Daily FX Market Commentary

Good Morning,

LMAX Close

USDJPY 109.607 | EURUSD 1.12042 | AUDUSD 0.69442| NZDUSD 0.65725 | USDCAD 1.34638 | USDCHF 1.00874 | GBPUSD 1.29048 |

LMAX highs and Lows 05.00 GMT

                                Highs | Lows

EURUSD               1.12088 | 1.12008

USDJPY                 109.689 | 109.525

GBPUSD               1.29137 | 1.29047

USDCHF               1.00883 | 1.00791

AUDUSD              0.69448 | 0.69222

USDCAD               1.34727 | 1.3456

NZDUSD               0.65778 | 0.65631

EURCHF                1.13054 | 1.12925

EURGBP               0.86827 | 0.86768

EURJPY                 122.937 | 122.687

For Today

  • GBP: A very quiet session with the market holding around the 1.2910 areas with minor pushes towards the 1.2900 areas but unable to really test the figure level or push much beyond the 1.2915 level through to the grey hour, downside bids congestive through to the 1.2900 areas where the bids are likely to be a little thicker on the move through to the 1.2860 before weak stops appear and the potential for a deeper move with technical support and sentimental bids appear, topside offers light through to the 1.3000 level and congestive all the way through to the 1.3100 areas with stronger congestion likely through to weak stops above the 1.3120-30 areas but congestion likely to continue through the 1.31 handle into stronger offers above 1.3180.
  • JPY: Limited movement with the market slowly rising through towards the 109.70 level before dropping quickly back after CNY numbers in Tokyo to the low 109.50’s before steadily moving back to the opening areas around the 109.60 areas and ranging quietly in a long run to the grey hour, Downside bids strong into the 109.00 levels with possible stronger stops on a move through the 108.80 areas with stronger bids through into the 108.50 level and increasing congestion through the downside through to the 108.00 level and the lows from the beginning of the year, topside offers light through to the 110.00 levels with weak stops pushing through the 110.20 areas and opening the possibility of a small squeeze through to the 111.00 areas where stronger offers reappear.
  • AUD: A quiet opening and move into the Tokyo session before the release of the CNY numbers with a dip in numbers sending the market through to the 0.6925 areas eventually, but the fall back was led by AUD numbers which were just as weak as the Chinese numbers and although only a steady selloff initially dropped quickly to the lows, the market saw limited recovery testing towards the 0.6940 level before dipping back to its lows for the day and holding quietly through to the grey hour holding the 0.6930 level. downside congestion mostly around the sentimental levels with possible stronger bids concentrated around the 69 cents level before opening the chance of testing to the 0.6800 area and the lows from early this year and the area that the market rose from in 2016. Topside offers likely to be weak through to the 70 cents level with some congestion and stops through the 0.7020 level and opening the market to stronger congestion on a move to the 0.7050 areas and continuing into a crowded 0.7050-0.7100 areas.
  • EUR: Very quiet session for the Euro with the pair pinned below the 1.1210 areas and unable to really test the 1.1200 area through the session and moving into the grey hour holding in that tight range. congestion through the current levels increasing into the 1.1280 areas with stronger offers through the 1.1300-20 level with weak stops likely to be through the level any stops are likely to find congestion continuing through the 1.1340-6t0 areas and continuing through to the stronger 1.1400 areas, downside bids likely to be limited through to the 1.1200 areas with weak congestion likely through to the 1.1150 area and opening a renewed test to the 1.1120 level with stronger bids in the area, any push through to the 1.1080 level is possibly opening the market to a deeper move.

 

Overnight News

CNY/USD:

China vows people’s war as trade fight takes nationalist turn

China doesn’t want to fight but it is not afraid to fight – Trvioum

China scrapped 30% of draft trade deal sources said – Nikkei

Pages went from 150 to 105 after Chinese leadership objected to unequal treaty – Nikkei

USD/CNY:

Why the US-China trade war could be long and painful – NYT

Is Trump’s war with China a civilizational conflict – Project Syndicate

US and China headed for heated trade battle in June – Nikkei

CNY:

China’s economy lost momentum even ahead of Trump’s new tariffs

USD:

Trump believes China tariffs will help him win re-election – WPT

Trump’s Iran escalation poses a threat for Germany – Der Spiegel

Kansas city Fed Pres. Esther George: Opposes cutting interest rates in an effort to raise inflation – BBG

George: Cutting rates could lead to bubbles, recession

John Williams Pres. New York FED: Tariffs starting to push up inflation, will have greater impact – BBG

Robert Kaplan, Pres. Dallas FED, Tariffs are sand in the gears for companies involved in global trade – BBG

Eric Rosengren, Pres. Boston FED: If current trade standoff with China lasts only for a few weeks its not going to have much impact at all – BBG

Rosengren: However, if it starts to be a situation where we expect tariffs to be high for a long period of time, it does start to disrupt trade patterns, that isn’t cost less – BBG

EUR:

Italy’s incurable economy: The country’s economy is growing less than the rest of the bloc’s but the ruling league and 5Stars don’t seem to mind – Politico

Irresponsible to speak of breaking EU fiscal rules – BBG

Italy’s Borghi: Nationalist alliance aims for less Europe – BBG

Deputy premier Di Maio: Tax evasion fight, spending review must be priorities

Di Maio: Criticises comments widening spread after Salvini spoke – BBG

Dep Pm Salvini reiterates that ready to break EU fiscal rules in necessary to get growth on track- Trade the news

Salvini: Govt. ready to exceed 3% budget deficit limit or allow debt to surplus 130-140% if necessary to spur jobs

CNY/HKD:

Hong Kong sounds the alarm on Chinese capital flight – Telegraph

GBP:

May will bring Brexit deal back to parliament at start of June (again) – BBG

OIL:

API is said to report US crude stocks rose 8.63M BBL last week – BBG

 

Today’s Data

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

JPY         Japan Money Stock M2+CD Y/Y Apr A 2.60% | C 2.30% | P 2.40%

AUD       Westpac Consumer Confidence May A 0.60% | P 1.90%

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

CNY        Fixed Assets Ex Rural YTD Y/Y Apr A 6.10% | C 6.40% | P 6.30%

CNY        Industrial Production Y/Y Apr A 5.40% | C 6.50% | P 8.50%

CNY        Retail Sales Y/Y Apr A 7.20% | C 8.60% | P 8.70%

CNY        Surveyed Jobless Rate Apr A 5.00% | P 5.20%

06:00     JPY         Machine Tool Orders Y/Y Q1 Apr (P) P -28.50%

06:00     EUR        German GDP Q/Q Q1 (P) C 0.40% | P 0.00%

09:00     EUR        Eurozone Employment Q/Q Q1 (P) C 0.20% | P 0.30%

09:00     EUR        Eurozone GDP Q/Q Q1 (P) C 0.40% | P 0.40%

12:30     CAD       CPI M/M Apr C 0.40% | P 0.70%

12:30     CAD       CPI Y/Y Apr C 2.00% | P 1.90%

12:30     CAD       CPI Core – Common Y/Y Apr C 1.80% | P 1.80%

12:30     CAD       CPI Core – Median Y/Y Apr C 2.00% | P 2.00%

12:30     CAD       CPI Core – Trim Y/Y Apr C 2.10% | P 2.10%

12:30     USD       Empire State Manufacturing May C 8 | P 10.1

12:30     USD       Retail Sales Advance M/M Apr C 0.20% | P 1.60%

12:30     USD       Retail Sales Ex Auto M/M Apr C 0.70% | P 1.20%

13:15     USD       Industrial Production M/M Apr C 0.00% | P -0.10%

13:15     USD       Capacity Utilization Apr C 78.70% | P 78.80%

14:00     USD       NAHB Housing Market Index May C 64 | P 63

14:00     USD       Business Inventories Mar C 0.00% | P 0.30%

14:30     USD       Crude Oil Inventories P -4.0M

 

Harry Hindsight

 

  • GBP: Early buyers quickly disappeared on the move into the Tokyo session, the market moving off the lows just above the 1.2940 level and trading through to the 1.2970 level for the high of the day before drifting lower through the session into the grey hour, the market quickly dipped on early selling to test through into the 1.2925 area into the London opening and then starting a slow a slow rise back to the opening levels for the move into the NYK session, with some strong selling moving in and gradually testing through to the 1.2905 areas and basing along that line through to the close.
  • JPY: USDJPY drifted from a lower opening around the 109.25 level into the Tokyo session probing towards the 109.15 areas before finally waking up and pushing quickly through to the 109.60 level, the market struggled with the level for a couple of hours before pushing through to the 109.70 areas fir the first time, dipping back to the 109.50 area, early buyers took the market quickly through to the highs of the day just short of the 109.80 level and ranged through to the NYK session holding around the 109.70 levels before dipping into the opening to test through into the 109.40’s, the market steadily recovered with the market slowly pushing into the 109.60-70 areas through to the close.
  • AUD: A limited day for the Oz with the market moving from the opening 0.6940 areas and trading into the Tokyo session testing through towards the 0.6960 area and ranging around the 0.6955 levels through to the London session, London were light sellers dropping through to the 0.6940 level ranging around the 0.6945 areas through to the close.
  • EUR: Dipping on the opening the market recovered from the 1.1220 areas and pushing slowly through to the mid 1.1235 levels and holding quietly around the level for several hours before pushing through to the 1.1240 area and then ranging through to the NYK session holding the 1.1230-40 level, dropping quickly as USD buyers moved in and the market dipping back to the 1.1210 area testing towards the 1.1200 level and holding quietly in the area through to the close.

 

Yesterday’s Premiership results

JPY         Current Account (JPY) Mar (P) A 1.27T | C 1.71T | P 1.96T | R 1.90T

AUD       NAB Business Conditions Apr A 3 | C 4 | P 7

AUD       NAB Business Confidence Apr A 0 | C 1 | P 0 | R -1

JPY         Eco Watchers Survey Current Apr A 45.3 | C 45.8 | P 44.8

EUR        German CPI M/M Apr (F) A 1.00% | C 1.00% | P 1.00%

EUR        German CPI Y/Y Apr (F) A 2.00% | C 2.00% | P 2.00%

CHF        Producer & Import Prices M/M Apr A 0.00% | C 0.20% | P 0.30%

CHF        Producer & Import Prices Y/Y Apr A -0.60% | C -0.40% | P -0.20%

GBP       Jobless Claims Change Apr A 24.7K | C 24.2K | P 28.3K

GBP       Average Weekly Earnings 3M/Y Mar A 3.20% | C 3.40% | P 3.50%

GBP       Weekly Earnings ex Bonus 3M/Y Mar A 3.30% | C 3.30% | P 3.40%

GBP       ILO Unemployment Rate 3Mths Mar A 3.80% | C 3.90% | P 3.90%

EUR        Eurozone Industrial Production M/M Mar A -0.30% | C -0.30% | P -0.20%

EUR        Eurozone Industrial Production w.d.a. Y/Y Mar A -0.60% | C -0.80% | P -0.30%

EUR        German ZEW Economic Sentiment May A -2.1 | C 5 | P 3.1

EUR        German ZEW Current Situation May A 8.2 | C 6 | P 5.5

EUR        Eurozone ZEW Economic Sentiment May A -1.6 | C 5 | P 4.5

USD       Import Price Index M/M Apr A 0.20% | C 0.70% | P 0.60%

 

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