Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 111.837 | EURUSD 1.0899 | AUDUSD 0.75253 | NZDUSD 0.69116 | USDCAD 1.36808 | USDCHF 0.99635 | GBPUSD 1.2886 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.09175 | 1.09019

USDJPY                 111.978 | 111.781

GBPUSD               1.29095 | 1.28874

USDCHF               0.99621 | 0.99527

AUDUSD              0.75560 | 0.75260

USDCAD               1.36785 | 1.36545

NZDUSD               0.69369 | 0.69094

EURCHF                1.08667 | 1.08577

EURGBP               0.84675 | 0.84521

EURJPY                 122.201 | 121.94

For Today

• EUR: Opening around the 1.0900 levels the market eased into the Tokyo session testing a little higher in a quiet session with volumes in line with yesterday, the market held around the 1.0910 areas for the bulk of the session before pushing to the 1.0915 areas before drifting towards the grey hour just off that level. Topside offers congested but strong offers likely into the 1.0940-60 areas with weak stops likely through the level running into possible option barriers and sentimental offers into 1.1000 and while there is likely to be two way play beyond the level the congestive offers are likely to eventually hold through to the stronger 1.1080 areas. Downside bids light through to the 1.0840-60 with only marginally stronger bids with better bids not seen to closer to the 1.0800 areas.
• GBP: Cable moved off its lows around the 1.2885 areas and easing up through the session towards the 1.2910 levels before slipping back a couple of time down through the 1.2900 areas but holding in a quiet session. Topside sees offers through the 1.2950 levels and likely to be sentimental rather than technical a push through the level will see further sentimental levels into the 1.3000 areas with limited congestion before the market can move up into the 1.3000-1.3500 range from post flash crash Oct move. Downside bids limited through to the 1.2800 level with stronger bids likely in the area however, the bids are likely to increase into 1.2760 with a break here likely to see some stronger stops appearing for a test down to the 1.2600 areas.
• JPY: A narrow range through the session however, while the market continued to push the 111.90 areas the market was still unable to push through the 112.00 levels, opening around the 111.85 areas the market rallied to 111.95 before drifting off into the Tokyo session, and resting on the 111.80 level for a couple of hours before attempting the levels again, the market remained in contact with the area trading around the 111.90 area through to the grey hours. Topside offers into the 112.00 areas with a push through the 112.20-30 areas likely to see weak stops triggered with some congestive offers likely to continue to the 112.50 levels, with impetus though the market opens up for a push to the 113 levels with stronger offers through that area. Downside bids likely to be congestive on a move down through to the 111.00 areas with strong bids possibly into the 111.20 area in particular, a move through the 111.00 level is likely to see stronger stops appearing and the market open to a test of the 110.00 levels.
• AUD: Opening around the 0.7525 areas the market slowly rose through the 0.7530 areas into the Tokyo session before starting a limited push into the 0.7550 areas with the market holding through to the grey hour around that level. Topside offers likely to be lightly congestive on a run to the 76 cent areas with reasonable offers into the area before the market sees stronger congestive offers from the 0.7640-60 areas likely to slow a move through to the 77 cent areas where the market gets very strong. Downside bids light through the 75 cent areas with stronger bids likely to be in the 0.7440-60 areas again with weak stops through that level and into the 0.7420-00 areas where stronger bids are likely.

Overnight News

USD/RUB:

Trump to speak with Putin on Tuesday

USD:

Trump priorities left out of US spending deal

US Commerce Secretary Ross says Trump will renegotiate NAFTA; waiting on technical notification

EUR:

Greece, Creditors conclude agreement in Athens Tsakalotos

JPY:

Aso: N.Korea issue is most serious, urgent issue for Japan

Aso: Would like to see change to current N.Korea leadership

Aso: Want to eliminate ICBM and Nuke capability from N.Korea

KRW/USD:

N.Korea says US bomber flights push peninsula to brink of nuclear war

AUD:

RBA keeps rates at 1.5%

Unchanged policy consistent with meeting CPI target over time

Says its forecasts for Australian economy little changed

Growth in housing debt has outplaced household income growth

CNY:

