Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 91.079 | EURUSD 1.35682 | EURJPY 123.57 | AUDUSD 1.04158 | NZDUSD 0.83175 | USDCAD 1.00126 | EURCHF 1.2357 | USDCHF 0.91082 | GBPUSD 1.58002 | EURGBP 0.85869 |

 

Harry Hindsight

·         EUR: The Euro traded quietly in Asia holding around the 1.3490 area for most of the session and only when pre London moved in did we start to see any movements, with the 1.3500 area being so close it was only reasonable to assume that we’d see a move upwards first to take out any weak stop losses there may be, and the market did not disappoint with the grey period seeing a high above 1.3510, from here it would have been anyone’s guess, and opening in London seemed to show that as the market slowly dipped back to 1.3500 however, the market seemed to second guess the coming confidence numbers in Europe with the economic number showing an improvement the market strengthened moving steadily over the next few hours to 1.3560 before finding some light resistance, a decent result for Italian bond auction helped keep the market buoyed, and then a pause as we waited for the US GDP figures, in a normal market once people had seen that print the USD would have plummeted and EUR would have been much high however, all the Euro could really do was hedge above the 1.3580 area with a peak around 1.3588 before settling back into a sideways 1.3560/70 market for the rest of the session.

·         GBP: Cable held in a tight range throughout the Asia session opening around 1.5760, with consumer credit numbers helping to move it off its early London lows below 1.5730 pushing it above 1.5770, from there it was steady gains throughout the London and NYK sessions, it lost ground again against the Euro with EURGBP cross which pushed to 1yr highs above 0.8600, drifting off late in the session as Cable continued to gain ground while the Euro drifted. Cable topped out above 1.5815 and we drifted into the close around the 1.5800 area.

·         JPY: USDJPY traded with mixed fortunes throughout the day with a sustained slow rally through Asia from the 90.707 area pushing above the 91.00 several times moving into London around the level, it pushed higher on the London opening as EURJPY buyers appeared taking the USDJPY leg above 91.40 as weak stops were triggered on the EUR surge however, from that point it struggled throughout the session with a spike on the GDP numbers lower blipping to below 90.80 before  instantly recovering to the 91.20 area, from there we’ve held above the 91.00 for an overall gain but it has struggled to maintain the level as the USD suffered against a basket of currencies.

·         AUD: The Oz was particularly resilient in the quiet trading in Asia holding for the most part above the 1.0460 level having opened above 1.0470 but as we moved into London the sellers reappeared as the as the markets reset now it’s perceived that Europe is on the mend? We moved steadily lower throughout the London session and shortly after the NYK open we saw the 1.0400 level under threat for the first time, US GDP had little effect in the Oz and although we did recover slightly it would seem that early Pacific rim traders took the opportunity again to threaten the 1.0400 pushing it just through the level before backing off as we head for the close.

Yesterday’s premiership results

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

NZD       Building Permits M/M Dec A 9.40% | C 6.00% | P -5.40% | R -5.20%

JPY         Retail Trade Y/Y Dec A 0.40% | C 0.30% | P 1.30% | R 1.20%

CHF        UBS Consumption Indicator Dec A 1.34 | P 1.23 

CHF        KOF Swiss Leading Indicator Jan A 1.05 | C 1.2 | P 1.28 | R 1.29

GBP       Mortgage Approvals Dec A 56.0K | C 54.5K | P 54.0K       

GBP       M4 Money Supply M/M Dec A 0.70% | C 0.20% | P -0.20%           

EUR        Eurozone Economic Confidence Jan A 89.2 | C 88.2 | P 87 | R 87.8

EUR        Eurozone Industrial Confidence Jan A -13.9 | C -13.5 | P -14.4 | R -14.2

EUR        Eurozone Consumer Confidence Jan (F) A -23.9 | C -23.9 | P -23.9            

EUR        Eurozone Services Confidence Jan A -8.8 | C -9 | P -9.8  

USD       ADP Employment Change Jan A 192K | C 163K | P 215K | R 185K

USD       GDP (Annualized) Q4 (A) A -0.10% | C 1.20% | P 3.10%  

USD       GDP Price Index Q4 (A) A 0.60% | C 1.50% | P 2.70%       

USD       Crude Oil Inventories A 5.9M | C 2.9M | P 2.8M

USD       FOMC Rate Decision A 0.25% | C 0.25% | P 0.25%             

For today

USDJPY:
Topside: 91.30-91.60 medium buy stops 91.60-91.95 light offers 92.00-92.30 decent buy stops
Downside: 90.60-90.90 light sell stops 90.30-90.60 light mixed bag

EURUSD:
Topside: 1.3590-1.3630 medium buy stops 1.3640-1.3670 light buy stops 1.3670-1.3700 light buy stops
Downside:  1.3520-1.3550 light mix 1.3490-1.3520 light bids 1.3460-1.3490 light sell stops

