Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 109.961 | EURUSD 1.12026 | AUDUSD 0.72272 | NZDUSD 0.67468 | USDCAD 1.30958 | USDCHF 0.99075 | GBPUSD 1.46104 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.12104 | 1.11967

USDJPY                 110.148 | 109.847

GBPUSD               1.46100 | 1.45911

AUDUSD              0.72432 | 0.72217

USDCHF               0.99149 | 0.99042

USDCAD               1.30986 | 1.30781

NZDUSD               0.67772 | 0.67364

EURGBP               0.76790 | 0.76676

EURJPY                 123.393 | 123.094

EURCHF                1.11048 | 1.10918

 

For Today

• EUR: Euro traded around the 1.1200 levels with a light attempt to the 1.1210 levels and testing only slightly through the downside through the figure in light trading, offers likely through the 1.1280 areas and very light from the current levels to that point, a push through the 1.1300 is likely to see weak stops appearing and the market limited to the 1.1340 before better offers move into the market but a quiet session with a lack of data to impact the Euro, Downside bids into the 1.1180 levels with the possibility of bids likely through to the 1.1150 levels before congestion into the 1.1100 areas and the possibility of weak stops on a push through the levels.
• GBP: A slow drift lower through the session with the market initially testing the 1.4610 areas before slowly drifting into the 1.4590’s, topside offers for the moment into the 1.4650 areas with the possibility of stronger offers as the market approaches the 1.4700 areas and weak stops through the level, Downside bids light through the 1.4550 with a possibility of weak stops through the level and the market opening to the 1.4500 and better bids into the level.
• JPY: The USDJPY moved a little lower from the opening testing again into the 109.80’s before stabilizing and again pushing above the 110.00 and a limited test to the 110.10 areas before holding quietly with little data to help the market along. Topside offers through to the 110.40 areas likely to slow any gains for the moment and with nothing special ahead the market could struggle for the day with a push through those levels possibly opening a quick move through the 111.00 areas. Downside bids into the 109.80 areas with weak stops likely through the 109.70 levels and opening only a limited fall into the 109.20 areas and better bids into the 109.00 levels.
• AUD: The Oz as with yesterday tested the 0.7240 levels over the course of the session but played along the 0.7230 levels for most of the day, the Topside is likely to see weak stops through the 0.7250 areas and opening the market to a short squeeze to the 73 cent before running into stronger offers however, given the quiet market expected could see the market push through the level. Downside bids into the 0.7180 levels and the topside of the ranges before March and although the support is possibly strong a move through the levels is likely to open to the 0.7050 areas in the medium term with bids likely into 0.7150 and 71 cent.

Overnight News

JPY:

Abe Adviser Honda Repeats That Sales-Tax Hike Should Be Delayed

Japan Targets Doubling Infrastructure Investment Abroad: Nikkei

Japan GPIF Adds Two Academics to Investment Advisory Cmte

JPY/USD:

Suga: Japan Protested to U.S. Over Death of Okinawa Woman

AUD:

Edwards Says Cutting RBA Inflation Goal Would Be Premature: WSJ

USD/EUR:

Treasury’s Lew Urges Europe to Provide Debt Relief to Greece

G7:

G7 Participants Said to See Brexit Leading to Unrest: Reuters

CNY:

China Names Zhang Tao Deputy Central Bank Governor

EUR:

German Tax Revenue Rises 5% in April After ‘Strong’ 1Q: Ministry

AUD/EUR:

Australia Plans to Launch FTA Talks With EU, Turnbull Says

CAD:

Labour Market Changes Can Drive Growth in G7: Canada’s Morneau

NZD:

New Zealand Says Foreign Visitor Spending Rises 25% in March Yr

New Zealand Says Net Permanent Immigration Increased in April

Today’s data

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

10:00     GBP       CBI Trends Total Orders May C -13 | P -11

12:30     CAD       Retail Sales M/M Mar C -0.70% | P 0.40%

12:30     CAD       Retail Sales Less Autos M/M Mar C -0.40% | P 0.20%

12:30     CAD       CPI M/M Apr C 0.40% | P 0.60%

12:30     CAD       CPI Y/Y Apr C 1.70% | P 1.30%

12:30     CAD       BoC CPI Core M/M Apr C 0.20% | P 0.70%

12:30     CAD       BoC CPI Core Y/Y Apr C 2.00% | P 2.10%

14:00     USD       Existing Home Sales Apr C 5.39M | P 5.33M

Harry Hindsight              

• EUR: Another quiet session for the Euro with the market opening around the 1.1220 levels and holding that area through the Asian session and into London, the market dipped only slightly into the early part of London to test the 1.12310 areas before holding into the ECB monetary policy meeting accounts, there was some selling on usual rhetoric but nothing spectacular with the market moving off the 1.1180 lows and trading back towards the 1.1230 level before then spending the rest of the day into NYK holding around the 1.1200 levels.
• GBP: Cable had more of a range over the day, Asia opened around the 1.4580 areas and made early headway back to the 1.4600 levels with sentiment continuing to favour the GBP after the recent in/out poll at the beginning of the week, and only once the market moved into the Tokyo session did the market start to weaken as the cross/JPY came under pressure from decent Machine order numbers in Japan and Cable slowly slipped to the 1.4570 levels into the London session, a stronger UK retail sales number for April saw the Cable quickly move higher and push eventually through the 1.4600 levels firmly to reach above the 1.4660 levels before steadily drifting lower over the course of the session into the NYK trading period, strong selling from the opening saw the market then trading through NYK in a choppy few hours ranging from the 1.4580 levels to the 1.4630 areas with the US numbers broadly in line with expectations and the market finishing almost unchanged on the day.
• JPY: USDJPY ranged reasonably quietly through the day with the market unable to push beyond the 110.40 levels and ranging for the first half of the day around the 110.00-20 levels before slipping under the figure areas on the move into the NYK session, and testing the 109.70 areas before a steady rise once the London session was closed to finish only just below the opening levels.
• AUD: The Oz having slipped during the previous session saw only minor fluctuations through the session with the employment data having only a minor effect on the market with the monthly rate just short of the expected and the actual rate steady, holding in the early part of the session to see the high above the 0.7240 levels the market started a slight slide lower through the session and test into the London session testing through the 72 cent levels before the opening London session testing quickly higher with day traders taking advantage and the move back to the 0.7220 levels, the move into the NYK saw further lows created as the market probed the 0.7180 levels it soon recovered and the market spent the rest of the day moving back to the opening levels.

Yesterday’s premiership results

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%

GBP       Retail Sales M/M Apr A 1.30% | C 0.70% | P -1.30% | R -0.50%

EUR        ECB Monetary Policy Meeting Accounts

CAD       Wholesale Sales M/M Mar A -0.10% | C 0.50% | P -2.20%

USD       Initial Jobless Claims (MAY 14) A 278K | C 276K | P 294K

USD       Philly Fed Manufacturing Index May A -1.8 | C 3 | P -1.6

USD       Leading Indicators Apr A 0.60% | C 0.40% | P 0.20%

Good Luck,

Andy

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