Daily FX Market Commentary

Good Morning,

LMAX Close

USDJPY 109.752 | EURUSD 1.12151 | AUDUSD 0.69887 | NZDUSD 0.65944 | USDCAD 1.34762 | USDCHF 1.01504 | GBPUSD 1.3007 |

LMAX highs and Lows 05.00 GMT

                                Highs | Lows

EURUSD               1.12348 | 1.12177

USDJPY                 110.050 | 109.627

GBPUSD               1.30202 | 1.29998

USDCHF               1.01583 | 1.01392

AUDUSD              0.70184 | 0.69781

USDCAD               1.34767 | 1.34366

NZDUSD               0.66143 | 0.65837

EURCHF                1.14093 | 1.13844

EURGBP               0.86349 | 0.86217

EURJPY                 123.616 | 1.23045

For Today

  • GBP: While volumes have been reasonable the movement in Cable has been very limited with the market ranging around the 1.3010 areas with early pushes towards the 1.3020 level and quickly dipping on early news from the US-China pushing towards the 1.3005 area before recovering and moving again to lightly test the 1.3020 level before resetting to the opening level for the move into the grey hour, Topside offers light through to the 1.3080-1.3100 level with some token offers building again in the area, with weak stops light through the 1.3100 level and limited offers until closer to the 1.3150 areas and building increasingly through to the 1.3200 area, downside bids cleared through to the 1.2950 areas with stronger stubborn bids in the area and congestion likely to continue through to the stronger 1.2900 areas and strong stops possible on a dip through to the 1.2880 level opening a deep move.
  • JPY: Opening around the 109.70 level the market made steady inroads to the topside through the early part of the sessio0n rising to push through the 110.00 level before dropping back quickly as the USD weakened to hold the opening levels around the 109.70 level through to the grey hour, downside bids likely to be strong with increasing congestion through the level and continuing into the 109.00 area with weak stops through the level likely to run into congestive bids through the 108.50 levels, a push to the 108.00 level is likely to be a struggle however, any push through the level is likely to see stronger stops appearing and the market pushing for the 107.50 area quickly with potential for a stronger move lower, topside offers weak through to the 111.00 area where stronger bids start to appear with congestion through the level likely to be tested by weak stops with stronger offers then appearing on any test above the 111.50 level and into the 112.20 level.
  • AUD: AUDJPY buying with a choppy session considering the poor report from the RBA with key expectations eventually catching up with the push from the lows in the 0.6980 level to test towards the 0.7020 level before reversing and drifting back to the opening levels with quick 10 pip moves throughout the session, Downside bids into the 0.6950 level likely to be congestive in nature with the market likely to be fairly stubborn through to the 0.6920-00 with strong bids reappearing, topside offers likely to be weak through to the 71 cents level with those offers likely to continue through to the 0.7120 level before weak stops appear and the market is free to push again towards the 72 cents levels.
  • EUR: Very quiet for the Euro moving off the late lows for the push through to the 1.1230 areas with a minor tick higher before holding around the level through to the grey hour, downside bids light through to the 1.1150 area where congestion increases through to the stronger supportive 1.1120-1.1080 with stops likely through the level and possibly stronger chance of a larger move, topside offer congested through the 1.1250 areas with those offers likely to increase through to the 1.1280 level and continuing through to the 1.1320 area before weakness appears for a short run into the 1.1350 areas.

 

Overnight News

USD/CNY:

US-China trade talks will continue Friday morning -paper editor – RTRS

Chinese VP told US Trade there is nothing more he can do, he told them now its up to Pres. Trump and Pres. Xi – TWT

Any US-China trade deal could be broken – Global times

US to go ahead with planned China tariff increase at 1201am

Tariff increase to go ahead as planned, – People familiar

CNY/USD:

China fed up with complaints from US about belt and road – NS6

China considers next volley in trade fight – WSJ

US raises tariffs on about 200B of Chinese goods to 25% China says it’s forced to retaliate

China says Hopes can find solution via cooperation dialogue

USD:

Automakers expect white house to delay decision on auto tariffs – Automotive news

US to vet more trading partners for currency manipulation

NZD:

RBNZ needs 3% economic growth to meet its targets, Bascand says – BBG

Bascand: Watching data, budget to assess if 2nd rate cut needed – BBG

Westpac no longer expects RBNZ to cut cash rate to 1.25% – BBG

GBP:

May plans new indicative votes as she’s warned she could end up with an Auf Wiedersehen Pet Brexit no one wants – Telegraph

AUD:

The coming of Aussie quantitative easing – AFR

RBA cuts GDP forecast for year through June 19 to 1.75% vs. 2.5%

RBA: Core CPI to remain low in coming Qtrs due to housing items

RBA: Focused on economic implications of low CPI at May meeting

RBA: Cuts 2Q19 dwelling interest forecast to -6% from -1.7% YoY

RBA; Cuts 2Q19 household consumption forecast to 1.6% from 2.2% YOY

RBA: Cuts core CPI forecast for year through 2020 to 2% vs. 2.25%

RBA: Lower jobless rate achievable while also meeting CPI goal

RBA: Housing slump contributing to weakness in CPI consumption

RBA: Quarterly statement – Board judged lower jobless rate “Achievable” given subdued inflation

RBA: Board will be paying close attention to labour market at upcoming meetings

RBA: Cuts GDP forecast for Jun 2019 by 0.75PPT to 1.75% Dec 2019 seen 2.75% Dec 2020 at 2.75%

RBA: Trimmed mean inflation 1.5% mean inflation 1.5% June 19, 1.75% Dec 19, 2% Dec 20 and Jun21

RBA: Forecasts made on technical assumption rates follow market pricing of two cuts to 1%

RBA: Near term indicators of labour demand have softened since the Feb statement

RBA: Partial indicators point to moderate GDP growth for the Mar Quarter

RBA: Domestic price pressure more subdued than previously thought

RBA: Weakness in housing market dragging on inflation, rent inflation lowest since 1993

RBA: Inflation constrained by government efforts on cost of living, a key uncertainty to outlook

RBA: RBA: Near term outlook for consumption growth has been revised lower

RBA: Strong growth in tax payments has dragged on household incomes

RBA: AUD at low end of range, low bond yields offsetting upward pressure from higher commodity prices

RBA: Outlook for export growth and terms of trade revised upward

RBA: Bank funding costs have eased, but not flowed through to variable mortgage rates

RBA: Some signs growth has picked up in China

RBA: Trade tensions remain downside risk to global outlook

 

 

Today’s Data

Actual – A | Consensus – C | Previous – P | Revised R | all timings GMT/UTC

JPY         Overall Household Spending YoY Mar A 2.10% | C 1.60% | P 1.70%

JPY         Labour Cash Earnings YoY Mar A -1.90% | C -0.50% | P -0.80% | R -0.70%

JPY         BoJ Summary of Opinions

AUD       RBA Statement on Monetary Policy May

0600       EUR        German Trade Balance (EUR) Mar C 19.4B | P 18.7B

0830       GBP        GDP MoM Mar C 0.00% | P 0.20%

0830       GBP        GDP QoQ Q1 (P) C 0.50% | P 0.20%

0830       GBP        Total Business Investment QoQ Q1 (P) C -0.70% | P -0.90%

0830       GBP        Industrial Production MoM Mar C 0.10% | P 0.60%

0830       GBP        Industrial Production YoY Mar C 0.40% | P 0.10%

0830       GBP        Manufacturing Production MoM Mar C 0.00% | P 0.90%

0830       GBP       Manufacturing Production YoY Mar C 1.10% | P 0.60%

0830       GBP        Construction Output MoM Mar C -0.90% | P 0.40%

0830       GBP       Visible Trade Balance (GBP) Mar C -13.7B | P -14.1B

0830       GBP       Index of Services 3M/3M Mar C 0.40% | 0.40%

1230       CAD       Building Permits MoM Mar C 2.30% | P -5.70%

1230       CAD       Net Change in Employment Apr C 15.0K | P -7.2K

1230       CAD       Unemployment Rate Apr C 5.80% | P 5.80%

1230       USD       CPI MoM Apr C 0.40% | P 0.40%

1230      USD       CPI YoY Apr C 2.10% | P 1.90%

1230       USD       CPI Core MoM Apr C 0.20% | P 0.10%

1230       USD       CPI Core YoY Apr C 2.10% | P 2.00%

 

