Daily FX Market Commentary

Good morning,

LMAX Close

USDJPY 109.741 | EURUSD 1.18512 | AUDUSD 0.74597 | NZDUSD 0.69903 | USDCAD 1.28544 | USDCHF 1.00524 | GBPUSD 1.35461 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.18699 | 1.18429

USDJPY                 109.640 | 109.00

GBPUSD               1.35578 | 1.35229

USDCHF               1.00428 | 1.00128

AUDUSD              0.74527 | 0.74244

USDCAD               1.29684 | 1.29459

NZDUSD               0.69715 | 0.69534

EURCHF                1.18974 | 1.18828

EURGBP               0.87622 | 0.8750

EURJPY                 129.876 | 129.362

For today

• EUR: The Euro traded around the opening levels through to the Tokyo session before dipping a little as the Italian news again saw selling move in and the market slipping a little lower but with less conviction than before, the market recovered with some weak buying pushing the market to the 1.1870 areas before holding quietly in the 1.1860-70 level through to the grey hour, downside bids into the 1.1840 level have more or less held through the past few days and the market is likely to see plenty willing to buy off the level and through to the 1.1880 area, a push below the 1.1780 level could see strong stops appearing and the market opening to a deeper move with sentimental values the only protection to the downside for a good distance. Topside offers light through the 1.1900 areas with possible weak stops on a push through the 1.1920 level however, from there the market is likely to see some short term sellers entering the market around the 1.1950 areas with stronger offers not suspected until closer to the 1.1980 level.
• GBP: A tight range through into the Tokyo session eventually pushing out of the 10 pip 1.3545-55 range and pushing through to the 1.3570 level to then trade in a tight range around the 1.3565 areas to the grey hour, Topside offers into the 1.3600 areas with weak stops likely to be through the 1.3610-20 areas and the market then opening to stronger offers into the 1.3650 level however, the topside through that level does become vulnerable with weak offers into the 1.3700 area and through to the 1.3750-1.3800 level where stronger offers again protect a larger move. Downside bids through to the 1.3500 level with some congestion through the level and the key reversal area for the short term, a push through the level will see some congestion however, any move through to the 1.3400 level is likely not to be strongly congested.
• JPY: The move into the Tokyo session saw the one and only attempt towards the topside pushing lightly above the 109.90 areas and holding briefly, the market then slipped back quickly to the opening 109.75 levels before dipping to the 109.60 and holding around the 109.70 for the balance of the session, Topside offers into the 110.00 level however, those offers are probably weaker than this time yesterday with possibly option barriers the only thing holding the market against the yield buyers we’ve seen over the past few weeks, a push through the level will likely see a mix of stops and congestive offers through to the 110.50 level and stronger offers then beginning to appear from there to the 111.00. downside bids light through to the 109.00 level and then likely to be strongly congestive through to the 108.80-60 areas with possible weak stops on a dip through the level and without yield buyers open to a test quickly to the 108.00 areas.
• AUD: A quiet opening with the Oz supported for the most part buy AUDNZD buying through the early part having seen the RBNZ hold the interest rate, the move into the TKY session saw the market slowly pull away from the 0.7460 level to push slowly through to 0.7475 and range around the 0.7470 into the grey hour, New lows for the year yesterday sees possibly strong bids into the 74 cent area and the market still contending with congestion around each sentimental level through to the 73 cent, topside offers into the 0.7480 levels likely to be limited with congestion likely to continue through to the 75 cent area, a push through could see some weakness however, the market could possibly see further congestion and a lot of two way play to the 0.7550 areas.

Overnight News

ILS:

Israel’s Katz: Strikes today could prevent wars tomorrow YNET

CAD:

NAFTA negotiations are bogging down ahead of a major deadline

Sanders says no announcement on NAFTA, continue to push forward

Freeland: Canada is making its maximum effort to get NAFTA deal

NZD:

RBNZ: Direction of next move equally balanced, up or down

RBNZ: Growth, employment in NZ robust, near sustainable levels

RBNZ: Capacity constraints to see CPI gradually rise to 2%

RBNZ: OCR will remain at 1.75% for some time to come

RBNZ Now forecasts rates rising 3Q 2019 vs. 2Q

RBNZ sees inflation reaching 2% in 4Q vs. 3Q 2020

RBNZ: Expect OCR at expansionary level for considerable period

RBNZ Gov. Orr says easiest decision had to make in several years and can keep the rate where it is for considerable period of time

Orr: Decision was unanimous across MPC group

Orr: risks for rate cut are international growth faltering, or international financial conditions tightening

Orr: Inflation is a concern and that’s why we’re keeping monetary policy expansionary

Orr: There is an argument to cut rates, but also a case to raise rates, it’s a balancing act

NZ plans NZ$42B of capital investment in next 5 yrs. FinMin Robertson comments on pre-budget

GBP:

UK house price gauge drops to 5 ½ yr low as London slumps

OIL:

Funds bet on $150 oil as Trump blunders into Middle East battlefield by rejecting Iran deal UKT

JPY:

Japan Lifers buy most foreign debt for any April month since 2008

EUR:

