WWM - Analytics

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    US FX Market Open – Friday, June 10, 2016: EUR/USD DIPS DESPITE DAX 2.1% SLIDE

    Overnight Events

    • BREXIT jitters hit stocks hard-FTSE off 1.9%, DAX down 2.1%
    • EUR/USD -0.2%, USD/JPY -0.3%, GBP/USD -0.05%, NZD/USD -0.08%
    • DXY 0.1%, CAC -1.9%, Brent -1.4%, Gold -0.25%
    • DE May Final HICP 0.0% y/y vs 0.0% exp, 0.0% prev
    • DE May Final CPI 0.1% y/y vs 0.1% exp, 0.1% prev
    • UK Apr Construction Output -3.7% y/y vs -4.8% exp, -4.5% prev
    • BoE May survey 41% of public exp rate rise in nxt 12-mths vs 38% last
    • Ladbrokes & William Hill-3/1 Britain votes to leave EU, 1/4 Britain votes to remain
    • Labour MP & TSC member John Mann advocates Brexit, in The Sun
    • 80% of BT.com readers are planning to vote to leave EU on June 23
    • OECD says ECB should ease further if infl. remains below tgt longer than expected
    • Russian CB cuts key rate 0.5% to 10.5%-Risk infl. will not reach target
    • Japan EconMin Ishihara – Closely eyeing UK EU membership vote
    • BPCE launches Y60.6 bln 3-tranche samurais via Daiwa, MUFJ/MS et al – IFR
    • Lipper – Investors pull money from US-based stock funds for 6th straight week
    • Lipper strong inflows into bond, emerging market funds at rate fears ebb

    Currency Summaries

    EUR/USD  
    • EUR/USD dips despite DAX plummeting 2.1%
    • EUR/USD 1.1279 as traders steer clear of EUR assets
    • Brexit risk eyed behind DAX dump. US stocks -0.5% in comparison
    • Specs long EUR/USD in wake of weak NFPs now under pressure
    • Daily Ichimoku cloud base 1.1219 may attract: https://reut.rs/1rfSX7H

    USD/JPY
    • USD/JPY range has been 106.68-107.27
    • Tech outlook remains bearish, stiff resistance above 107.00
    • Risk for eventual losses below Thu's 106.26 low, Jaoanese bids down to 106.00
    • Spot was bid up in Asia on Gotobi/pre-weekend demand, short-covering
    • EUR/JPY has seen 120.45-121.19
    • POLL: BOJ seen standing pat in June, but easing further in July - RTRS
    • Break lower in JGB yields to new record lows

    EUR/CHF
    • Brexit jitters clearly driving flow into CHF and EUR/CHF looks to 1.0850
    • Real yield differentials also seen driving flow towards the CHF
    • Cross hit 1.0886 low Thurs and holds soft just above the level today
    • Below 200DMA but also below lower 30DMA Bolli hinting at o/s
    • Fade l/t average, currently 1.0930, for drop to mid-April 1.0843 low
    • Chart: https://reut.rs/1XKxjXQ

    GBP/USD   
    • GBP/USD fell from 1.4473 (early Europe low) to  1.4410 low amid Brexit fears
    • 80% of respondents to BT.com survey backed Brexit (16,271 out of 20,460)
    • EUR/GBP was helped to a European am high of 0.7853 by Dax losses
    • 0.7809 was early Europe low. 0.7809 was also Thursday’s low

    USD/CAD
    • USD/CAD rose to a European am high of 1.2759 as WTI fell to $49.65/barrel
    • 1.2717 was early Europe low. Canada jobs data due 8.30am ET
    • Employment f/c 3.8k in May to follow 2.1k fall in Apr. Jobless rate f/c 7.1%

    AUD/USD        
    • AUD/USD fell to a European am low of 0.7392 amid risk aversion
    • 0.7392 was June 6 high. 0.7407 was Asia low
    • AUD/NZD topped out at 1.0467 early Asia after profit-taking on shorts
    • 1.0410 was 13mth low Thursday. Talk of HF interest to buy cross circa 1.0360
    • 1.0358 = 76.4% of 1.0021-1.1450. 1.0353 was May 2015 low

    NZD/USD
    • NZD/USD is eyeing 0.7122 (Asia high) after firming from 0.7085 (late Asia low)
    • 0.7148 (Thursday’s 12mth high after unchanged RBNZ) among obstacles beyond

    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)

    • USD/JPY:  106.95/107.00 (477M), 107.50 (343M)
    • EUR/USD: 1.1295/1.1300 (402M), 1.1375 (321M) 1.1400 (756M)
    • AUD/JPY: 80.75 (307M). AUD/USD: 0.7300 (498M)
    • USD/CAD: 1.2770 (392M), 1.2835/40 (608M) NZD/USD: 0.7030 (672M)

     


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