Daily FX Market Commentary

Good morning,

LMAX Close

USDJPY 109.091 | EURUSD 1.1962 | AUDUSD 0.75394 | NZDUSD 0.70211 | USDCAD 1.28477 | USDCHF 0.99997 | GBPUSD 1.35297 |

 

LMAX Ranges 5am GMT

Highs    Lows

EURUSD               1.19781 | 1.19546

USDJPY                 109.209 | 108.758

GBPUSD               1.35648 | 1.35319

AUDUSD              0.75431 | 0.75193

USDCHF               1.00062 | 0.99842

USDCAD               1.28588 | 1.28393

NZDUSD               0.70416 | 0.70159

EURGBP               0.88374 | 0.88267

EURCHF                1.19650 | 1.19545

EURJPY                 130.591 | 130.204

For today

• EUR: A little bit of movement on the move into the Tokyo session after a quiet couple of hours, the market struggled off the lows around the 1.1955 areas and pushed through to the 1.1975 areas, before slipping back steadily in the run to the grey hours and bank holiday in London, Light offers to the topside through the 1.2000 levels, with weak stops possibly through the 1.2030 areas and opening up a possible squeeze through to the 1.2080 areas and stronger offers, downside bids light through to the 1.1920 levels with thicker bids from there through to the 1.1880 areas with possibility of stronger stops below the level and the possibility of a deeper move if momentum can be maintained.
• GBP: Opening unchanged for the day the market pushed through into the Tokyo session pushing through from the 1.3150 levels to test to the 1.3190 area before holding through to the final hour before slowly drifting back a little, downside bids weak back through the 1.3100 levels with congestive bids likely through the 1.3080 areas and the market only seeing stronger bids once the market pushes through to the 1.3050 level and into the recent lows. Topside offers lightly congestive through the 1.3220 areas a push through the level could see weak stops opening through the level and increasing into the 1.3250 area before some weakness shows for the run to the 1.3300 and possibly not today with the UK bank holiday.
• JPY: USDJPY opened quietly around the 109.10 areas and deep into the session the market pushed weakly through to the 109.20 areas before dropping quickly back to the 109.00 pausing and then continuing the move to the 109.76 areas with local banks and cross selling doing the damage before starting a slow steady climb to the opening levels. Downside bids suspected through the 108.60 level with weak stops possibly on a push through to the 108.40 level and the market to 108.00 very vulnerable to the 107.60 area. Topside offers through to the 109.30-60 level congestive in nature with the offers then increasing through to the 110.00 levels with stops likely through the 110.20 level.
• AUD: Opening around the 0.7540 levels the market drifted lower through the day testing to the 0.7520 areas the market then ranged between the areas in some slow trading and hardly affected by the better confidence numbers and pushing into the London session just off the lows. Downside bids into the 0.7480 areas with possible weak stops on a move through the level and opening a test to further congestion in the 0.7460-40 areas and stronger bids towards the 74 cent level, topside offers into the 0.7560 areas with some limited congestion through the 0.7580 areas and better offers on any attempt to the 76 cent area and weak stops through the level.

Overnight News

CNY/USD:

Orewellian nonsense? China says that’s the price of doing business

China’s trade imbalance with US a long term problem says Central Bank governor

AUD:

Australian PM flags tax cuts, infrastructure spend in federal budget

Australian business activity jumps to record in April Survey

JPY:

BoJ should maintain easy policy as still long way to go to hit price goal

Appropriate for BoJ to keep easing persistently

Today’s data

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

JPY         BoJ Minutes

AUD       NAB Business Conditions Apr A 21 | P 14 | R 15

AUD       NAB Business Confidence Apr A 10 | P 7 | R 8

06:00     EUR        German Factory Orders M/M Mar C 0.50% | P 0.30%

07:00     CHF        Foreign Currency Reserves (CHF) Apr P 738B

07:15     CHF        CPI M/M Apr C 0.30% | P 0.40%

07:15     CHF        CPI Y/Y Apr C 0.90% | P 0.80%

08:10     EUR        Eurozone Retail PMI Apr P 50.1

08:30     EUR        Eurozone Sentix Investor Confidence May C 21 | P 19.6

 

Weekend News

USD:

