Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 108.799 | EURUSD 1.2252 | AUDUSD 0.78123 | NZDUSD 0.72538 | USDCAD 1.25814 | USDCHF 0.93958 | GBPUSD 1.38286 |

 

LMAX Ranges 6am London time

Highs    Lows

EURUSD               1.22981 | 1.22433

USDJPY                 108.890 | 108.562

GBPUSD               1.38728 | 1.38069

AUDUSD              0.78394 | 0.78119

USDCHF               0.94100 | 0.93776

USDCAD               1.25979 | 1.25559

NZDUSD               0.72773 | 0.7239

EURGBP               0.88759 | 0.88549

EURCHF                1.15324 | 1.15042

EURJPY                 133.657 | 133.031

For today

• EUR: With Tokyo out for the day a very quiet session was had with the Euro moving up from the opening around the 1.2245 level and testing late in the session to the 1.2295 level before slipping a little to move into the grey hours around the 1.2280 areas, Topside offers into the 1.2300 level and the market technical guys maybe looking at this short term pattern with a push through the 1.2335 level negating the pattern and the market finding some stops in the area, to test into light offers 1.2340-60 with the market likely to increase in bids on any attempt to the 1.2400 level, downside bids light through to the 1.2205 areas with some stronger bids in the area with stops on a push through the 1.2180 and the market then free to move quickly lower through to light bids into the 1.2100 areas and increasing on any dip through the level,
• GBP: Cable started a slow steady push from the opening around the 1.3810 levels testing through to about the 1.3870 levels on steady trading before holding through to the grey hours above the 1.3850 to the close. Topside offers light through to the 1.3950 level where there is likely to be some stronger offers and continuing through to the 1.4000 levels before weak stops appear and a run towards the lightly offered 1.4050 levels with possible interest continuing through to the 1.4100 where congestion is likely to stiffen and the market running into good offers from 1.4100-15 areas, a push through the level is likely to see more congestion however, the market will likely to be gaining impetus on the break and stronger offers appear around the 1.4150 levels to slow the ascent. Downside bids light through to the 1.3800 areas with some stronger bids and the market possibly interested in picking up the market through to the 1.3750 levels with stronger bids the deeper you go towards that level, a breakdown through the level sees very little to stop the market from tumbling back and into the ranges from the beginning of the year.
• JPY: Bank holiday markets saw the USDJPY trading in a very quiet range with the opening periods topping just below the 108.90 level and then slipping back to trade around the 108.55 level before ranging through to the grey hours in a tight range around the 108.70 level. Topside offers through the 109.20 level and into the 109.35 areas, likely weak stops above the level however, congestion is likely to continue on a move through to the 109.70 level before stronger offers again start to appear in the market with the market likely to see ever increasing resting offers on a move above the 110.00 level and through to the 110.50 area, Downside bids light through to the 108.20 level where bids are likely to increase with weak stops waiting just below the 107.80 areas and again stronger bids moving in on any attempt through the 107.50 levels,
• AUD: A quiet rise for the Oz from the opening around the 0.7810 areas to rise quietly through to just below the 0.7840 level and into the grey hours with little to write home about, Topside offers a little congested above the highs with the offers likely to continue through the 0.7860 level before minor stops appear and light congestion into the 79 cent levels with offers likely to continue lightly through to 0.7940 where a possibility of stronger offers. Downside bids light through to the 0.7760 areas where strong bids are suspected with weak stops on a break down through the 0.7740 and limited bids from there into the 77 cent levels where stronger congestion can be found.

Overnight News

OPEC:

OPEC concerns may grow, with US shale oil increasing with rig count increasing by 26 to 791

NZD:

NZ inflation gauge driven by tobacco tax increase ANZ

GBP:

UK house prices post first annual decline in six years

Consumer spending falls to its lowest in five years – Times

USD:

US budget director warns interest rates may spike on deficit

Japan Govt. mulls promoting BoJ exec director Amamiya to deputy governor

USD dips lower in Asia some blaming budget balance miss headlines

Trump’s budget won’t project balance in 10 years ‘ Washington post

Post cites 3 people familiar, say deficit cuts short of balance

CNY:

Moody’s effect of intensified regulation in China no longer limited to de-risking financial sector, but now beginning to impact supply of credit to real economy

China shadow banking growth will be constrained in 2018 by intensified regulation

Today’s data

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

08:15     CHF        CPI M/M Jan C -0.20% | P 0.00%

08:15     CHF        CPI Y/Y Jan C 0.80% | P 0.80%

19:00     USD       Federal Budget Balance Jan C 50.2B | P -23.2B

Weekend News

EUR:

Merkel stands firm on German coalition deal in rebuff to critics

Merkel says its acceptable for CDU to give up finance post

Merkel says her decision to seek fourth term was right one

Merkel reiterates she ran for four year term, nothing less

Merkel says giving up finance ministry to SPD is painful

Five star lead in Italy dips to 28.3% in istituto Ixe poll

Nowotny: ECB worried about US political pressure on forex

Nowotny: sees ECB rate rise need in foreseeable future

Nowotny says central banks task isn’t to satisfy markets

CNY:

Chinese local governments rust to admit fake data

EM:

Emerging markets see biggest portfolio outflow in 14months Nikkei

CAD:

Canada sheds 88K net jobs, but sees full time gains: jobless rate 5.9%

GBP:

BoE in no rush to raise rates, Haldane tells Chroniclelive

JPY:

Kuroda’s reported BoJ reappointment seen easing pressure on Yen

ZAR:

Whale sized public sector wage bill approaches a cliff

Harry Hindsight

• EUR: A fairly quiet day overall with early trading seeing the highs into London before dropping off later into the end of the day, Opening just below the 1.2250 levels the market moved into the Tokyo session testing the 1.2260 levels and holding for several hours in that range with one minor dip through to the 1.2240 level, the move into the grey hours saw the market rising through the London opening and testing the 1.2285 levels before dipping back and slowly trading through to the NYK opening pushing to new lows just below 1.2230 areas before rising quickly on the opening to the 1.2280 levels testing the area a couple of times before starting a steady drop back through the lows to test to the 1.2205 areas before rising to the close unchanged on the day.
• GBP: The move through Asia was quiet with the market edging up slowly through to the grey hours with the market moving off the 1.3920 and holding for the most part around the 1.3940 areas the move into the grey hours saw the market rising into the London opening testing through to the 1.2990 level before USD buying started to move in, GBP dropped back through the 1.3950 levels triggering some weak stops and the market then slipping slowly through the 1.3900 levels hitting the 1.3870 areas and triggering further stops and a quick move to the 1.3835 levels then struggling to just below the 1.3800 level before ranging for a long period between those areas, the end of the London session saw the market dip to its lows testing through the 1.3770 level before starting a slow recovery into the close.
• JPY: USDJPY Opened weakly sinking back to the 108.50 levels before recovering into the Tokyo opening to test through the 109.00 levels in early morning, and while it struggled with the level the market continued to test the level through to the grey hours, the move into the grey hours started a run to the highs through into the London session testing above the 109.30 levels before drifting through London back to the opening levels, the move through to the NYK session saw the market holding the 108.80 level before recovering to the 109.00 levels, before drifting through the balance of the day to test through to the 108.05 areas and bouncing in late NYK to above the 108.50 levels and into the close little changed on the day.
• AUD: Ranging around the opening levels 0.7780 the market moved through the Asian session touching through the 0.7790 levels and dipping back to the 0.7760 to make the lows for the day, the market then returned to the opening levels and traded quietly through the London session pushing higher on the opening in NYK with the market testing to the 0.7830 level in a fairly steady rise before slipping slowly back to trigger weak stops on a dip through the 78 cent levels and holding around the 0.7780 opening levels before rising a little into the close.

Yesterday’s premiership results

JPY         Japan Money Stock M2+CD Y/Y Jan A 3.40% | C 3.60% | P 3.60%

AUD       Home Loans M/M Dec A -2.30% | C -1.00% | P 2.10% | R 1.60%

AUD       RBA Monetary Policy Statement

CNY        CPI Y/Y Jan A 1.50% | C 1.50% | P 1.80%

CNY        PPI Y/Y Jan A 4.30% | C 4.20% | P 4.90%

JPY         Tertiary Industry Index M/M Dec A -0.20% | C 0.10% | P 1.10%

CHF        Unemployment Rate Jan A 3.00% | C 3.00% | P 3.00%

GBP       Industrial Production M/M Dec A -1.30% | C -0.90% | C 0.40% | P 0.30%

GBP       Industrial Production Y/Y Dec A 0.00% | C 0.40% | P 2.50% | R 2.60%

GBP       Manufacturing Production M/M Dec A 0.30% | C 0.30% | P 0.40% | R 0.20%

GBP       Manufacturing Production Y/Y Dec A 1.40% | C 1.20% | P 3.50% | R 3.80%

GBP       Construction Output M/M Dec A 1.60% | C -0.10% | P 0.40% | R 0.10%

GBP       Visible Trade Balance (GBP) Dec A -13.6B | C -11.5B | P -12.2B | R -12.5B

GBP       NIESR GDP Estimate Jan A 0.50% | C 0.50% | P 0.60%

CAD       Net Change in Employment Jan A -88.0K | C 10K | P 78.6K

CAD       Unemployment Rate Jan A 5.90% | C 5.80% | P 5.70%

USD       Wholesale Inventories M/M Dec (F) A 0.40% | C 0.20% | P 0.20%

Stay lucky

Andy

Any opinions, news, research, analyses, prices or other information contained on this Blog, whether by LMAX, its employees, partners or contributors, does not constitute investment advice nor has it been prepared in accordance with legal requirements designed to promote the independence of investment research. Further, the material contained within this Blog does not contain (and should not be construed as containing) investment advice or an investment recommendation, or an offer of, or solicitation for, a transaction in any financial instrument. Whilst information provided on this Blog may help with your investment research you must consider carefully whether you should make (or refrain from making) investment or other decisions based on what you see without doing further research on the investments you are interested in. Participating in this Blog cannot be a substitute for obtaining advice from an appropriate expert independent adviser who takes into account your circumstances and specific investment needs in selected investments that are appropriate for you. LMAX has not verified the accuracy or basis-in-fact of any claim or statement made by any third parties as comments for every Blog entry.

LMAX will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. No representation or warranty is given as to the accuracy or completeness of the above information. While the material produced in this Blog was obtained from sources deemed to be reliable, LMAX does not provide any guarantees about the reliability of such sources.

Consequently any person acting on it does so entirely at his or her own risk.

If you currently hold an account with LMAX for the purposes of trading FX and CFD’s, you are encouraged to use a different Username and Password to access the Blog or any other online systems. The Blog is a place to learn, discuss and share information and ideas with Blog followers. It is not a place to slander, use unacceptable language or to promote LMAX or any other FX, Spread Betting and CFD provider and any such postings, excessive or unjust comments and attacks will not be allowed and will be removed from the site immediately.