Daily FX Market Commentary

Andy Harrison

Good morning,

NYK Close SYD open

USDJPY 88.165 88.07-28 | EURUSD 1.30697 1.3070-79 | EURJPY 115.211 115.107-461 | AUDUSD 1.04791 1.0473-86 | NZDUSD 0.83173 0.8290-0.8327 | USDCAD 0.98748 0.9865-87 | EURCHF 1.20851 1.2085-91 | USDCHF 0.92462 0.9209-98 | GBPUSD 1.6072 1.6029-88 | EURGBP 0.81316 0.8103-46 |

 

Weekend News

USD:

Plosser, Bullard Say Fed’s Asset Purchases Contingent on Jobs
Yellen Says Communications Now Playing ‘Big Role’ in Fed Policy
Plosser Says Fed Must Defend 2% Explicit Target for Inflation
Obama Says Rich Should Pay More Tax Through Fewer Loopholes 
Camp Sees Debt Default Averted as Republicans Seek Spending Cuts
Obama Returns From Hawaiian Holiday to Second-Term Challenges
IMF:

Lagarde Says Debt Ceiling, Euro Crisis Threaten Global Growth
JPY:

Japanese buys $1.76 Million Tuna to Beat Hong Kong Rival Again
Japan’s Property Prices May Have Fallen Too Much, Nishimura Says
Japan to Draw Up Plan by June to Revive Industries, Nikkei Says
Toyota Plans No New Plant Building for Three Years, Nikkei Says
JPY/CNY:

Toyota Sells Almost 90,000 Cars in China in Dec., Reuters Says
Japan Alerts Jets as China Plane Nears Disputed Isles: Yomiuri
EUR:

Merkel Shifts Focus to Economy From Debt as State Election Nears
Spain Treasury to Present 2013 Funding Plan Jan. 8: Expansion
Spain Regions Reject Budget Ministry Data on Deficit, Cinco Says
CNY:

China Jan-Nov Agricultural Products Imports Rise 20.8%: Xinhua

Harry Hindsight

·         EUR: The pair slowly declined in Asia moving from an opening above 1.3050 and slipping to below 1.3020 before recovering to just below 1.3050 as early London arrived at their desks and started to sell to the weak side, we briefly dallied below 1.3000 however, PMI number in line with expectations helped to keep the pair above the level and we traded 1.3000-20 for several hours until numbers in the States and while the headline number was better than expected the revision to the unemployment rate offset the gain and the Euro’s rose quickly to above 1.3060 and when factory orders came in worse than expected the Euro got another boost higher to trade just below 1.3090, we dropped back a little as we moved into the close but with a stronger Euro overall.

·         GBP: The Cable dropped back from its opening levels in Asia as the pair played catch up to the Euro’s falls over the week, We moved from an opening around 1.6110 to below 1.6060 in the first hour or so in Asia we stayed between 1.6060-70 for the balance of the session until early London began selling pre PMI services numbers and once they came in lower than expected the market took even more of a sell tone dropping down to 1.6010 before find any support which coincided with the poor revisions in the US numbers helping to turn the market to move back above the 1.6080 area for a more reasonable loss for the day. However, the loss seen against the USD was only slightly better received than that against the Euro which managed to finish higher than it started and left EURGBP some 35 tics higher than when the day started.

·         JPY: With jawboning of the new government in particular taking a stance that USD and EUR are performing under par against the Yen rather than the Yen beginning to trade more in line with true value as opposed to the manipulated rate still saw the Yen weaken, with Japanese stocks rallying one can only surmise that Japanese investors were quick to snap up equities in the US and Europe thus requiring further Yen selling rather than some of the wild comments others have been making, We moved during Asia straight up for the fixing as demand seemed to be the name of the game in early trading however, once we had reached the 87.80 level the market levelled off and we seemed to be stuck, Tokyo lunch passed and we started to see interest in buying EURJPY picking up to take the market to new highs into early London hitting 88.40 just before the NYK market opened, of course when the US figures hit we quickly reversed the mood selling USD’s in particular back down to 87.70 before bargain hunters again moved it to the 88.30 level, some late take profits sold the market into the close and we finished around the 88.15 level for the day.

·         AUD: With rumours of GDP fallout in China the market struggled to maintain the 1.0500 area we saw for most of the week, we opened around the 1.0460 level only to slowly drop back through the Asian session touching below 1.0430, London entered the fray and was in the same mind and we saw EURAUD buying as well as straight Oz selling against the USD on the same selling of the rumour, we traded to below 1.0400 but looked uncomfortable on the level and started to trade higher as the Euro began to reverse its losses, once the NYK market kicked in we moved steadily throughout the remainder of the session to push to above the opening levels into the close of NYK.

