Daily FX Market Commentary

Good morning,

LMAX Close

USDJPY 110.353 | EURUSD 1.18376 | AUDUSD 0.74723 | NZDUSD 0.68591 | USDCAD 1.28759 | USDCHF 1.0014 | GBPUSD 1.35067 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.18372 | 1.1816

USDJPY                 110.385 | 110.198

GBPUSD               1.35103 | 1.34837

USDCHF               1.00170 | 0.99996

AUDUSD              0.74777 | 0.74476

USDCAD               1.28772 | 1.28527

NZDUSD               0.68788 | 0.6851

EURCHF                1.18499 | 1.18263

EURGBP               0.87644 | 0.87539

EURJPY                 130.610 | 130.31

For today

• EUR: A quiet session overall with the market initially drifting lower into the Tokyo session and then basing on the 1.1815 level through the day, rising a little back to the 1.1835 area but never able to reach the opening levels again as market runs a little weak on the concerns over Italy, congestion to the downside around the 1.1800 levels and through, a push through the 1.1780 level will likely see stops appearing however, congestion is likely to continue through to the 1.1700 areas and stronger bids, topside offers light through to the 1.1900 areas with possibly light offers through to that level, before stronger offers on a move just above the level with a mix of weak stops appearing.
• GBP: Cable ranged around the 1.3500 level for the session testing back to the closing level around the 1.3510 areas and dipping to its low in mid-session to the 1.3485 area before returning to the 1.3500 as the drag of the Euro dominated trading, downside bids into the 1.3450 level reasonably strong with bids likely to extend through to the 1.3430 areas before weak stops are likely to appear, congestion likely to appear on any tests through the level, topside offers around the 1.3600 level and likely to extend to the 1.3620 area before weak stops appear, and a push through the market is likely to open a little with congestive offer starting to appear through to the 1.3650-1.3700 level.
• JPY: A very quiet session for the USDJPY with the market held in a 110.20-40 range through to the grey hour with the market unable to push through the opening levels and basing on that 110.20 level, Topside offers through the 110.50 level with offers likely to continue and increase on a move through to the 111.00 level weak stops on a test through the 111.20 areas the market is likely to be quiet decent and the weak stops are likely to grind only so far through that congestion, downside bids light back through the 110.00 levels however, weak stops on a dip through the level and opening the market for a move back into the lower 109 handle.
• AUD: Opening around the 0.7475 areas the market moved quietly through to late in the Asian session before dipping quickly back to the 0.7450 level after the release of the of the weaker wage price index, the market again recovered off the 0.7450 lows to move back to the opening levels again and hold through to the grey hour unchanged. Bids to the downside increase on any move through to the 0.7420 levels with those bids likely to continue through to the 0.7400 areas with weak stops likely to appear and congestive bids likely to continue through to the 0.7350 areas. Topside offers light through to the 0.7500 areas with some light congestive offers in the area and likely to continue through to the 0.7550 with a mix of weak stops on the way could see a small short squeeze through the level before stronger offers appear into the 76 cent level.

Overnight News

EUR:

Italy’s populists, right wingers want Italexit and ECB to cancel billions of debt

Draft League/Five star compact sought path to leave Euro, text dismissed by parties as old but ideas highlight potential shock to Europe

Italy’s populists say government talks entering final stretch

CNY:

China’s holdings of US treasuries increase to 5 months high

OIL:

API is said to report US crude stocks rose 4.85M BBL last week

NZD:

Whole milk powder average price falls to $3,226 a ton

USD:

Fed’s Williams says three to four hikes still warranted in 2018

GBP:

Menopausal UK economy risks once in a century slump, warns deputy chief of the BoE

MXN:

Mexico doesn’t see NAFTA talks wrapping up before deadline

JPY:

Japan 1Q GDP fell annualized 0.6% QoQ est -0.1%

KRW:

1. Korea says will never engage in economic trade with US in exchange for giving up its nuclear programme KCNA
2. Korea says Trump will remain as failed leader if he follows in the footsteps of previous US presidents KCNA
3. Korea disappointed with US provocative comments
4. Korea to reconsider summit if US only forces giving up Nuke

