the market had tested to the 1.4400 levels however, the rejection of the lows saw the market rise quickly higher ans strong buying moved in on the Cable and EURGBP weakening saw the cross drop through the 7800 levels with stops triggered as the cross dropped quickly, Cable pushed to the 1.4520 areas and broke through triggering weak stops through the levels and the rally continued with little interference until above the 1.4620 areas where the market started to run out of space, a slight weakening on the FOMC saw Cable back below the 1.4600 areas to the close.
• JPY: Early selling in the cross/JPY after a strong GDP result than the market actually expected however, the market took the numbers in its stride and started to recover once the market discounted the figures and continues to suspect and underlying problems with the economy being masked by those numbers, the recovery from the early losses saw the market trade back from the lows in the 108.70 areas to press the 109.30 levels before drifting to the opening levels for the move into the London session, the market opened with the market moving higher and test through the 109.50 and struggled through deeper into the NYK session before pushing steadily higher through to the FOMC, the market lifted from the 109.60 levels and initially struggled around the 110.00 levels before triggering some weak stops as the market pushed to the 110.20 areas ad a quiet close on those highs.
• AUD: The market drifted lower through the session with cross JPY selling dominating the market during the early part of the session after RBA minutes were released and that continuing weakness saw the Oz drift through to the London session off the 0.7330 opening and testing the 0.7260’s before holding steadily through the early London session, the move through the London and into the NYK session saw the Oz recovering higher and then the FOMC saw the Oz drop quickly through to the lows and triggering weak stops through the lows and into the 0.7230 area closes.

Yesterday’s premiership results

NZD       PPI Inputs Q/Q Q1 A -1.00% | C 0.30% | P -1.20%

NZD       PPI Outputs Q/Q Q1 A -0.20% | C 0.40% | P -0.80%

JPY         GDP Q/Q Q1 (P) A 0.40% | C 0.10% | P -0.30%

JPY         GDP Deflator Y/Y Q1 (P) A 0.90% | C 1.00% | P 1.50%

AUD       Westpac Leading Index M/M Apr A 0.20% | P -0.10%

AUD       Wage Cost Index Q/Q Q1 A 0.40% | C 0.50% | P 0.50%

GBP       Jobless Claims Change Apr A -2.4K | C 4.1K | P 6.7K | R 14.7K

GBP       Claimant Count Rate Apr A 2.10% | P 2.10%

GBP       ILO Unemployment Rate (3M) Mar A 5.10% | C 5.10% | P 5.10%

GBP       Average Weekly Earnings 3M/Y Mar A 2.00% | C 1.70% | P 1.80% | R 1.90%

EUR        Eurozone CPI M/M Apr A 0.00% | C 0.00% | P 1.20%

EUR        Eurozone CPI Y/Y Apr (F) A -0.20% | C -0.20% | P -0.20%

EUR        Eurozone CPI – Core Y/Y Apr (F) A 0.70% | C 0.70% | R 0.80%

CAD       International Securities Transactions (CAD) Mar A 17.17B | C 10.35B | P 15.94B

USD       Crude Oil Inventories A 1.3M | C -3.1M | P -3.4M

USD       FOMC Minutes

Good Luck,

Andy

Any opinions, news, research, analyses, prices or other information contained on this Blog, whether by LMAX, its employees, partners or contributors, does not constitute investment advice nor has it been prepared in accordance with legal requirements designed to promote the independence of investment research. Further, the material contained within this Blog does not contain (and should not be construed as containing) investment advice or an investment recommendation, or an offer of, or solicitation for, a transaction in any financial instrument. Whilst information provided on this Blog may help with your investment research you must consider carefully whether you should make (or refrain from making) investment or other decisions based on what you see without doing further research on the investments you are interested in. Participating in this Blog cannot be a substitute for obtaining advice from an appropriate expert independent adviser who takes into account your circumstances and specific investment needs in selected investments that are appropriate for you. LMAX has not verified the accuracy or basis-in-fact of any claim or statement made by any third parties as comments for every Blog entry.

LMAX will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. No representation or warranty is given as to the accuracy or completeness of the above information. While the material produced in this Blog was obtained from sources deemed to be reliable, LMAX does not provide any guarantees about the reliability of such sources.

Consequently any person acting on it does so entirely at his or her own risk.

If you currently hold an account with LMAX for the purposes of trading FX and CFD’s, you are encouraged to use a different Username and Password to access the Blog or any other online systems. The Blog is a place to learn, discuss and share information and ideas with Blog followers. It is not a place to slander, use unacceptable language or to promote LMAX or any other FX, Spread Betting and CFD provider and any such postings, excessive or unjust comments and attacks will not be allowed and will be removed from the site immediately.