Daily FX Market Commentary

Andy Harrison

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 107.606 | EURUSD 1.09498 | AUDUSD 0.65659 | NZDUSD 0.61192 | USDCAD 1.39543 | USDCHF 0.97049 | GBPUSD 1.22222 |

 

LMAX Highs and Lows 0500 GMT

Highs | Lows

EURUSD               1.09533 | 1.09276

USDJPY                107.767 | 107.428

GBPUSD               1.22340 | 1.22058

USDCHF               0.97205 | 0.9705

AUDUSD              0.65702 | 0.65329

NZDUSD               0.61258 | 0.60975

USDCAD               1.40034 | 1.39427

EURCHF               1.06291 | 1.06276

EURGBP               0.89593 | 0.89516

EURJPY                117.970 | 117.427

 

For Today

 

  • GBP: Holding around the 1.2230 level through into the Tokyo session before starting a push lower to test through into the 1.2205 area the closer the market moved to the grey hour, Topside offers a little weaker with the bulk of congestion around the 1.2300 level and while there may be some weak stops congestion is likely to continue through to the 1.2350 level in some form with stronger offers then creeping in just above and increasing on any push to the 1.2400 level. Downside bids light through to the 1.2150 level with support beginning to build after the recent move higher, weakness through the 1.2150 level and then increasing on any move to the 1.2100 area. With possible strong stops just below.
  • JPY: Opening a little stronger around the 107.65 level the market ranged around the level deep into the morning session before pushing steadily through to the 107.75 area however, that is as far as it got and once the high had traded fell back steadily through to the 107.60 area holding for a couple of hours before starting a steady drift lower as safe haven buyers started to move into the market and USDJPY testing the 107.40 for the move into the grey hour, Downside bids through to the 106.80 level with limited weak stops on a move through the level to open a test of the 106.50 area again, a push through leads to stronger bids appearing from the 106.30 area and likely to continue through to the 105.90-80 area with stops appearing and the market vulnerable to a larger fall through to the 105.00 area before stronger bids appear. Topside offers through to the 107.70-108.00 level and some limited congestive offers appearing, a push through to the 108.20 area has limited effect with some weak stops likely to be absorbed through to the 108.40 level and stronger offers thereafter through to the 108.80-109.00 area.
  • AUD: Holding quietly through the early part of the session the Oz started to slip only into midmorning in Tokyo testing steadily from the highs just above the 0.6570 area through to the 0.6535 level for the move into the grey hour. downside bids likely to appear on any test of the 64 cents level and through to the 0.6380 level where limited weak stops are likely to appear and quickly be absorbed by the congestive bids around the 0.6350 area and through to stronger bids into 63 cents. Topside offers through the 0.6600 level again and likely extending to the 0.6620 and possibly weak stops appearing to open a move through to the 0.6640-60 sentimental area with increasing offers on a push through to the 0.6680 levels.
  • EUR: A quiet day overall with USD buying moving through late in the session and the Euro slipping off its highs and opening area around the 1.0950 level to slowly drift through to the 1.0925 area for the move into the grey hour, Topside offers increasing on any attempt to push the 1.0980 level through to 1.1020 area and possible option related stops appearing to see a quick move through to the 1.1050 area. Downside bids likely to be light through the 1.0900 level with weak stops quickly appearing and opening the market to a quick test of the 1.0850 level and limited congestion until closer to the 1.0800-1.0780 level and further stops.

 

 

Overnight News

 

USD:

Trump confirms withdrawal from open skies treaty – NS6

Fed may wait until fall for more rate guidance, Clarida says – BBG

Mnuchin says strong likelihood for more virus spending – BBG

JPY:

BoJ Keeps deposit rate at -0.1% 10yr yield around 0%

BoJ: Maintains short term interest rate target at 0.1%

BoJ: Keeps monetary policy steady

BoJ: Decides on details of new loan scheme aimed at boosting lending to small, mid-sized firms hit by coronavirus

BoJ: Will set aside 75trn Yen for new loan program to combat virus impact

BoJ: Will extend deadline of program until March 2021

BoJ: Won’t hesitate to ease further if needed

BoJ: Will conduct loans under new lending programme from June

BoJ: New Loan programme will target lending based on Govt. Interest rate, unsecured loan programmes

BoJ to watch virus impact, act more if needed

BoJ to extend virus programs by six months

BoJ lending program starts from next month

AUD:

Australia outlook to negative by Fitch – BBG

CNY/HKD/USD:

China’s Hong Kong crackdown could put Trump in an unwelcome spot

China set to impose new Hong Kong security law; Trump warns of strong US reaction – NPW

GBP/CNY:

PM Johnson seeks to end reliance on some China imports – Times

 