EURJPY:
Topside: 123.70-124.10 light buy stops 124.30-124.60 light offers 124.60-124.90 light offers
Downside: 122.70-123.00 light sell stops AUDUSD:
Topside: 1.0460-1.0480 light stops 1.0500-1.0510 light offers
Downside: 1.0370-1.0380 light bids

 

JPY:

BOJ deputy governor: BOJ will increasingly take bold policy steps

Japan’s Industrial Output Rises 2.5%, Government Ups Outlook

Japan Jan manufacturing PMI rises to 47.7 from 45.0 in Dec

Japan Dec housing starts rise 10 pct year/year Govt

Japan’s Auto Exports -12.7% On Year In Dec

AUD:

Australia Vulnerable to Slowdown Risk -S&P

SGD:

Singapore Jobless Edges Lower in 4Q on Foreign Labour Curbs

Singapore Dec bank lending up 1.9% from Nov

NZD:

Reserve Bank of NZ Keeps Cash Rate Unchanged At 2.50%

 

 

·         EUR: Another quiet day in the heady financial markets in Asia, we opened around the 1.3570 area and managed to push up to above 1.3576 in the early part of the session, after Tokyo open we dropped back and spent a good portion of the session in the 1.3560’s trading down below 1.3563 to set the low since then we’ve been hovering around the 1.3570/80 area with very little going on.

·         GBP: Cable opened around the 1.5800 mark and moved steadily lower into the 1.5790’s a small amount of fixing demand saw it jump back above the figure before retracing to set the low at 1.5792, since the low has been made we’ve pushed higher topping out above 1.5820 for the day and holding on above the 1.5800 level as we move to London.

·         JPY: USDJPY opened just short of 91.10 and traded sideways into the Tokyo open with the drop in industrial production the market fell back a little however, what could have been a sharper move was tempered by the usual round of comments from the BoJ and MoF we eventually dropped to just below 90.75 and held for the moment moving back to above 90.90 as we move to London.

·         AUD: The Oz opened just below 1.0415 and was fairly well bid in the early part of the session moving steadily higher to above the 1.0430 level however, it was short lived as S&P made an announcement that Australia is vulnerable to slowdown risk and the market took a dive dropping to below 1.0385 but not able to penetrate all the light bids below, and is hovering around the 1.0400 level as we head to London.

 

 

Today’s data

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

NZD       RBNZ Rate Decision A 2.50% | C 2.50% | P 2.50%               

JPY         Industrial Production M/M Dec (P) A 2.50% | C 4.10% | P -1.40%               

GBP       GfK Consumer Sentiment Jan A -26 | C -28 | P -29           

AUD       Import Price Index Q/Q Q4 A 0.30% | C 0.40% | P -2.40%              

JPY         Housing Starts Y/Y Dec A 10.0% | C 13.50% | P 10.30%    

07:00     GBP       Nationwide House Prices M/M Jan C 0.20% | P -0.10%   

07:00     EUR        German Retail Sales M/M Dec C -0.10% | P 1.20%            

08:55     EUR        German Unemployment Change Jan C 8K | P 3K              

08:55     EUR        German Unemployment Rate Jan C 6.90% | P 6.90%      

12:30     USD       Challenger Job Cuts Y/Y Jan P -22.10%   

13:00     EUR        German CPI M/M Jan (P) C -0.50% | P 0.90%      

13:00     EUR        German CPI Y/Y Jan (P) C 2.00% | P 2.10%            

13:30     USD       Employment Cost Index Q4 C 0.50% | P 0.40%   

13:30     USD       Personal Income Dec C 0.80% | P 0.60%

13:30     USD       Personal Spending Dec C 0.30% | P 0.40%            

13:30     USD       PCE Deflator M/M Dec C 0.00% | P -0.20%           

13:30     USD       PCE Deflator Y/Y Dec C 1.40% | P 1.40% 

13:30     USD       PCE Core M/M Dec C 0.10% | P 0.00%    

13:30     USD       PCE Core Y/Y Dec C 1.50% | P 1.50%        

13:30     USD       Initial Jobless Claims (JAN 27) C 355K | P 330K    

13:30     CAD       GDP M/M Nov C 0.20% | P 0.10%            

13:30     CAD       Industrial Product Price M/M Dec C 0.00% | P -0.30%     

13:30     CAD       Raw Materials Price Index M/M Dec C 0.80% | P -1.90%

14:45     USD       Chicago PMI Jan C 51 | P 51.6     

15:30     USD       Natural Gas Storage C -198B | P -172B

Ranges as of 6am London time

                                Highs    Lows

USD/JPY               91.16 | 90.745

EUR/USD             1.3584 | 1.3560

EUR/JPY               123.70 | 123.13

AUD/USD            1.0432 | 1.0380

NZD/USD             0.8367 | 0.8344

USD/CAD             1.0034 | 1.0009

EUR/CHF              1.2369 | 1.2336

USD/CHF             0.9115 | 0.9089

GBP/USD             1.5827 | 1.5792

EUR/GBP             0.85925 | 0.8582

 

Good luck

Andy