Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 110.705 | EURUSD 1.06633 | AUDUSD 0.7569 | NZDUSD 0.69652 | USDCAD 1.34367 | USDCHF 1.00494 | GBPUSD 1.24834 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.06843 | 1.06627

USDJPY                 110.578 | 110.296

GBPUSD               1.25012 | 1.24757

USDCHF               1.00456 | 1.00273

AUDUSD              0.75763 | 0.75332

USDCAD               1.34444 | 1.34294

NZDUSD               0.69860 | 0.69609

EURCHF                1.07176 | 1.07104

EURGBP               0.85563 | 0.85434

EURJPY                 118.068 | 117.778

For Today

• EUR: A quiet rise through the early part of the session as the market recovered the small drop into the NYK close and testing the 1.0685 areas before slowly drifting through the rest of the session to the grey hours, Topside offers through the 1.0700 levels with some minor congestion through to the 1.0750 areas, possible weak stops on the break through the 1.0720 levels but limited at best, stronger offers into the 1.0800 areas will likely see stronger offers. Downside bids light through to the 1.0660-40 areas with some congestive bids before opening the market to the stronger 1.0600 areas.
• GBP: The market moved through into the Tokyo session pushing towards the 1.2500 levels and the Tokyo session eventually breached the level albeit only just before drifting to hold around the 1.2480 areas to the grey hours. Topside offers through the 1.2500 areas, with congestion likely to continue through the level and into the 1.2550 where the market is likely to be particularly resistant, a push through the level opens a new test to the 1.2600 levels and possible strong offers into the areas, Downside bids into the 1.2450 areas are likely limited but a push through will see stronger bids moving in around the 1.2400-20 areas and the market then congestive through to the 1.2350 levels.
• JPY: Having dropped back in the late NYK session the market in Asia did not improve with the market opening around the 110.70 areas and dipping in early trading to the 110.50 areas, the market generally moved around the level for the bulk of the session with some movement through to the 110.30 areas in early Tokyo before returning to the 110.50 area and holding into the grey hour. Topside offers into the 111.50 areas are likely to be limited with stronger offers appearing around the 112.00 level, a push through some congestion around that level will likely see weak stops on a move into the 112.50 areas and a weak opening to the 113.00. Downside bids light through to the 110.30-00 areas remain key to a strong downside move and the market open to the 1.0800 levels.
• AUD: Australia’s banks could be forced to raise billions of dollars with APRA attempting to resolve the way Banks allocate capital to home loans, this saw the Oz drop back from the highs above the 0.7575 level and dipping to the 0.7535 level before regaining its composure and holding the 0.7540 areas. Downside bids into the 75 cent levels are likely fairly strong with those bids likely to disappear once the market dips towards the 0.7450 areas and the market opening to the 0.7300 levels before stronger bids reappear, Topside offers through to the 76 cent level with weak stops through the level but likely to be light with congestion continuing through the 76 level to the strong 77 cent area.

Overnight News

KRW:

1. Korea Succeeds in Testing 800km-Range New Missile: Yonhap

KRW/USD:

1. Korea, U.S. Vow to Strengthen Sanctions Against N. Korea

USD/JPY:

Trump Said ‘All Options on Table’ on North Korea: Japan PM Abe

USD:

Fed’s Monetary Policy Framework ‘Highly Effective,’ Potter Says

Fed’s Kaplan Says Central Bank Takes Confidentiality Seriously

EUR:

Macron’s lead narrows in French presidential election polls

JPY:

Japanese Bought Net 1.1 Trillion Yen Overseas Debt Last Week

AUD:

RBA’s Debelle: Net Income Deficit to Widen in Coming Quarters

RBA’s Debelle: Australia Less Vulnerable to Shock Than in ’08

Morrison: Budget to Place Downward Pressure on Cost of Living

CNY:

Caixin China March Services PMI 52.2 vs 52.6 in Feb.