KCNA sites n. Korea foreign ministry deputy minister

Today’s data

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

JPY         GDP Q/Q Q1 (P) A -0.20% | C 0.00% | P 0.40% | R 0.10%

JPY         GDP Deflator Y/Y Q1 (P) A -0.20% | C 0.30% | P 0.10% | R 0.00%

AUD       Westpac Consumer Confidence May A -0.60% | P -0.60%

AUD       Wage Price Index Q/Q Q1 A 0.50% | C 0.60% | P 0.60% | R 0.50%

JPY         Industrial Production M/M Mar (F) A 1.40% | C 1.20% | P 1.20%

06:00     EUR        German CPI M/M Apr (F) C 0.00% | P 0.00%

06:00     EUR        German CPI Y/Y Apr (F) C 1.60% | P 1.60%

09:00     EUR        Eurozone CPI M/M Apr C 0.30% | P 1.00%

09:00     EUR        Eurozone CPI Y/Y Apr (F) C 1.20% | P 1.30%

09:00     EUR        Eurozone CPI Core Y/Y Apr (F) C 0.70% | P 0.70%

12:30     CAD       Manufacturing Sales M/M Mar C 1.00% | P 1.90%

12:30     USD       Housing Starts Apr C 1.33M | P 1.32M

12:30     USD       Building Permits Apr C 1.35M | P 1.35M

13:15     USD       Industrial Production M/M Apr C 0.60% | P 0.50%

13:15     USD       Capacity Utilization Apr C 78.40% | P 78.00%

14:30     USD       Crude Oil Inventories P -2.2M

22:45     NZD       PPI Input Q/Q Q1 C 0.30% | P 0.90%

22:45     NZD       PPI Output Q/Q Q1 C 0.20% | P 1.00%

23:50     JPY         Machine Orders M/M Mar C -2.80% | P 2.10%

Harry Hindsight

• EUR: The market held its levels through the Asian session having opened around the 1.1930 areas early limited pushes to the 1.1940 areas saw little ability to push through the level and the move towards the grey hour and the talk of the Italy’s new government forming had the market weakening, the move into the London session saw a recovery of sorts with mixed ZEW numbers but holding through to the NYK session above the 1.1910 level, the move into the NYK session saw the market dropping back quickly with mixed news with US numbers mixed but ok, the market dropped quickly back to the 1.1880 level holding briefly before dropping again and triggering weak stops through the level for a quick move to the 1.1850 level and then slipping steadily through to the 1.1815 areas before bouncing a little to push to the end of London around the 1.1870 areas, the bounce over and the London session out of the way the market drifted through to the close holding around the 1.1840 areas.
• GBP: A very similar pattern to the Euro however the end result was a little bit more resistant, opening around the 1.3560 areas the early move into the Tokyo session saw the market pushing above the 1.3570 level before drifting into the grey hour and testing through the 1.3550 level to hold the 1.3540 area to the London early morning, slight rise in Jobless claims saw the Cable dip to the 1.3525 level before rising back to above the 1.3550 level for the run to the NYK session, early NYK saw quick selling as the market followed the Euro lower testing quickly through the 1.3500 area to the 1.3490 level and then slowing and falling to the 1.3450 level before moving back higher, not so much a bounce but a reasonably strong move pushing back to the 1.3525 areas and then holding through to the close above the 1.3500 areas to the close.
• JPY: Given the movement through the day in the other currencies USDJPY was a little muted, the early part of the Asian session saw the market rising through to the 109.75 areas testing towards the 109.80 level on a several occasions but struggling until industry index hit and the USDJPY rose through to the grey hour pushing the 109.90 levels for the run into the London session, the market tested the 110.00 level for the first time and the market then traded around the 109.90 through to the NYK session, NYK opened and the market pushed quickly to the 110.10 levels holding for a short period before breaking through to the 110.25 areas with some strong buying on the move against the congestive offers, the market continued to grind through the offers and pushing to the 110.45 level before running out of steam and drifting back only a little for the move through to the close.
• AUD: As with the other currencies a light session through the early part of the Asian session, RBA comments from the May meeting saw very little reaction and the market topping out just above the 0.7535 areas and holding until the JPY late releases, index number weaker than expected saw the USDJPY moving higher and the result saw the Oz dip to its lows for the move into the grey hour holding around the 0.7510 areas and ranging to deep into the London session basing on that level, the move to NYK was a quiet affair and only once the early NYK traders moved in did the market dip quickly through the 75 cent level, the market bounced off the low but soon saw strong USD buying continuing and pushing the Oz back through to the 0.7450 level before regaining some composure and pushing back to the 0.7475 level to hold quietly through to the close.

