Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close SYD open

USDJPY 92.705 92.75-77 | EURUSD 1.33636 1.3356-675 | EURJPY 123.892 123.665-92 | AUDUSD 1.0318 1.0320-27 | NZDUSD 0.83596 0.8340-75 | USDCAD 1.00274 1.0018-33 | EURCHF 1.22588 1.2260-94 | USDCHF 0.91735 0.9190-95 | GBPUSD 1.57984 1.5785-1.5818 | EURGBP 0.84591 0.8447-645 |

 

Weekend News

JPY:

Japan’s Amari Wants Nikkei to Reach 13,000 by March, Kyodo Says
Japan to Name BOJ Candidates Before Abe U.S. Visit, Sankei Says
Honda Counters Yen Criticism After U.S. Automaker Group Objects
JPY/Asia:

Japan’s Okura to Expand Asia Chain by 10 Hotels, Nikkei Reports
JPY/SAR:

 Japan, Saudi Arabia to Cooperate on Nuclear Power, Nikkei Says
CNY:

China Passes U.S. to Become World’s Biggest Trading Nation 
CHF:

NB Policy Hampers Europe Integration, IMF Adviser Tells Boersen
EUR:

Merkel Adviser Warns Against Calling Euro Crisis Over, Welt Says
ECB’s Visco Says Some Italian Lenders Still Need More Capital
Spain’s Outlook Kept Negative at Two Levels Above Junk by Fitch
European Leaders Bow to Cameron Demand for Cuts in Budget Deal

EUR/Asia:

Germany Focusing on Southeast Asia for Growth, Westerwelle Says

 

Harry Hindsight

·         EUR: A tight range in Asia with the market opening around the 1.3400 level and dropping to the 1.3385 level a few times during the early part of the session however, a weakening JPY helped boost the Euro in the latter stages of the session taking the market above 1.3410 peaking around the 1.3415 area in a fairly lacklustre session, pre London came in selling taking us down to the low just above the 1.3380 level, the London opening saw the move reversed and we moved up over the next few hours to the highs above 1.3425 helped by a healthy German trade balance, NYK came in with a decent reduction in their own trade balance with some $7.5B less than expected helping the USD to rally moving away from the highs for the day for it to trade lower to 1.3360 area before bouncing, US sellers continued to sell after the bounce making a low around 1.3355 before trading slowed as we moved towards the close holding around the 1.3365 level.

·         GBP: Again Cable and EURGBP cross played catch up as the Euro weakened, Cable rallied throughout the session rising slowly in Asia from the opening levels around 1.5710 to just short of 1.5740, with no real data for the UK it latched onto the weakness in Euro’s and we saw plenty of cross trading in the EURGBP going through, especially once we’d moved into the period just before NYK where it dropped from the 0.8520 area to below 0.8450, Cable rose in two waves first up to 1.5820 on Euro weakness and again moving up to above 1.5840 once NYK released its numbers before settling back to trade around the 1.5800 level into the close.   

·         JPY: USDJPY suffered on two counts during the day’s trading, moving quietly in Asia dropping from the 93.70 highs to 93.30 during the session as comments by Aso were again misinterpreted when he said the weakening was too much he meant it had weakened to quickly, importer demands against coming exporter repatriation for the year end is never an easy task, net result was Yen being bought, in the face of poor numbers for the current account which should have had the market going the other way, but the market had already been spooked by his and other comments, as we moved into London, the market was susceptible to the selloff in the Euro’s and cross selling hit the market and USDJPY dropped heavily to below 92.20 at one stage just after the London opening, after that the market spent the rest of the day trying to recover some of its losses but only partially being successful on the USD rise finishing the day around 92.70 for one of the largest moves this year.
AUD: The Oz spent the Asian session on the defensive, dropping from the opening levels of 1.0280 to below 1.0260 as it continued to weaken as the JPY weakened however, China’s trade balance helped to boost the Oz back above the opening levels to 1.0295 trading quietly into the London open, from there the Oz rose as EURAUD selling kicked in and we found ourselves back above 1.0340 before the NYK open as the Euro was sold against most other currencies, it failed to move any further and once NYK was open found itself struggling against the USD as investors again started to sell into any rallies forcing the pair back to the 1.0310 area and we finished the day just off that level around 1.0320.