China April factory growth slows to weakest in 7 months: Caixin PMI

Today’s data

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

JPY       BOJ Minutes of March 15-16 Meeting

JPY       Monetary Base Y/Y Apr A 19.80% | C 21.20% | P 20.30%

CNY       Caixin Manufacturing PMI Apr A 50.3 | C 51.4 | P 51.2

AUD       RBA Rate Decision A 1.50% | C 1.50% | P 1.50%

07:30    CHF       SVME PMI Apr C 58.2 | P 58.6

07:45    EUR       Italy Manufacturing PMI Apr C 55.9 | P 55.7

07:50    EUR       France Manufacturing PMI Apr (F) C 55.1 | P 55.1

07:55    EUR       Germany Manufacturing PMI Apr (F) C 58.2 | P 58.2

08:00    EUR       Eurozone Manufacturing PMI Apr (F) C 56.8 | P 56.8

08:30    GBP       PMI Manufacturing SA Apr C 54 | P 54.2

09:00    EUR       Eurozone Unemployment Rate Mar C 9.40% | P 9.50%

 

Harry Hindsight

• EUR: A narrow range as you’d expect for a May day, the market opened around the 1.0895 levels and spiked a little higher on single ticket work before moving through into the Tokyo session pushing again to above the 1.0910 areas before drifting through to the London session, London opened on the days lose around the 1.0885 areas before slowly rising back to the 1.0900 areas as the NYK session opened, the highs for the day were quickly made into the 1.0920’s before drifting through to the close slowly moving back to the 1.0900 areas.
• GBP: With Brexit commentary taking front page again with the EU intransience coming second to PM May and commentary on walking away with nothing for either side however, one has to say this is likely to continue to the point where negotiations start and one hopes that the children will settle down to a more constructive period of discussion, The market therefore opened a little lower, attempted to fill the gap pushing from the 1.2930 level towards the 1.2945 area before drifting through into the Tokyo session to base along the 1.2905 levels through to the London session, not to belabour the fact that mush of the market was out for the May day holiday Cable managed a steady rise through towards the 1.2940 areas again and then drifted in a narrow 1.2920-40 for the bulk of the session until the end of London before slipping through the 1.2900 level to trigger weak stops and holding in the 1.2885 areas to the close.
• JPY: USDJPY was a little lower on the opening around the 111.40 areas and a slow drift into the 111.20 areas before Tokyo bought the market back higher and a push through the 111.50 areas, limited stops saw the market test to the 111.75 areas before holding around the 111.65 levels through to the London session, small push through to the 111.90 levels on the opening in London saw the market hold for a period without making any progress and then drifted off through into the NYK session to test to the 111.50 levels with US numbers weaker than expected on the manufacturing side only to bounce back for the run to the close to hold around the 111.80 areas.
• AUD: Weaker numbers in CNY over the weekend saw the Oz opening around the 0.7475 areas and moving to fill the gap on the charts and then quietly move into the Tokyo session pushing the 0.7490 levels, midsession saw the market again testing the lows before starting a slow and steady rise through the day to the 0.7535 areas, the general move through the rest of the session saw the market range around the 0.7535 levels with a push to the 0.7540 areas but unable to capitalize during the NYK session and finishing just off those highs into the close.

Yesterday’s premiership results

JPY       Manufacturing PMI Apr (F) A 52.7 | C 52.8 | P 52.8

AUD       TD Securities Inflation M/M Apr A 0.50% | P 0.10%

CHF       Retail Sales (Real) Y/Y Mar A 2.10% | C 0.50% | P 0.60% | R 0.70%

USD       Personal Income Mar A 0.20% | C 0.30% | P 0.40% | R 0.30%

USD       Personal Spending Mar A 0.00% | C 0.20% | P 0.10% | R 0.00%

USD       PCE Deflator M/M Mar A -0.20% | P 0.10%

USD       PCE Deflator Y/Y Mar A 1.80% | P 2.10%

USD       PCE Core M/M Mar A -0.10% | C -0.10% | P 0.20%

USD       PCE Core Y/Y Mar A 1.60% | P 1.80%

USD       ISM Manufacturing Apr A 54.8 | C 56.7 | P 57.2

USD       ISM Prices Paid Apr A 68.5 | C 66.5 | P 70.5

USD       Construction Spending M/M Mar A -0.20% | C 0.40% | P 0.80%

Good Luck,

Andy

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