Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 90.723 | EURUSD 1.34921 | EURJPY 122.413 | AUDUSD 1.04737 | NZDUSD 0.8374 | USDCAD 1.00085 | EURCHF 1.24313 | USDCHF 0.92138 | GBPUSD 1.57625 | EURGBP 0.8559 |

 

Harry Hindsight

·         EUR: The Euro in Asia was a non-event we opened around the 1.3450 area and moved only slightly above and below over the course of 8hrs of nothing, trading as low as 1.3445 area before rising to above 1.3460 in one of the quietest days this year, most of the flow was Yen related as would be expected, we moved into London with the market making its first move lower pushing to below 1.3430 with early East Europeans making the move. While the consumer confidence number for Germany was higher than expected it did nothing to instil the market and once London opened officially we started to see renewed buying entering the market however, it was short lived only release of some peripheral data from Germany, we dropped again to set new lows in the next couple of hours to trade below 1.3420 however, the downside did not seem to be under any serious threat and at this point one would have suspected the market was looking jaded after a day of being whipped around rather than a second day of meandering on nothing, US data saved the day for the Euro, with and unexpected larger drop in consumer confidence the Euro scurried higher to top above the 1.3490 area where it has remained for the best part of 6hrs.

·         GBP: Cable opened quietly and the Asian session was as dire as the Euro, with a steady rise moving from the opening 1.5690 area to above the 1.5700 over the course of Asia, London opened as mutely as Asia and only the comments from David Miles MPC helped it move along a little quicker and by NYK opening we’d set the high of 1.5740 in a steady rise, the US market initially started where it had left off selling GBP however, as with the Euro poor consumer confidence numbers set the USD on its heels Cable rallied strongly to above the 1.5770 level before settling back on minor profit taking in the run into towards the close holding the 1.5760 areas.

·         JPY: After dropping quickly from the opening 90.70 area to around the 90.40 levels it struggled in the early part of Asia however, once we got moving after the Tokyo fix the market moved over the course of the session to a high above the 91.00 area, then Tokyo lunch arrived, and we started to see exporters willing to sell EURJPY and some of the other crosses, the retail market followed and we soon saw the market back to the opening levels and looking decidedly vulnerable to further falls, London did not disappoint and followed through sending the market to a low below 90.30 before the US data helped reverse the losses, taking us back to just above the opening levels.

·         AUD: The Oz maintained its slow rise having failed for the first time to breach firmly through the 1.0400 rising from the opening levels of 1.0410 steadily rising on the back of improving confidence and the link between AUDNZD as kiwi trade balances showed a stunning recovery, we moved through to top out above 1.0450 during Asia, London picked up and followed through with the motion, against the reactive technical analyse being put out, NYK bought smalls but on what was a lacklustre day for all currencies, Oz was not able to push much beyond the 1.0470 area where we look to be closing on the day, with USD weakness more responsible for the current highs in later trading.

Yesterday’s premiership results

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               

EUR        German GfK Consumer Sentiment Feb A 5.8 | C 5.7 | P 5.6          

USD       S&P/Case-Shiller Composite-20 Y/Y Nov A 5.50% | C 5.60% | P 4.30%      

USD       Consumer Confidence Jan A 58.6 | C 64 | P 65.1 | R 66.7               

For today

USDJPY 
Topside: 91.20-91.50 medium buy stops  91.60-91.90 medium offers 
Downside: 90.30-90.60 light bids 90.00-90.30 medium sell stops 89.70-90.00 light bids 

EURUSD 
Topside: 1.3500-1.3530 medium buy stops  1.3530-1.3560 light buy stops  1.3570-1.3600 decent buy stops 
Downside: 1.3440-1.3470 medium bids 1.3400-1.3430 light bids 

EURJPY 
Topside: 122.90-123.20 medium buy stops 
Downside: 122.00-122.30 light bids 121.70-122.00 light sell stops  AUDUSD 
Topside: 1.0480-1.0510 light buy stops  1.0520-1.0550 light buy stops 
Downside: 1.0440-1.0455 light sell stops 1.0400-1.0430 light sell stops

 