Today’s Data

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

NZD       Retail Sales QoQ Q1 A -0.7% | P 0.7%

GBP        GfK Consumer Confidence (MAY) A -34 | P -33

JPY         National Core CPI YoY (APR) A -0.2% | C -0.1% | P 0.4%

JPY         National CPI MoM A -0.2% | P 0.0%

JPY         BoJ Interest Rate Decision A -0.10% | P -0.10%

0600      GBP        Core Retail Sales MoM (APR) A | C -15.0% | P -3.7%

0600      GBP        Core Retail Sales YoY (APR) A | C -18.2% | P -4.1%

0600      GBP        Public Sector Net Borrowing A | C 35b | P 2.33b

0600      GBP        Retail Sales MoM (APR) A | C -16.0% | P -5.1%

0600      GBP        Retail Sales YoY (APR) A | C -22.2% | P -5.8%

1130      EUR       ECB Publishes Account of Monetary Policy Meeting

1230      CAD       Core Retail Sales MoM (MAR) A | C -5.0% | P -15.6%

1230      CAD       Retail Sales MoM (MAR) A | C -10.0% | P 0.3%

1700      USD       Baker Hughes total Oil Rig Count A | P 339

 

Harry Hindsight

  • GBP: A wide opening settled down to trade just below the 1.2240 level and once into the NYK session dropped back quickly to the 1.2210 level, slow drift through to midsession saw the market holding around the 1.2200 area through into the grey hour where it slipped through to test just through the 1.2190 level basing around the level for several hours before starting a steady push back to the opening levels and a choppy period making the highs in early NYK and dropping back from the 1.2250 level to test the 1.2210 several times through to the close around the 1.2220 area.
  • JPY: Rising through into the Tokyo session testing the 107.75 area before drifting through the bulk of the Asian session before seeing good buying moving in during the grey hour to make the highs into the newly opened London session pushing the 107.85 area a couple of times before dropping back for the move into the NYK session holding around the 107.65 area and for a long period used the level as a base however, as London left the market the USDJPY dipped through to the 107.60 areas and eventually tested back to the opening level around the 107.55 area for the run to the close.
  • AUD: A fairly limited day overall with the market opening on its highs around the 66 cents level before slowly drifting through into midsession in Tokyo testing the 0.6550 level which formed a base through into the London session, London was tight with very little direction until late in the morning with the market running to the NYK session pushing for the opening levels however, failing to move on and through the level it quickly tell back again to hold the 0.8560-70 level to the close.
  • EUR: Holding tightly around the 1.0980 level from the opening and into early Tokyo the market drifted from the level eventually through to the 1.0960 area and ranged through into the London session dipping to the 1.0955 area before finding some early buyers to take the market close to the opening level and force the range to the 1.0970 level area, the move through to the NYK session saw strong buying push through the weakened topside offers topping out just above the 1.1005 level before the gamma players moved in taking the market lower a little quicker than it rose testing initially to the 1.0970 area and then after a pause and the release of the US numbers dipping quickly through to the 1.0940 area for the day’s low and although it did attempt to recover was never that convincing and finishing around the 1.0950 level.

 

Yesterday’s Premiership Results

AUD       Manufacturing PMI A 42.8 | P 44.1

AUD       Services PMI A 25.5 | P 19.5

JPY         Exports YoY (APR) A -21.9% | C -22.7% | P -11.7%

JPY         Trade Balance (APR) A -930.4b | C -560.0b | P 5.4b

JPY         Services PMI (MAY) A 25.3 | P 21.5

JPY         Manufacturing PMI (MAY) A 38.4 | P 41.9

AUD       RBA Gov. Lowe speaks

EUR       French Manufacturing PMI (MAY) A 40.3 | C 36.1 | P 31.5

EUR       French Services PMI (MAY) A 29.4 | C 27.8 | P 10.2

EUR       German Manufacturing PMI (MAY) A 36.8 | C 39.2 | P 34.5

EUR       German Services PMI (MAY) A 31.4 | 26.6 | P 16.2

EUR       Eurozone Manufacturing PMI (MAY) A 39.5 | C 38 | P 33.4

EUR       Eurozone Services PMI (MAY) A 28.7 | C 25 | P 12

GBP        Manufacturing PMI (MAY) A 40.6 | P 32.6

GBP        Services PMI (MAY) A 27.8 | C 25 | P 13.4

GBP        CBI Industrial Trends Orders (MAY) A -62 | C -59 | P -56

USD       Continuing jobless claims A 25,073k | C 24,765k | P 22,833k | R 22,548k

USD       Initial Jobless Claims A 2438k | C 2400k | P 2981k | R 2687k

USD       Philadelphia Fed Manufacturing index A -43.1 | C -41.5 | P 56.6

USD       Manufacturing PMI (MAY) A 39.8 | C 38.0 | P 36.1

USD       Service  PMI (MAY) A 36.9 | C 30 | P 36.7

USD       Existing Home sales MoM (APR) A -17.8% | C -18.9% | P -8.5%

USD       Existing Home sales (APR) A 4.33m | C 4.30m | P 5.27m

USD       FOMC Member Williams Speaks

USD       US Leading Index MoM (APR) A -4.4% | C -5.5% | P -6.7% | R -7.4%

USD       FOMC Member Clarida Speaks

USD       Fed Chair Powell Speaks

USD       FOMC Member Brainard Speaks

 

Best Regards

Andy

 

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