 

 

Harry Hindsight

 

  • GBP: Slightly bumpy start however, the market lifted off the 1.3000 area and pushed steadily into the Tokyo session towards the 1.3015 areas and held through into midsession before drifting back to the opening 1.3005 area, a long stale run through to late in the session before starting a steady rise into the grey hour and a test to the 1.3025 level before early London came in selling and the market pushed through to the 1.3010 levels and the impact of commentary from an EU senior member seemed mock PM May, a strong dip back to the 1.2980 level before bouncing and then ranging in a wide range testing eventually lightly through the 1.2970 level before strong NYK buying pushed the market back to the opening levels and a quiet run to the London close before NYK took the Cable through to the 1.3036 area for the highs of the day holding for a short period before slowly drifting off to the opening areas for the end of the session.
  • JPY: A steady drift for the most part with the market opening around the 110.10 area moving into the Tokyo session dipping from the figure level through to the 109.80’s before holding through into the grey hour around the 110.90 area, London were quick sellers taking the market down to the 109.60 level bouncing the first time back to the 109.90 level before steadily drifting through to the NYK session and fresh impetus appeared to test the 109.50 level holding the level through to the end of London and quickly moving off those lows to push the 109.90 area again, failing the level again the market drifted through to hold the 109.70 area to the close.
  • AUD: A slow rise through to the 0.6995 for the move through into the Tokyo session before selling in AUDJPY took the market lower with margins squeezed after a poor day in the equity market, the Oz dipped through to the 0.6970 levels ranging weakly just above the level deep through the day never quiet able to push through the 0.6980 levels with any conviction until London finished for the day pushing quickly through to the opening levels and set the highs just short of the 70 cents levels for the move to the close almost unchanged.
  • EUR: A quiet move through to the London session with the market ranging around the 1.1190 level and finally pushing through the 1.1200 level in the grey hour but with not enough impetus to fully push through, London were quick sellers taking the market into the mid 1.1170’s before recovering back above the 1.1190 level and holding through into the NYK session rising quickly on limited sentiment through to the 1.1250 level dropping back after the initial run to settle around the 1.1220 level and stops cleared on the topside, and finishing the day around the 1.1215 levels.

 

Yesterday’s Premiership results

GBP       RICS House Price Balance Apr A -23.00% | C -22.00% | P -24.00% | R -23.00%

CNY        CPI YoY Apr A 2.50% | C 2.50% | P 2.30%

CNY        PPI YoY Apr A 0.90% | C 0.60% | P 0.40%

JPY         Consumer Confidence Index Apr A 40.4 | C 40.3 | P 40.5

CAD       New Housing Price Index MoM Mar A 0.00% | C 0.00% | P 0.00%

CAD       International Merchandise Trade (CAD) Mar A 3.21B | C -2.45B | P -2.90% | P -3.42B

USD       PPI MoM Apr A 0.20% | C 0.20% | P 0.60%

USD       PPI YoY APR A 2.20% | C 2.30% | P 2.20%

USD        PPI Core MoM Apr A 0.10% | C 0.20% | P 0.30%

USD       PPI Core YoY Apr A 2.40% | C 2.50% | P 2.40%

USD       Trade Balance (USD) Mar A -50.0B | C -51.4B | P -49.4B | R -49.3B

USD       Initial Jobless Claims (May 4) A 228K | C 220K | P 230K

USD       Wholesale inventories MoM Mar (F) A -0.10% | C 0.00% | P 0.00%

USD       Natural Gas Storage A 85B | C 88B | P 123B

 

 

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