Daily FX Market Commentary

Andy Harrison

Andy Harrison

Good Morning,

 

LMAX Close

USDJPY 109.788 | EURUSD 1.09159 | AUDUSD 0.67141 | NZDUSD 0.64004 | USDCAD 1.32868 | USDCHF 0.9758 | GBPUSD 1.29526

 

LMAX highs and Lows 06.00 GMT

                                Highs | Lows

EURUSD               1.09211 | 1.09117

USDJPY                 109.893 | 109.77

GBPUSD               1.29690 | 1.29518

USDCHF               0.97591 | 0.97505

AUDUSD              0.67377 | 0.67131

USDCAD               1.32950 | 1.32786

NZDUSD               0.64766 | 0.6404

EURCHF               1.06558 | 1.06431

EURGBP               0.84262 | 0.84159

EURJPY                 119.988 | 119.841

 

 

For Today

  • GBP: A slow rise from the opening to push the highs from yesterday testing the 1.2970 level before drifting back a little to hold in the 1.2960’s through to the grey hours, Topside offers light back through the 1.3000 level with some limited congestion on a test to the 1.3050 area but the market only lightly defended then through to the 1.3150 area with limited stops through the 1.3100 areas, downside bids strong through into the 1.2900 level however, weak stops growing behind the level and limited congestion through to the 1.2850 level and increasing only once the market moves through the area to head for the 1.2800 area.
  • JPY: A slow rise through to the highs in midsession testing towards the 109.90 area before drifting in a quiet session holding in the low 109.80’s to the grey hours, Topside offers likely to be limited with weak stops on a push through the 110.20 area and opening up limited room through to the 110.50 and increasing resistance as the market approaches the 111.00 areas, downside bids light through to the 109.00 area with limited support and weak stops likely to be light for a move back to the stronger 108.50 area with good support likely to appear on any dips to the 108.00 levels.
  • AUD: Opening quietly and moving into the Tokyo session testing the 0.6720 area before dipping and then running on the Tokyo fix to test the 0.6735 level, the market then eventually pushed lightly through the level before trading steadily around the 0.6730 area through to the grey hours, downside bids cleared  through to the 0.6680 level opening up a deeper move over a long period with bids likely to appear around the sentimental 00/50 areas, topside offers light through to the 0.6780 level with strong offers likely to increase into the 0.6800/20 area with weak stops appearing through the level and 0.6840-60 likely to be stronger.
  • EUR: A slow slide lower slipping from the opening 1.0920 areas and testing through to hold the 1.0910 through to the grey hours, Topside offers light through to the 1.1040 area with limited congestion then appearing through to the 1.1070 level where stronger offers are suspected. Downside bids into the 1.0900 level and likely to continue through to 1.0880 before weak stops move into the market with a small gap through to the 1.0860 level where stronger bids appear and congestion through to the 1.0800 level likely with possibly a set of stops around the 1.0840-30 area.

 

 

Overnight News

NZD:

RBNZ: Maintains benchmark interest rate at 1%

RBNZ Sees average OCR in 3Q 2020 at 1.01%

RBNZ Sees average OCR in 1Q 2021 at 1.03%

RBNZ Sees average OCR in 2Q 2021 at 1.01%

RBNZ Sees average OCR in 3Q 2021 at 1%

RBNZ: Employment slightly above maximum sustainable level

RBNZ: Coronavirus outbreak is emerging downside risk

RBNZ: Forecasts show no chance of rate cut in 2020

RBNZ: Low rates necessary to keep employment, CPI around target

RBNZ: GDP growth expected to accelerate in second half of 2020

RBNZ: Econ impact of virus in NZ will be of short duration

RBNZ: Raises 2Q GDP growth forecast to 0.9% from 0.7%

RBNZ: Sees indications household spending growth will increase

RBNZ: Policy has time to adjust to virus impact if needed

RBNZ: Policy committee reached consensus on rate decision

RBNZ: Fiscal stimulus is reducing burden on monetary policy

NZ retail card spending unexpectedly fell in Jan – BBG

JPY:

Japan Defence Minister says quarantine officer has Coronavirus

CNY:

China’s virus crisis hits global flows of letters, parcels – APW

China home sales plunged 90% in first week of Feb on Virus – BBG

USD:

API reports US crude stockpiles rose 6m bbl last week – BBG

Powell: Risks to outlook remain closely monitoring Coronavirus

Powell: Policy likely appropriate barring material reassessment

Powell: Virus could cause disruption in China with spill overs

Trump: Fed rate is too high, USD tough on exports

GBP:

BoE’s Limited policy space argues for immediate cut, Haskel says – BBG

 

