Daily FX Market Commentary

Andy Harrison

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 108.849 | EURUSD 1.0855 | AUDUSD 0.62306 | NZDUSD 0.60226 | USDCAD 1.40093 | USDCHF 0.97234 | GBPUSD 1.23838 |

 

LMAX Highs and Lows 0600 GMT

 

Highs | Lows

EURUSD               1.08792 | 1.08537

USDJPY                109.063 | 108.791

GBPUSD               1.24173 | 1.23719

USDCHF               0.97289 | 0.97051

AUDUSD              0.62495 | 0.6209

NZDUSD               0.60207 | 0.6001

USDCAD               1.40328 | 1.40035

EURCHF               1.05583 | 1.05535

EURGBP               0.87806 | 0.87522

EURJPY                118.612 | 118.122

 

For Today

 

  • GBP: A very limited day for the Cable with the market rising from the 1.2385 area after several hours of holding in the area to push through the 1.2400 level and steadily rising to the 1.2420 area before drifting back off through to the opening levels to range quietly and finally head to the grey hour holding the 1.2400 level. Topside offers into the 1.2450 level and likely to increase through to the 1.2500 area before weak stops are likely to appear on a push through the 1.2510-20 areas and opening the market to weak resistance around the sentimental levels and likely to be open to a medium term run through to the 1.2800 level. Downside bids light through to the 1.2300 level with weak support in the area increasing around the sentimental levels before stronger support appears from the 1.2200 level through to the 1.2100 area.
  • JPY: limited rise from the opening levels around the 108.85 area with initial dip giving the session low and then a test into the Tokyo session pushing initially to the 109.00 level and then after a brief dip running a second time through to the 109.15 areas and dropping back to a quiet range around the 108.95 level. Downside bids light through to the 107.50 level with bids likely to increase through to the 107.00 level with strong stops on any dip through the 106.80 level otherwise the market is lightly populated between the 108-109 levels, Topside offers light through to the 109.50-70 level with possibility of weak stops on a break through with increasing offers into the 110.00-20 level and stops again reappearing for any move above there with congestion then appearing in depth to slow any move.
  • AUD: A quiet limited day with the market opening around the 0.6225 level and rising to make the 0.6250 level into Tokyo and dropping back on the failure to penetrate the area to test to the low of the session around the 0.6210 area and eventually pushing into the grey hour holding close to the opening level, Immediate topside stops cleared and the resistance appears to start around the 0.6250 level onwards and likely increasing as the market moves through the 0.6280 area and any attempt at the 63 cents level however, a break above this level is likely to see vulnerability through to the 65 cents area with stronger sentimental offers likely. Downside bids light through to the 0.5900 level and limited support before opening for a further test of the downside and the stronger 58 cents level.
  • EUR: As with others a quiet opening then a steady rise from the 108.60 level to test lightly above the 1.0880 area and a quicker dip back to the opening levels with the market basing around the 1.0855 area and slowly recovering to the 1.0870 level for the move into the grey hour, Downside bids light through to the 1.0800 area where the possibility of strong congestion however, a push through again exposes the lows to further tests especially if the situation with the virus continues to worsen. Topside offers through into the 1.1000 level are likely to be limited but increasing through the sentimental level and into the 1.1080-1.1100 level with weak stops likely on a push through the 1.1120.

 

 

Overnight News

 

JPY:

BoJ to forecast economic contraction, Reuters report

Japan to pay firms to leave China, relocate production elsewhere – SCMP

NZD:

NZ Traffic gauges drop, adding to signs of 1Q contraction – ANZ – BBG

AUD:

RBA Financial stability review: Regulatory authorities have been working closely together to minimise the economic harm caused by the pandemic – TWT

RBA: Exceptional measures taken to contain COVID-19 are having a major effect on economic activity and the global financial system

RBA: Australian financial system enters this challenging period in a strong starting position

RBA: Financial market uncertainty is elevated

RBA: Capital levels are high, and the banks liquidity position has improved considerably over recent times

RBA: Banks have limited need to issue debt in the period immediately ahead

RBA: Banks also enter the downturn with high profitability and very good asset performance7

RBA: the COVID-19 pandemic is putting the spotlight on a number of pre-existing global financial vulnerabilities

RBA: economic downturn uncertainty and social distancing are likely to result in very little turnover in the housing market

RBA: With many staff working from home and from different locations, financial institutions face increased operational risks and may have less capacity to take on and mange market risk

RBA: Pandemic has changed the nature of some I.T. and cyber risks

RBA: Australian businesses generally have low levels of gearing and most have significant liquid assets

RBA: In the period ahead, many households will find their finances under strain due to efforts to contain the virus

 

 

