Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 109.112 | EURUSD 1.23657 | AUDUSD 0.78777 | NZDUSD 0.72903 | USDCAD 1.25399 | USDCHF 0.93169 | GBPUSD 1.3960 |

LMAX Highs and Lows 6am GMT

                                High | Low

EURUSD               1.23883 | 1.23509

USDJPY                 109.301 | 108.457

GBPUSD               1.39767 | 1.39392

USDCHF               0.93355 | 0.93067

AUDUSD              0.78918 | 0.78355

USDCAD               1.25656 | 1.25171

NZDUSD               0.73046 | 0.72599

EURCHF                1.15597 | 1.15127

EURGBP               0.88710 | 0.88564

EURJPY                 135.288 | 133.987

For today

• EUR: While the direction remains to the downside as with yesterday the range for the currencies was limited with the market dipping back to the 1.2355 areas and extending the losses late into the session to the 1.2350 level each time recovering some of the losses, Downside bids through the 1.2350 level and likely to see weak stops on a move through the 1.2330-20 levels before further bids appear into the 1.2300 areas, congestion through that level with the market finding possibly good bids around the 1.2240-60 areas before limited weakness towards the 1.2200 areas. Topside offers light through the 1.2400 areas with the market likely to see stronger offers on any attempt to push towards the 1.2480 level however, there is a slight possibility of some weak stops and a short squeeze moving in but it’s likely to be limited.
• GBP: Cable ranged through the session in the 1.3940-70 areas and centring around the 1.3950 level for the most part, equity markets were the big movers and the volumes moving through the market were reasonable, with hedges being lifted, Topside offers light back through the 1.4000 level with limited offers on any concerted effort in that direction with the best offers likely to be around the 1.4120 level however, this level is likely to be limited and the offers are not likely to increase until the market starts pushing towards the 1.4200 areas, downside bids into the 1.3900 levels likely to slow the market only fractionally with weak stops on a move through limited and the downside bids increasing on a move through to the 1.3850 levels with congestion likely to continue on any test below the 1.3850 areas.
• JPY: Opening around the 109.20 levels the market moved through into the Tokyo session and then drifting back from the level to test through to the 108.60 levels before holding for a period before slowly drifting through to the 108.50 areas and bouncing off the level and then drifting through to the grey hours, Downside bids likely to be strong into the 108.50 areas with congestion continuing through to the 108.00 level, with particular strength below the previous lows of last month, a dip through the level will likely see stops appearing on a push through the 107.80 areas and the market then opening up for a push through to the 10730-40 areas with some stronger bids in that area and possibly yield hunters willing to come out a bit more, Topside offers light through to the 110.40 areas with weak stops likely above the level and opening quickly into the congested 111.00 areas, only a push beyond the 111.40 will free the market and reverse the losses since the end of last month.
• AUD: Oz continued its slow drift lower with the market opening around the 0.7880 areas and slowly slipping through to the 0.7835 areas before finding some support and pushing into the grey hours holding the 0.7865 level, the market fared no better after the expected no change in rates and the RBA was nothing we hadn’t heard previously, this left the market broadly unchanged with a limited push to the 0.7870 levels before drifting into the grey hours holding around the 0.7850 areas again. Downside congestion light through the 0.7840-00 levels with weak stops on a dip below the 0.7780 areas with nothing particularly strong until the market approaches the 0.7720-00 areas with stronger congestion just below that level, Topside offers light through the 79 cent levels with weak stops likely on a push through the level and the market likely to move a little with very little until closer to the 0.7960 areas where offers start to appear again.

