Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 107.372 | EURUSD 1.13578 | AUDUSD 0.74592 | NZDUSD 0.69713 | USDCAD 1.27358 | USDCHF 0.96515 | GBPUSD 1.45434 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.13747 | 1.13547

USDJPY                 107.400 | 106.724

GBPUSD               1.45590 | 1.45316

AUDUSD              0.74640 | 0.74301

USDCHF               0.96559 | 0.96435

USDCAD               1.27600 | 1.27278

NZDUSD               0.70060 | 0.69459

EURGBP               0.78207 | 0.78060

EURJPY                 122.001 | 121.329

EURCHF                1.09723 | 1.09618

 

For Today

• EUR: Moving through into the Tokyo session holding along the 1.1355-60 levels the market eventually made steady headway to the 1.1370 in light trading then held the levels through to the London session, Topside offers through the 1.1380-1.1400 levels will likely see a light mixture through the levels and then congestion too the 1.1450 areas before the market has any further attempts through the 1.1500 levels. Downside bids light through the 1.1300 levels and likely weak stops on a move below the 1.1280 areas with better bids possibly into the 1.1220 areas.
• GBP: A very quiet session with the Cable lifting off the 1.4540 areas and then trading around the 1.4550 levels for most of the session, Topside light offers through the 1.4600 levels with the market likely to see some stronger offers on a move through the 1.4650 areas, no real stops likely until the market tests through those offers and 1.4700-20 is likely to be the better offered area, Downside bids a little weak on a push through the 1.4500 areas with possibly weak stop likely to push back into the 1.4450-00 areas and firmer support.
• JPY: Having opened around the 107.40 areas the market moved quietly into the Tokyo session before slipping steadily lower with some strong selling initially to the 107.00 levels clearing the level eventually and forcing the market to the 106.75 area before finding limited support, Downside bids light through to the 106.50 areas and then bids starting to build the lower the market pushes with a push through the 106.00 likely to see limited buying continuing and weak stops on a push below 105.50. Topside offers light through to the 107.80 areas where there is likely a strong exporter type offers, the market would need strong momentum to push through the level and weak stops are likely to quickly appear on a push through the 108.30 areas leaving the weak 108.50 cleared quickly on a move to the 108.70-109.00 areas.
• AUD: Initially drifting lower from the opening around the 0.7460 areas the market saw the oz slipping back to test the 0.7430 areas to mid-session before reversing and moving back to the opening levels in very quiet trading. Topside offers from the current highs likely to extend through the 75 cent levels and although there may be some weak stops through the 0.7520 areas the market is likely to see congesting through to the 0.7560 areas before the next level become vulnerable, downside bids a little thin with bids into the 74 cent levels likely to be forming and of little consequence, a push through the 0.7350 level is likely to be a little stiffer with stops through the level and the market again looking to the 72 cent level for stronger support.

Overnight News

CNY:

China May Exports Fall 4.1% Y/y in USD; Est. -4.0%

PBOC Working Paper Keeps China 2016 GDP Growth Forecast at 6.8%

China Forex Regulator Says Market Demand, Supply Balanced in May

CNY/AUD:

Chinese Imports from Australia Rise First Time in 21 Months

JPY:

BOJ Easing Seen by End of July in Market Watcher Survey: Nikkei

Mitsubishi UFJ Unit May Drop Out of JGB Dealer Group: Nikkei

Suga: Will Coordinate Closely With Market on JGB Take-Up

Japan Revised 1Q GDP Raises Annualized 1.9%; Est. +1.9%

Japan April Current-Acct Surplus 1.88T Yen; Est. +2.30T Yen

JPY/CAD:

Japanese Buying of Canada Govt. Bonds Hits 10-Year High in April

AUD:

Australia April Home-Loan Approvals Rose 1.7% M/M; Est 2.5% Rise

WB:

World Bank Cuts 2016 Global Growth Forecast to 2.4% From 2.9%

NZD:

