Untitled

Andy Harrison

Good morning,

LMAX Close

USDJPY 113.788 | EURUSD 1.09752 | AUDUSD 0.74129 | NZDUSD 0.68775 | USDCAD 1.36343 | USDCHF 0.9966 | GBPUSD 1.28962 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.09947 | 1.09771

USDJPY                 113.772 | 113.419

GBPUSD               1.29181 | 1.28976

USDCHF               0.99644 | 0.9950

AUDUSD              0.74354 | 0.74056

USDCAD               1.36386 | 1.36162

NZDUSD               0.69061 | 0.68798

EURCHF                1.09406 | 1.09343

EURGBP               0.85169 | 0.85038

EURJPY                 124.964 | 124.595

For Today

• EUR: A quiet session with the market easing higher through the session to trade in the 1.0985-90 levels into the grey hours, topside offers into and through the 1.1000 levels with the possibility of stops through the 1.1020-30 levels however, the move through to the 1.1050 areas likely to see some strong offers appearing as the market moves into the bottom of the ranges from last year, with further offers likely to be strong into the 1.1080-1.1100 levels. Downside bids light through the 1.0950 areas and the market open for a test through the 1.0900 level again with stops likely on a move through the level.
• GBP: Cable moved from the opening 1.2895 levels to test quietly through the 1.2915 level before drifting around the 1.2910 areas into the grey hour, Topside offers light through the 1.2950 areas and congestion through the level building to stronger offers into the 1.3000 level and possible option barriers in the way however, a push through will likely see a strong resistance level into the 1.3050 levels and whether that holds depends on the size of the options in play however, all bets are off on a push through that level and the market could see stronger buying moving in. Downside bids are likely to be light through to the 1.2850 levels with some bids appearing around the level with weak stops on a test through the 1.2830 areas and making the 1.2800 level vulnerable to a strong test and the 1.2765 areas likely to be a key level to a deeper move. Plenty of inflationary data to look for whether that has any bearing on interest rates at the moment.
• JPY: USDJPY moved off the early 113.,55 and into Tokyo around the opening levels before pushing from the fix in Tokyo to test through the 113.75 level, limited AUDJPY selling from the RBA minutes saw the USDJPY pushed down and through the 113.50 levels however, the market recovered from the lows and held the level for the balance of the session on limited trading, Topside offers through the 113.90 levels are for the moment proving to be stubborn with a push through the 114.00 likely to see continued congestion with possible weak stops however, stronger stops are likely to be behind the 114.60 level with the market opening for a move through to the 115 handle with only sentimental offers from the 114.80-115.00 area. Downside bids light back through the 113.00 with limited congestion on a move into the 112.50 areas however, the closer the market moves to the 112.00 areas the stronger the bids are likely to become with only a strong push through the 111.80 opening up further declines.
• AUD: Light buying from the opening saw the market run to the 0.7430 levels before the release of the RBA minutes pushing to the highs around the 0.7435 level before starting a steady decline , The RBA announcement which was more or less in line with previous ones and emphasis on Housing bubble but still looking like a watch and wait that we’ve seen over the past few months, the market eased back trading steadily to the 0.7405 levels before finding some light bids and holding around the 0.7415 as the market moved into the grey hours. Topside offers light through the 0.7440-60 areas however, the move to the 75 cent level will see congestion in the area and the market requiring plenty of impetus to challenge the possibly stronger figure area, with weak stops through the 0.7530 areas likely the topside remains congestive for the moment, downside bids through the 0.7350 areas and possibly some weak stops on a move through the level however from the 73 cent onwards the bids are likely to increase with the range through to 72 cent very congested.

Overnight News

AUD:

RBA: says Labour, housing markets warrant careful monitoring

RBA: accommodative stance consistent with achieving targets

RBA: 1Q CPI data increased confidence in core CPI forecast

RBA: may be some time before stronger non=mining invest growth

RBA: will take time to assess effects of mortgage rate hikes

RBA: says outlook for global economy remained positive

ANZ the largest lender is clamping down further on interest only loans

Australian banks face real risk of future bank tax tweaks Fitch

Australia new vehicle sales up 0.3% MoM in April

USD:

59% of Americans want independent investigation of alleged Trump campaign ties to Russia up 5%

48% of Americans want Comey replacement to be an FBI outsider

Trump revealed highly classified information to Russian foreign minister and ambassador later denied

GBP:

New poll suggests 2/3rds of people now support Brexit Telegraph

CNY/JPY:

Both countries increase holdings of US Govt. Treasuries

USD/KRW:

Several links to N.Korea for the Cyberattack after Russia and the US trade blows

EUR:

