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Daily FX Market Commentary

Good morning,

 

LMAX Close

USDJPY 111.487 | EURUSD 1.11034 | AUDUSD 0.74201 | NZDUSD 0.68907 | USDCAD 1.36026 | USDCHF 0.97988 | GBPUSD 1.29421 |

 

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.11149 | 1.10996

USDJPY                 111.561 | 111.114

GBPUSD               1.29588 | 1.29418

USDCHF               0.98037 | 0.97912

AUDUSD              0.74282 | 0.74066

USDCAD               1.36101 | 1.35922

NZDUSD               0.68992 | 0.68816

EURCHF                1.08924 | 1.08779

EURGBP               0.85835 | 0.85722

EURJPY                 123.919 | 123.388

 

For Today

  • EUR: A very quiet session compared with yesterday, with the Euro drifting around the 1.1100-1.1110 level for the most part with minor moves on either side, Topside offers light through to the 1.1170 areas where the market thickens and strengthens as the market moves towards the 1.1200 level, a push through the level could see a strong rally with little in the way until close to the 1.1260-80 areas however, even here the market may not be as strong with limited interest standing in the way to the 1.1400 levels, Downside bids light into the 1.1080 areas weak stops a possibility on a move through the level with the market finding some congestion to soak up the selling however, the confusion from the ECB is very reminiscent of the old Bundesbank double talk with one official saying one thing and another saying something completely different the difference here is that they are likely to be pushing for an end to QE.
  • GBP: A very quiet rise through to the 1.2950 levels before holding around the level through to the grey hours in very quiet trading, Topside offers light through to the 1.3050 areas with strong offers likely into that area, whether the market has strong option barriers remains to be seen however, the market above is congested but the break through the level opens up the pre October ranges and while there is some congestion the period was limited to a short period and the market could therefore target the 1.3440 topside of the range eventually. Downside bids light into the 1.2900 levels with possible light stops through the level and stronger bids likely through to the 1.2850 areas, with those bids increasing a little along the way.
  • JPY: USDJPY tested into the 111.60 levels from the opening before slipping slowly lower through into Tokyo mid-session, the market held around the 111.20-15 areas for several hours before rising quickly back towards the opening level. Topside offers into the 111.70 levels are light with a slight increase into the 112.00 areas however, this is likely to just be sentimental, a push through the level will see only slightly stronger offers into the 112.50 areas and the resistance only starts to increase on a test of the 113.00 levels. Downside bids light through the 111.00 level and stronger bids into the 110.50 areas with the market seeing stronger support into the 110.00 and while the move through the level on the way up was only a few weeks ago any option barriers are likely to be a little thin on the ground.
  • AUD: A very quiet session with the market ranging for the bulk of the session around the 0.7415-20 areas before dipping towards the 0.7405 level before finding some strength late in the session to push through towards the 0.7430 area. Topside offers into the 0.7485 level and continuing through to 75 cent, weak stops likely through the level however, congestion continues through the level and any movement remains slow. Downside bids into the 74 cent levels area with stronger bids increasing on a move lower towards the 0.7350 areas and stronger bids likely to continue on any attempt to push through the 0.7340-0.7300 areas.

 

Overnight News

JPY:

Japanese cabinet approves bill allowing emperor’s abdication

USD:

Trump denies asking Comey to drop probe, colluding with Russia

Microsoft withheld update that could have slowed Wannacry – report

US plane intercepted by Chinese SU-20’s with scenes reminiscent of Top Gun

US inflation expectations drop to lowest since November as opposed to Fitch’s expectations

AUD:

Shares dip as financials extend losses

CNY:

China is using the Yuan to combat risk of market meltdown

NZD:

Card spending slowed for the YoY number to 6.4% vs. 7.2% previous

EUR:

Dutch Consumer Confidence dipped to 23 in May from 26

 

