Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 110.258 | EURUSD 1.11131 | AUDUSD 0.71844 | NZDUSD 0.66941 | USDCAD 1.30302 | USDCHF 0.99474 | GBPUSD 1.46199 |

 

LMAX Ranges 6am London time

Highs    Lows

EURUSD               1.11179 | 1.10978

USDJPY                 111.163 | 110.362

GBPUSD               1.46315 | 1.45993

USDCHF               0.99519 | 0.99425

AUDUSD              0.71881 | 0.71486
USDCAD               1.30934 | 1.30243

NZDUSD               0.67033 | 0.66754

EURCHF                1.10566 | 1.10417

EURGBP               0.76101 | 0.75898

EURJPY                 123.462 | 122.676

For today

• EUR: A quiet dip lower to test the 1.1100 areas several times from the opening around the 1.1113 levels, the market range was limited. Topside offers light through to the 1.1150 areas with possibility of weak stops above the level and limited offers to the 1.1200 areas, with a UK bank holiday movement could be limited; Downside bids through the 1.1100 areas are likely to see stops through the 1.1080 areas and the market opening for a further leg lower into the 1.1000 areas.
• GBP: Cable ranged in a 30 pip movement over the course of the session with the market testing higher early in the session before slipping back a little back to test the 1.4600 areas, light EURGBP selling saw the Cable again testing towards the 1.4630 levels and holding just off those areas into the move into the Bank holiday UK, Topside offers are likely thin and better into the 1.4680 areas and continuing into the 1.4700 levels, from there the offers are likely to increase into the 1.4750 areas and would for the moment see a little far away for a Bank holiday, Downside bids light through the 1.4600 levels and a push through will likely see weak stops appearing in the market and a push through those stops the market then opens to weakness on a run towards the congested 1.4500 levels.
• JPY: USDJPY ran higher from the opening with Abe proposing further fiscal stimulus of up to 10 trillion Yen, opening around the 110.40 levels the market made steady progress higher to push to the 110.80 levels in early trading into Tokyo and then pushing through the offers to test towards the London opening and the 110.20 areas and remainder of the offers. Topside offers into the 111.50 areas with the market likely to increase in offers above the 111.80 areas and stronger through the 112.00 levels. Downside bids into the 110.50 levels likely to be reasonable with weak stops on a push back through the level and opening the 109.00 levels for further testing with only limited 110.00 congestion.
• AUD: With the USD rising the Oz was gradually forced lower through the bids to tes from the opening 0.7180 areas and into the 0.7150 levels, limited bids into that low area with increasing through to the 0.7100 areas, limited topside bids moving into the 72 cent levels and with talk of increasing worries in China on possible bankruptcies limits potential topside for the moment, and then increasing into the 0.7240 levels.

Overnight News                                                                  

JPY:

Japan will delay sales tax hike by two and half years Abe

Japan retail sales stall in April

CNY:

Fixes Yuan at five year low

Default Chain reaction threatens products worth 35% of GDP

IMF:

IMF turns its back on Europeans in Greece bailout

USD:

Feds Bullard says global markets seem well prepared for summer rate hike

USDJPY hits 1 Month high after Yellen builds rate hike expectations

Today’s data

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

JPY         Retail Trade Y/Y Apr A -0.80% | C -1.30% | P -1.10% | R -1.00%

JPY         Retail Trade s.a. M/M Apr A 0.00% | C -0.50% | P 1.40% | R 1.50%

JPY         Large Retailers’ Sales Apr A -0.80% | C -0.90% | P -1.20% | R -1.00%

07:00     CHF        KOF Leading Indicator May C 102.9 | P 102.7

09:00     EUR        Eurozone Business Climate Indicator May P 0.13

09:00     EUR        Eurozone Economic Confidence May C 104.4 | P 103.9

09:00     EUR        Eurozone Industrial Confidence May C -3.6 | P -3.7

09:00     EUR        Eurozone Services Confidence May C 10.8 | P 11.5

09:00     EUR        Eurozone Consumer Confidence May (F) C -7 | P -7

12:00     EUR        German CPI M/M May (P) C 0.30% | P -0.40%

12:00     EUR        German CPI Y/Y May (P) C 0.10% | P -0.10%

12:30     CAD       Current Account (CAD) Q1 C -17.4B | P -15.4B

12:30     CAD       Industrial Product Price M/M Apr C 0.20% | P -0.60%

12:30     CAD       Raw Materials Price Index M/M Apr C 2.20% | P 4.50%

Weekend News

JPY:

Japan’s Abe Said to Delay Sales Tax Increase to 2019: Nikkei
Abe to Propose Second Supplementary Budget of 5-10t Yen: Nikkei
Abe Aide Says No Option But to Delay Sales-Tax Rise: Fuji TV
Japan Economic Conditions Require Tax Hike Delay: Tanahashi
Abe Cabinet Approval Rating Rises 7 Points to 55.3%: Kyodo
Japanese Cos. Seen Boosting FY16 Capital Spending 8.3%: Nikkei
CNY:

PBOC Official Says Prudent Monetary Policy Achieved Good Results
Beijing to Allow More Foreign Investment in Services: Sec. News
RUB:

Russian Energy Minister Won’t Attend June 2 OPEC Meeting: RIA
EUR:

Spanish Economy to Grow More in 1H Than a Year Earlier: Rajoy
SEK:

Sweden Green Party Support Falls to 14-Year Low in DN/Ipsos Poll
TRY:

Zeybekci Says Central Bank Should Ignore Lira Speculators: BHT
HUF:

Hungary Aims to Keep Key Rate Stable at 0.9%, Nagy Tells Hirlap

Harry Hindsight

• EUR: The market opened quietly and tested to the 1.1200 in steady trading from the opening around the 1.1190 levels and then drifted slightly lower than the opening through the Asian session, the London opening saw the same highs tested before the market started to drift lower through the session and into the release of the GDP numbers, a weaker set of numbers did little to lift the market and the Euro continued to weaken through the day as Brexit continues to weigh on the markets, the move through to the 1.1130 areas was a little quicker than the rest of the day, the market held the level briefly attempting a weak bounce towards the 1.1150 before dropping quickly back to the 1.1110 levels for the final hours to the close.
• GBP: A choppy market throughout the day with the market opening around the 1.4670 levels trading in the Asian session above the 1.4680 levels briefly before holding steadily through to the London session around the 1.4670 levels, the move into the London session saw the market dipping to the 1.4640 levels before a strong bounce to the 1.4690 as the full market moved into place, the rally was short and the market resumed a downward trend falling through the session to trade around the 1.4610 levels bouncing along through the session.
• JPY: USDJPY moved quietly through the session opening around the 109.80 levels and unable to push through the 110.00 in Asia with the market attempting only once before holding the 109.90 levels through into the London session and a steady drift through into the NYK session testing the 109.50 levels, from the NYK opening though and the release of the weaker GDP figures the USD did start a slow recovery and then the push through the 110.00 level saw strong stops appearing and the market running quickly to the closing levels. As with previously this year the market saw rumours of impending easing moving into the market
• AUD: The Oz traded quietly through the Asian session holding the opening levels for the most part and rising to above the 0.7230 levels on several occasions but unable to push to far through the level and drifting steadily lower through the London session to hold the 0.7210 levels into the NYK session, as with the rest of the market USD buying moved in through the session and the market eventually tested through the 72 cent levels and eventually pushed below the 0.7170 areas before finishing quietly just off those lows.

Friday’s premiership results

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

GBP       GfK Consumer Confidence May A -1 | C -4 | P -3

JPY         National CPI Core Y/Y Apr A -0.30% | C -0.30% | P -0.30%

JPY         Tokyo CPI Core Y/Y May A -0.50% | C -0.40% | P -0.30%

USD       GDP (Annualized) Q1 (S) A 0.80% | C 0.90% | P 0.50%

USD       GDP Price Index Q1 (S) A 0.60% | C 0.70% | P 0.70%

USD       U. of Michigan Confidence May (F) A 94.7 | C 95.9 | P 95.8

Stay lucky

Andy

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