Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 111.256 | EURUSD 1.08733 | AUDUSD 0.74653 | NZDUSD 0.6878 | USDCAD 1.36336 | USDCHF 0.9942 | GBPUSD 1.29041 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.08756 | 1.08574

USDJPY                 111.354 | 111.073

GBPUSD               1.29162 | 1.28892

USDCHF               0.99477 | 0.99374

AUDUSD              0.74778 | 0.7463

USDCAD               1.36478 | 1.36257

NZDUSD               0.68911 | 0.68708

EURCHF                1.08131 | 1.0800

EURGBP               0.84293 | 0.84144

EURJPY                 121.058 | 120.70

For Today

• EUR: Moving through into the Tokyo session saw the market drifting to the 1.0860 levels before ranging through the session basing along that line and unable to truly push through the 1.0870 areas again. Topside offers into the 1.0950 areas with the offers likely to continue through to the 1.0960 levels strongly and then again increasing into the 1.0980 areas and into the 1.1000 level with possible option barriers into the level adding to sentimental sellers, a push through the level will see limited congestion possibly cleared quickly if the barriers are of any size and the market testing into the 1.1040-60 sentimentally strong areas, with 1.1080 level likely to be stronger still. Downside bids likely to be weaker today than yesterday with the bids limited on a move back through to the 1.0840 areas possibly seeing weak stops through the level for a run to the 1.0810 areas with further stops through the 1.0780 level with congestion from then on.
• GBP: Cable drifted initially on the move into the Tokyo session to trade just below the 1.2890 level before steady buying took the market slowly higher to push to the 1.2915 areas however, like yesterday the market failed to push through and the market ran out of time with early Europeans selling the market back to the opening area around the 1.2905 level for the move into the grey hour, Topside offers into the 1.2920 areas and around the bottom of the summer range of 2016 , a push through the topside offers is likely to see some stops appearing with the market opening to weaker offers into the 1.2950 and 1.3000 areas, possible weak option barriers with sentimental offers around those areas are likely to take the sting out of the stops however, stronger offers are not likely until the market moves to the 1.3050 areas. Downside bids light through to the 1.2800 areas with the chances of some bids around 1.2850 however, that is likely to be too new to have attracted to many bids and the 1.2800 level is likely to support the market for the moment with a push through to the 1.2760 areas likely to see stronger bids and the possibility of stronger stops on a move through the level with congestion limited until the 1.2600 handle.
• JPY: USDJPY traded quietly as the market moves to the end of the month and Bank holidays around the globe for Labour/May day on Monday, Opening around the 111.25 areas the market moved quietly into the Tokyo session push through to the 111.35 levels before dropping back and basing along the 111.10 areas through into the grey hour with plenty of decent numbers falling on an unwilling market, Topside offers into the strong 111.80 areas with those offers likely to continue through the 112.00 level with continuing congestion mixed with weak stops, a break above the 112.50 areas will likely see stronger stops appearing clearing the market to a vulnerable 113.00 level and stronger offers through to 113.30 areas. Downside bids light through the 111.00 areas with a push through the 110.80 areas likely to see weak stops appearing and the market opening to the 110.50-20 areas with limited congestion running into stronger sentimental bids.
• AUD: With a long weekend for most the Oz market has been particularly quiet today with the market opening just off the lows and for the most part keeping to a 0.7465-75 range through out the session with the market testing just through either level with little conviction on which way to go. Topside offers through the 0.7490 areas are likely to be light for the moment with some weak stops on a push above the 75 cent areas a possibility however, nothing to get overly excited about for the day one suspects with congestive offers limited but likely to be continuous through the level to the 76 cent and then increasing in size. Downside bids through to the 0.7440 levels with some weakness beyond but limited to stronger bids on a move to the 0.7420-0.7400 areas and while there are possibly some stops through the 0.7380 areas congestion into the 0.7350-0.7300 areas is likely to provide strong support for the market.