JPY: Japan PM: BOJ steps aimed at beating deflation, boosting economy

BOJ Should Double Assets to Beat Deflation, Economist Iwata Says

Main Japan Opposition Says BOJ Independence Key for Next Chief

Japan Parties Signal Cooperation to Choose Next BOJ Chief -Kyodo

Amari Says Currency is Finance Minister’s Responsibility

Japan Dec Overall Retail Sales +0.4% on Year

SGD:

MAS Managing Director: Currency Appreciation Not Enough to Guard Against ‘Wall of Money’

CNY:

China banks make huge local government debt rollover FT

China to crack down on banks’ Ponzi-style “fund pools”

China parliament: no flowers, gifts and keep speeches short

AUD:

Australia’s PM Gillard Calls General Election For Sept. 14

Australia’s Central Bank Feared Banknote Shortage in Crisis

NZD:

N.Z. Central Bank Kept Up Passive Currency Intervention

NZ new housing consents jump on apartments surge in December

USD:

Fed Researchers Find Bond-Buying Programs Could Lead to Losses

Fitch may cut US rating if politicians still have no consensus on debt ceiling issues

 

·         EUR: Basically a 10tic range with 1.3490 the opening level being the centre of the movement, moving one way and then the other dull does not paint a picture.

·         GBP: For once Cable had a bigger move than the Euro, opening around the 1.5760 area and moving down on fixing supply in GBPJPY before holding around the 1.5755 mark, late into the session we again saw selling of GBPJPY forcing the pair to below 1.5742 however for the moment the market holds the area in a quiet session.

·         JPY: The market opened around the 90.70 area and trended higher throughout the early part of the session with several supportive comments but nothing we haven’t heard before many times, one to not is Amari keeping his nose clean as with most new ministers they’re only so much rope before someone yanks it, we moved to just above the 91.00 area again where we saw several exporters offering cross related stuff, but for the moment its settled into the 90.90 levels and trading quietly as we move to London.

·          AUD: The Oz for the moment seems to have run out of space and struggles each time we move above the 1.0475 levels trading back from that high we stumbled down below 1.0460 before moving back to the opening levels however, every so often we see some JPY related selling come through that sends a little lower it’s a little early to speculate on end of year repatriation but one is reminded of similar trends in years gone by.

 

 

 

Today’s data

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

NZD       Building Permits M/M Dec A 9.40% | C 6.00% | P -5.40%               

JPY         Retail Trade Y/Y Dec A 0.40% | C 0.30% | P 1.30%              

07:00     CHF        UBS Consumption Indicator Dec  P 1.23 

08:00     CHF        KOF Swiss Leading Indicator Jan C 1.2 | P 1.28    

09:30     GBP       Mortgage Approvals Dec C 54.5K | P 54.0K          

09:30     GBP       M4 Money Supply M/M Dec C 0.20% | P -0.20%               

10:00     EUR        Eurozone Economic Confidence Jan C 88.2 | P 87              

10:00     EUR        Eurozone Industrial Confidence Jan C -13.5 | P -14.4       

10:00     EUR        Eurozone Consumer Confidence Jan (F) C -23.9 | P -23.9              

10:00     EUR        Eurozone Services Confidence Jan C -9 | P -9.8  

13:15     USD       ADP Employment Change Jan C 163K | P 215K   

13:30     USD       GDP (Annualized) Q4 (A) C 1.20% | P 3.10%        

13:30     USD       GDP Price Index Q4 (A) C 1.50% | P 2.70%            

15:30     USD       Crude Oil Inventories C 2.9M | P 2.8M   

19:15     USD       FOMC Rate Decision C 0.25% | P 0.25% 

Ranges as of 6am London time

                                Highs    Lows

USD/JPY               91.03 | 90.67

EUR/USD             1.3496 | 1.34845

EUR/JPY               122.83 | 122.35

AUD/USD            1.0475 | 1.0456

NZD/USD             0.8390 | 0.8358

USD/CAD             1.0023 | 1.0010

EUR/CHF              1.2443 | 1.2428

USD/CHF             0.9226 | 0.9215

GBP/USD             1.5763 | 1.5742

EUR/GBP             0.85675 | 0.8556

 

Good luck

Andy