Macron backs Merkel for a bid to shake up Europe

Today’s data

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

AUD       RBA Minutes

JPY       Tertiary Industry Index M/M Mar A -0.20% | C 0.10% | P 0.20%

08:00    EUR       Italian GDP Q/Q Q1 (P) C 0.20% | P 0.20%

08:30    GBP       CPI M/M Apr C 0.40% | P 0.40%

08:30    GBP       CPI Y/Y Apr C 2.60% | P 2.30%

08:30    GBP       Core CPI Y/Y Apr C 2.30% | P 1.80%

08:30    GBP       RPI M/M Apr C 0.40% | P 0.30%

08:30    GBP       RPI Y/Y Apr C 3.40% | P 3.10%

08:30    GBP       PPI Input M/M Apr C 0.00% | P 0.40%

08:30    GBP       PPI Input Y/Y Apr C 17.00% | P 17.90%

08:30    GBP       PPI Output M/M Apr C 0.20% | P 0.40%

08:30    GBP       PPI Output Y/Y Apr C 3.40% | P 3.60%

08:30    GBP       PPI Output Core M/M Apr C 0.20% | P 0.30%

08:30    GBP       PPI Output Core Y/Y Apr C 2.50% | P 2.50%

08:30    GBP       House Price Index Y/Y Mar C 5.30% | P 5.80%

09:00    EUR       Eurozone Trade Balance (EUR) Mar C 18.8B | P 19.2B

09:00    EUR       German ZEW (Economic Sentiment) May C 22 | P 19.5

09:00    EUR       German ZEW (Current Situation) May C 82 | P 80.1

09:00    EUR       Eurozone ZEW (Economic Sentiment) May C 29.1 | P 26.3

09:00    EUR       Eurozone GDP Q/Q Q1 (P) C 0.50% | P 0.50%

12:30    USD       Housing Starts Apr C 1.26M | P 1.22M

12:30    USD       Building Permits Apr C 1.27M | P 1.27M

13:15    USD       Industrial Production Apr C 0.40% | P 0.50%

13:15    USD       Capacity Utilization Apr C 76.30% | P 76.10%

Harry Hindsight

• EUR: The hangover from Fridays poor US numbers saw the USD again drifting through the session, opening around the 1.0935 levels the market drifted in the Tokyo session and traded in a very narrow range testing just below the 1.0925 level but limited for the most part in a 1.0925-30 area through to the London session, from the London opening the market steadily rose through to the NYK session testing to the 1.0970 areas, the move into NYK saw a small rise to test the 1.0990 levels and suspiciously like the previous efforts around the level the market moved away reluctantly to test to the 1.0965 areas before holding around the 1.0975 to the close.
• GBP: A little more choppy through the day, opening around the 1.2890 levels and slipping through to the 1.2880 level into Tokyo before slowly rising through the session to push to the 1.2905 areas, the push into the London session saw the market fail the 1.2910 level initially before running a second time to push through triggering minor stops on a move through to the 1.2935 levels and dipping a little before trading just above the 1.2940 level, from there the market moved into the NYK session with opportunists selling the market to the 1.2915 and drifting slowly for several hours to the 1.2905 level. Once London left the market the support melted quickly away and the market quickly testing back to the lows of 1.2880 before finishing the day just short of the figure level.
• JPY: USDJPY saw limited action opening lower around the 113.20 levels and rising through to fill the gap from the opening into the Tokyo session, the market remained in a tight range around the 113.35 areas through into the London session where the market ran higher as Cross buying moved the market topped in early morning above the 113.70 level before drifting back off as the USD took over the market and the cross buying passed, the market held into the NYK session around the 113.50 level with weak stops triggered on the move through testing the 113.25 level before bouncing back again and pushing through the session to the 113.85 levels and while the early NYK push higher was strong the market ran out of steam and faced stronger offers before holding the 113.80 area to the close.
• AUD: Asia was very quiet through the session with the market slowly rising from the lows around the 0.7385 areas to push to the 74 cent levels, the move into the London saw fresh buying appearing with a quick run to the 0.7415 levels holding briefly before running again and trading in the 0.7440-45 for a few hours into the NYK session making the highs just above 0.7445 and then drifing back over the rest of the session to the 0.7415 levels.

Yesterday’s premiership results

NZD       Retail Sales Ex Inflation Q/Q Q1 A 1.20% | C 0.90% | P 0.60% | R 0.70%

JPY       Domestic Corporate Goods Price Index Y/Y Apr A 2.10% | C 1.80% | P 1.40%

AUD       Home Loans Mar A -0.50% | C 0.00% | P -0.50% | R -0.80%

CNY        Retail Sales Y/Y Apr A 10.70% | C 10.80% | P 10.90%

CNY        Fixed Assets Ex Rural YTD Y/Y Apr A 8.90% | C 9.10% | P 9.20%

CNY       Industrial Production Y/Y Apr A 6.50% | C 7.00% | P 7.60%

JPY       Machine Tool Orders Y/Y Apr (P) A 34.70% | P 22.80%

CHF       Producer & Import Prices M/M Apr A -0.20% | C 0.00% | P 0.10%

CHF       Producer & Import Prices Y/Y Apr A 0.80% | C 1.00% | P 1.30%

USD       Empire State Manufacturing Index May A -1 | C 7.5 | P 5.2

USD       NAHB Housing Market Index May A 70 | C 68 | P 68

USD       Net Long-term TIC Flows Mar A 59.8B | C 68.3B | P 53.4B | 53.1B

Good Luck,

Andy

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