Untitled

Andy Harrison

Good morning,

LMAX Close

USDJPY 113.254 | EURUSD 1.07689 | AUDUSD 0.75853 | NZDUSD 0.72456 | USDCAD 1.3049 | USDCHF 0.99297 | GBPUSD 1.26586 |

LMAX Highs and Lows 6am GMT

                                High | Low

EURUSD               1.07955 | 1.07623

USDJPY                 113.367 | 112.477

GBPUSD               1.26803 | 1.26563

USDCHF               0.99383 | 0.99057

AUDUSD              0.76521 | 0.75777

USDCAD               1.30534 | 1.29994

NZDUSD               0.73100 | 0.72427

EURCHF                1.06960 | 1.06892

EURGBP               0.85213 | 0.85031

EURJPY                 122.039 | 121.415

For Today

• EUR: Opening around the 1.0770 levels the market moved higher from the opening in Tokyo to push steadily through to the 1.0790’s before drifting back into the 1.0780’s in a slow day with plenty to digest, Article 50 vote, FOMC and Oz Trade balance however, the market for the most part has not truly reacted and volumes were limited, Topside offers into the 1.0800 areas and into the 1.0810 with stops likely through the level and the market then open to test the 1.0860 levels and congestion into the 1.0900 and possibly better offers however, this moves into the ranges prior to Nov 2016 and likely to struggle without decent news from Europe. Downside bids light through to the 1.0700 areas and even then it’s likely to be limited with better bids through the level with congestive bids.
• GBP: Cable moved higher from the opening in Tokyo pushing to the 1.2680 levels before drifting back to the opening levels through into the grey hours, after the initial moves yesterday the market remains quiet, with the market breaking through the 1.2630 areas the sentimental level around 1.2700 is near term resistance for the market to go through once through that level the next key level is likely to be around the 1.2765 -70 areas and is likely to be the strong point with the market possibly opening up to a larger move higher over the coming weeks. Downside bids likely to be light on a move back through to the 1.2600 level with limited bids around that level providing little support and the market open for a test back through 1.2550 areas and a vulnerable 1.2500 areas, with better bids likely to be a little stronger through the level and into the 1.2480 areas before further weakness.
• JPY: The USDJPY drift3ed from the opening in Tokyo having slipped from the highs around the 113.40 area testing back to the 113.00 level on the opening in Tokyo and holding for several hours around the level, the market eventually broke lower and tested steadily through to 112.70 before hitting the 112.50 level into the grey hours. Topside offers through the 113.30 then will likely see some weak stops before further offers on a move towards the 114.00, US numbers with initial jobs likely to focus the market however, the one to watch is possibly the unit labour costs, downside bids into the 112.00 levels likely to be strong with stops possibly appearing on a dip through the 111.80 level and opening the market to limited bids into the 111.00 areas.
• AUD: The day started as you would expect for the Oz quietly however, having pushed lightly through the 0.7580 areas the release of the largest trade balance ever with a revision to last month’s to boot saw the Oz push quickly through the 0.7600 stalling area to test to the 0.7630 area before running a little out of steam, the market kept the pressure on and eventually triggered stops through the level to rise towards the 0.7650 areas and early Europe joined the market into the grey hours to attempt a break there again, Topside offers congestive through to the 77 cent levels with those offers likely to continue through the level with 0.7775 areas likely to see the stronger levels and possibly continuing with mixed interest through to 0.7840, beyond the level though the market could see break out stops appearing and the market opening to the 80 cent level in the coming days, downside bids light back through the 76 cent level however, a move through to the 0.7550 areas is likely to see bids building and the congestion from a couple of weeks trading in the range supportive for the moment, a push through 75 cent will possibly see weak stops and the market grinding through congestive bids.

Overnight News

JPY:

GPIF Says Won’t Change Investment Policy at Government Request

Abe: Haven’t Intervened in FX, But Could If It’s an Emergency

Japanese Sold Net 1.4 Trillion Yen Overseas Debt Last Week

Japan’s 10-Year Yield Rises to 0.1% First Time Since December

JPY/USD:

Japan-U.S. Summit May Be Expanded to 2 Days, Nikkei Reports

JPY/CNY:

Japanese Regional Banks to Join Yuan Payment Network: Nikkei

AUD:

Australia Dec. Trade Surplus A$3.51 Bln; Est. A$2 Bln

CNY:

China State Media Refutes Tusk’s Comment Calling China a Threat

SGD:

MAS’s Menon Says Singapore Unlikely ‘Main Beneficiary’ in Brexit

Singapore Sees Little Growth in Investment This Year, EDB Says

NZD:

English Says New Zealand Must Defend Free Trade Amid Nationalism

New Zealand Job Ads Fell in January, Labor Demand Strong: ANZ

Tuberculosis Found in Single Dairy Herd in NZ’s Matamata: Ospri

Asia:

Asia Outlook Dominated by Downside Risks, Says IMF’s Furusawa

HKD:

HKMA Asks Public to Manage Risks Prudently After Fed Holds Rate

ZAR:

1. Africa’s Zuma Said to Blame Treasury for Blocking Agenda: BD

USD/MXN:

Trump Never Threatened to Send Troops to Mexico on Call: Sanchez

Today’s data

Actual = A | Consensus = C | Previous = P | Revised = R All timings GMT

JPY         Monetary Base Y/Y Jan A 22.60% | C 24.20% | P 23.10%

AUD       Trade Balance (AUD) Dec A 3.51B | C 2.00B | P 1.24B | R 2.04B

AUD       Building Approvals M/M Dec A -1.20% | C -1.80% | P 7.00% | R 7.50%

JPY         Consumer Confidence Jan A 43.2 | C 43.7 | P 43.1

08:15     CHF        Retail Sales (Real) Y/Y Dec C -0.70% | P 0.90%

09:00     EUR        ECB Economic Bulletin

09:30     GBP       Construction PMI Jan C 53.8 | P 54.2

10:00     EUR        Eurozone PPI M/M Dec C 0.50% | P 0.30%

10:00     EUR        Eurozone PPI Y/Y Dec C 1.20% | P 0.10%

12:00     GBP       BoE Rate Decision C 0.25% | P 0.25%

12:00     GBP       BoE Asset Purchase Target C 435B | P 435B

12:00     GBP       MPC Official Bank Rate Votes C 0–0—9 | P 0–0–9

12:00     GBP       MPC Asset Purchase Facility Votes C 0–0—9 | P 0–0–9

12:00     GBP       BoE Inflation Report

12:30     USD       Challenger Job Cuts Y/Y Jan P 42.40%

13:30     USD       Non-Farm Productivity Q4 (P) C 0.90% | P 3.10%

13:30     USD       Unit Labour Costs Q4 (P) C 1.90% | P 0.70%

13:30     USD       Initial Jobless Claims (JAN 28) C 251K | P 259K

15:30     USD       Natural Gas Storage P -119B

Harry Hindsight

• EUR: FOMC day so limited movement through the Asian session with the market pushing weakly above the 1.0800 levels from the opening before dropping back to the 1.0795 areas and drifting in the Tokyo session to run along the 1.0790 area through into the grey hours, limited selling took the market down to the 1.0775 level before moving into the London session and pushing back through to test the 1.0807 areas and extending the highs a little before early NYK came in selling Euro’s in the run to the ADP numbers, Euro dropped quickly through to the 1.0760 areas and then slipping in stages through to the 1.0740 areas before recovering a little into the mid-session before the FOMC release, when the release came the market saw a dip to the 1.0730 level before bouncing to the 1.0790 areas, Fed left the rate target range between 0.5%-0.75% as expected saying consumer, business sentiment have improved but repeating that business investment remained soft and apart from the added inflation will rise instead of expected to rise the communique was as previous with the actual vote unanimous, having hit the highs quickly the market drifted through to the close around the 1.0770 for the day. The vote on the draft for Article 50 passes its first vote in the UK Parliament with a majority of 384.
• GBP: The Cable move through the Asian session drifting off the 1.2590 highs and running just below the 1.2580 areas through to the grey hours, the market drifted a little lower and bouncing off the 1.2540 levels to push into the London opening on a steady rise through to the 1.2640 levels and ranging through to the FOMC release around that level, the market moved quickly to test the 1.2680 areas before closing just off those levels.
• JPY: USDJPY opened around the 112.85 areas dipping to the 112.65 level before the market opened in Tokyo and a steady rise through the session to the 113.25 areas into the grey hours. London were quick buyers to take the market above the 113.60 areas before drifting through the London session into the NYK releases, the market gapped higher on the ADP numbers and steadily moved to the 113.90 levels before struggling and failing the 114.00 and slipping back to the 113.30 areas in anticipation of the FOMC, the release saw the market dropping quickly to the 112.90 areas before balancing itself and finishing the day around the 113.20.
• AUD: Opening around the 0.7580’s the market ranged through the day dipping towards the 0.7550 levels from the opening in Tokyo and then drifting steadily higher through to the London session, London took the market too its highs pushing above the 0.7595 levels and ranging around the 0.7590 levels into the release of the US data just after the opening, this saw the market drop back again for an uneventful move and then rise back to the 0.7590 areas for the FOMC and then holding just below to the close.

Yesterday’s premiership results

NZD       Employment Change Q/Q Q4 A 0.80% | C 0.80% | P 1.40% | R 1.30%

NZD       Unemployment Rate Q4 A 5.20% | C 4.80% | P 4.90%

GBP       BRC Shop Price Index Y/Y Jan A -1.70% | C -1.00% | P -1.40%

CNY        Manufacturing PMI Jan A 51.3 | C 51.2 | P 51.4

CNY        Non-manufacturing PMI Jan A 54.6 | P 54.5

GBP       Nationwide House Prices M/M Jan A 0.20% | C 0.00% | P 0.80%

CHF        SVME PMI Jan A 54.6 | C 55.9 | P 56

EUR        Italy Manufacturing PMI Jan A 53 | C 53.3 | P 53.2

EUR        France Manufacturing PMI Jan (F) A 53.6 | C 53.4 | P 53.4

EUR        Germany Manufacturing PMI Jan (F) A 56.4 | C 56.5 | P 56.5

EUR        Eurozone Manufacturing PMI Jan (F) A 55.2 | C 55.1 | P 55.1

GBP       PMI Manufacturing Jan A 55.9 | C 55.9 | P 56.1

USD       ADP Employment Change Jan A 246K | C 167K | P 153K | R 151K

USD       ISM Manufacturing Jan A 56 | C 55 | P 54.7

USD       ISM Prices Paid Jan A 69 | C 66 | P 65.5

USD       Construction Spending M/M Dec A -0.20% | C 0.30% | P 0.90%

USD       Crude Oil Inventories A 6.5M | C 2.6M | P 2.8M

USD       FOMC Rate Decision A 0.75% | C 0.75% | P 0.75%

Good Luck,

Andy

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