Asia:

ADB Keeps 2017 Growth Forecast for Developing Asia at 5.7%

NZD:

N.Z. Eight-Month Budget Surplus NZ$912m Larger Than Forecast

Today’s data

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

CNY        Caixin PMI Services Mar A 52.2 | C 53.2 | P 52.6

JPY         Consumer Confidence Index Mar A 43.9 | C 43.4 | P 43.1 | R 43.2

06:00     EUR        German Factory Orders M/M Feb C 3.50% | P -7.40%

07:15     CHF        CPI M/M Mar C 0.20% | P 0.50%

07:15     CHF        CPI Y/Y Mar C 0.50% | P 0.60%

08:10     EUR        Eurozone Retail PMI Mar P 49.9

11:30     EUR        ECB Monetary Policy Meeting Accounts

11:30     USD       Challenger Job Cuts Y/Y Mar P -40.00%

12:30     CAD       Building Permits M/M Feb P 5.40%

12:30     USD       Initial Jobless Claims (APR 01) C 250K | P 258K

14:30     USD       Natural Gas Storage P -43B

Harry Hindsight

• EUR: Some choppy action through the session however, the range overall was contained, moving from the opening around the 1.0670 areas the market moved through to the Tokyo session testing the 1.0685 levels before drifting through the balance of the session into the London, the market ran contrary to the numbers which overall disappointed but did see the market test towards the 1.0690 levels to make the highs of the day, before dropping back again as Euro weakened against a stronger GBP, while the market tested back to the 1.0665 level the market repeated the test higher into the NYK opening and the release of better than expected ADP figure and the market dropped back to just below the opening levels and a steady drift to the 1.0645 areas, the market dipped a last time to the 1.0635 areas before rising quickly as light profit taking moved in after a daily French poll showed Marine Le Pen 0.5% ahead of the Macron. The market tested to the 1.0680 levels before slipping back to the 1.0665 levels.
• GBP: A slightly wider range for the Cable through Asia with the market opening around the 1.2445 levels and rising weekly towards the 1.2450 area before drifting back into the London session to test the 1.2425 level, the release of the GBP services numbers number saw the market quickly gap above the 1.2450 levels and test the 1.2490 levels before falling back to range around the 1.2475 areas, the market extended the highs a little pushing to the 1.2495 levels and then ranging for a period through to the FOMC minutes and little change overall but the market testing back to 1.2450 areas before again testing towards the 1.2500 levels and holding most of the gains to the close.
• JPY: A quiet range through the Asian session and through into London, the market opened around the 110.70 areas and tested early in Tokyo to the 110.90 levels before drifting through towards the grey hours dipping to the 110.55 level and holding quietly through into London ranging for the most part around the 110.70 opening level. The movement of the GBP saw the USDJPY rising on cross buying rising towards the 111.00 before holding around the 110.90 level to the release of the ADP number, gapping to the 111.10 level the market then pushed through to the 111.40 areas on two occasions before settling back to test the lows into the close.
• AUD: A very quiet range through the day with market through Asia opening around the 0.7565 level and then unable to pass above the 0.7575 level before returning to the opening areas and into the London session with the range increasing to 25 pips through to the FOMC minutes with one minor dip to the 0.7560 levels and a close no different to the opening.

Yesterday’s premiership results

GBP       BRC Shop Price Index Y/Y Mar A -0.80% | P -1.00%

EUR       Italy Services PMI Mar A 52.9 | C 54.3 | P 54.1

EUR       France Services PMI Mar (F) A 57.5 | C 58.5 | P 58.5

EUR       Germany Services PMI Mar (F) A 55.6 | C 55.6 | P 55.6

EUR       Eurozone Services PMI Mar (F) A 56 | C 56.5 | P 56.5

GBP       Services PMI Mar A 55 | C 53.5 | P 53.3

USD       ADP Employment Change Mar A 263K | C 189K | P 298K | R 245K

USD       ISM Non-Manufacturing Composite Mar A 55.2 | C 57 | P 57.6

USD       Crude Oil Inventories A 1.6M | C -0.1M | P 0.9M

USD       FOMC Meeting Minutes

Good Luck,

Andy

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