Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 107.20 | EURUSD 1.23559 | AUDUSD 0.77616 | NZDUSD 0.73749 | USDCAD 1.26998 | USDCHF 0.9570 | GBPUSD 1.41758 |

LMAX Highs and Lows 6am GMT

                                High | Low

EURUSD               1.23651 | 1.23527

USDJPY                 107.226 | 106.969

GBPUSD               1.41841 | 1.41742

USDCHF               0.95711 | 0.75625

AUDUSD              0.77693 | 0.77477

USDCAD               1.26064 | 1.25909

NZDUSD               0.73755 | 0.73485

EURCHF                1.18269 | 1.18215

EURGBP               0.87187 | 0.87143

EURJPY                 132.519 | 132.262

For today

• EUR: A very quiet session with the market seeing slow USD selling and the Euro rising from the 1.2355 areas to push above the 1.2365 initially, the market reversed the move and then having tested to the lows just below the opening repeated the rise testing a little higher on the move into the grey hour, topside offers likely to be strong into the 1.2380-1.2400 areas with congestion likely through the level and while there maybe some weak stops on a move through the 1.2420 areas the market is likely to find those offers continuing and increasing on any push through the 1.2440 level, even a push through the 1.2460 level is not going to clear the topside offers easily with the market likely to continue to sell into any rallies towards and through the 1.2500 areas with the years highs likely to attract strong attention. Downside bids light through to the 1.2320 levels with congestion still building and likely to be weak enough to push through easily however, the move through while seeing weak stops is not about to melt and bids then start to strengthen on a dip through the 1.2260 levels and particularly on any attempt to the 1.2220 area.
• GBP: A slow rise through the session saw the market for the most part holding tightly around the 1.4180 level before closing in on the grey hour and starting a push through to the 1.4190 to enter the period on its highs, topside offers into the 1.4200 level thinning out a little and chatter in the media about further unnamed hawkish comments from MPC member would suggest some concern now filtering through on the inflation side of things, Topside offers through the 1.4200 level will likely see weak stops appearing however, it may be short lived with possibly strong offers into the 1.4250 level before the market opens to the stronger levels around and above the 1.4300 areas and the highs from January likely to be significantly resistant to any further gains, downside bids light through to the 1.4120-00 levels with the market then seeing weak congestive bids on a move through the figure level with the weak stops possibly stronger than those close to bids, a push into the 1.4050 level is likely to see stronger bids appearing and congestive then through to the 1.4000 level.
• JPY: A very quiet session for the USDJPY with the market holding in the 107.00-20 areas for the most part with the market opening just off the highs and then slipping back to make the lows early in the Tokyo session with a light penetration of the figure level before holding through to the grey hours in the 107.00-10 areas to the grey hour, Topside offers light through to the 107.40-50 areas with congestive offers then taking up guard above and increasing the closer you get to the 108.00 level however, the potential for a higher USDJPY through that level will likely see stops around the 108.20 areas and the market quickly pushing for the very congestive 108.80-109.00 areas, Downside bids light through the 106.y60 level however this week has seen the level strongly resilient on dips and the market would have to probably clear the 106.50 level to get the downside impetus on board for a deeper move.
• AUD: The move into the Tokyo session saw the Oz slip back a little to trade around the 0.7750 levels through to the London session with very little going on, a push through the 77 cent level will see some light congestion continuing and one suspect that the stops are not likely to appear until the 0.7640 level is cleared and the Oz opens up a path through to the 0.75 cent levels, Topside offers through into the 78 cent level are likely to be strong with weak stops building the longer the market around the figure holds, a push through the level still sees congestive offers however, those offers are likely to be thinner than expected and break out stops could cause a small move higher.

Overnight News

USD/CNY:

US China talks said to have stalled on high-tech industry

USD:

API is said to report US crude stocks rose 1.76M bbl last week

Stormy Daniels cooperating with federal investigators probing receipt of funds from Michael Cohen

The White house edged closer to firing Robert Mueller

Trump considering firing Rosenstein to check Mueller

Fed probe into Trump’s lawyer seeks records about 2 women who allegedly received payments

Senators move to protect Mueller as Trump criticises probe

ECB:

Dismisses Nowotny comments on rate increase as personal view

Eurocontrol warns airlines to exercise caution in E. Mediterranean due to possible launch of air strikes at Syria

JPY:

Japan sovereign bond risk jumps as land scandal deepens

Scandals in and out of school pose triple threat to Japan’s Abe

Allegations of cronyism and cover-ups just won’t die – Nikkei

AUD:

DJ inflation still seen lacking in Australia

Trade war would damage Australia’s economy RBA’s Gov. Lowe

NZD:

NZ inflation gauge shows price pressures remain elusive

CNY:

Chinese utilities may raise Forex exposure long term

China March consumer prices 2.1% YoY: est. 2.6%

Today’s data

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

JPY         Machine Orders M/M Feb A 2.10% | C -2.50% | P 8.20%

JPY         Domestic CGPI Y/Y Mar A 2.10% | C 2.00% | P 2.50%

AUD       Westpac Consumer Confidence Apr A -0.60% | P 0.20%

CNY        CPI Y/Y Mar A 2.10% | C 2.60% | P 2.90%

CNY        PPI Y/Y Mar A 3.10% | C 3.30% | P 3.70%

08:30     GBP       Visible Trade Balance (GBP) Feb C -11.9B | P -12.3B

08:30     GBP       Industrial Production M/M Feb C 0.40% | P 1.30%

08:30     GBP       Industrial Production Y/Y Feb C 2.90% | P 1.60%

08:30     GBP       Manufacturing Production M/M Feb C 0.20% | P 0.10%

08:30     GBP       Manufacturing Production Y/Y Feb C 3.30% | P 2.70%

08:30     GBP       Construction Output M/M Feb C 0.70% | P -3.40%

11:00     GBP       NIESR GDP Estimate Mar C 0.30% | P 0.30%

12:30     USD       CPI M/M Mar C 0.00% | P 0.20%

12:30     USD       CPI Y/Y Mar C 2.40% | P 2.20%

12:30     USD       CPI Core M/M Mar C 0.20% | P 0.20%

12:30     USD       CPI Core Y/Y Mar C 2.10% | P 1.80%

14:30     USD       Crude Oil Inventories P -4.6M

18:00     USD       Monthly Budget Statement Mar C -175.0B | P -215.2B

18:00     USD       FOMC Meeting Minutes                                                              

 

Harry Hindsight

• EUR: Opening around the 1.2320 areas and pushed slowly into early Tokyo testing towards the 1.2330 level but a very weak effort before slowly slipping back through to the 1.2310 level and basing in that area through to the grey hour with an actual low just below, London saw limited selling to test towards the 1.2300 levels before recovering and heading up through the opening levels and limited weak stops to test towards the 1.2335 level, the move into the NYK session saw strong PPI numbers and risk disappeared and Euro shot higher to test quickly to the 1.2380 level before slipping slowly back to trade initially to the 1.2350 areas and then the market moved into the London close pushing back to the 1.2330 areas, a slow climb through the balance of the session with the market closing just off the 1.2360 areas.
• GBP: A quiet Asian session saw the Cable move around the opening levels testing initially to the 1.4140 areas before slipping back through the 1.4130 opening level and pushing to the days lows above 1.4120, the move into the London session saw early morning buyers moving in and the market pushing through to the 1.4150 levels, the push through saw little resistance surprisingly and continued to rise pushing to the 1.4180 before finding sufficient interest to curb the push the market ranged back to the 1.4150 levels through the NYK session with the market always recovering to again test the highs pushing through to make new highs just below the 1.4190 level and continuing to bounce around through to the close holding most of the gains.
• JPY: A narrow range for the USDJPY with the market opening towards the lows of the day and testing into early Tokyo to the 106.60 areas before starting a rise through to the 107.20 levels as Pres Xi calmed early trading on comments about the tariffs in the row with the US, the market then ranged through to the London session holding the 107.10-20 levels before early London sold the market back through the 107.00 areas and to a little dip to 106.80 and then trading quietly around the 107.00 level again into the NYK session, NYK extended the highs in a steady push through to the 107.40 levels before ranging around the 107.20 for a long run to the close.
• AUD: The Oz followed the USDJPY move with cross buying helping the Oz from the opening lows around the 0.7695 levels to test above the 0.7735 area and hold through to the London session ranging around the 0.7730 level, the move into London again saw that high tested before drifting a little back to 0.7720 and holding through to the NYK session with a steady rise into that opening, the market pushed off from the 0.7735 levels and this time managed a slow rise through the 0.7760 level and congestive offers then pinned the market down however, the market kept in touch with the level through the long afternoon session unable to push to the 0.7770 level but quietly ranging above 0.7760.

Yesterday’s premiership results

GBP       BRC Retail Sales Monitor Y/Y Mar A 1.40% | P 0.60%

AUD       NAB Business Conditions Mar A 14 | C 17 | P 21

AUD       NAB Business Confidence Mar A 7 | C 12 | P 9

JPY         Machine Tool Orders Y/Y Mar (P) A 28.10% | P 39.50%

CAD       Building Permits M/M Feb A -2.60% | C 1.30% | P 5.60% | R 5.20%

USD       PPI M/M Mar A 0.30% | C 0.10% | P 0.20%

USD       PPI Y/Y Mar A 3.00% | C 2.90% | P 2.80%

USD       PPI Core M/M Mar A 0.30% | C 0.20% | P 0.20%

USD       PPI Core Y/Y Mar A 2.70% | C 2.60% | P 2.50%

USD       Wholesale Inventories M/M Feb (F) A 1.00% | C 0.60% | P 1.10%

 

 

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