Overnight News

GBP:

UK Police arrest man with Knives in Westminster in anti-terrorism operation

Women shot by police in London anti-terror raid

EUR/GBP:

Merkel and May draw Brexit battle lines

USD/CNY:

China needs to boost economic pressure on N.Korea: US

JPY:

Japan consumer prices rise in March for third straight month Govt.

A dip on construction orders YoY to 1.1% from previous 5.7%

USD:

Trump to order review of offshore drilling bans, in nod to oil industry

Trump says N.Korea is his biggest global worry

Trump says he would like to resolve N.Korea situation diplomatically “but its difficult”

Trump says Chinese Pres. Xi “is doing everything in his power” to help with N.Korea situation

Trump says he credits N.Korean leader Kim, “not many 27 year old men could go in and take over a regime”

NZD:

RBNZ says remains concerned by elevated levels of house prices

RBNZ expects debt to income consultation paper with 6y weeks

Today’s data

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

NZD       Building Permits M/M Mar A -1.80% | P 14.00% | R 17.20%

NZD       Trade Balance (NZD) Mar A 332M | C 375M | P -18M | R -50M

GBP       GfK Consumer Confidence Apr A -7 | C -7 | P -6

JPY       Jobless Rate Mar A 2.80% | C 2.90% | P 2.80%

JPY       Household Spending Y/Y Mar A -1.30% | C -0.50% | P -3.80%

JPY       National CPI Core Y/Y Mar A 0.20% | C 0.20% | P 0.20%

JPY       Tokyo CPI Core Y/Y Apr A -0.10% | C -0.20% | P -0.40%

JPY       Retail Trade Y/Y Mar A 2.10% | C 1.50% | P 0.10% | R 0.20%

JPY       Industrial Production M/M Mar (P) A -2.10% | C -0.80% | P 3.20%

AUD       PPI Q/Q Q1 A 0.50% | C 0.30% | P 0.50%

JPY       Housing Starts Y/Y Mar A 0.20% | C -2.60% | P -2.60%

05:30    EUR       French GDP Q/Q Q1 (A) C 0.40% | P 0.40%

06:00    EUR       German Retail Sales M/M Mar C 0.00% | P 1.80%

06:00    EUR       German Import Price Index M/M Mar C -0.10% | P 0.70%

07:00    CHF       KOF Leading Indicator Apr C 107.5 | P 107.6

08:00    EUR       Eurozone M3 Y/Y Mar C 4.70% | P 4.70%

08:30    GBP       BBA Mortgage Approvals Mar C 42.1K | P 42.6K

08:30    GBP       GDP Q/Q Q1 (A) C 0.40% | P 0.70%

08:30    GBP       Index of Services 3M/3M Feb C 0.50% | P 0.60%

09:00    EUR       Eurozone CPI Estimate Y/Y Apr C 1.80% | P 1.50%

09:00    EUR       Eurozone CPI – Core Y/Y Apr (A) C 1.00% | P 0.70%

12:30    USD       Employment Cost Index Q1 C 0.60% | P 0.50%

12:30    CAD       GDP M/M Feb C 0.10% | P 0.60%

12:30    CAD       Industrial Product Price M/M Mar P 0.10%

12:30    CAD       Raw Materials Price Index M/M Mar P 1.20%

12:30    USD       GDP (Annualized) Q1 (A) C 1.10% | P 2.10%

12:30    USD       GDP Price Index Q1 (A) C 2.00% | P 2.10%

13:45    USD       Chicago PMI Apr C 56.7 | P 57.7

14:00    USD       U. of Michigan Confidence Apr (F) C 98 | P 98

 

 

