Daily FX Market Commentary

Good morning,

LMAX Close

USDJPY 109.23 | EURUSD 1.19094 | AUDUSD 0.7517 | NZDUSD 0.70172 | USDCAD 1.28819 | USDCHF 1.00274 | GBPUSD 1.35566 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.19390 | 1.19087

USDJPY                 109.139 | 108.851

GBPUSD               1.35777 | 1.35451

USDCHF               1.00372 | 1.00164

AUDUSD              0.75271 | 0.74914

USDCAD               1.29144 | 1.28764

NZDUSD               0.70277 | 0.70082

EURCHF                1.19597 | 1.19529

EURGBP               0.87957 | 0.87860

EURJPY                 130.127 | 129.825

For today

• EUR: A quiet start to the day saw the Euro eventually tick up once Tokyo moved in pushing to the 1.1940 level holding for a few hours around the 1.1935 before dropping quickly back to the 1.1915 areas ranging quietly between the 1.1915-25 for the bulk of the session before dipping to the 1.1910 areas, downside bids into the 1.1900 level and likely to continue through to the 1.1880 area before stops begin to appear and the market opens a little with some congestion through to the 1.1860 level and some stubborn bids likely through to the 1.1840 areas and then weakening bids opening up a larger fall, topside offers light through to the 1.2000 areas with some limited offers in the mid 1.1950 areas , any move to the 1.2000 is likely to see some stronger offers given the comments coming out over the past few weeks with stops likely through the level.
• GBP: Early buying saw the Cable running to the 1.3580 areas before dropping back to the opening levels as the news items bit into the gains, and the market tested back to the open around 1.3560 before eventually extending the losses to the 1.3545 areas before holding the level through to the grey hour, bids appear into the 1.3500 level with weak stops likely to be joined by breakout types some congestion is possible however, better bids are not likely to appear until the market approaches the 1.3430 areas with those bids likely to continue to the 1.3400 areas.
• JPY: Early trading into Tokyo saw the market post the highs before dropping back on the early news testing to the 108.90 and ranging around the 109.00 level deep into the session, the move towards the grey hour saw the market start to rise back through to the opening levels to hold the 109.10 level, Downside bids remain through to the 108.80 level and the recent buyer would seem to be still active, any move through to the 108.60 could be a signal that the bidder has left however, nothing is written in stone, a test through the level could see the market quickly dropping back to the 108.00 areas with some congestive bids just below however, the level is likely to be vulnerable with 107.50 the strongest point from there. Topside offers through the 109.35-60 areas congestive with stronger offers the closer the market moves to the 110.00 areas with strong offers likely to reappear into the 110.50 areas weak stops in between the two could surprise the market leaving that 110.50 very vulnerable.
• AUD: Early trading saw the market pushing through to the 0.7528 areas before holding quietly around the 0.7520 level, trade numbers with China before dropping back quickly to the 0.7490 levels, the market then held around the 75 cent areas for the balance of the session testing a little lower before pushing into the grey hour, downside bids through to the 0.7480 level and while there maybe stops in the area on a break of the level the 0..7450 is likely to show strong support and continue through to the 74 cent level before bids decrease to the point where stops could do further damage, topside offers through the 0.7550 area light with the market seeing stronger offers only on an approach to the 0.7600 areas and weak stops and the market opening only a little bit with decent offers likely to reappear on a push through to the 0.7640 areas.

Overnight News

EUR:

Five star won’t back Italy neutral Govt. calls for July vote

Jan Smets says ECB may announce phase-out of QE over summer WSJ

ECB’s Praet on reasons why the Euro area economy has slowed

Praet: Monetary policy will evolve in data dependent way

Praet: Euro area economic data point to some moderation

Praet: Euro area economic data consistent with solid expansion

Praet: Ample degree of monetary stimulus remains necessary

Praet: Limited signs that strong Euro is dampening exports

AUD:

Sydney, Melbourne head for house price tumble

GBP:

Tory Eurosceptics angered over fears that UK will never fully leave the EU

Consumer debt boom is bigger than Lawson bubble, Fitch warns Tel

Clouds linger as UK economy sours in April BBG

JPY:

