Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 107.331 | EURUSD 1.2337 | AUDUSD 0.78842 | NZDUSD 0.73522 | USDCAD 1.2648 | USDCHF 0.93614 | GBPUSD 1.39956 |

LMAX Highs and Lows 6am GMT

                                High | Low

EURUSD               1.23448 | 1.23166

USDJPY                 107.903 | 107.298

GBPUSD               1.40083 | 1.39722

USDCHF               0.93818 | 0.93589

AUDUSD              0.79032 | 0.78479

USDCAD               1.26676 | 1.26428

NZDUSD               0.73552 | 0.73262

EURCHF                1.15600 | 1.15486

EURGBP               0.88198 | 0.88084

EURJPY                 133.059 | 132.348

For today

• EUR: Light USD buying through the session continued with the market ranging through the early part of the session in the 1.2345-30 before slowly pushing through the downside and pressing into the 1.2320’s before holding quietly into the grey hours, downside bids weak into the 1.2300 levels with congestion on a push through the level and centred around the 1.2250 areas where better bids are expected, a push through to the 1.2200 level will likely see strong stops appearing on a break through and the market quickly opening to the 1.2120 level before significant bids reappear. Topside offers light back through to the 1.2350 level with some offer likely to show up with limited congestion then through to the 1.2400 areas and possibly stronger offers going through to the 1.2450 areas.
• GBP: Cable made early gains rising from the opening 1.3995 level to push slowly through the 1.4005 level before starting a slow drift lower as the USD continued its steady climb through towards the grey hours with the Cable slipping back to hold around the 1.3970 areas, for the moment Cable struggles to hold its composure however, downside bids are likely to have rebuilt and the market through to the 1.3950 level remains fairly stubborn with bids increasing into the 1.3900 sentimental level and really only a break below the 1.3800 level will see any significant stops appearing and for the moment seems to be for a different day, saying that the topside is not that dissimilar with offers through the 1.4050 limited but increasing on any challenge of the 1.4100 levels with weak stops likely through the level and stronger offers into the 1.4150 level and possibly the weak side with employment data and earnings numbers.
• JPY: From the opening USDJPY started to rise pushing into the Tokyo session testing through the 107.50 level and stalling for a short period into the 107.60 areas, the push through saw the market move quickly through to the 107.80 level and the market discounting much of the selling from last week and stalling only into the 107.90 as the market ran out of steam, even so the market moves into the grey hours holding just below the highs, topside offers into the 108.00 levels and once through likely to find only token offers on a quick challenge through the 108.60 towards the 108.80-109.00 levels and possibly stronger offers with a break here opening the market in a limited fashion and congestion then running through to the 109.60 levels and likely to curb any further rises, downside bids light through the 107.00 levels with weak stops likely on a move through the level with bids then likely to be light through to the 106.00 level before starting to increase.
• AUD: The Oz started the day drifting however, the wage price index came in a little stronger and the market took that as a signal to buy for any expectant rate rise in the future with the Oz touching through the 79 cent level quickly before dropping back just as quickly and extending to the 0.7870 and through the opening levels, the market then drifted lower as the USD buying pushed through the market in thin volumes and the Oz holding around the 0.7850 lows into the grey hours, bids through the 0.7850 levels with a push through the 0.7840 level likely to see some weak stops appearing and the 78 cent then quickly under pressure, bids then into the 0.7760 level and likely to slow any descent for the time being with strong stops possible on a push through the 0.7740 level. Topside offer light through to the 0.79 cent areas and then some congestion likely to slow any ascent towards the 80 cent level with the offers likely to increase the closer you get.

Overnight News

NZD:

Whole milk powder average price rises to NZ$ 3,246 a ton

NZ Treasury says external member enrich RBNZ Policy debate

CPTPP may boost economy by at least NZ$1.2B a year and may rise to NZ$4B a year

SEK:

Riksbank’s Floden not worried by gradual Krona appreciation

JPY:

Japan’s top financial diplomat puts strong Yen on notice

GBP:

May under pressure after 62 Tories demand clean Brexit

AUD:

IMF: Australia exposed to financial vulnerability, offshore risk

World:

Household debt sees quiet boom across the globe

Today’s data

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

AUD       Wage Price Index Q/Q Q4 A 0.60% | C 0.50% | P 0.50%

AUD       Construction Work Done Q4 A -19.40% | C -10.00% | P 15.70% | R 16.60%

JPY         PMI Manufacturing Feb (P) A 54 | C 55.2 | P 54.8

JPY         All Industry Activity Index M/M Dec A 0.50% | C 0.40% | P 1.00%

08:00     EUR        France Manufacturing PMI Feb (P) C 58 | P 58.4

08:00     EUR        France Services PMI Feb (P) C 59 | P 59.2

08:30     EUR        Germany Manufacturing PMI Feb (P) C 60.5 | P 61.1

08:30     EUR        Germany Services PMI Feb (P) C 57 | P 57.3

09:00     EUR        Eurozone Manufacturing PMI Feb (P) C 59.2 | P 59.6

09:00     EUR        Eurozone Services PMI Feb (P) C 57.6 | P 58

09:30     GBP       Jobless Claims Change Jan C 2.3K | P 8.6K

09:30     GBP       Claimant Count Rate Jan P 2.40%

09:30     GBP       Average Weekly Earnings 3M/Y Dec C 2.50% | P 2.50%

09:30     GBP       ILO Unemployment Rate 3Mths Dec C 4.30% | P 4.30%

09:30     GBP       Public Sector Net Borrowing Jan C -11.0B | P 1.0B

14:45     USD       US Manufacturing PMI Feb (P) C 55.5 | P 55.5

14:45     USD       US Services PMI Feb (P) C 54 | P 53.3

15:00     USD       Existing Home Sales Jan C 5.63M | P 5.57M

19:00     USD       FOMC Meeting Minutes

Harry Hindsight

• EUR: Two days of US Treasury auctions and the USD starts to react with a stronger USD filtering through the market, opening around the 1.2405 areas the market touched just above the 1.2410 level before starting a slow drift through the Asian session testing through the 1.2400 level into the Tokyo session and moving to the 1.2475 levels into the grey hours, early London sold the market quickly through to the 1.2350 areas and the limited movement through the German numbers saw the market basing at the 1.2335 levels through into the NYK session, the market then ranged through the NYK session around that level with dips and rises becoming less pronounced as the market moved to the close.
• GBP: Early trading was not dissimilar to the Euro with the market opening around the 1.4005 and the highs just above there before starting a slow slide through the Tokyo morning session to test back to the 1.3975 levels and holding around the level through into the London opening, London were quick sellers chasing the market to the 1.3930 levels before starting a slow recovery through to the German numbers, not what I would call reliable but the Cable quickly recovered testing quickly to the 1.4015 area and then for the most part ranging around the 1.4000 level testing to the 1.3970 and repeatedly test to the highs before moving into the NYK session, the market eventually extended the highs to the 1.4025 level however the market again dipped and the market went out again holding the 1.4000 levels.
• JPY: USDJPY was a steady riser as I’m sure the yield players bought USD’s for the 3 days of auctions and the market moved off the opening lows around the 106.60 areas and rose slowly through to the grey hours pushing towards the 106.95 levels, the move into the London session saw the market pushing through to the 107.20 levels and struggling with the level into the NYK session before a quick push saw weak stops into the 107.35 level and the market holding around the 107.30 levels to the close.
• AUD: Mixed day for the Oz with the market in Asia seeing the highs after a weak start, the market dipping from the early highs around the 0.7920 level to test to the 0.7890 area and then struggling higher through too late in the session before testing quickly through to the 0.7930 level as Feb meeting minutes were digested, the market then held above the 0.7920 areas through to the grey hours before early London started to sell the market back through the opening levels and through to the 0.7885 areas where the market continued to base through into the NYK session trading lower through the end of the session to test to the 0.7875 level and finishing just off those lows.

Yesterday’s premiership results

NZD       PPI Input Q/Q Q4 A 0.90% | C 0.30% | P 1.00% | R 1.10%

NZD       PPI Output Q/Q Q4 A 1.00% | C 0.40% | P 1.00%

AUD       RBA February Meeting Minutes

EUR        German PPI M/M Jan A 0.50% | C 0.50% | P 0.20%

EUR        German PPI Y/Y Jan A 2.10% | C 1.80% | P 2.30%

CHF        Trade Balance (CHF) Jan A 2.09B | C 2.78B | P 2.63B

EUR        German ZEW Economic Sentiment Feb A 17.8 | C 16 | P 20.4

EUR        German ZEW Current Situation Feb A 92.3 | C 94 | P 95.2

EUR        Eurozone ZEW Economic Sentiment Feb A 29.3 | C 28.4 | P 31.8

GBP       CBI Trends Total Orders Feb A 10 | C 11 | P 14

CAD       Wholesale Trade Sales M/M Dec A -0.50% | C 0.40% | P 0.70%

EUR        Eurozone Consumer Confidence Feb (A) A 0 | C 1 | P 1.3

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