Daily FX Market Commentary

Good morning,

LMAX Close

USDJPY 109.333 | EURUSD 1.20793 | AUDUSD 0.75297 | NZDUSD 0.70378 | USDCAD 1.28429 | USDCHF 0.99072 | GBPUSD 1.37655 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.20844 | 1.20681

USDJPY                 109.397 | 109.241

GBPUSD               1.37730 | 1.37537

USDCHF               0.99190 | 0.99047

AUDUSD              0.75461 | 0.75268

USDCAD               1.28382 | 1.28211

NZDUSD               0.70411 | 0.70312

EURCHF                1.19731 | 1.19643

EURGBP               0.87760 | 0.8770

EURJPY                 132.132 | 132.003

For today

• EUR: Another quiet session with the Euro holding initially around the 1.2080 levels before dipping a little to the 1.2075 areas and running through to the grey hours quietly, Downside light congestion into the 1.2000 areas with weak stops on a move through the level and the market opening up to further losses with sentimental values now holding the key to the downside, with the 1.1900 level likely to be the strongest point for the time being, topside offers weak back through the 1.2100 level with weak stops just beyond the level and further strong offers on any move to the 1.2150 areas.
• GBP: A slow rise from the opening below 1.3770 and struggling above the level for the first few hours of the new day of the month, the move into the mid-session before slipping slowly lower and testing the 1.3760 level and the low of the session and into London, Downside bids into the 1.3700 level and a key level with March’s lows in the same area, a push through the 1.3700 will likely see strong stops appearing and the market limited to sentimental levels through to the 1.3600 level and possibly limited in strength and opening the market to a possible strong dip further, topside offers light through the 1.3800 level with weak stops limited above that level however, a short squeeze is unlikely and any move through the level will likely attract only limited impetus and congestion slowing that move.
• JPY: Opening around the 109.26 level the market slowly moved into the Asian session around that level and then rising slowly through towards the 109.40 level before holding quietly around the 109.35 areas to the London opening. Topside offers congestive through to the 109.60 levels with offers around that level likely to increase with weak stops once the market pushes through the level however, stronger offers are likely to appear on any move beyond the 109.80 level and continue through into the 110.00-50 level with possible stops in the mix along the way. Downside bids light through to the 108.00 level notwithstanding the buying we’ve seen over the past week or so, and whether that will reappear in the next few days remains to be seen, a push through the 108.00 level will likely see strong stops appearing and the market quickly opening to a test to the stronger congested 107.50 levels.
• AUD: A quiet move through into the Asian session holding for the most part above the 0.7530 level and then finally pushing above the 0.7540 level for the run to the RBA rate announcement, some gyration around the release saw the market rising to the 0.7546 area before again slowing for the move into the grey hour, Downside bids into the 75 cent level with weak stops on a move through contesting against some congested bids through the level however, the congestion is likely to be spread out and the market could find the 0.7450 levels a little stronger and able to absorb the selling, Topside offers through the 0.7600 area likely to be light with weak stops on a move through the level and the market quickly moving to the stronger 0.7640-60 areas however the 77 cent level is still vulnerable to a challenge with very little likely on a test of the area.

Overnight News

GBP:

UK Lords defeat May on Brexit, making no deal less likely

USD:

Mnuchin: Bond market can easily absorb more treasuries supply

Mnuchin: Expect tariff decision later today from Trump

Mnuchin: Spoke with Trump on tariffs, won’t broadcast decision

Mnuchin: He’s not hearing that labour market is tight

Mnuchin: He doesn’t expect to see a lot of inflation

Mnuchin: Looking to change the discussion on trade with China

Mnuchin: Trump determined Iran won’t have nuclear weapons

How bad is the Labour shortage? Cities will pay you to move there WSJ

Trump finalizes deal to exempt S. Korea on steel WSJ

Trump to postpone steel tariff decision for EU until 1^st June WSJ

AUD:

Australia home prices fall for seventh month, led by big Cities

RBA leaves cash rate target unchanged at 1.50%

RBA says inflation likely to remain low for some time

RBA low rates continuing to support Australian economy

RBA unchanged policy consistent with sustainable economic growth

RBA sees growth to average a bit above 3% in 2018-19

CNY:

Foreign investors wary of iron ore trading in China

GBP:

Proposes another solution to Brexit deadlock over Irish border

Today’s data

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

NZD       Building Permits M/M Mar A 14.70% | P 5.70% | R 6.40%

JPY         PMI Manufacturing Apr (F) A 53.8 | C 53.3 | P 53.3

AUD       RBA Rate Decision A 1.50% | C 1.50% | P 1.50%

08:30     GBP       Mortgage Approvals Mar C 63.0K | P 63.9K

08:30     GBP       Money Supply M4 M/M Mar C 0.20% | P -0.30%

08:30     GBP       PMI Manufacturing Apr C 54.8 | P 55.1

12:30     CAD       GDP M/M Feb C 0.30% | P -0.10%

13:30     CAD       RBC Manufacturing PMI Apr P 55.7

13:45     USD       Manufacturing PMI Apr (F) C 56.5 | P 56.5

14:00     USD       Construction Spending M/M Mar C 0.50% | P 0.10%

14:00     USD       ISM Manufacturing Apr C 58.5 | P 59.3

14:00     USD       ISM Prices Paid Apr C 76.8 | P 78.1

22:45     NZD       Unemployment Rate Q1 C 4.50% | P 4.50%

22:45     NZD       Employment Change Q/Q Q1 C 0.60% | P 0.50%

23:01     GBP       BRC Shop Price Index Y/Y Apr P -1.00%

23:50     JPY         Monetary Base Y/Y Apr C 9.20% | P 9.10%

 

Harry Hindsight

• EUR: Opening a little lower from Fridays close and slipping to the Asian lows around the 1.2120 area, with Golden week the Asian market was a little thin and the moves limited with the market pushing back through the 1.2125 opening level and pushing through into the mid 30’s for the move into the London session, early London tested towards the 1.2140 areas but was unable to make much headway as German retail sales saw the market dropping quickly back to the 1.2110 level, the weaker numbers undermined the market and although the market did recover a little it was unable to push much above the 1.2120 areas and the move towards NYK saw the market again slipping quickly through to the 1.2070 area and eventually finding a base with the market trading off that level for several hours, the market tested a couple of times into the 60’s but always moved back higher again, end of London saw the market pushing back to the 1.2100 levels but it was a single move and the market then drifted to the 1.2080 area to hold quietly to the close.
• GBP: With thin trading the opening saw a little dip through to the 1.3765 level before starting a slow rise through to the London session testing to the highs of the day just above the 1.3790 level before the drag of the Euro saw the market dropping back to the 1.3750 level holding briefly before triggering weak stops on the move through to the lows around the 1.3715 level, the move through into the NYK session saw a steady flow of buyers taking the market back through to the opening levels and then a narrowing range through to the close around the 1.3760 levels.
• JPY: With a lack of players in the Asian market early trading was contained in the 109.00-20 level narrowing but pushing to those higher levels, London were slightly stronger buyers and the market pushed through to the 109.30 level and holding quietly into the NYK session, the market eventually pushed through the next 10 pips or so and was unable to get to the 109.50 ranging tightly through to the London close and reversing most of the gains, the run to the close saw the market eventually holding the 109.30 levels.
• AUD: A slow slide lower through the session, with the USD strengthening against the rest of the market, opening around the 0.7575 areas the market struggled in early trading to push above the 0.7580 level before moving lower in the final hours testing quickly to the 0.7560 level and then holding around the 0.7570 into the London session, London were also slow sellers with the market testing back to base along the 0.7540 levels through into the NYK session and holding that level through to the final couple of hours dipping away to test the 0.7525 level and holding quietly to the close.

Yesterday’s premiership results

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

EUR        German Retail Sales M/M Mar A -0.60% | C 0.80% | P -0.70%

CHF        KOF Leading Indicator Apr A 105.3 | C 106 | P 106 | R 105.1

EUR        Eurozone M3 Money Supply Y/Y Mar A 3.70% | C 4.10% | P 4.20%

EUR        German CPI M/M Apr (P) A 0.00% | C -0.10% | P 0.40%

EUR        German CPI Y/Y Apr (P) A 1.60% | C 1.50% | P 1.60%

CAD       Industrial Product Price M/M Mar A 0.80% | C 0.20% | P 0.10% | R 0.30%

CAD       Raw Materials Price Index M/M Mar A 2.10% | C 0.60% | P -0.30% | R -0.40%

USD       Personal Income Mar A 0.30% | C 0.40% | P 0.40% | R 0.30%

USD       Personal Spending Mar A 0.40% | C 0.40% | P 0.20% | R 0.00%

USD       PCE Deflator M/M Mar A 0.00% | C 0.00% | P 0.20%

USD       PCE Deflator Y/Y Mar A 2.00% | C 2.00% | P 1.80% | R 1.70%

USD       PCE Core M/M Mar A 0.20% | C 0.20% | P 0.20%

USD       PCE Core Y/Y Mar A 1.90% | C 1.90% | P 1.60%

USD       Chicago PMI Apr A 57.6 | C 58 | P 57.4

USD       Pending Home Sales M/M Mar A 0.40% | C 0.80% | P 3.10% | R 2.80%

 

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