Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 90.86 | EURUSD 1.34549 | EURJPY 122.252 | AUDUSD 1.04175 | NZDUSD 0.83089 | USDCAD 1.00618 | EURCHF 1.24632 | USDCHF 0.92626 | GBPUSD 1.5694 | EURGBP 0.85736 |

 

Harry Hindsight

·         EUR: A quiet day overall with Asia stuck in a tight range moving from the opening 1.3454 level to top out above 1.3470 before light EURJPY selling kicked in from exporters taking the market lower during the fix, it didn’t recover till late in the session holding just below the opening levels and pushing back to above 1.3465 just before we started to move into the grey period before London, from there it was downward and just after the official opening touching the low for the day below 1.3425 with a lack of numbers until the NYK market opened we stayed below the opening level however, as usual Euro perked up after a good durable goods number and we saw new highs for the day above 1.3475 before slipping back in an ever decreasing sideways movement to finish the day around the opening levels.

·         GBP: Cable opened just above 1.5770 and topped just below 1.5790 in the first hour of trading, then it was all one way after that Asia slowly sold it lower taking it to 1.5750 and early Europeans sold it aggressively during the grey period before London opens officially to just below 1.5720, with no real data the follow through from the UK/Europe question and a less than impressive 4Q GDP it continues to fall, while there was periods of buying as soon as it was over we would push to a new low with no convincing bounces, early NYK sold it on the opening and for once the bounce was big than the original sell off only for it to drop even further through the 1.5700 level and below 1.5680 before finding any support, we meandered from that point to a close around 1.5690 on a less than impressive day, at least the exporters should be enjoying this fall.

·         JPY: We opened a little higher than Fridays close and made a 31mth high above 91.20 before dropping off on fixing supply in EURJPY in particular, to below the 91.00 area we struggled from then on with another bout of cross selling from exporters and some light AUDJPY carry trade selling, however, it did manage to move back above the 91.00 area and hold there for a few hours before seeing more cross selling as we moved into Tokyo lunch, as London opened we had been in decline for an hour or so and they followed through with mover selling triggering minor stops along the way in the crosses eventually taking us below 90.60 for the day’s lows, pre NYK saw the pair rally again and we managed to push to just below 91.10 however again cross selling killed it and we ended up basing off  the 90.60 area into the close.

·         AUD: The Oz was in a quiet mood still dropping in Asia but a little better bid once we hit the lows, we traded from the opening area of 1.0415 to just below 1.0430 before pre London took the significance of comments about safe haven selling now that Europe is fixed (not my words) we eventually reached below 1.0400 basing off 1.0385 several times before the market gave up on the downside and we started to rise to the starting area again throughout the NYK session.

 

Yesterday’s premiership results

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

JPY         Corporate Service Price Y/Y Dec A -0.40% | C -0.50% | P -0.40% 

EUR        Eurozone M3 Y/Y Dec A 3.30% | C 3.90% | P 3.80%           

USD       Durable Goods Orders Dec A 4.60% | C 1.90% | P 0.70% | R 0.80%

USD       Durables Ex Transportation Dec A 1.30% | C 0.80% | P 1.60%       

USD       Pending Home Sales M/M Dec A -4.30% | C 0.50% | P 1.70%       

For today

USDJPY:
Topside: 91.00-91.30 light offers 91.30-91.60 light mix 91.60-91.90 light offers 91.90-92.20 decent buy stops
Downside: 90.30-90.40 medium bids 90.00-90.30 medium sized sell stops

EURUSD:
Topside: 1.3470-1.3500 light offers 1.3500-1.3540 medium buy stops 1.3540-1.3570 light buy stops 1.3570-1.3600 medium buy stops
Downside: 1.3400-1.3425 light bids 1.3350-1.3380 light bids 1.3320-1.3350 light sell stops

EURJPY:
Topside: 122.70-123.00 light offers 123.00-123.30 light buy stops
Downside: Nothing significant AUDUSD:
Topside: 1.0450-1.0460 light buy stops 1.0470-1.0500 light offers
Downside: 1.0340-1.0370 light mix

 

JPY:

Amari: World Understands Yen Fall Not Manipulation but Result of Efforts vs. Deflation

CNY:

China End-2012 Outstanding Loans to Local Govt Vehicles Reached CNY9.2 Tln -Report

China Researcher: Urbanization May Create CNY25 Tln Demand to 2020 -Report

AUD:

Australia business confidence rebounds, activity lags-survey

SGD:

Singapore wants to boost population to 6.9M by 2030

NZD:

NZ PM Key reaffirms budget surplus, asset sales plans

USD:

Senate Clears $50.5 Billion Sandy Aid Bill

 

·         EUR: Another quiet session in Asia with trading in the Euro’s very limited in range, we started the day around the 1.3455 level and saw early selling pressure taking it down to just below 1.3445 for the first few hours, once we had the numbers out we saw risk rising again with the help of the Oz, Euros slowly crawled back above the starting area to make the high above 1.3460 before it started drifting for a second time, a lack of chatter, even the CB of Asia were out of the market both physically and verbally which is highly unusual. As we head towards the London open the Euro is again under pressure from EURJPY selling coming in from exporters for a change.

·         GBP: If you thought Euro was quiet Cable went one way and it moved from the opening level of 1.5690 areas to move to 1.5706 in slow waves, not the strongest indication of a recovery but with a lack of movement in particular in Cable today at least it’s almost all one way.

·         JPY: The USDJPY began the day with some retail Japan taking back some of its long positions as carry trades with NZD moving higher after the trade balance and a couple of numbers in Oz from the opening around 90.85 we fell sharply into the Tokyo fixing moving to a low of 90.40 before holding, comments by Amari (honest gov we did nothing) helped stabilize the situation and the market rebounded just as quickly as some EURJPY buying moved into the market with the help of the comments USDJPY peaked above the 91.00 level before again seeing some cross selling which seemed to coincide with the RBIndia cutting rates to drop the market to the 90.70. JPY seemed to be the centre of attraction with most of the volume today going through against one currency or another.

·         AUD: The Oz opened slightly weaker from 1.0415 area dropping initially towards the figure before finding comfort as buyers appeared to take it away from the lows, although the leading index number was poor its 2months behind where we are now and all expectations seemed to be hanging on the confidence number which impressed and the market moved quickly higher touching above the 1.0455 level after a long sustained albeit slow rally higher. For the moment we hang around the 1.0450 area moving to London.

Today’s data

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

NZD       Trade Balance (NZD) Dec A 486M | C -105M | P -700M   

AUD       Conference Board Leading Index Nov A -0.20% | P 0.20%             

AUD       NAB Business Confidence Dec A 3 | P -9               

07:00     EUR        German GfK Consumer Sentiment Feb C 5.7 | P 5.6        

14:00     USD       S&P/Case-Shiller Composite-20 Y/Y Nov C 5.60% | P 4.30%          

15:00     USD       Consumer Confidence Jan C 64 | P 65.1

Ranges as of 6am London time

                                Highs    Lows

USD/JPY               91.025 | 90.40

EUR/USD             1.3461 | 1.3443

EUR/JPY               122.45 | 121.555

AUD/USD            1.0453 | 1.0405

NZD/USD             0.8374 | 0.8327

USD/CAD             1.0063 | 1.005

EUR/CHF              1.2469 | 1.2454

USD/CHF             0.9268 | 0.9259

GBP/USD             1.5707 | 1.5686

EUR/GBP             0.85735 | 0.85645

 

Good luck

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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