WWM - Analytics

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    US FX Market Open –FRIDAY, MAY 13, 2016: Waiting for U.S. Sales Data

     

    Overnight Events

    • USD/JPY _0.17%, EUR/USD -0.28%, GBP/USD -0.33%
    • DXY 0.18%, DAX -0.25%, Brent -1.5%, Iron -5.2%
    • DE Flash Q1 GDP 0.7% q/q vs 0.3% prev, 0.6% exp
    • DE Flash Q1 GDP 1.3% y/y vs 2.1% prev, 1.5% exp
    • DE Final Apr HICP -0.3% y/y vs -0.3% prev, -0.3% exp
    • DE Final Apr CPI -0.1% y/y vs -0.1% prev, -0.1% exp
    • UK Mar Construction Output -4.5% y/y vs -0.4% prev, -2.7% exp
    • EZ Flash Q1 GDP 0.5% q/q vs 0.3% prev, 0.6% exp
    • EZ Flash Q1 GDP 1.5% y/y vs 1.6% prev, 1.6% exp
    • Lagarde-BREXIT to hit UK econ very bad to very very bad-Rtrs
    • EU referendum biggest risk to UK economy-IMF
    • Riksbank Skingsley-don’t want SEK to appreciate too quickly- Rtrs
    • BoJ Gov Kuroda says little new at Jiji News event
    • Kuroda-won’t hesitate to ease more if needed
    • Kuroda- economic risks tilted towards downside – Rtrs
    • Jpn E.Min Ishihara – Abenomics hasn’t failed, wages up 3 straight yrs
    • Chilly Auckland officially the hottest place for luxury homes - Telegraph

    Currency Summaries

    EUR/USD  
    • Europe's opening gambit sees EUR/USD 1.1329 force out some longs
    • 1.1350-1.1450 a popular and profitable range play this week
    • EZ GDP cools to 1.5% yy in Q1 from 1.6%
    • Option vols suppressed, price EUR/USD moves today at just 48 pips
    • Unless US data shocks EUR 763 mln 1.1350 expiries a likely anchor
    • New range within Apr 28 low 1.1298 & May 5 1.1494 high looks likely

    USD/JPY
    • USD/JPY propped up by 108.50 bids
    • USD/JPY falls from 109.13 to 108.52, sales in EUR/JPY weigh
    • Large NY cut expiry worth 1.1B @108.18; another 405M @108.20
    • Large expiries between 108.18/108.20 could attract in early NY trading
    • On the topside, Japanese exporter offers up to 109.50
    • There have been multiple failures ahead of 109.47 Fibo weighs
    • EUR/JPY fell from 124.13-123.08

    EUR/CHF
    • EUR/CHF lower from the opening bell in Europe:  https://reut.rs/1Xouqu7
    • 1.1049-1.1015 so far with SNB clearly absent
    • SNB's success in driving cross to 1.1100 allowing it to step back
    • More risk averse conditions now weigh on those long the cross
    • But techs suggest good value for long entry against 21/DMA/cloud
    • SNB may also seen need to shore up the cross around 1.1000
     
    GBP/USD   
    • GBP/USD elicited support just shy of 1.4375 after falling from Ldn open
    • 1.4375 was Monday’s low (100DMA helped define low). 1.4424 = Asia low
    • 100DMA is now 1.4356. Strong US retail sales data could spur test
    • 0.7667-0.7681 was European am range for EUR/GBP amid USD gains

    USD/CAD
    • USD/CAD met headwind circa 1.2879 after vaulting 1.2869 (Asia high)
    • 1.2879 was Thursday’s early Europe high. More offers expected near 1.29
    • 1.2900 option expiry for NY cut, $370mn strike. 1.2819 was early Asia low
    • WTI oil $45.90/barrel at 6.15am ET, 80 cents lower on day

    AUD/USD   
    • AUD/USD plumbed a fresh 10wk low of 0.7277 during the European am
    • 0.7286 was Asia low. AUD losses influenced by recent 27% iron ore fall
    • Option barrier mooted at 0.7275. Large 0.7300 expiry today, A$617mn strike

    NZD/USD
    • NZD/USD fell to a European am low of 0.6785 amid greenback gains
    • 0.6794-0.6830 was Asia range, when AUD/USD slid through 0.73
    • AUD/NZD plumbed 11wk low of 1.0707 during the European am
    • Cross losses influenced by ANZ Bank tipping unchanged RBNZ June 9

    Today’s events

    An expiring FX option heading into the New York Cut, if close enough to the strike price, can act as a magnet for selling/buying.  If the option is large, it can generate enough trading to move the market.  

    Option Expirations(Source:ThompsonReuters)

    • EUR/USD: 1.1350 (763M) AUD/USD: 0.7300 (617M)
    • USD/CAD: 1.2800 (546M), 1.2830-35 (302M) 1.2840-45 (432M)
    • USD/JPY: 108.18 (1.1BLN), 108.20 (405M)

    Economic Data(Source:Bloomberg)

     

     


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