Today’s data

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

06:00    EUR       German PPI M/M Apr C 0.20% | P 0.00%

06:00    EUR       German PPI Y/Y Apr C 3.20% | P 3.10%

08:00    EUR       Eurozone Current Account (EUR) Mar P 37.9B

10:00    GBP       CBI Trends Total Orders May C 4 | P 4

12:30    CAD       Retail Sales M/M Mar C 0.30% | P -0.60%

12:30    CAD       Retail Sales Less Autos M/M Mar C 0.20% | P -0.10%

12:30    CAD       CPI M/M Apr C 0.50% | P 0.20%

12:30    CAD       CPI Y/Y Apr C 1.70% | P 1.60%

12:30    CAD       CPI Core – Common Y/Y Apr C 1.40% | P 1.30%

12:30    CAD       CPI Core – Trim Y/Y Apr P 1.40%

12:30    CAD       CPI Core – Median Y/Y Apr P 1.70%

14:00    EUR       Eurozone Consumer Confidence May (A) C -3 | P -4

 

Harry Hindsight

  • EUR: The Euro made limited gains from the opening to test above the 1.1170 areas however, the news from Trump saw a fight back while further revelations were mooted, the market traded around the 1.1160-50 levels into the grey hours and the market pushed through the downside as it moved into the London session to trade in a narrow band until the release of UK retail sales, with mixed commentary from ECB members one would guess that we would need an odd number of ECB members to get a consensus however, this saw the Euro sliding gradually over the day with decent volumes in either direction with the market testing to the 1.1110 levels and ranging to the 1.1140 level into late into NYK, the market dropped quickly to test through to the 1.1080 areas before slowly rising to the close.
  • GBP: Cable traded quietly through the Asian session rising from the opening to the 1.2980 levels before trading around the 1.2970 levels for the most part into the grey hour, early sellers took the market through to the 1.2940 level as the drag from a lower Euro effected the market, the release of the retail sales numbers saw a sharp recovery in the number and Cable with the market rallying through the 1.3000 triggering some weak stops along the way and testing into the 1.3050 areas and finding strong offers appearing the market then spent several hours ranging and testing the level dipping through to 1.3020 each time, the market moved steadily back to the 1.3000 levels into the NYK session and as with the Euro strong USD buying moved into the session and the Cable dropped through quickly triggering weak stops along the way and a lack of liquidity saw the market trading through the 1.2900 levels before bouncing off the support areas to rise back to the 1.2940 levels and just short of the opening levels.
  • JPY: A choppy day for the USDJPY with early sellers testing the 110.55 support level before rallying into the Tokyo session to push through the 111.20 levels, Asia then saw the market trading around the 111.00 for much of the session before starting a steady rise into the London session, a combination of weak USD and a strong GBP, Euro saw the USDJPY slipping lower back through the 111.00 levels having tested the 111.40 levels, some bids into the 111.00 eventually broke with the UK retail sales numbers and the market triggered weak stops on a move back through to the 110.30 areas before support appeared in the market, the move into the NYK session saw the market pushing to 110.80 areas with the move deeper into NYK seeing the market rising back through 111.00 and testing initially to 111.30, the market moved around the 111.00 in a wide range until the USD buying moved in late in the session and the Euro quickly moving to the 111.70 levels before holding around the 111.50 area to the close.
  • AUD: The usual gyration on the employment numbers saw the market hit its lows and then rally from the 0.7410 level to the 0.7450 areas before slowing a little and pushing through to test the 0.7465 areas on a push into the London session, slow selling then emerged through the session and the market drifted back to the opening levels before dropping on the strong GBP number and the market dropped back to test towards that 0.7410 level again before ranging through the balance of the session between 0.7410-40 to close just off the lows.

 

Yesterday’s premiership results

JPY       GDP Q/Q Q1 (P) A 0.50% | C 0.40% | P 0.30%

JPY       GDP Deflator Y/Y Q1 (P) A -0.80% | C -0.70% | P -0.10%

AUD       Consumer Inflation Expectation May A 4.00% | P 4.10%

AUD       Employment Change Apr A 37.4K | C 5.0K | P 60.9K | R 60.0K

AUD       Unemployment Rate Apr A 5.70% | C 5.90% | P 5.90%

GBP       Retail Sales M/M Apr A 2.30% | C 1.10% | P -1.80% | R -1.40%

CAD       International Securities Transactions (CAD) Mar A 15.13B | C 17.23B | P 38.84B | R 39.16B

USD       Initial Jobless Claims (MAY 13) A 232K | C 240K | P 236K

USD       Philly Fed Manufacturing Index May A 38.8 | C 18.5 | P 22

USD       Leading Indicators Apr A 030% | C 0.40% | P 0.40%

USD       Natural Gas Storage A 68B | C 61B | P 45B

 

Good Luck,

Andy

 

 

 

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