Friday’s premiership results

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

CNY        Trade Balance (USD) Jan A $29.15B | C $24.20B | P $31.62B          

JPY         Current Account (JPY) Dec A 0.10T | C 0.24T | P 0.23T     

JPY         Eco Watchers Survey: Current Jan A 49.5 | C 48 | P 45.8 

CNY        CPI Y/Y Jan A 2.00% | C 2.10% | P 2.50%

CNY        PPI Y/Y Jan A -2.20% | C -1.60% | P -1.90%           

06:45     CHF        Unemployment Rate Jan A 3.10% | C 3.10% | P 3.00%    

07:00     EUR        German Trade Balance (EUR) Dec A 16.8B | C 13.7B | P 14.6B      

08:15     CHF        Retail Sales (Real) Y/Y Dec A 5.10% | C 3.20% | P 2.90% | R 3.00%

13:15     CAD       Housing Starts Jan A 161K | C 195.0K | P 197K     

13:30     CAD       Trade Balance (CAD) Dec A -0.9B | C -1.50B | P -1.96B    

13:30     CAD       Net Change in Employment Jan A -21.9K | C 4.0K | P 39.8K          

13:30     CAD       Unemployment Rate Jan A 7.00% | C 7.20% | P 7.10%    

13:30     USD       Trade Balance Dec A -$38.5B | C -$46.0B | P -$48.7B        

15:00     USD       Wholesale Inventories Dec A 0.40% | P 0.60%

 

For today

USDJPY 
Topside: 92.70-93.00 light offers  93.00-93.30 light buy stops 93.50-75 light buy stops
Downside: 92.00-92.30 medium bids 91.70-92.00 light bids 

EURUSD 
Topside: 1.3380-1.3400 light offers 1.3400-1.3420 light stops 1.3420-1.3450 light offers 
Downside: 1.3330-1.3350 light bids 1.3300-1.3330 mixed 1.3250-1.3275 medium bids

EURJPY 
Topside: 124.10-124.30 light buy stops  124.40-124.70 light buy stops  125.00-125.30 light buy stops
Downside: 123.00-123.30 medium sell stops  AUDUSD 
Topside: 1.0320-1.0350 light buy stops 1.0350-1.0370 light buy stops 1.0370-1.0400 mixed 
Downside: 1.0270-1.0300 light sell stops 1.0200-1.0230 light bids

 

JPY:

BoJ Governor. candidate seeks monetary policy regime change (Kyodo)

JPY/TRY:

Sumitomo Mitsui to Form Tie With Garanti Bank, Nikkei Says

JPY/PHP:

Japan to Provide Patrol Ships to Philippines, Nikkei Says

AUD:

Australia Dec Home Loan Approvals Fell 1.5%

Australia delays decision on equities clearing competition for two years

NZD:

NZ house prices rise more broadly in Jan – Quotable Value

 

·         EUR: With most of Asia closed this week for New Year the markets have been particularly thin and static, Euro opened around the 1.3365 level where we left off in NYK on Friday, and we’ve stayed in touch with that level rising to just below 1.3380 and trading just below the opening level with EURJPY being the only thing really showing in the market for the moment.

·         GBP: A wide opening with trades between 1.5786 and 1.5801, and that was seen throughout the session as flow came to the market finding very little in the way of liquidity, we traded below 1.5886 briefly sometime after the opening but generally it was light buying in the early stages topping out above 1.5806 before drifting back lower into the mid 1.5790’s towards the latter part of the session.

·         JPY: USDJPY was particularly quiet opening around 92.73 and dropping back from the opening to below 92.40 on very little volume only to find EURJPY buyers willing to pick up the market taking it to the middle of the 92.70’s where we had started, we’ve stayed from that point in more or less a 20 point range basing of the 92.50 area as we move to London the market is just off the opening area.

·         AUD: The Oz was the only one with data and moving but again the range was not impressive, we opened around the 1.0320 area peaking above 1.0325 in early trading before the Home loans number hit and for the third month in a row it disappointed and we saw the Oz starting to drift off from the highs, it wasn’t all one way and there was a brief respite when we traded through 1.0310 bouncing back towards the highs but from that point on it’s been in steady declining pushing down through the 1.0300 level to trade just above 1.0290.

 

One can expect the markets to continue in this vain throughout the Asian sessions this week.

Today’s data

Actual = A Consensus = C  Previous = P Timings GMT

AUD       Home Loans Dec A -1.50% | C 0.10% | P -0.50%

Ranges as of 6am London time including Sydney open

                                Highs    Lows

USD/JPY               92.88 | 92.36

EUR/USD             1.3381 | 1.3325

EUR/JPY               124.065 | 123.52

AUD/USD            1.0327 | 1.0291

NZD/USD             0.8373 | 0.8328

USD/CAD             1.0049 | 1.0025

EUR/CHF              1.2292 | 1.2255

USD/CHF             0.92085 | 0.917

GBP/USD             1.5810 | 1.5785

EUR/GBP             0.84705 | 0.8442

 Stay lucky

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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