FX Flows

From the FXWW Chatroom: Started the day with a strong New Zealand trade data. Surplus rose Nzd292bn in April from Nzd117mio, beating estimates of Nzd25mio. NzdUsd had a mild bounce from 0.6760 from 0.6745. Feels like some profit taking in AudNzd below 1.0640. Topside risk is 0.6805, move above could trigger some ugly stops.

Speculative names lifted AudJpy positioning for risk-on sentiment. AudUsd stayed firm but laggard following the release of Kiwi data. AudUsd then slipped from 0.7188 to 0.7176 on CNY fix. Into late morning, AudNzd buying pushed AudUsd into 0.72-handle.

There is a decent notional option expiry tomorrow NY cut strike at 0.7210.  I’m hearing is that gamma traders have spot locked in tight range. Bids are scattered under 0.7170 and offers above the strike price.

Nikkei 225 Index gained 1.6% at open but UsdJpy struggled to get beyond 110.20. Small demand for Goto-bi Day as well but exporters’ interests overwhelmed. There should be some intraday buying into the 109.90’s and hearsay stop buy orders above 110.52.

Price of oil futures is a challenge. The commodity price rose steadily and puts the Canadian dollar firmer against the Usd. We are picking up stops on the downside mid-1.30’s from various names; most are trailing stops. Very good buying into 1.3000.

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