Friday’s premiership results

Actual = A | Consensus = C | Previous = P | Revised = R 

09:00     EUR        Eurozone PMI Services Dec (F) A 47.8 | C 47.8 | P 47.8   

09:30     GBP       PMI Services Dec A 48.9 | C 50.1 | P 50.2              

10:00     EUR        Eurozone CPI Estimate Y/Y Dec A 2.20% | C 2.10% | P 2.20%        

13:30     USD       Change in Nonfarm Payrolls Dec A 155K | C 145K | P 146K | R 161K

13:30     USD       Unemployment Rate Dec A 7.80% | C 7.70% | P 7.70% | R 7.80%

13:30     CAD       Industrial Product Price M/M Nov A -0.30% | C -0.20% | P -0.10%             

13:30     CAD       Raw Materials Price Index M/M Nov A -1.90% | C -1.00% | P 0.00% | R 0.10%

13:30     CAD       Net Change in Employment Dec A 39.8K | C 0.0K | P 59.3K           

13:30     CAD       Unemployment Rate Dec A 7.10% | C 7.30% | P 7.20%   

15:00     USD       Factory Orders Nov A 0.00% | C 0.40% | P 0.80%               

15:00     USD       ISM Non-Manufacturing Composite Dec A 56.1 | C 54.3 | P 54.7

15:30     USD       Natural Gas Storage A -135B | C -129B | P -72B  

16:00     USD       Crude Oil Inventories A -11.1M | C -0.7M | P -0.6M

For today

USDJPY:
Topside: 88.40-88.70 decent buy stops 88.70-89.00 light buy stops 89.00-89.30 light mix
Downside: 87.50-87.70 light mix 87.20-87.50 light sell stops

EURUSD:
Topside: 1.3090-1.3130 light buy stops 1.3140-1.3170 light offers 1.3180-1.3210 light offers
Downside: 1.3010-1.3040 light bids 1.2980-1.3010 light bids

EURJPY:
Topside: 115.50-115.70 light buy stops
Downside: 114.00-114.40 light bids AUDUSD:
Topside: 1.0500-1.0535 light mix 1.0540-1.0570 light buy stops 1.0570-1.0600 light buy stops
Downside: 1.0410-1.0440 light bids 1.0380-1.0410 light bids

 

JPY: Japan PM: Will pursue bold monetary policy, big fiscal spending

JPY: Govt Suga: Expect Issuing of Joint Statement with BOJ at Next Policy Meeting- Nikkei

JPY: Japan Govt Finalizing Stimulus Package with Y5T in Public Works – Report

JPY: Japan considers resuming inflation-linked bonds in FY2013/14-Nikkei

JPY: Japan Dec monetary base hits record on BOJ easing policy

CNY: China Ministry Offers Subsidies to Firms Investing in Public Housing

 

·         EUR: A quiet session overall with good volumes going through especially with the announcement that the Basel bank rules are softer than expected and are not going to be implemented until 2019, Euro’s began the day just below 1.3080 close to where the market left off on Friday, however, once the Tokyo market entered the fray it was pretty much all one way and we saw selling from the starting levels to 1.3060 before we saw any support entering the market and this support held us for several hours before again giving ground and we dropped to the 1.3030 level as we move towards London.

·         GBP: Nothing special with a similar pattern to the Euro opening unchanged and being sold from the Tokyo opening pushing us steadily lower from the opening 1.6070 down to mid 1.6020’s as we head into London.

·         JPY: Cross selling seemed to be the way forward and we saw Yen strengthening against most to the major currencies forcing USDJPY to move steadily lower from the highs above 88.30 to below 87.80 over the course of the session with retail Japanese making a good appearance.

·         AUD: Early buyers of Oz from the opening 1.0490 took the market to above 1.0510 pre Tokyo opening however, as with the rest AUDJPY seemed to dominate the market and it started to reverse on the opening as the Yen strengthened and we saw Oz move down to the 1.0470 level in quiet trading for the pair.

Today’s data

Actual = A Consensus = C  Previous = P Timings GMT

JPY         Monetary Base Y/Y Dec A 11.80% | C 5.30% | P 5.00%                                     

08:00     CHF        Foreign Currency Reserves Dec C 423.0B | P 424.8B         

09:30     EUR        Eurozone Sentix Investor Confidence Jan C -13.8 | P -16.8           

10:00     EUR        Eurozone PPI M/M Nov C -0.10% | P 0.10%         

10:00     EUR        Eurozone PPI Y/Y Nov C 2.40% | P 2.60%              

15:00     CAD       Ivey PMI Dec C 51.3 | P 47.5       

Ranges as of 6am London time

                                Highs   Lows

USD/JPY               88.38 | 87.79

EUR/USD             1.3091 | 1.30285

EUR/JPY               115.55 | 114.43

AUD/USD            1.0513 | 1.0466

NZD/USD             0.8327 | 0.8288

USD/CAD             0.9887 | 0.9860

EUR/CHF              1.2100 | 1.2084

USD/CHF             0.9275 | 0.9240

GBP/USD             1.6082 | 1.6022

EUR/GBP             0.8138 | 0.8129

 

 Stay lucky

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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