Trump team’s trade mission to China lays bare yawning divide

Connecticut joins effort to overturn Electoral College which would make it the 11^th to adopt National popular vote interstate compact

FED’s Kaplan (non voter) US growth faces challenges in medium term

Kaplan: US debt is on an unsustainable path relative to GDP

Kaplan: Reiterates rate hike path will likely be flatter than in the past

USD/KRW:

1. Korea denies US pressure is behind denuclearization

OIL:

OPEC may not cope with return of Iranian sanctions BBG

Harry Hindsight

• EUR: A quiet Asian session saw the market ranging around the opening 1.1985 areas through to the London opening with the market testing a couple of times to the 1.1995 area before dropping through into the grey hour to push the lows around the 1.1980 and the London market stepping in to push the market through to the 1.1960 areas. Poor PMI numbers saw the market drifting through to the 1.1950 areas and then holding quietly through into the NYK session, NFP saw the market initially bounce to the highs before the market dropped off with USD pushing on the lower unemployment rate moving 0.20% over the month and better than expected the Euro dropped to the 1.1910 levels with further expectations for another rate rise limited by comments through the balance of the day and the Euro rising back to the 1.1960 for a quiet finish to the day.
• GBP: A quieter range for the Cable with the long weekend approaching, opening around the 1.3125 level the market moved to hold around the 1.3130 into the TKY session before dropping back to the 1.3115 areas for a short period and rising steadily through to the 1.3140 area to hold through to the grey hours before drifting into the London session more or less unchanged, London were steady sellers through the session and into early London morning saw the market testing the 1.3090 areas before starting a slow and steady recovery through to the NYK session to the 1.3120 areas, a knee jerk reaction to the NFP saw the market spike to above the 1.3150 levels before dropping off quickly as the balance of the numbers were weighed up testing the lows and dipping to the 1.3080 level, the market bounced off the level and pushed over through to the close in London to the opening levels again then dipping back as the flow disappeared before starting a slow rise through to the close testing the 1.3190 level again and finishing the day just off the high.
• JPY: A quiet session for USDJPY initially with the Asian market opening around the 109.20 areas dipping in early trading to the 109.10 level reversing and testing through the 109.20 level and then dipping for the second time through to the 109.00 areas to hold through too late in the Asian session before slowly rising through to the London market holding around the 109.10 levels again, the move through to the NYK session saw the market drifting through the 109.00 levels again and then quickly testing through to the lows around the 108.55 level on the release of the numbers, initial reaction was quickly reversed and the market saw weak stops on the move back to the opening levels and the run to London close saw the highs slightly increased into the 109.28 area before drifting through to the close finishing the day only just off the open.
• AUD: Opening quietly the RBA monetary policy statement while more or less unchanged saw the market rising through to the 0.7560 areas into the grey hour from the opening around the 0.7530 level, the move into the London session saw the market drifted through to early morning testing to the 0.7510 areas in slow trading and then ranged through to the NYK session around the 0.7520 levels, the move on the NFP was less exaggerated than the other pairs and the market tested lightly above the 0.7540 levels before dropping back quickly to test through towards the 0.7490 level, the rise back was a steady and the market after 3hrs and into the London close pushed through the opening levels and held quietly in the 0.7530-40 to the close.

Yesterday’s premiership results

AUD       RBA Monetary Policy Statement

CNY        Caixin PMI Services Apr A 52.9 | C 52.3 | P 52.3

EUR        Italy Services PMI Apr A 52.6 | C 53 | P 52.6

EUR        France Services PMI Apr (F) A 57.4 | C 57.4 | P 57.4

EUR        Germany Services PMI Apr (F) A 53 | C 54.1 | P 54.1

EUR        Eurozone Services PMI Apr (F) A 54.7 | C 55 | P 55

EUR        Eurozone Retail Sales M/M Mar A 0.10% | C 0.50% | P 0.10% | R 0.30%

USD       Change in Non-farm Payrolls Apr A 164K | C 194K | P 103K | R 135K

USD       Unemployment Rate Apr A 3.90% | C 4.00% | P 4.10%

USD       Average Hourly Earnings M/M Apr A 0.10% | C 0.20% | P 0.30%

CAD       Ivey PMIs Index Apr A 71.5 | C 60.2 | P 59.8

Stay lucky

Andy

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