Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 111.296 | EURUSD 1.12371 | AUDUSD 0.74772 | NZDUSD 0.69916 | USDCAD 1.35022 | USDCHF 0.97341 | GBPUSD 1.2999 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.12542 | 1.12304

USDJPY                 111.345 | 110.866

GBPUSD               1.30057 | 1.29735

USDCHF               0.97380 | 0.79199

AUDUSD              0.75026 | 0.74662

USDCAD               1.35049 | 1.34833

NZDUSD               0.70228 | 0.69931

EURCHF                1.09441 | 1.09344

EURGBP               0.86668 | 0.86415

EURJPY                 125.129 | 124.611

For today

• EUR: A very quiet session for the most part with Euro’s dipping a little from the opening before recovering from the 1.1230 levels to slowly move through to the 1.1250 area and trade around the level through to the grey hour, Topside offers into the 1.1275 levels and thickening through to the 1.1300 level with possible weak stops on a move through the 1.1320 levels with some congestion through to the 1.1340-60 areas with stronger offers then appearing in the 1.1400 areas a push through the level opens up a test towards the highs of last year and the 1.1500 level. Downside bids light through the 1.1200 areas with weak stops appearing on a move back through the 1.1180 level with limited bids through the 1.1150 level the 1.1100 becomes vulnerable to a test.
• GBP: Choppy movement with news of an explosion at a concert in Manchester with early movement touching the 1.3005 area before dropping back to the 1.2990 levels and holding that range through into the Tokyo session, the market drifted lower through the Tokyo session with much of the action being GBP cross selling and the market testing back to the 1.2975 level, the market continued to range in 1.2975-1.3000 through to the London session, Topside offers continue into the 1.3050 levels with possible strong stops likely through the level and the market moving into the 1.3050-1.3500 range from pre October, Downside bids into the 1.2980 levels likely to be light however, a push through to the 1.2940 levels will likely see weak stops and the market opening to the 1.2900 levels and possibly weak bids at best.
• JPY: Opening around the 1.1130 level and pushing slightly higher through to Tokyo where the sellers quickly moved in to push the market back to the 111.10 areas and a slow grind through to the 111.00 level, light sellers then completed the run to the 110.90 areas before finding some support and reversing the market to trade back to the 1.1120 areas through into the grey hour, Topside offers sees congestion through the 111.50 areas with further offers increasing as the market moves to the 111.80 level, with limited offers likely through to the 112.00 levels, the market is not likely to see stops in any number until a move through that level, Downside bids light through the current lows with the market increasing in depth as it reaches the 110.50 areas with possible weak stops likely but not in any real amounts, a push through to the 110.00 level and stronger bids with stronger stops likely through the level to opening up the low 109.00 areas.
• AUD: Oz drifted through the early part of the session opening around the 0.7475 areas to trade a narrow 0.7470-75 areas into Tokyo, before the market picked up on cross buying to push through to the 0.7485 areas, with the market close to the 75 cent levels and plenty of time to go before the next session the buying continued with the market grinding through the offers stalling initially at the 0.7490 level but remaining in touch with the target and eventually pushing through as the market moved into the Tokyo lunch period briefly testing through the level before slipping back to the 0.7495 levels as the market moved into the grey hour, Topside offers into the 75 cent still in play however, a push through could see some weak stops appearing with strong offers likely to continue through to the 0.7530 areas with strong stops a possibility, and the market then facing further slow movement into offers. Downside bids light into the 0.7480 levels and then every 20 pips with stronger congestion on a move towards the 0.7420 levels with weak stops likely through the level before returning to stronger bids again on any attempt through the 0.7340 areas.

Overnight News                                                                  

GBP:

19 dead and 50 injured after terrorist explosion in Manchester

CNY:

Iron stockpiles hit record in China as quality gets scrutiny

USD:

Fed’s Kaplan reiterates call to start shrinking balance sheet

Fed’s Kaplan says expects oil in mid 40-50’s band

Fed’s Kaplan sees two more rate hikes in 2017 are appropriate

Fed’s Kaplan progress toward Fed’s 2% inflation target has been slow

Fed’s Kaplan lower March, April inflation don’t show weakening trend

Fed’s Kaplan says US is moving very close to full employment

Leaders of US senate intelligence committee promise to vigorously pursue Flynns testimony

US Senate intelligence leaders say they are disappointed former NSA Flynn declined request

Trump asked two intel chiefs to deny Russia collusion: Report

Flynn may have lied in security review, Democrat lawmaker says

EUR:

Eurozone ministers eye Greek debt deal with IMF, new loans decision in June

KRW:

N.Korea says missile ready for mass production US questions progress

SGD:

Singapore headline inflation eases to 0.4% in April due to timing of S&CC rebates