 

Overnight News

EUR:

German coalition talks extended until Tuesday Party official

GBP:

Leaked: The 37 EU rules Britain could be forced to accept during Brexit transition

USD:

Debt ceiling probably won’t be realised to stopgap bill – Lawmaker

Circuit breakers triggers in DJ

Today’s data

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

GBP       BRC Sales Monitor Y/Y Jan A 0.60% | C 0.70% | P 0.60%

AUD       Trade Balance Dec A -1.36B | C 0.25B | P -0.63B | R 0.04B

AUD       Retail Sales M/M Dec A -0.50% | C -0.20% | P 1.20% | R 1.30%

AUD       RBA Rate Decision A 1.50 | C 1.50% | P 1.50%

07:00     EUR        German Factory Orders M/M Dec C 0.70% | P -0.40%

09:10     EUR        Eurozone Retail PMI Jan P 53

13:30     CAD       International Merchandise Trade (CAD) Dec C -2.3B | P -2.5B

13:30     USD       Trade Balance Dec C -52.1B | P -50.5B

15:00     CAD       Ivey PMI Jan P 60.4

 

Harry Hindsight

• EUR: For the Euro the move through the early part of the session saw very little movement in the FX world with the market opening around the 1.2445 areas and giving ground in early trading slipping through to the 1.2425 level before recovering and pushing back above the 1.2450 levels rising to the 1.2465 levels weakly but generally staying close to the 1.2450 levels through to the grey hours, the market dipped again through to early London, mixed PMI numbers did nothing to move the market and the market held around the level through to the NYK session, strong equity selling throughout the day on all exchanges saw the FX limited as flows ebbed and flowed through the session in the FX with the market moving into the NYK session slipping steadily through to the 1.2400 levels and dipping into the close to the 1.2365 areas quickly.
• GBP: Cable was more effected by the Equity markets with the market initially opening around the 1.4110-00 areas and holding through the Asian session around the level and never looking like breaking out in either direction after the initial move through to the 1.4080 level and held around the 1.4115 levels into the London session with the market edging higher into the services PMI before slipping back and then starting a steady drop lower over the course of the move into the NYK session, the market pushed eventually through to the 1.4000 levels and held for several hours in that area through until later in the session with the move through to the close sliding through to the 1.3960 areas.
• JPY: USDJPY fared as well as the other currencies through deep into the NYK session with the market dropping back from the opening highs around the 110.25 levels and then basing through the Asian session along the 109.80 areas, the move through London saw the low extended a little before moving into the NYK session to test back to the highs, from there though the market slipped slowly back to the 109.85 areas again before dropping quickly as the equity markets dropped back testing quickly through to the 109.15 level and eventually extending to the 109.00 level through to the close.
• AUD: Opening just below Fridays close the Oz dipped from the opening and traded through the 79 cent levels before bouncing back higher and trading slowly through to the London session pushing to the 0.7935 levels, the London market eventually extended the highs to just above the 0.7950 level and the markets fall back was less exaggerated late in the session with the market slipping slowly through to the 0.7880 lows.

Yesterday’s premiership results

AUD       CBA Australia PMI Services Jan A 53.8 | P 55.1

AUD       TD Securities Inflation M/M Jan A 0.30% | P 0.10%

CNY        Caixin China PMI Services Jan A 54.7 | C 53.5 | P 53.9

EUR        Italy Services PMI Jan A 57.7 | C 55.9 | P 55.4

EUR        France Services PMI Jan (F) A 59.2 | C 59.3 | P 59.3

EUR        Germany Services PMI Jan (F) A 57.3 | C 57 | P 57

EUR        Eurozone Services PMI Jan (F) A 58 | C 57.6 | P 57.6

GBP       Services PMI Jan A 53 | C 54.1 | P 54.2

EUR        Eurozone Sentix Investor Confidence Feb A 31.9 | C 33.2 | R 32.9

EUR        Eurozone Retail Sales M/M Dec A -1.10% | C -1.00% | P 1.50% | R 2.00%

USD       US Services PMI Jan (F) A 53.3 | C 53.3 | P 53.3

USD       ISM Non-Manufacturing/Services Composite Jan A 59.9 | C 56.6 | P 55.9

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