BoJ to explain why it omitted inflation target timing Sankei

NZD:

NZ Inflation expectations fall before rate decision

CNY/AUD:

China’s April imports from Australia -3.1% YoY

Today’s data

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

CNY        Trade Balance (USD) Apr A 28.8B | C 27.5B | P -5.0B

CNY        Trade Balance (CNY) Apr A 183B | C 187B | P -30B

AUD       Retail Sales M/M Mar A 0.00% | C 0.20% | P 0.60%

NZD       RBNZ 2-Year Inflation Expectation Q2 A 2.00% | P 2.10%

05:45     CHF        Unemployment Rate Apr C 2.90% | P 2.90%

06:00     EUR        German Trade (EUR) Balance Mar C 19.9B | P 19.2B

06:00     EUR        German Industrial Production M/M Mar C 0.80% | P -1.60%

07:30     GBP       Halifax House Prices M/M Apr C -0.20% | P 1.50%

12:15     CAD       Housing Starts Apr C 218K | P 225K

23:01     GBP       BRC Retail Sales Monitor Y/Y Apr C -0.80% | P 1.40%

 

Harry Hindsight

• EUR: The market opened in line with Fridays close and moved quietly into the Asian session dipping through to the 1.1955 level before starting a slow and steady rise into the grey hours testing to above the 1.1975 level, the move into the grey hour saw the market dropping back as German factory orders dipped with 1.40% down from expectations and the Euro continued falling into early London with only limited liquidity in the market, the market eventually found some support around the 1.1930 level for the run into late morning before breaking again and pushing through to threaten the 1.1900 level and NYK rising a little through the NYK session with the market eventually pushing to the 1.1930 areas and holding quietly through to the close. Concern about the missing inflation seems to mystify some however, with the exception of Germany there is no shortage of labour available with Eurozone employment only mildly short of 10% so unlike the US and UK those wage pressures are not apparent so deflation remains a constant worry.
• GBP: Opening in line with Friday the market moved into the Tokyo session rising steadily through to the 1.3565 area before drifting through the balance of the day to the NYK opening, London saw the market pushing back to the opening levels and basing on the 1.3530 level and the early Asian low through to the NYK opening before dipping back into the 1.3515 areas, the market bounced off the level and tested quickly back to the 1.3550 areas after a short period the market again pushed through to make new highs as the consequences of the German numbers tilted the markets a little, having tested the 1.3575 areas the market drifted from the level into the close around 1.3560.
• JPY: Opening unchanged the market made early gains into Tokyo and testing to the 109.20 level before falling quickly lower and testing the 109.00 level and eventually break through to test to the lows of the day, the market pushed lightly through the 108.80 levels and failed to trigger any meaningful stops before bouncing back to the 108.90 level and pushing slowly through to the 109.00 areas, eventually pushing through the level some weak shorts were triggered and the market then pushed through into the London session testing to the 109.30’s before holding steady through into the NYK session pushing lightly through the level to the 109.40 areas and slowly drifting through the NYK session back to the opening levels.
• AUD: Early highs from the opening saw the market drift off from the 0.7540 level to test to the 0.7520 area before recovering and pushing back to the highs for the move into the grey hour, the market dropped quickly as early London moved in and the market tested the lows triggering some light stops and the market then drifted to the 0.7510 level and basing along the line through to the NYK session and the market renewing the test lower and through the figure level to hold the 0.7490 level, the market slowly rallied through the session testing back to the 0.7530 area before sagging to the close.

Yesterday’s premiership results

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

EUR        German Factory Orders M/M Mar A -0.90% | C 0.50% | P 0.30%

CHF        Foreign Currency Reserves (CHF) Apr A 757B | P 738B

CHF        CPI M/M Apr A 0.20% | C 0.30% | P 0.40%

CHF        CPI Y/Y Apr A 0.80% | C 0.90% | P 0.80%

EUR        Eurozone Retail PMI Apr A 48.6 | P 50.1

EUR        Eurozone Sentix Investor Confidence May A 19.2 | C 21 | P 19.6

 

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