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Andy Harrison

Good morning,

For Today

• GBP: A slow rise from the opening around the 1.2725 area to lush through to the 1.2740 level into Tokyo, a quick rally around the Tokyo fix saw Cable test above the 1.2755 level before slowly drifting back to range around the 1.2720 level and test to the 1.2710 low late into the session towards the grey hour, light congestion to the topside on the move through to the 1.2750 area where offers are likely to be a little thicker and then stronger offer into the 1.2800 level with weak stops appearing and if Futures positioning has any bearing the possible of a short squeeze higher as stops are triggered however, there is a possibility of a more balanced market and limited potential above the 1.2800 area for movement in the short term. Downside bids creeping high with light bids
• JPY: A quiet opening with a steady drift from the Tokyo opening and the high of the day around the 108.50 level to test through into midsession holding just above the 107.90 level eventually making it back above the 108.00 level and trading quietly in the 108.05-15 area to the grey hour, Topside offers into the 108.80-109.00 level likely to be light however, the high the market goes the more resistance is likely to move in with strong offers above the 109.80 level and through the 110.20 area before stops appear, downside bids into the 107.80 level with limited light stops on a break through to the 107.50 level where stronger support starts to appear and continues through to the 107.00 level with the possibility of particularly strong bids into the figure before stops start to appear on the move through onto the 106 handle from 106.70 onwards.
• AUD: Early buying saw the market pushing higher through from the 0.7020 level before revaluations of property news started to hit and the market quickly dropped from the highs just above the 0.7040 level to initially push the opening area and then push through for a quick move to run along the 0.6990 area through to the grey hour with a reasonable range around the 0.7000 area to the grey hour. Topside offers likely to be light through the 0.7050 area and stiffen on any move through to the 0.7080-0.7100 area, once through the 0.7120 area the possibility of a small squeeze however, with the market drifting away from the area the possibility of a reverse h&s could appear and this would attract a stronger move into next week and once through 0.7150 the 72 cents level is very vulnerable. Downside bids light through to the 0.6880 area and weak stops appearing and limited support until 0.6820 however, any push through to the 0.6780 level is likely to see stronger stops appearing and the downside opening to a deeper move.
• EUR: A quiet session with the market just extending the range from yesterday rising in early Tokyo to the 1.1315 level and then dipping back to run along the 1.1285 area through to the grey hour, Some congestion through to the 1.1400-20 level with limited stops through the area of 1.1420 should see stronger offers then appearing and increasing from the 1.1440 area onwards particularly through the 1.1480 level with stops quickly appearing on a push through the 1.1500 level to open up further gains technically to the topside. Downside bids light through to the 1.1200 level and weak stops on any dip through those weak bids into that level however, stronger bids start to appear on any push for the 1.1150 level and likely to continue in size to the 1.1100 level.

Overnight News

AUD/CNY:
China’s investment in Australia falls to 13-year low amid spat – BBG
KRW:
N. Korea takes aim at South to raise status of Kim’s Sister – Strait Times
N. Korea to cut off Communication lines with South – KCNA
To Cut lines with South completely at noon today – KCNA
EUR:
ECB’s Lagarde defends proportionate bond buys against German challenge
ECB seeks to identify polluters in push for green finance system
AUD:
GPT devalues retail properties by 9% – AFR
Australian Job ads steady in May after record low
HKD:
Cathay Pacific, Swire Pacific, Air China suspend trading in Hong Kong – BBG

Harry Hindsight

• GBP: Opening a little higher around the 1.2675 area and then pushing steadily to the 1.2700 level for the Tokyo opening before rallying through to the Asian high early in Tokyo testing the 1.2730 level before drifting back to the 1.2700 level for a long drawn out range through to the London open, London were initially slow sellers pushing through early London to the 1.2680 level to range from there to the figure level before dipping through to the 1.2630 area with strong EURGBP off the 0.8900 area causing most of the movement however, with what looks like a single ticket item over with the Cable started to slowly rise and EURGBP started to dip again, and Cable returned to the 1.2700 level again holding for a short period before moving steadily higher through to the 1.2730 area for the move to the close.
• JPY: opening around the 109.60 level and just of the high for the day the market eased into the Tokyo session testing the 109.70 level before dipping into the Tokyo session to range around the 109.50 level through the balance of the session, with minor tests to the 109.40 area the move into the NYK session saw strong selling move through the market and the USDJPY testing through steadily to the London close pushing the 108.50 level and after a brief pause continuing to the 108.25 level for the low of the day, meagre return for the close in quiet evening trading.
• AUD: Early buying from the low opening around the 0.6960 area to push quickly through to the 0.6990 with no Sydney session, moving into the Tokyo session saw some limited buying through to the 70 cents level and the high for the Asian session with the market then slowly drifting back to the lows for the move into the London session, London repeated the move trading steadily from the lows to test above the 70 cents level again before dipping and ranging through to the NYK opening around the 0.6990 level, after some whippy trading the market moved steadily through the 70 cents level and this time continued to the 0.7030 levels before dipping a little for a close.
• EUR: A very quiet session really overall, opening higher from Fridays close the market continued to range around the 1.1300 level with a quick stab lower in an illiquid Sydney session to make early lows just through the 1.1290 level, snapping back to the figure then pushing through into the Tokyo session rising slowly through to the 1.1315 level for the high of the day before dipping slowly through to move through to the London session testing the lows again, London bought a little to again push the 1.1315 area however, the early EURGBP Buyer disappeared and the cross moved back through the 0.8900 level with ease and the Euro took the brunt of the movement testing through to the lows of the day holding the 1.1265 area for an hour or so before NYK moved in to reverse the move to take it steadily to the high and then rang around the refigure through to the close.

Yesterday’s Premiership Results
CNY Exports YoY (MAY) A -3.3% | C -7.0% | P 3.5$
CNY Imports YoY (MAY) A -16.7H% | C -9.7% | P -14.2%
CNY Trade Balance USD (MAY) A 62.93b | C 39.0b | P 45.33b
JPY Current Account n.s.a. (APR) A 0.263t | C 0.48t | P 1.971t
JPY GDP YoY (Q1) A -2.2% | C -2.1% | P -3.4%
JPY GDP QoQ (Q1) A -0.6% | C -0.5% | P -0.9%
EUR German Industrial Production MoM (APR) A -17.9% | C -16.0% | P -9.2% | R 0.3%
CAD Housing Starts (MAY) A 195.5k | C 150k | P 166.4k | R 166.5k

Best Regards
Andy

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