Yesterday’s premiership results

AUD       RBA May Meeting Minutes

CNY        Retail Sales Y/Y Apr A 9.40% | C 10.00% | P 10.10%

CNY        Industrial Production Y/Y Apr A 7.00% | C 6.40% | P 6.00%

JPY         Tertiary Industry Index M/M Mar A -0.30% | C -0.20% | P 0.00% | R 0.10%

EUR        German GDP Q/Q Q1 (P) A 0.30% | C 0.40% | P 0.60%

CHF        Producer & Import Prices M/M Apr A 0.40% | C 0.30% | P -0.20%

CHF        Producer & Import Prices Y/Y Apr A 2.70% | C 3.00% | P 2.00%

GBP       Jobless Claims Change Apr A 31.2K | C 13.3K | R 11.6K | P 15.7K

GBP       Claimant Count Rate Apr A 2.50% | P 2.40%

GBP       Average Weekly Earnings 3M/Y Mar A 2.60% | C 2.60% | P 2.80%

GBP       ILO Unemployment Rate 3Mths Mar A 4.20% | C 4.20% | P 4.20%

EUR        Eurozone Industrial Production M/M Mar A 0.50% | C 0.70% | P -0.80% | R -0.90%

EUR        Eurozone GDP Q/Q Q1 (P) A 0.40% | C 0.40% | P 0.40%

EUR        German ZEW Economic Sentiment May A -8.2 | C -8.2 | R -8.2

EUR        German ZEW Current Situation May A 87.4 | C 85.2 | P 87.9

EUR        Eurozone ZEW Economic Sentiment May A 2.4 | C 2 | P 1.9

USD       Empire State Manufacturing May A 20.1 | C 15 | P 15.8

USD       Retail Sales Advance M/M Apr A 0.30% | C 0.30% | P 0.60%

USD       Retail Sales Ex Auto M/M Apr A 0.30% | C 0.50% | P 0.20%

USD       Business Inventories Mar A 0.00% | C 0.10% | P 0.60%

USD       NAHB Housing Market Index May A 70 | C 70 | P 69 | R 68

USD       Net Long-term TIC Flows Mar A 61.8B | P 49.0B

 

Any opinions, news, research, analyses, prices or other information contained on this Blog, whether by LMAX, its employees, partners or contributors, does not constitute investment advice nor has it been prepared in accordance with legal requirements designed to promote the independence of investment research. Further, the material contained within this Blog does not contain (and should not be construed as containing) investment advice or an investment recommendation, or an offer of, or solicitation for, a transaction in any financial instrument. Whilst information provided on this Blog may help with your investment research you must consider carefully whether you should make (or refrain from making) investment or other decisions based on what you see without doing further research on the investments you are interested in. Participating in this Blog cannot be a substitute for obtaining advice from an appropriate expert independent adviser who takes into account your circumstances and specific investment needs in selected investments that are appropriate for you. LMAX has not verified the accuracy or basis-in-fact of any claim or statement made by any third parties as comments for every Blog entry.

LMAX will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. No representation or warranty is given as to the accuracy or completeness of the above information. While the material produced in this Blog was obtained from sources deemed to be reliable, LMAX does not provide any guarantees about the reliability of such sources.

Consequently any person acting on it does so entirely at his or her own risk.

If you currently hold an account with LMAX for the purposes of trading FX and CFD’s, you are encouraged to use a different Username and Password to access the Blog or any other online systems. The Blog is a place to learn, discuss and share information and ideas with Blog followers. It is not a place to slander, use unacceptable language or to promote LMAX or any other FX, Spread Betting and CFD provider and any such postings, excessive or unjust comments and attacks will not be allowed and will be removed from the site immediately.