Today’s Data

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

GBP        RICS House Price Balance (MAR) A 11.0% | C 10.0% | P 29.0%

JPY         Kuroda Speech at Branch Managers meeting

0500      JPY         Consumer Confidence Index (MAR) A | C 35.0 | P 38.4

0600      EUR       German Trade Balance (FEB) A | C 16.5b | P 13.9b

0600      GBP        Construction Output YoY (FEB) A | C 0.2% | P 1.6%

0600      GBP        Industrial Production YoY (FEB) A | C -3.0% | P -2.9%

0600      GBP        Manufacturing Production YoY (FEB) A | C -4.0% | P -3.6%

0600      GBP        Monthly GDP 3M/3M (FEB) A | C 0.1% | P 0.0k%

0600      GBP        Monthly GDP MoM (FEB) A | C -0.1% | P 0.0%

0600      GBP        Trade Balance Non-EU (FEB) A | C -1000m | P 2232m

0600      GBP        Visible Trade Balance (FEB) A | C -6000m | P -2720m

0600      JPY         Machine Tool Orders YoY (MAR P) A | P -29.6%

1230      CAD       Net Change in Employment (MAR) A | C -500k | P 30.3k

1230      CAD       Unemployment Rate (MAR) A | C 7.4% | P 5.6%

1230      CAD       Full Time Employment Change (MAR) A | P 37.6k

1230      CAD       Hourly Wage Rate Permanent Employees A | C 4.4% | P 4.3%

1230      USD       Initial Jobless Claims (APR 4) A | C 5000k | P 6648k

1230      USD       Continuing Claims (MAR 28) A | P 3029k

1400      USD       U. of Mich Sentiment (APR P) A | C 75.0 | P 89.1

1700      USD       Baker Hughes US Rig Count (APR 10) A | P 664

2350      JPY         Bank Lending Ex-Trusts YoY (MAR) A | P 2.2%

2350      JPY         Bank Lending incl. trusts YoY (MAR) A | P 2.1%

 

Harry Hindsight

 

  • GBP: A slow drift through the Asian session saw the market initially running to just above the 1.2350 level before slipping back into the Tokyo session to test through to the 1.2310 level and holding through to the grey hours for the most part, early buying in London saw the market pushing through to close to the early highs before strong selling saw the market make the low of the day on a test to the 1.2290 area before slowly recovering and starting a steady tight channelled rise through to deep into the NYK to test the 1.2420 area before dipping a little for the run to the close.
  • JPY: A very limited day for the USDJPY with the market lifting off the days lows just after the Tokyo opening to pushing quickly back to the opening around the d108.90 level and continuing thr run into the grey hour to test the 109.00 the move through the London session saw limited movement with the market holding in the 108.90-109.00 levels before testing quickly to 109.10 before dropping back quickly to the 108.70 level and a slow drift through to the 108.60 for the low of the day, once London was over with the market slow rose through to the close.
  • AUD: Dipping on the move into the Tokyo saw the market test through to the 0.6130 level before ranging through to the grey hours in a tight range, early London saw the downside low extended to the 0.6115 area before starting a steady rise through the session to the end of London pushing the 0.6240 level and then starting a tight range through to the close.
  • EUR: A quiet opening before moving through into the Tokyo session and early selling moving the market from just above the 1.0890 level and testing to the 1.0870 area and holding through into the midsession around the level a minor dip through to the 108.60 level saw the market moving through into the grey hour rising through to nearly recapture the day before London moved in and the market dropped `quickly through to make the low of 1.0830 area bouncing only to the 1.0860, the slow movement through the session saw limited buying through to the NYK session before losing its shine again and slowly drifting through to the close in a quiet range.

 

Yesterday’s Premiership Results

JPY         Machine Orders YoY (FEB) A -2.4% | C -3.0% | P -0.3%

JPY         Trade Balance BOP Basis (FEB) A 1366.6b | C 2021.5b | P 1626.8b | R -985.1b

AUD       Home Loans Value MoM (FEB) A -1.7% | C 2.0% | P 4.6%

AUD       Investor Loan Value MoM (FEB) A -1.9% | C 2.5% | P 3.6%

JPY         Bankruptcies YoY (MAR) A 11.79% | P 10.71%

JPY         Eco Watchers Survey Current (MAR) A 14.2 | C 22.0 | P 27.4

JPY         Eco Watchers Survey Outlook SA (MAR) A 18.8 | C 19 | P 24.6

CHF        Unemployment Rate (MAR) A 2.8% | C 2.6% | P 2.5%

CHF        Unemployment Rate s.a. (MAR) A 2.9% | C 2.6% | P 2.3%

MXN      Industrial Production NSA YoY (FEB) A 1.9% | P -1.6%

USD       MBA Mortgage Applications (APR 3) A -17.9% | P 15.3%

CAD       Housing Starts (MAR) A 195.2k | C 170.0k | P 210.1k

CAD       Building Permits MoM (FEB) A -7.3% | C -3.5% | P 4.0% | R 3.3%

USD       DOE US Crude Oil Inventories (APR 3) A 15177k | P 13833k

USD       FOMC Meeting Minutes (MAR 15)

 

Best Regards

Andy

 

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