Today’s data

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

JPY         All Industry Activity Index M/M Mar A -0.60% | C -0.50% | P 0.70%

06:00     CHF        Trade Balance (CHF) Apr P 3.10B

06:00     EUR        German GDP Q/Q Q1 (F) C 0.60% | P 0.60%

07:00     EUR        France Manufacturing PMI May (P) C 55.2 | P 55.1

07:00     EUR        France Services PMI May (P) C 56.7 | P 56.7

07:30     EUR        Germany Manufacturing PMI May (P) C 58 | P 58.2

07:30     EUR        Germany Services PMI May (P) C 55.5 | P 55.4

08:00     EUR        Eurozone Manufacturing PMI May (P) C 56.5 | P 56.7

08:00     EUR        Eurozone Services PMI May (P) C 56.4 | P 56.4

08:00     EUR        German IFO – Business Climate May C 113.1 | P 112.9

08:00     EUR        German IFO – Expectations May C 105.4 | P 105.2

08:00     EUR        German IFO – Current Assessment May C 121 | P 121.1

08:30     GBP       Public Sector Net Borrowing (GBP) Apr C 8.0B | P 4.4B

10:00     GBP       CBI Realized Sales May C 10 | P 38

12:30     CAD       Wholesale Sales M/M Mar C 1.00% | P -0.20%

13:45     USD       US Manufacturing PMI May (P) C 53.1 | P 52.8

13:45     USD       US Services PMI May (P) C 53.2 | P 53.1

14:00     USD       New Home Sales Apr C 610K | P 621K

Harry Hindsight

• EUR: Euro’s slipped a little lower through the Asian session with the market opening in line with Friday’s close to move from the 1.1210 areas to test to the 1.1185 area and ranging around the 1.1190 levels through into the London session, Early sellers pushed the market too the lows around the 1.1160 area before starting a steady rise with EU saying the Eurozone fiscal stance improving with low inflation the market moved through quickly to the 1.1210 levels with weak stops triggered and the market slowing but continuing on the move through the 1.1220 level to push through into the NYK session testing the 1.1260 levels the market peaked before slipping back and trade the balance of the session in the 1.1230-40 range.
• GBP: With comments over the weekend from David Davis that the UK will walk away, and comments from May reiterating the point Cable opened a little weaker around the 1.3010 levels, the market did attempt a rise higher however the 1.3020 level was all it could manage until moving into the Tokyo session falling back to the 1.2975 levels early into the session, the market recovered into the 1.3000 level through to the London session, a choppy early morning with momentum buyers working against the Brexit news and the early part of the session saw new lows to the 1.2965 areas before starting a quick steady recovery back to the 1.3000 levels and ranging through the day around that level for the most part, NYK session saw a move to the 1.3040 on USD weakness before returning to the 1.3000 levels again for the run to the close.
• JPY: Another quiet day for the USDJPY with the mixed fortunes through the day, Opening a little lower the USDJPY pushed from the 111.15 levels to push into the Tokyo session rising to fill the gap on the charts and trading steadily through to the 111.50 areas and peaking just above the 111.60 level to post the day’s highs, The move into the grey hour saw the USDPY slipping back to the 111.15 levels and the opening area, the market ranged through into the NYK session between the 111.15-50, USD weakness reappeared and the market dropped back to test through the 111.00 briefly before rising slowly back through the opening levels to finish the day in line with Fridays close.
• AUD: A slow start to the day with the market opening a little lower and slowly filling the gap on the chart from the 0.7445 to around the 0.7455 level before drifting into the Tokyo session, the market moved to the lows of the day just off the 0.7435 level and holding close to the level through into the grey hour, early London took the market to the 0.7465 areas before drifting a little and starting a second move as the market moved towards the NYK session, NYK saw and opening around the 0.7465 level and continued pushing through to the 0.7485 area before running into sufficient offers and day traders selling back there longs and the market trading around the 0.7475 through to the close.

Yesterday’s premiership results

GBP       Rightmove House Prices M/M May A 1.20% | P 1.10%

JPY         Trade Balance (JPY) Apr A 0.10T | C 0.25T | P 0.17T | R 0.11T

USD       Fed’s Harker Speaks in New York

USD       Fed’s Kashkari Speaks

Good Luck,

Andy

Any opinions, news, research, analyses, prices or other information contained on this Blog, whether by LMAX, its employees, partners or contributors, does not constitute investment advice nor has it been prepared in accordance with legal requirements designed to promote the independence of investment research. Further, the material contained within this Blog does not contain (and should not be construed as containing) investment advice or an investment recommendation, or an offer of, or solicitation for, a transaction in any financial instrument. Whilst information provided on this Blog may help with your investment research you must consider carefully whether you should make (or refrain from making) investment or other decisions based on what you see without doing further research on the investments you are interested in. Participating in this Blog cannot be a substitute for obtaining advice from an appropriate expert independent adviser who takes into account your circumstances and specific investment needs in selected investments that are appropriate for you. LMAX has not verified the accuracy or basis-in-fact of any claim or statement made by any third parties as comments for every Blog entry.

LMAX will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. No representation or warranty is given as to the accuracy or completeness of the above information. While the material produced in this Blog was obtained from sources deemed to be reliable, LMAX does not provide any guarantees about the reliability of such sources.

Consequently any person acting on it does so entirely at his or her own risk.

If you currently hold an account with LMAX for the purposes of trading FX and CFD’s, you are encouraged to use a different Username and Password to access the Blog or any other online systems. The Blog is a place to learn, discuss and share information and ideas with Blog followers. It is not a place to slander, use unacceptable language or to promote LMAX or any other FX, Spread Betting and CFD provider and any such postings, excessive or unjust comments and attacks will not be allowed and will be removed from the site immediately.