 

Today’s Data

Actual – A | Consensus – C | Previous – P | Revised R | all timings GMT/UTC

NZD       RBNZ Official Cash Rate (FEB 12) A 1.00% | C 1.00% | P 1.00%

NZD       RBNZ Governor News Conference After OCR Decision

JPY         Machine Tool Orders YoY (JAN P) A -35.6%| P -33.5%

1000       EUR        Eurozone Industrial Production w.d.a. YoY (DEC) C -1.9% | P -1.5%

1200       USD       MBA Mortgage Applications (FEB 7) P 5.0%

1500       USD       Powell Testifies Before Senate Banking Panel

1530       USD       DOE US US Crude Oil Inventories (FEB 7) P 3355k

1900       USD       Monthly Budget Statement (JAN) C 6.2b | P -13.3b

1910       NZD       Governor at Parliament Select Committee on MPS

 

Harry Hindsight

 

  • GBP: Opening around the 1.2910 area the market ranged around the opening level pushing towards the 1.2920 level then holding steady between the levels through to the grey hours, early London selling saw the market dropping back through the 1.2900 level in front of the data releases and pushed off the low of 1.2895 quickly as the numbers generally came in better than expected and pushed through to the 1.2940 level before finding limited resistance, the market then drifted through to the NYK session and then again rallied this time bursting through to the 1.2970 level dipping back and running a second time before holding around the 1.2955 area to the close.
  • JPY: A slow start saw the market holding around the opening 109.75 area and not until the Tokyo fix did the market move pushing quickly through to the 109.85 area and then slowly rising through the session testing to the 109.90 level before slowing and drifting back a little only to recover for the move into the grey hours, early London extended the highs but, only just testing towards the 109.95 area before moving fully into London and a steady drift through to the 109.80’s area again falling on the opening into the NYK session testing back to the opening levels before holding quietly, Powell’s speech pushed the market through to again extend the highs and again extending that high by a pip or two before dropping back to the 109.80 level, the move to the close saw the market extend the low in the same fashion as the highs by a pip or two before finishing the day just above the opening level and off those 109.72 area.
  • AUD: The Oz opened around the lows with a slight dip into the Tokyo opening to make the low around the 0.6684/3 area and then never really looked back, trading with the movement in the JPY saw the Oz push steadily above the 67 cent level and then slowly rise through to the 0.6720 area for the move into the grey hours, the market drifted a little for the London session testing the 67 cents level into the NYK opening where buyers reappear and a steady push through to the highs testing the 0.6735 level before dipping on the Powell’s speech to hold around the 0.6715 level through to the close.
  • EUR: A reasonably quiet session through to the NYK session with the market holding between the 1.0905-15 area, the move through to the NYK session saw the market slowly pushing to the 1.0920 level before dipping into the Lagarde speech and then quickly rising having dipped through to the 1.0895 level last seen in Oct last year, the market then started to reverse and push steadily through to make the high of the day testing the 1.0925 area before holding in a steadily declining range to the close around the 1.0918 area.

 

Yesterday’s Premiership results

AUD       Home Loans Value MoM (DEC) A 4.4% | C 1.6% | P 1.9%

AUD       Investor Lean Value MoM (DEC) A 2.8% | C 1.6% | P 2.5%

AUD       NAB Business confidence (JAN) A -1 | P -2

GBP       GDP YoY (4Q P) A 1.1% | C 0.8% | P 1.1% | R 1.2%

GBP       Construction Output A 5.0% | C 3.7% | P 2.0% | R 2.6%

GBP       GDP QoQ (4Q P) A 0.0% | C 0.0% | P 0.4% | R 0.5%

GBP       Industrial Production YoY (DEC) A-1.8% | C -0.8% | P -1.6% | R -2.5%

GBP       Manufacturing Production YoY (DEC) A -2.5% | C -1.0% | P -2.0% | R -3.3%

GBP       Monthly GDP MoM (DEC) A 0.3% | C 0.2% | P -0.3%

GBP       Trade Balance (DEC) A 7715m | C -350m | P -4031m | R 1821m

GBP       Trade Balance non-EU (DEC) A 6721m | C -2000m | P 1734m | R 2364m

GBP       Visible Trade Balance (DEC) A 845m | C -10000m | P -5256m | R -4947m

MXN      Industrial Production n.s.a. YoY (DEC) A -1.0% | C -0.5% | P -2.1%

EUR        ECB Pres. Lagarde Speaks in Strasbourg EU Parliament

USD       Powell to speak before House Financial Services Panel

GBP       BoE Governor Carney Speaks before Lords Committee

 

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