Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 109.055 | EURUSD 1.21312 | AUDUSD 0.75821 | NZDUSD 0.70859 | USDCAD 1.28286 | USDCHF 0.98793 | GBPUSD 1.37807 |

 

LMAX Ranges 5am GMT

Highs    Lows

EURUSD               1.21343 | 1.21189

USDJPY                 109.183 | 109.023

GBPUSD               1.37864 | 1.37689

AUDUSD              0.75826 | 0.75596

USDCHF               0.98853 | 0.98759

USDCAD               1.28508 | 1.28334

NZDUSD               0.70891 | 0.70636

EURGBP               0.88061 | 0.87963

EURCHF                1.19860 | 1.19789

EURJPY                 132.380 | 132.231

For today

• EUR: With Golden week underway the CNY and JPY markets were closed and volumes have been light through the session, Euro’s opened a little lower around the 1.2125 areas and rangeing around the level through the session with early trading testing to the 1.2120 areas before rallying slowly to push through towards the 1.2135 level but generally holding those opening levels for the move into the grey hour, Downside bids light through to the 1.2060 level with decent bids likely through to the 1.2040 areas and light congestion through to the 1.2000 level a push through the level will likely see some stops appearing however, stronger congestion then starts to appear with the market again centred around the sentimental levels. Topside offers light through to the 1.2180 levels with better offers likely to appear on any attempt to push through the 1.2200 levels with weak stops just above the market is likely to be very congested above the 1.2250 areas and increasing in size to the 1.2300 level.
• GBP: Very quiet for the Cable with the market holding around the opening levels and generally holding the 1.3765-85 range through the session making an early dip only to rise slowly through the session to hold around the highs for the move into the grey hour, Downside bids likely to be strong on any approach of the 1.3700 levels and March lows a break through the level does open a deeper move to the levels from the beginning of the year around the 1.3600-1.3500 range with weakness likely to that range, topside offers light on a push back through the 1.3800 level with some light stops possible but limited a test through to the 1.3850 level will likely attract further buying moving in however, it is likely to be limited with US numbers more of a factor than anything else.
• JPY: A quiet range for the USDJPY as you’d expect with the market holding above the 109.00 levels through the session with the market dipping a couple of times towards the level but rising through to the 109.15-18 areas for the move into the grey hour after failing that high early in the session, Topside offers light through to the 109.50 level and beyond there the market is likely to be a little stronger and increasing on any approach of the 110.00 level however, with the JPY market players quiet for the Golden week the market could find impetus elsewhere for a move in either direction, downside bids light through the 109.00 level if the market can push through the level with weak stops likely on a dip through the 108.80 level with no sign at that point of the recent buyer the market could see a quick move lower and open to some choppy trading through the next few days. A push through of the 108.00 level will likely see stronger congestion moving into the market but again this depends on what standing orders have been left.
• AUD: The Oz drifted through the session with very little to excite and a limited market all around, early trading saw the market attempting to push beyond the 0.7580 areas on several occasions but always tailing above the level and eventually after a few hours of trying pushed back through to the 0.7560 level and clearing some of the weak longs out, Topside offers likely to be light on a move back to the 76 cent level and the market having limited stops above the level opening the 0.7620 level to stronger stops and the market running into congestion on any test above the 0.7640 level and struggling to the 0.7660 level. Downside bids into the 0.7530-00 levels with plenty of congestion suspected through to the 75 cent level and possibly stronger bids appearing into that level.

Overnight News

GBP:

Amber Rudd resigns as Home Secretary over Windrush scandal

USD:

Ross says US to extend duty relief to some allies, not all BBG

Fed’s interest rate plans come under pressure WSJ

SYP:

Military locations in the suburbs of Aleppo and Hama were targeted by hostile missiles SANA

JPY/CNY:

Bank holidays

JPY:

FSA seeks to tighten FX leverage to 10/1 from 25/1 Sankei

NZD:

NZ Apr business activity outlook index at 17.8

NZ Apr business confidence index at -23.4

Business confidence drops led by construction gloom ANZ

NZ Treasury sees annual GDP growth below 3% 1H 2018

NZ Treasury sees annual inflation less than 2% in 2018

Today’s data

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

AUD       TD Securities Inflation M/M Apr A 0.50% | P 0.10%

CNY        Manufacturing PMI Apr A 51.4 | C 51.3 | P 51.5

CNY        Non-manufacturing PMI Apr A 54.8 | C 54.5 | P 54.6

06:00     EUR        German Retail Sales M/M Mar C 0.80% | P -0.70%

07:00     CHF        KOF Leading Indicator Apr C 106 | P 106

08:00     EUR        Eurozone M3 Money Supply Y/Y Mar C 4.10% | P 4.20%

12:00     EUR        German CPI M/M Apr (P) C -0.10% | P 0.40%

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

12:30     CAD       Industrial Product Price M/M Mar C 0.20% | P 0.10%

12:30     CAD       Raw Materials Price Index M/M Mar C 0.60% | P -0.30%

12:30     USD       Personal Income Mar C 0.40% | P 0.40%

12:30     USD       Personal Spending Mar C 0.40% | P 0.20%

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

12:30     USD       PCE Deflator Y/Y Mar C 2.00% | P 1.80%

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

12:30     USD       PCE Core Y/Y Mar C 1.90% | P 1.60%

13:45     USD       Chicago PMI Apr C 58 | P 57.4

14:00     USD       Pending Home Sales M/M Mar C 0.80% | P 3.10%

22:45     NZD       Building Permits M/M Mar P 5.70%

 

