Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 109.317 | EURUSD 1.07172 | AUDUSD 0.75267 | NZDUSD 0.70134 | USDCAD 1.3470 | USDCHF 0.99866 | GBPUSD 1.28139 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.07210 | 1.07072

USDJPY                 109.423 | 109.189

GBPUSD               1.28091 | 1.27941

USDCHF               0.99945 | 0.99848

AUDUSD              0.75334 | 0.75162

USDCAD               1.34799 | 1.34662

NZDUSD               0.70109 | 0.69837

EURCHF                1.07104 | 1.06977

EURGBP               0.83767 | 0.83621

EURJPY                 117.252 | 116.996

For Today

• EUR: Early trading saw the market dipping through the 1.0710 areas before slowly moving through into the Tokyo session testing back through to the 1.0720 areas before holding steady around the 1.0715 levels. Topside offers thin through to the 1.0780 level with offers increasing on a move through to the 1.0800 areas with a break through the 1.0820 level opening the market to a quick stab at the 1.0900 levels however, given the French first round of voting for Sunday the market is likely to be reliant on the numbers today with a plethora of PMI numbers to watch for. Downside bids light through the 1.0700 areas with some weak congestion continuing through to the stronger 1.0650 levels, weak stops on a move through the level are likely to run into more strong bids into the 1.0600 areas.
• GBP: Cable drifted steadily lower through the session however, we are talking only slight movement, opening around the 1.2815 levels the market dipped in early selling to the 1.2800 before moving into the Tokyo session to push through the 1.2795 areas to hold quietly through to grey hour, Topside offers into the 1.2850 areas are likely to be light with stronger offers appearing into the 1.2900 level, with possible strong stops on a move cleanly through the area. Downside bids light into the 1.2780 areas with possible bids building around the 1.2750 sentimental level, nothing to stop a major move but sufficient in a quiet market, a push through will possibly see some limited congestive bids around the sentimental levels with the 1.2630-00 areas possibly the stronger support areas.
• JPY: USDJPY performed ok into the early part of the session pushing off the opening levels to test above the 109.40 areas however, with uncertainty over the French elections, geopolitical arena the weak positions were closed and this saw the USDJPY slip a little to base along the 109.20 areas into the grey hour, Topside offers possibly light through the 109.50 areas however, the market has not really tested the level sufficiently, possibly weak stops on a break and the 110.00 level likely to be strong and sufficient to slow the market on a major move however, PPI numbers in the US could see the level break and the market open to a small squeeze higher, Downside bids light through to the 108.70 areas with light bids moving in around the area with congestion likely to continue through the 108.50 areas to the stronger 108.20-00 level bids
• AUD: Dead in the water with little independent news to affect the Oz for the day with the market ranging tightly around the 0.7515-35 levels through to the grey hours, early selling in Tokyo saw the market slip towards the 0.7515 areas before recovering to tade around the 0.7528 area through to the grey hour, Topside offers light into the 0.7540 level with some slightly better offers around the area and into 0.7560 before the stronger offers start to kick in on any attempt through the 0.7580-0.7600 areas, weak stops are likely to appear behind the 76 cent areas however the congestive market remains to the upside and any push through is likely to be a slow grind higher, Downside bids into the 0.7490 areas and while there could be some weak stops through the 0.7480 areas its likely to be just as congestive on a move to and through that level with further bids likely into the 0.7450 areas and beyond.

Overnight News

EUR:

Le Pen loses ground on Macron in French election race: Poll

Experts say automated accounts sharing fake news ahead of French election

Police officer killed and two wounded in Paris shooting

IMF:

Can cooperate with Trump to improve global trade: Legarde

USD:

Fed unmoved by soft patch hardens conviction on rate hike plan

Mnuchin says tax overhaul plan will still happen by year’s end

Trump targets cheap Chinese steel in probe, rallying US steel stocks

JPY:

BoJ’s Kuroda says current purchase pace to continue for some time

FinMin Aso says reconfirmed with US Treasury Sec Mnuchin that FX issues should be discussed among finance leaders

FinMin Aso says don’t see any problem with US Pres Trumps comment that dollar is too strong

Aso cannot say whether discussed with Mnuchin possible sanctions against N.Korea

Aso says told G20 that while there are bright signs in Global economy the outlook remains uncertain

NZD:

Consumer confidence dips MoM to -2.8% from the -1.7%

Today’s data

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

JPY         PMI Manufacturing Apr (P) A 52.8 | C 52.5 | P 52.4

JPY         Tertiary Industry Index M/M Feb A 0.20% | C 0.30% | P 0.00%

07:00     EUR        France Manufacturing PMI Apr (P) C 53.2 | P 53.3

07:00     EUR        France Services PMI Apr (P) C 57.2 | P 57.5

07:30     EUR        Germany Manufacturing PMI Apr (P) C 58.1 | P 58.3

07:30     EUR        Germany Services PMI Apr (P) C 55.5 | P 55.6

08:00     EUR        Eurozone Manufacturing PMI Apr (P) C 56.1 | P 56.2

08:00     EUR        Eurozone Services PMI Apr (P) C 56.0 | P 56.0

08:00     EUR        Eurozone Current Account (EUR) Feb C 26.3B | P 24.1B

08:30     GBP       Retail Sales M/M Mar C -0.30% | P 1.40%

12:30     CAD       CPI M/M Mar C 0.40% | P 0.20%

12:30     CAD       CPI Y/Y Mar P 2.00%

12:30     CAD       CPI Core – Trim Y/Y Mar P 1.60%

12:30     CAD       CPI Core – Median Y/Y Mar P 1.90%

12:30     CAD       CPI Core – Common Y/Y Mar P 1.30%

13:45     USD       Manufacturing PMI Apr (P) C 53.9 | P 53.3

13:45     USD       Services PMI Apr (P) C 53.7 | P 52.8

14:00     USD       Existing Home Sales Mar C 5.61M | P 5.48M

Harry Hindsight

• EUR: Opening around the 1.0710 level the market struggled through the Asian session pushing towards the 1.0720 levels but unable to make it until the market moved into the grey hour, basing for the most part off the 1.0710 areas the market eventually pushing through to the London opening testing the 107.25 areas, German PPI numbers saw a dip and the Euro moved quickly from that point on testing to the 1.0750 areas before pausing and then squeezing through to rally steadily through to the 1.0775 areas and the stronger offers turning the market, the move into the NYK session saw the market resting again just below the 1.0750 areas before the opening saw a further run to the highs, a slightly better than expected consumer confidence numbers was the trigger however, a better leading indicator number then turned the market the other way and the USD started a quick recovery and the market again found itself basing along the opening levels.
• GBP: A quiet range through into the Tokyo session saw the low just below 1.2775 areas before starting a steady rally deeper into Tokyo pushing through to the grey hours moving quickly to the 1.2805 level before holding into the London session before again starting a steady rally through to the 1.2845 levels, reports of Britain being squeezed out of European contracts and running commentary from EU officials attempting to sway UK remainers however, whether this works or not they are likely to be split between the opposing parties and possibly dilute the vote. With the EURGBP drifting through the early session in London before marginally recovering, Cable again tested the highs into the later part of the session however, the reports of a terrorist attack in Paris saw the Euro move lower and Cable following with the market drifting back to the 1.2810 areas to finish.
• JPY: A quiet rally from the opening testing through the 109.00 areas before the market drifted off a little to move into the grey hours and light selling from the opening in London, the market made lows just below the 108.75 areas before quickly rising with EURJPY buying moving through the market to spend the rest of the London session basing along the 109.00 areas, the move through into NYK saw a wider choppy session as the US numbers hit the market and news of the terrorist in Paris filtered through, the market eventually settled down to a tighter range having failed to push through the 109.50 areas to close around the 109.30 level.
• AUD: A steady rise through the day however, the Oz remains quiet over all with the early range into Tokyo holding just below the 75 cent levels and then rising through to trade around the 0.7505 areas to the London session, quick buyers saw the market test above the 0.7530 levels with some weak stops triggered, the move through into the NYK session saw the market slowly rising again and making the highs into the London close with the market touching the 0.7545 areas before drifting back to hold around the 0.7525 areas to the close.

Yesterday’s premiership results

NZD       CPI Q/Q Q1 A 1.00% | C 0.80% | P 0.40%

JPY         Trade Balance (JPY) Mar A 0.17T | C 0.61T | P 0.68T

AUD       NAB Business Confidence Q1 A6 | P 5 | R 6

EUR        German PPI M/M Mar A 0.00% | C 0.20% | P 0.20%

EUR        German PPI Y/Y Mar A 3.10% | P 3.10%

USD       Initial Jobless Claims (APR 15) A 244K | C 241K | P 234K

USD       Philly Fed Manufacturing Index Apr A 22 | C 25.6 | P 32.8

EUR        Eurozone Consumer Confidence Apr (A) A -4 | C -5 | P -5

USD       Leading Indicators Mar A 0.40% | C 0.20% | P 0.60% | R 0.50%

USD       Natural Gas Storage A 54B | C 49B | P 10B

Good Luck,

Andy

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