Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 110.841 | EURUSD 1.11858 | AUDUSD 0.74651 | NZDUSD 0.70999 | USDCAD 1.34604 | USDCHF 0.97466 | GBPUSD 1.28581 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.11820 | 1.11694

USDJPY                 111.228 | 110.755

GBPUSD               1.28318 | 1.28007

USDCHF               0.97603 | 0.97521

AUDUSD              0.74759 | 0.74474

USDCAD               1.34730 | 1.34493

NZDUSD               0.71183 | 0.70831

EURCHF                1.09067 | 1.09005

EURGBP               0.87315 | 0.8711

EURJPY                 124.287 | 123.734

For today

• EUR: A quiet session with the market slowly slipping from the opening just below the 1.1190 levels to trade along the 1.1170 level and ranging in a tight range between the 1.1170-80 levels through into the grey hour. Topside offers into the 1.1200 levels with possibility of weak stops with congestion through to the 1.1260 areas and stronger offers from there into the 1.1300 levels, Downside bids into the 1.1100 areas and through to the 1.1080 area with weak stops through the level opening the market to test to the 1.1000 levels and mixed interest in the area. If the stops get the better of the market the downside sees further congestion into the 1.0950 areas and below to slow the market.
• GBP: Another day off cross trading sending the Cable lower, this time EURGBP buying moved in from the opening in Tokyo running from the 0.8700 areas to push quickly to 0.8740 and with Cable illiquid into the period the Cable dropped from the 1.2860 opening areas to trade through the 1.2800 levels as real money flow chose a strange hour to transact the business, the move through into the Tokyo session saw the market recovering slowly to push through to the 1.2830 levels and holding through to the grey hour in the 1.2820 levels. Topside offers light through to the 1.2880 areas with some offers likely to be hanging around the 1.2900 area but not really that strong overall, a push through the congestion in the area opens the market to 1.2950 where stronger offers increase through to the 1.3000 levels with little sign of decent stops. Downside bids into the 1.2800 areas are light however, there does seem to be bids building through the level and for the moment the market is dominated by the polls for the election on the 8^th Jun, a push through the 1.2780 areas will likely see weak stops but stronger bids likely into the 1.2765 areas.
• JPY: Moving off the 110.80 levels saw the market holding around the 110.85 level before dipping a little to the 110.75 low before pushing slowly through to the 111.00, the move through the level late in the session saw some weak stops triggered to move the market through the 111.20 areas and that was the range over with the market slipping back to the 111.00 to the grey hour. Topside offers from the 111.80 and through the 112.00 areas before some weak stops appear and the market then facing congestion through the 112.50 areas and into stronger offers around the 113.00 level. Downside bids likely to continue through the 110.80 areas and into the 110.50 level with strong bids likely to slow the market, a push through the level finds some congestion with the market likely seeing stronger bids into the 110.00 areas and more a sentimental area than a strong support level.
• AUD: Limited range as usual for the Oz with the market making some early gains to the 0.7475 level before dropping back quickly from the highs to push through the opening level and dipping to the 0.7450 level where the market based through to the grey hours, Topside offers through the highs and into the 75 cent level with congestion likely through the level with the market needing to push through the 0.7525 areas to get into the stops however, its likely to remain offered into the 0.7540-60 areas. Downside bids light through to the 0.7420 levels and weak bids into the 74 cent level, a push through however, the bids are likely to increase the deeper the market goes with strength into the sentimental areas.

Overnight News                                                                  

NZD:

RBNZ says significant share of housing loans are being made at high debt to income ratios

RBNZ says Finaincial system remains sound and risks facing the system have reduced in past six mths

RBNZ says Global policy uncertainty remains elevated and debt burdens are high in a number of countries

RBNZ says banks are vulnerable to risks because their increasing reliance on offshore funding for credit growth

RBNZ says house prices remain elevated relative to income

JPY:

Japan fund managers trim equity exposure in May

SGD:

Singapore April bank lending rises 7% YoY

Moody’s changes outlook for Singapore banks from negative to stable

EUR/CNY:

China still treats foreign firms unfairly: EU group

CNY:

China May official services PMI rises to 54.5 vs. 54

Today’s data

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

GBP       GfK Consumer Confidence May A -5 | C -8 | P -7

GBP       BRC Shop Price Index Y/Y May A -0.40% | C -0.30% | P -0.50%

JPY        Industrial Production M/M Apr (P) A 4.00% | C 4.10% | P -1.90%

NZD        ANZ Business Confidence May A 14.9 | P 11

CNY        Manufacturing PMI May A 51.2 | C 51 | P 51.2

CNY        Non-manufacturing PMI May A 54.5 | P 54

JPY        Housing Starts Y/Y Apr A 1.90% | C -1.50% | P 0.20%

06:00    EUR       German Retail Sales M/M Apr C 0.40% | P 0.10%

06:00    CHF        UBS Consumption Indicator Apr P 1.5

07:55    EUR        German Unemployment Change May C -14K | P -15K

07:55    EUR        German Unemployment Rate May C 5.70% | P 5.80%

08:30    GBP        Mortgage Approvals Apr C 66K | P 67K

08:30    GBP        M4 Money Supply M/M Apr C 0.40% | P 0.30%

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

09:00    EUR        Eurozone CPI Estimate Y/Y May C 1.50% | P 1.90%

09:00    EUR        Eurozone CPI – Core Y/Y May (A) C 1.00% | P 1.20%

12:30    CAD        GDP M/M Mar C 0.30% | P 0.00%

13:45    USD        Chicago PMI May C 57 | P 58.3

14:00    USD        Pending Home Sales M/M Apr C 0.60% | P -0.80%

18:00    USD        Fed Beige Book

Harry Hindsight

• EUR: Early trading saw sharp cross JPY selling which turned the Euro lower from the 1.1170 areas dropping back to the 1.1140 areas before finding some interest, the market continued to drift through the Asian session and the move into the grey hours saw the market pushing to the 1.1110 level, London were quick buyers reversing the Euro to the 1.1140 levels into the European numbers, a dip in German import price index helped early on then the French GDP saw the Euro rising back to the opening levels before holding around the 1.1150 areas into the NYK session, a set of unremarkable numbers saw the USD weaken quickly and the market testing initially to the 1.1190 areas before slipping back again, a weaker consumer confidence saw a further push higher with the market pushing this time through the 1.1200 level before ranging around the 1.1180-90 levels through to the close.
• GBP: Cable moved through the opening in Asia quickly before strong cross selling saw the Cable slip steadily back to the 1.2800 level and pushing lightly through before recovering to the 1.2820 levels to trade quietly for the balance of the session into London, Cable recovered through the early part of the day with little data apart from a stabilizing set of poll results however, these numbers are dependent on different methods of working out the levels of potential voters actually voting so are very subjective at best as we’ve seen in the past Cable moved to the opening levels and then quickly pushed through to trigger weak stops on a move through the 1.2850 areas and stopping at the 1.2870 level the market then based along the 1.2850 levels through into the NYK session with early USD selling seeing the GBP rise through towards the 1.2890 areas, before dropping back quickly into the London close to hold through to the close around the 1.2860 areas.
• JPY: The move through into the Tokyo session saw the market drifting as cross JPY pushed the USDJPY slowly lower the base currencies of the crosses took the brunt of the selling until deeper into the Tokyo session when the market broke down through the 1.1110 areas triggering weak stops on the move through the 111.00 areas before finding support moving into the market and holding the 110.80 through to the London session, the market then ranged around the 111.00 areas through into the NYK session with some light cross buying as the USD weakened seeing a brief respite and the market testing the 111.25, the weakness in the USD saw the market again drifting and the markets push through the 111.00 level this time saw weak stops triggered and the market this time dropping to the 110.65 areas then basing along the 110.75 areas through to close.
• AUD: The Oz initially dipped into the Tokyo session as the cross Yen selling impacted the market taking the Oz to the 0.7420 levels before holding through towards the grey hour where early buying took the market back through the opening levels to test to the 0.7440 in rather quiet trading, a rising Euro helped the Oz push through the 0.7450 areas and a quiet range around the level through to the US numbers, NYK session continued a steady rise on a limited day with the market pushing through to finish around the 0.7465 areas.

Yesterday’s premiership results

NZD       Building Permits M/M Apr A -7.60% | P -1.80% | R -1.20%

JPY       Unemployment Rate Apr A 2.80% | C 2.80% | P 2.80%

JPY       Household Spending Y/Y Apr A -1.40% | C -0.70% | P -1.30%

JPY       Retail Trade Y/Y Apr A 3.20% | C 2.20% | P 2.10%

AUD       Building Approvals M/M Apr A 4.40% | C 3.00% | P -13.40% | R -10.30%

06:00    EUR       German Import Price Index M/M Apr A -0.10% | C 0.10% | P -0.50%

06:45    EUR       French GDP Q/Q Q1 (P) A 0.40% | C 0.30% | P 0.30%

07:00    CHF       KOF Leading Indicator May A 101.6 | C 106.2 | P 106 | 1.063

09:00    EUR       Eurozone Business Climate Indicator May A 0.90 | C 1.11 | P 1.09 | R 1.10

09:00    EUR       Eurozone Economic Confidence May A 109.2 | C 110 | P 109.6 | R 109.7

09:00    EUR       Eurozone Industrial Confidence May A 2.8 | C 3.1 | P 2.6

09:00    EUR       Eurozone Services Confidence May A 13 | C 14.1 | P 14.2

09:00    EUR       Eurozone Consumer Confidence May (F) A -3.3 | C -3.3 | P -3.3 | R -3.6

12:00    EUR       German CPI M/M May (P) A -0.20% | C -0.10% | P 0.00%

12:00    EUR       German CPI Y/Y May (P) A 1.50% | C 1.60% | P 2.00%

12:30    CAD       Current Account (CAD) Q1 A -14.1B | C -11.4B | P -10.7B  | R -11.8B

12:30    CAD       Industrial Product Price M/M Apr A 0.60% | 0.70% | P 0.80%

12:30    CAD       Raw Materials Price Index M/M Apr A 1.60% | C 3.80% | P -1.60% | R -1.70%

12:30    USD       Personal Income Apr A 0.40% | C 0.40% | P 0.20%

12:30    USD       Personal Spending Apr A 0.40% | C 0.40% | P 0.00% | R 0.30%

12:30    USD       PCE Deflator M/M Apr A 0.20% | C 0.20% | P -0.20%

12:30    USD       PCE Deflator Y/Y Apr A 1.70% | C 1.70% | P 1.80% | R 1.90%

12:30    USD       PCE Core M/M Apr A 0.20% | C 0.10% | P -0.10%

12:30    USD       PCE Core Y/Y Apr A 1.50% | C 1.50% | P 1.60%

13:00    USD       S&P/Case-Shiller Composite-20 Y/Y Mar A 5.90% | C 5.60% | P 5.90%

14:00    USD       Consumer Confidence May A 117.9 | C 120 | P 120.3

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.