Italy’s Pres. Give populists 24hours to seek coalition

Italy’s Berlusconi says open to Five star league government

Today’s data

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

NZD       RBNZ Official Cash Rate A 1.75% | C 1.75% | P 1.75%

GBP       RICS House Price Balance Apr A -8.00% | C -1.00% | P 0.00%

JPY         BoJ Summary of Opinions

JPY         Current Account (JPY) Mar A 1.77T | C 1.62T | P 1.02T | R 0.96T

CNY        CPI Y/Y Apr A 1.80% | C 1.90% | P 2.10%

CNY        PPI Y/Y Apr A 3.40% | C 3.40% | P 3.10%

08:00     EUR        ECB Monthly Economic Bulletin

08:30     GBP       Visible Trade Balance (GBP) Mar  C -11.4B | P -10.2B

08:30     GBP       Industrial Production M/M Mar C 0.20% | P 0.10%

08:30     GBP       Industrial Production Y/Y Mar C 3.10% | P 2.20%

08:30     GBP       Manufacturing Production M/M Mar C -0.20% | P -0.20%

08:30     GBP       Manufacturing Production Y/Y Mar C 2.90% | P 2.50%

08:30     GBP       Construction Output M/M Mar C -2.20% | P -1.60%

11:00     GBP       BoE Bank Rate C 0.50% | P 0.50%

11:00     GBP       BoE Asset Purchase Target May C 435B | P 435B

11:00     GBP       MPC Official Bank Rate Votes C 20—7 | P 207

11:00     GBP       MPC Asset Purchase Facility Votes C 00—9 | P 009

11:00     GBP       BoE Quarterly Inflation Report

11:00     GBP       NIESR GDP Estimate Apr P 0.20%

12:30     CAD       New Housing Price Index M/M Mar C 0.00% | P -0.20%

12:30     USD       CPI M/M Apr C 0.30% | P -0.10%

12:30     USD       CPI Y/Y Apr C 2.50% | P 2.40%

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

12:30     USD       CPI Core Y/Y Apr C 2.20% | P 2.10%

12:30     USD       Initial Jobless Claims (MAY 5) C 219K | P 211K

14:30     USD       Natural Gas Storage P 62B

18:00     USD       Monthly Budget Statement Apr C -5.0B | P -208.7B

22:30     NZD       Business NZ Manufacturing PMI Apr P 52.2

23:50     JPY         Japan Money Stock M2+CD Y/Y Apr C 3.20% | P 3.20%

Harry Hindsight

• EUR: opening around the 1.1860 levels the market struggled into the Tokyo session with talk of Italy going back to the polls seeming to upset the market, early trading pushed the market to the 1.1870 before the comments and the Euro then spend the next few hours pushing to the 1.1840 level before recovering a little for the move to the grey hours, early London were good sellers with the market dropping into the 1.1825 area to make the lows of the year, solid push off the lows saw the market rising through the London session and triggering weak stops on a move through the 1.1865 level, the market pushed through to the 1.1890 levels before the move into the NYK, NYKM extended the highs but only slightly pushing through towards the 1.1900 level before running out of steam and then the call back was a mirror image of the move up with weak longs cutting on a dip through the 1.1880 level to hit the 1.1850 level quickly before drifting through to the 1.1840 and finding its legs and holding around the 1.1850 area to the close.
• GBP: A wider range for the Cable but similar story through to the close, opening around the 1.3550 area and slowly slipping through to the grey hour testing the 1.3525 level, London sold the market on a test to the 1.3500 level before failing miserably and reversing back to the opening level by mid-morning, the move through to the NYK session was quiet and with Trump again at odds with the EU over the Iran deal Cable managed a decent push through in the NYK session to test lightly through the 1.3600 level making highs around the 1.3605 area before slowly drifting through to the close to finish the day around the opening level.
• JPY: USDJPY moved into the Tokyo session before the news that the Iran deal was off for the US and the USDJPY quickly rallied higher through from the 109.00 level to test the 109.70 areas and the old trend line, the market then held quietly through to the London session holding the 109.50- areas. London were slow buyers as they pushed through the level to extend the highs to the 109.80 level and the market continued to push through holding around the 109.70 levels with several pushes at the highs but a declining range to finish off the highs.
• AUD: The Oz initially suffered on the USDJPY rally with AUDJPY profit taking moving in and pushing the Oz leg lower through to the 0.7430 level and then holding quietly through to the London session ranging between the 0.7430-40 level, London sold the market on an attempt to test the 74 cents before finding the going a little tough and reversing steadily back to the opening levels, the move into the NYK session saw further light buying and the market pushing through the opening levels and testing eventually to the 0.7470 areas before ranging quietly again around the 0.7460 level to the close.

Yesterday’s premiership results

GBP       BRC Retail Sales Monitor Y/Y Apr A -4.20% | C -0.80% | P 1.40%

JPY         Labour Cash Earnings Y/Y Mar A 2.10% | C 1.00% | P 1.30% | R 1.00%

JPY         Leading Index CI Mar (P) A 105 | C 105.1 | P 106

CAD       Building Permits M/M Mar A 3.10% | C 2.00% | P -2.60% | R -2.80%

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

USD       PPI Y/Y Apr A 2.60% | C 2.80% | P 3.00%

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

USD       PPI Core Y/Y Apr A 2.30% | C 2.40% | P 2.70%

USD       Wholesale Inventories M/M Mar (F) A 0.30% | C 0.60% | P 0.50%

USD       Crude Oil Inventories A -2.2M | C -0.2M | P 6.2M

 

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