FX Flows

From the FXWW Chatroom: UsdJpy slipped in early trade. Remarks from BOJ Governor Kuroda that inflation expectations are weak and the central bank will need to continue powerful monetary easing. Those last words stopped the market from testing the 100-Day SMA 113.12. Usd reversed back to 113.30’s. The move up was also aided by EurJpy demand. Offers are reminded at 113.50-55, rumour that breakout artists have stops above 113.60.

NZIER shadow board recommended that RBNZ stays unchanged this Thursday and that it should adopt a tightening bias. NzdUsd edged higher after – Bloomberg News said macro funds also bought NzdUsd – they too sold AudNzd, positioning for tonight’s Aussie budget. Judging from the chart, they didn’t get much juice out of that ahead of Aussie data.

Australia March retail sales was weaker than thought at -0.1%, revision was lower at -0.2% from -0.1%. AudUsd fell from 0.7395 to 0.7364. Dalian Iron ore futures Sept Contract fell 2% added some pressure on AudUsd, printed low 0.7355. Traders are watching 0.7300 with care, close below 0.7298 points the Aud a lot lower.

Cable has been surprisingly firm today versus Usd and Euro. Earlier, UK BRC April like-for-like sales jumped an amazing 5.6% from a minus 1%. This is largest increase since 2002. Also, British PM Theresa May said she will put a cap on unfair energy price rises if she is re-elected on June 8. May said this in a private commentary in The Sun (not page 3). Spot GbpUsd has climbed slowly to 1.2956, EurGbp traded to 0.84315. Offers are mentioned above 1.2980.

Another dull session for EurUsd. Strategic accounts are looking to buy this on dips, so are the real money accounts. Intraday sellers near 1.0940 and profit taking reported close to 1.0990. The 200-Day SMA at 1.0923, 1.0890 will see some demand surface.

Post-French elections, most newspapers are focussing on the June parliamentary vote which is hindering Emmanuel Macron’s reform plan. FT said this vote is even harder to predict than the presidential one. Many of France’s 577 constit

Post-French elections, most newspapers are focussing on the June parliamentary vote which is hindering Emmanuel Macron’s reform plan. FT said this vote is even harder to predict than the presidential one. Many of France’s 577 constituencies could face three or four candidates in the second round of voting on June 18 (any candidate with 12.5 per cent of the votes in the first round goes through to the run¬off). Meanwhile unions, who oppose Mr Macron’s plans to introduce labour market reforms by governmental decree, may try to test the new president’s authority and inexperience with street protests

Oil price is rather stable but weak Aussie is weighing on the Loonie. Sellers are reported in the 1.3755 to 1.3800.

14:09:14

(CIBC)
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