Daily FX Market Commentary

Andy Harrison

Good Morning,

For Today

• GBP: Opening around the 1.3640 area the market pushed through to above the 1.3650 level for the high of the session before heading into the Tokyo session with a slow drift through to the open again, midsession saw USD buying moving through the market and the market steadily dropping back through to the 1.3600 area for the move into the grey hours, Topside offers into the 1.3750 area with weak stops covered by stronger offers the closer the market pushes towards the 1.3800 area, weak stops through the level on a move through and likely to continue only a short distance before weakness appears and the topside opens up through to the 1.40 handle with sentimental offers limited. Downside bids through the 1.3600 area and stops losses through the level and a light run through to the 1.3550 area and strong bids start to appear and continue to increase into the 1.3500 level.
• JPY: Moving through into the Tokyo session dipping from the opening around the 105.03 area before slipping through to the 104.98 before stronger USD buying moved through pushing the USDJPY through to the 105.15 level for the move into the grey hours, Topside offers light through to the 105.20 area with possible weak stops through the level before stronger offers start to appear in a congestive move through into the 105.60 level and after a little bit of weakness increases through to the 106.00 level with stronger stops above the 106.20-30 area. Downside bids light through to the 104.50 level with bids beginning to fill the market around the level and stronger into the 104.00-20 areas and stronger bids below the 103.60 levels.
• AUD: A quiet session with the market rising a little from the stronger export numbers to China than expected and helping the AUD through to just below the 0.7650 area before dipping back as USD buying moved through the session, nothing unusual for a Thursday, the market slipped back to the opening levels and moved into the grey hours holding around the 0.7625 area, downside bids light through to the 0.7560 area and bids likely to be strong through to the 0.7550 areas and increasing on any move into the 0.7500-0.7480 area with strong stops through the level and opening stronger downside potential, topside bids light through the 0.7650 area and limited build of offers around the 77 cents level sees limited stops and the market then starting to increase resistance on any move through the 0.7750 level.
• EUR: Light rise through into the Tokyo session testing above the 1.2040 level before slowly drifting through into the Tokyo session, the USD buying saw the Euro dip quickly on a break of the 1.2030 area to test quickly to the 1.2020 level and then range for an hour or so before moving towards the grey hours and another set of selling and a dip into the mid-teens, Downside strong bids into the 1.2000 level with weak stops on a move through the 1.1980 area and supportive congestion around the sentimental levels through to the 1.1900 level, Topside offers into and through the 1.2080 area continuing to the 1.2120 area before weakness appears and light weak stops open the 1.2150 area for a test, from there though topside offers start to increase into the 1.2200 level and above to limit any sudden moves,

Overnight News

GBP:
Oxford-AstraZeneca Vaccine appears to stop the virus spreading – AFR
BoE tells Finance firms to lower hopes of EU Market Access – BBG
Many UK companies report trade hassles from Brexit shift – RTRs
UK govt. reports vaccine roll-out passes 10m
USD:
House adopts budget measure in bid to fast track Biden stimulus – BBG
Fed’s Evans says the more fiscal support the better – RTRs
AUD:
China tops Australian trading partners with AUD21.5b – BBG
CNY:
Foreign buyers added most China Government bonds ever in January – BBG
EUR:
Draghi calls for unity as he tries to form Italian government – AFP

Today’s Data
NZD Building Consents MoM (DEC) A 4.9% | P 1.2%
USD FOMC Member Mester Speaks
USD FOMC Member Kaplan Speaks
AUD NAB Quarterly Business Confidence A 14 | P -10 | R -8
AUD Trade Balance (DEC) A 6.785b | P 5.022b
0645 CHF SECO Consumer Climate (Q1) A | P -30
0830 EUR HIS Markit Construction PMI (JAN) A | P 47.1
0900 EUR ECB Economic Bulletin
0930 GBP Construction PMI (JAN) A | C 52.9 | P 54.6
1000 EUR Retail Sales MoM (DEC) A | C 1.6% | P -6.1%
1200 GBP BoE MPC Vote (FEB) A | C 9 | P 9
1200 GBP BoE QE Total (FEB) A | C 875b | P 875b
1200 GBP BoE Interest Rate Decision A | C 0.10% | P 0.10%
1330 USD Initial Jobless Claims A | C 830k | P 847k
1330 USD Non-Farm Productivity QoQ (Q4) A | C -2.8% | P 4.6%
1330 USD Unit Labour Costs QoQ (Q4) A | C 4.0% | P -6.6%
1500 USD Factory Orders MoM (DEC) A | C 0.7% | P 1.0%
1900 USD FOMC Member Daly Speaks
2230 AUD RBA Governor Lowe Speaks
2330 JPY Household Spending YoY (DEC) A | C -2.4% | P 1.1%
2330 JPY Household Spending MoM (DEC) A | C -1.9% | P -1.8%