Weekend News

AUD:

Decade of Banks behaving badly laid bare in Australian inquiry

RBA clinging to rates ammo sees reprieve from Australia tax cuts – BBG

USD:

Pompeo signals Trump may walk away from Iran deal NYP

JPY:

Abe to decide on leadership re-election as soon as June

KRW:

Kim Jong-un told Moon Jae-in he would abandon nuclear weapons if US ends Korean war and ensure nonaggression

 

Harry Hindsight

• EUR: A quiet session through Asia with the market holding around the opening level for the bulk of the session and after a minor dip through the 1.2100 level pushing to above the 1.2115 areas before drifting to the London session, London were quick sellers with lower GDP numbers for France hitting first and Euro testing to the 1.2065 levels and slowly reversing towards the 1.2095, the recovery was short lived and the move into the pre NYK session saw renewed selling of the Euro once the German confidence numbers had helped the recovery, and although the US GDP numbers looked good overall the Euro started a recovery and managed to push back to the early highs before pushing through the 1.2120 levels to test towards the 1.2135 level into the closing hour.
• GBP: A slow rise to the highs testing the 1.3935 level a couple of times late into the session before dropping back through the opening levels around the 1.3920 areas, the move into the London session saw the market dropping back with services index and poor GDP numbers sending the Cable tumbling through to test the 1.3800 level, triggering weak stops on the move and the market after a weak bounce continuing to drift lower through the day to push to the 1.3750 area and the NYK session, the market then struggled for the rest of the session with the market regaining the 1.3800 level for the move to the London close before drifting again to hold the 1.3780 level through to the close.
• JPY: Another quiet day for the USDJPY with a seemingly reluctance to sell into the recent buying the market has seen, the market opened around the 109.30 levels and struggled into the early part of Tokyo before dipping back through to range around the 109.20 level, early London saw a quick round of buying and the market back to the opening levels and then steadily pushing through deeper to the highs again and another quick stab higher to test above the 109.50 levels for the first time, the market then settled back to trade around the 109.30-35 levels through to the NYK session and a repeat the spike higher before dropping back quickly through to the lows and then slipping to test the 109.00 levels once the US data was out of the way, the market then ranged through to the close holding above the 109 levels but unable to hold above the 109.15 area through to the close.
• AUD: The Oz held the 0.7540-60 levels for the most part through the Asian session with a single attempt through the 0.7540 areas before holding above the 0.7550 for the move into the London session, London attempted the down side again with early sellers testing the 0.7530 level before again recovering back to above the 0.7550 level with weak shorts taking back there positions and the market back to the opening levels, the market ranged through to the NYK session holding the opening area and with the spike in USD again taking the Oz through to the 0.7540 before starting a slow but steady rise through the balance of the session to the 0.7580 levels with the high just above and holding to the close.

Yesterday’s premiership results

NZD       Trade Balance Mar A -86M | C 200M | P 217M | R 172M

GBP       GfK Consumer Confidence Apr A -9 | C -7 | P -7

JPY         Jobless Rate Mar A 2.50% | C 2.50% | P 2.50%

JPY         Tokyo CPI Core Y/Y Apr A 0.60% | C 0.80% | P 0.80%

JPY         Retail Trade Y/Y Mar A 1.00% | C 1.50% | P 1.60% | R 1.70%

JPY         Industrial Production M/M Mar (P) A 1.20% | C 0.50% | P 2.00%

AUD       PPI Q/Q Q1 A 0.50% | C 0.40% | P 0.60%

AUD       PPI Y/Y Q1 A 1.70% | C 1.20% | P 1.70%

JPY         BoJ Rate Decision A -0.10% | C -0.10% | P -0.10%

JPY         Housing Starts Y/Y Mar A -8.30% | C -4.80% | P -2.60%

EUR        French GDP Q/Q Q1 (A) A 0.30% | C 0.40% | P 0.70%

EUR        German Import Price Index M/M Mar A 0.00% | C 0.10% | P -0.60%

EUR        German Unemployment Change Apr A -7K | C -15K | P -19K | R -18K

EUR        German Unemployment Claims Rate Apr A 5.30% | C 5.30% | P 5.30%

GBP       Index of Services 3M/3M Feb A 0.40% | C 0.60% | P 0.60%

GBP       GDP Q/Q Q1 (A) A 0.10% | C 0.30% | P 0.40%

EUR        Eurozone Economic Confidence Apr A 112.7 | C 112 | P 112.6 | R 112.7

EUR        Eurozone Business Climate Indicator Apr A 1.35 | C 1.28 | P 1.34 | R 1.44

EUR        Eurozone Industrial Confidence Apr A 7 | C 5.8 | P 6.4 | R 7

EUR        Eurozone Services Confidence Apr A 14.9 | C 15.9 | P 16.3 | R 15.9

EUR        Eurozone Consumer Confidence Apr (F) A 0.4 | C 0.4 | P 0.4

USD       GDP Annualized Q/Q Q1 (A) A 2.30% | C 2.00% | P 2.90%

USD       GDP Price Index Q1 (A) A 2.00% | C 2.20% | P 2.30%

USD       Employment Cost Index Q1 A 0.80% | C 0.70% | P 0.60%

USD       U. of Mich. Sentiment Apr (F) A 98.8 | C 98 | P 97.8

Stay lucky

Andy

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