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US FX Market Open – Friday, April 15, 2016:KIWI STAR PERFORMER IN QUIET FRIDAY MARKET

Posted by Marge Maresca on Apr 15, 2016 7:27:15 AM

 

 nzdo.png

Overnight Events

• NZD/USD up 1.1% as AUD/NZD profit taking a standout feature
• USD/JPY -0.26%, EUR/USD -0.08%, GBP/USD -0.3%
• DAX +0.15%, Brent -0.5%, DXY +0.04%, Nikkei +3.23%
• CH Mar Prod/import prices -4.7%  y/y vs -4.6% prev
• EZ final Mar CPI 0.0%  y/y vs -0.1% prev, -0.1% exp
• UK You-Gov poll-In and out campaigns tied at 39%, 17% don’t no
• Swiss radio-Possibility SNB reintroducing new EUR/CHF floor on Brexit
• Finnish parliament to debate in fortnight whether to hold EUR referendum
• Fin Min Aso: Japan told US concerned about "1-sided" FX moves - Rtrs
• BoJ Gov Kuroda – BoJ hasn’t shifted policy focus on rates
• Kuroda: Does not think yen rise was caused by NIRP - RTRS
• Suga: Cautious of one-sided FX moves, will take action if needed - Rtrs
• Kuroda-many ways to ease  more if needed

Currency Summaries

EUR/USD  
• EUR/USD drifts around in tight 1.1246-71 range
• EUR/crosses lower. EUR/JPY weighed by more risk averse conditions
• DAX -0.5, Nikkei -0.37%. Brent -1.1%
• EUR/GBP extends losses to 0.7940, rates divergence one factor
• EUR 61bln EZ bond redemptions a likely weight on EUR

USD/JPY
• USD/JPY weak within a 108.97-109.74 range
• Offers still thick to 110.00, stops clustered above
• There are 432M worth of 109.50 NY cut expiries
• EUR/JPY also weak, sees  122.83-123.57 so far
• Nikkei 225 Index closed down 0.37%

EUR/CHF
• USD/CHF second day of stability and limited direction
• Price matches Thurs’s 0.9688 high and returns close to its 0.9668 open
• Potential topping pattern but also possible bullish continuation
• On options Brexit risk continues to elevate 3mth atm “insurance” spills into EUR/CHF
• Cross also tight as it continues to alternate bull and bear sessions
• Chart:  1) http://reut.rs/1SFNc9L 2) http://reut.rs/1SFGa4S
 
GBP/USD   
• GBP underpinned by more buoyant risk appetite
• Some GBP shorts cover as cash flows back into higher yield currencies
• GBP/USD steadily higher after breaking 200-HMA 1.4165
• Construction output disappoints but house building strong
• Brent -1.1% yet to brake the more positive mood but a cautionary note
• 21-DMA 1.4232, close mid-point of 6 weeks trading

USD/CAD
• USD/CAD has lost its way somewhat despite weaker oil
• Price holds towards 1.2855 session high but clear of 1.2897 Thurs top
• Trades 1.2798-1.2855 and currently settled back on its 1.2842 open
• Technically looks like pull of the underlying bear trend still strong
• Canadian mfg sales data for Feb expected weak so could have bearing

AUD/USD            
• Asia opened at 0.7693 then  0.7681-0.7727 and ups high to 35 in Europe
• Profit taking  in AUD/NZD after 1.55% Thurs rally met with fresh AUD demand
• AUD/NZD gives back 0.6% to 1.1151 but trying to base again
• Former daily trend res. Off 1.1328 Mar 23 high now key supp. At 1.1088
• Solid set of China releases: GDP 6.7% as exp helped underpin AUD
• Chart: 1 )  http://reut.rs/1V62YBv 002) http://reut.rs/1V63AXH

NZD/USD
• NZD/USD stages a strong rebound out of Thursday’s 0.6824 hole
• Oversold conditions help underpin rally to 0.6927 Europe high
• Spot plays out 0.6844 to 0.6927 and 0.6916 into NY
• Short covering in NZD/JPY seen main driver along with frothy China GDP data
• AUD/USD pullback off-set by AUD/NZD drop: Limited drag factor evident
• Chart:  http://reut.rs/1V65gjW

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 1.1200 307 mln, GBP/USD 1.4200 785 mln
• USD/JPY 109.50 432 mln, AUD/USD 0.7700 611 mln
• USD/CAD 1.2800 480 mln, 1.2835 340 mln, NZD/USD 0.6890 1.0 bln

Economic Data(Source:Bloomberg)

Apr15data.png

Topics: US FX Market Open

 

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