Harry Hindsight

• GBP: Opening around the 1.3665 area ranging around the level through into the Tokyo session before pushing through to the 1.3680 and holding for a short period before drifting through to the 1.3650 level to hold through to the London opening where quick buying again pushes to the 1.3680 areas to hold for a brief period before starting a steady repeat steps through to the 1.3620 area to make the lows for the day, the move through into the NYK session saw a limited rise and the market holding around the 1.3650 area for the bulk of the session losing a little ground to finish in the 1.3640’s area.
• JPY: Another quiet day for the USDJPY with early rise through the 105.00 level and then creating the general centre for ranging, the move through into the Tokyo session dipping through to the 104.92 area for the lows of the day before starting a slow but steady rise through to the 105.10 area and the high of the day on the move into the grey hours, slow drift through the London session with the market holding around the figure level and finishing the day just above 105.00 level.
• AUD: A very tight range through the whole day rising through the 0.7610 level into early Tokyo and then ranging around the 0.7610 area through to the close with a limited rise to finish the day pushing through the 0.7620 area but with very little conviction.
• EUR: Quiet opening around the 1.2040 area and dipping through to the 1.2035 before rising into the Tokyo session testing the 1.2050 before slowly sliding lower through into the grey hours and with no reprieve from the London session the market dipped to 1.2010 area and ranged around the 1.2015 level before moving into the NYK session rising through to the opening levels again.

Premiership Results
NZD Employment Change QoQ (Q4) A 0.6% | C -0.8% | P -0.8%
NZD Unemployment Rate (Q4) A 4.9% | C 5.6% | P 5.3%
AUD Building Approvals MoM (DEC) A 10.9% | P 2.6%
JPY Services PMI (JAN) A 46.1 | P 47.7
AUD RBA Gov. Lowe Speaks
CNY Caixin Services PMI (JAN) A 52.0 | P 56.3
EUR ECB Monetary Policy Statement
EUR Spanish Services PMI (JAN) A 41.7 | C 45.3 | P 48.0
EUR German Services PMI (JAN) A 46.7 | C 46.8 | P 46.8
EUR Markit Composite PMI (JAN) A 47.8 | C 47.5 | P 47.5
EUR Services PMI (JAN) A 45.4 | C 45.0 | P 45.0
GBP Composite PMI (JAN) A 41.2 | C 40.6 | P 40.6
GBP Services PMI (JAN) A 39.5 | C 38.8 | P 38.8
EUR Core CPI YoY (JAN) A 1.4% | C 0.2% | P 0.2%
EUR CPI YoY (JAN) A 0.9% | C 0.5% | P -0.3%
EUR German BuBa Wuermeling Speaks
USD ADP Nonfarm Employment Change (JAN) A 174k | C 49k | P -123k | R -78k
USD Markit Composite PMI (JAN) A 58.7 | P 58.0 | R 55.3
USD Services PMI (JAN) A 58.3 | P 57.5
USD ISM Non-Manufacturing Employment (JAN) A 55.2 | P 48.7
USD ISM Non-Manufacturing PMI (JAN) A 58.7 | C 56.8 | P 57.7
USD Crude Oil Inventories A -0.994m | C 0.446m | P -9.910m
EUR German BuBa vice Pres. Buch Speaks
USD FOMC Member Bullard Speaks
USD FOMC Member Harker Speaks

Best Regards
Andy

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