Harry Hindsight

• EUR: A reasonably quiet session for the Euro through Asia with the market opening around the 1.0905 areas and rising slowly through to the 1.0920 areas before drifting into the European session, grey hour selling saw the market dip through the 1.0900 levels and early German numbers helping the market back towards the 1.0920 areas and holding the area into better than expected confidence numbers, that is apart from the Eurozone consumer confidence number which came in as expected but still negative and unchanged, the market dipped back through the 1.0900 levels and tested lower into the ECB rate decision, with monetary policy unchanged the buyers quickly appeared chasing the market to a quick 1.0930 levels from the 1.0880 area before quickly reversing with the Draghi informing everyone that risks receding and Europe is back on track, this then ran into the US numbers with a dip in inventories and some better than expected numbers and the USD rallied forcing the Euro down to the 1.0850 areas before finding sufficient bids to hold the market, the rest of the day saw the market rising through to the 1.0885 areas before3 holding to the 1.0870 levels into the close.
• GBP: Cable had a steady day with the Asian session doing more than its far share of trading and pushing from the opening around the 1.2850 to test higher after holding the area for several hours, Tokyo eventually took the market to the 1.2870 areas for the move into the grey hour and from that point the market pushed through into early London pushing through the 1.2900 areas but unable to penetrate to far through the level and far more profit taking than I would have guessed, the market then continued to trade around the 1.2900 levels and the only dip seemed to related to the NYK option cut with the move lower to the 1.2870 areas reversed once that period was over and again trading around the 1.2910 areas through to the close.
• JPY: The USDJPY struggled through the session with the market moving slowly higher through the early part of the session, moving from the 111.05 areas to test to the 111.40 levels before drifting through to the grey hour, London did very little and the market was mostly contained within the Tokyo range, the move towards the NYK session saw the market rising slowly through to the 111.50 levels and pushing to the NYK option cut testing the 111.60 level before dropping back once the period passed, the market stabilized around the 111.20 areas with a minor dip below the 111.10 areas before ranging around the 111.20 to the close in quiet trading.
• AUD: The move through the Asian session saw some limited buying taking the market to the 0.7490 areas and some resistance, the market drifted to the opening in London with light selling driving the market steadily lower through to the 0.7440 areas before starting to recover and as with some of the other currencies once the option cut was over with the market lifted back to the 0.7470 areas to finish the day quietly.

Yesterday’s premiership results

JPY       Monetary Policy Statement

AUD       Import Price Index Q/Q Q1 A 1.20% | C -0.50% | P 0.20%

CHF       Trade Balance (CHF) Mar A 3.10B | C 3.01B | P 3.12B

EUR       German GfK Consumer Confidence May A 10.2 | C 9.9 | P 9.8

EUR       Eurozone Economic Confidence Apr A 109.6 | C 108.1 | P 107.9

EUR       Eurozone Business Climate Indicator Apr A 1.09 | C 0.82 | P 0.82 | R 0.83

EUR       Eurozone Industrial Confidence Apr A 2.6 | C 1.3 | P 1.2 | R 1.3

EUR       Eurozone Services Confidence Apr A 14.2 | C 12.9 | P 12.7 | R 12.8

EUR       Eurozone Consumer Confidence Apr (F) A -3.6 | C -3.6 | P -3.6

GBP       CBI Realized Sales Apr A 38 | C 6 | P 9

EUR       ECB Rate Decision A 0.00% | C 0.00% | P 0.00%

EUR       ECB Marginal Lending Facility A 0.25% | C 0.25% | P 0.25%

EUR       ECB Deposit Facility Rate A -0.40% | C -0.40% | P -0.40%

EUR       ECB Asset Purchase Target (EUR) Apr A 60B | C 60B | P 80B

EUR       German CPI M/M Apr (P) A 0.00% | C -0.10% | P 0.20%

EUR       German CPI Y/Y Apr (P) A 2.00% | C 1.90% | P 1.60%

USD       Advance Goods Trade Balance Mar A -64.8B | C -65.2B | P -63.9B | R -63.9B

USD       Wholesale Inventories Mar (P) A -0.10% | C 0.30% | P 0.40% | R 0.20%

USD       Durable Goods Orders Mar (P) A 0.70% | C 1.30% | P 1.80%

USD       Durables Ex Transportation Mar (P) A -0.20% | C 0.50% | P 0.50%

USD       Initial Jobless Claims (22 APR) A 257K | C 241K | P 244K | R 243K

USD       Pending Home Sales M/M Mar A -0.80% | C -1.00% | P 5.50%

USD       Natural Gas Storage A 74B | C 72B | P 54B

Good Luck,

Andy

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