New Zealand Manufacturing Volumes Fall on Meat, Dairy

Today’s data

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

NZD       Manufacturing Activity Q1 A -2.60% | P -1.90% | R -2.30%

JPY         Current Account (JPY) Apr A 1.63T | C 2.04T | P 1.89T

JPY         GDP Q/Q Q1 (F) A 0.50% | C 0.50% | P 0.40%

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

AUD       Home Loans Apr A 1.70% | C 2.60% | P -0.90% | R -0.70%

CNY       Trade Balance May A $49.98B | C $55.70B | P $45.56B

JPY         Eco Watchers Survey: Current May A 43 | C 43.4 | P 43.5

07:15     CHF        CPI M/M May C 0.20% | P 0.30%

07:15     CHF        CPI Y/Y May C -0.40% | P -0.40%

08:30     GBP       Industrial Production M/M Apr C 0.00% | P 0.30%

08:30     GBP       Industrial Production Y/Y Apr C -0.40% | P -0.20%

08:30     GBP       Manufacturing Production M/M Apr C 0.10% | P 0.10%

08:30     GBP       Manufacturing Production Y/Y Apr C -1.50% | P -1.90%

12:15     CAD       Housing Starts M/M May C 194K | P 191.5K

12:30     CAD       Building Permits M/M Apr C 1.50% | P -7.00%

14:30     USD       Crude Oil Inventories C -3.5M | P -1.4M

21:00    NZD       RBNZ Rate Decision C 2.00% | P 2.25%

Harry Hindsight              

• EUR: A very quiet and tight range over the course of the day with limited trading between the 1.1350-65 levels through the Asian session to gradually push to the highs through the early part of London testing to the 1.1380 areas and into the offers, before dropping back once the market had taken in the Eurozone GDP number which came in slightly better than expected, the fall back through the 1.1370 saw the market moving to cover weak longs and the move into the NYK session saw the market setting the lows around the 1.1340 areas before bouncing back into the 1.1350-65 r4ange through to the close of the session.
• GBP: Trading through the Asian session making small gains on a move to the 1.4480 levels from the opening around the 1.4440 area, and then as some would have the market believe a fat finger pressed to many zero’s on a buy trade and the market trade from the 1.4480 level to 1.4660 in seconds, personally I don’t see that and while it was messy the move back was a little more orderly and the market held above the 1.4500 levels into the London session and again rose from the release of the GDP numbers for the Eurozone before spending the day drifting a little through to the close around the 1.4540 areas.
• JPY: A reasonably quiet range overall with the market dipping from the opening in Tokyo testing tot the 107.20 areas before recovering and pushing back through the opening 107.60 areas to test the 107.80 areas repeatedly through the first half of the day, with London again testing to the 107.90 level before the market drifted through into the NYK session and then holding around the 107.30 areas on a long run to the close.
• AUD: Opening quietly in anticipation of the rate announcement the market moved around the opening 0.7370 levels before lifting quickly through the 0.7410 areas as the no change signal was released with a neutral commentary for the day, the market once through the 0.7420 areas continued a steady rise through the day to push above the 0.7450 areas and 0.7460 into the close and the upper limit of most of the offers for the day.

Yesterday’s premiership results

GBP       BRC Retail Sales Monitor Y/Y May A 0.50% | P -0.90%

AUD       RBA Rate Decision A 1.75% | C 1.75% | P 1.75%

JPY         Leading Index Apr (P) A 100.5 | C 100.8 | P 99.3

EUR        German Industrial Production M/M Apr A 0.80% | C -0.20% | P -1.30% | R -1.10%

CHF        Foreign Currency Reserves May A 602B | P 588B

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

USD       Non-Farm Productivity Q1 (F) A -0.60% | C -0.60% | P -1.00%

USD       Unit Labour Costs Q1 (F) A 4.50% | C 4.00% | P 4.10%

CAD       Ivey PMI May A 49.4 | C 54.2 | P 53.1

Good Luck,

Andy

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