Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 93.417 | EURUSD 1.34527 | EURJPY 125.648 | AUDUSD 1.03663 | NZDUSD 0.84138 | USDCAD 1.00165 | EURCHF 1.23359 | USDCHF 0.91706 | GBPUSD 1.55416 | EURGBP 0.86561 |

 

Harry Hindsight

·         EUR: Asia was quiet with the Euro moving from the opening level around the 1.3455 area to touch briefly below 1.3440 but for the most part centring around the 1.3450 area for the whole session, London entered the market buying as interest in peripheral bonds increased and the inflows helped the Euro above the 1.3520 level also a decent IP number for the zone at the time pushed it to the highs, once there though a comment attributed to the ECB about the strength of the Euro affecting any recovery sent the market scurrying south again triggering a lot of weak stops from break out traders pushing us back below 1.3470 and a follow through in the NYK session took us to new lows on the day, hitting below 1.3430 and thus we return to the opening levels as we head to the close in NYK,

·         GBP: Cable opened around the 1.5660 area and held above the level throughout the Asian session moving steadily up to 1.5690 level before moving towards the London opening slowly dropping back to below the starting area once we moved into London the market was quiet until the inflation report was released with ominous warnings that inflation was likely to stay stubbornly high over the course of the year and possibly stalling the fragile recovery, the Cable dropped from 1.5650 to below 1.5550 in a quick move, with only NYK left to jump on the bandwagon, they pushed it slightly lower and we set a low on the day below 1.5630. EURGBP was no different and we saw the cross jump to above the 0.8680 area before GBP started to recover some of the losses EURGBP settling back to the 0.8650 area and Cable barely holding onto the 1.5540 levels as we come to the close.

·         JPY: A rather mixed day for the USDJPY with Asia continuing the selloff taking if from the opening levels of 93.40 area to trade to just above the 82.80 point where we held and started to move up in late Asia with reaffirmation from the MoF on there determination to push through with the economic policies they’ve set out the market started to recover pushing back to the opening area as London walked in we soon saw weak stops being triggered in both USDJPY and EURJPY pushing the USDJPY back to above 93.70 during the early London session, from there it started to slow down as interest waned and the market started to look jaded through the action in Euro, Cable and USDJPY and we moved quietly to settle around the opening level.

·         AUD: The Oz started the day on its lows moving from the 1.0305 area quietly into the Consumer confidence number and rallying strongly to the 1.0340 level once the number was released from there it was a range bound day with the market stuck between the 1.0340-1.0355 levels up until we moved towards the close where a late rally took us above the 1.0370 level on stops been triggered.

Yesterday’s premiership results

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

AUD       Westpac Consumer Confidence Feb A 7.70% | P 0.60% 

JPY         Domestic CGPI Y/Y Jan A -0.20% | C -0.30% | P -0.60%    

JPY         Tertiary Industry Index M/M Dec A 1.40% | C 0.80% | P -0.30%

CHF        Producer & Import Prices M/M Jan A -0.10% | C 0.20% | P 0.10%              

CHF        Producer & Import Prices Y/Y Jan A 0.80% | C 1.10% | P 1.00%    

EUR        Eurozone Industrial Production M/M Dec A 0.70% | C 0.30% | P -0.30% | R -0.70%

USD       Import Price Index M/M Jan A 0.60% | C 0.80% | P -0.10%           

USD       Advance Retail Sales Jan A 0.10% | C 0.10% | P 0.50%     

USD       Retail Sales Less Autos Jan A 0.20% | C 0.20% | P 0.30% 

USD       Business Inventories Dec A 0.10% | C 0.30% | P 0.30%   

USD       Crude Oil Inventories A 0.6M | P 2.6M  

For today

USDJPY 
Topside: 93.65-93.80 light offers  94.00-94.30 medium buy stops  94.40-94.70 decent offers 
Downside: 93.00-93.30 light bids 92.70-93.00 medium bids 92.40-92.70 light bids 

EURUSD 
Topside: 1.3470-1.3500 light offers 1.3500-1.3530 mix 
Downside: 1.3400-1.3430 light sell stops 1.3350-1.3380 light bids 

EURJPY 
Topside: 125.70-126.00 light offers 
Downside: 125.00-125.30 light bids  AUDUSD 
Topside: 1.0370-1.0410 light buy stops 1.0400 medium offers 1.0420-1.0450 light buy stops 
Downside: 1.0300-1.0330 medium bids 1.0270-1.0300 medium sell stops

 

JPY:

BOJ keeps policy steady, raises economic assessment

Japan Oct-Dec GDP Shrinks on Quarter, Data Worse Than Expected

Ex-BOJ Deputy Gov Iwata Sees Y90-100 As Dollar’s Appropriate Range -Kyodo

Your Party’s Eda Says Kuroda, Muto Unsuitable as BOJ Head: Kyodo

Japan Econ Min Amari: Some Econ Weakness May Remain for Time Being

Japanese Manufacturer Exchange-Rate Forecast Assumptions (Table)

Sakakibara Says Japan Punishes Neighbours as Yen Falls Toward 98

JPY/USD/KRW:

Japan PM Abe, Obama Discuss North Korea Over Phone -Kyodo

G20:

G-20 to Pledge to Avoid Currency Devaluations, Asahi Reports

KRW:

South Korea unveils missile it says can hit North’s leaders

NZD:

New Zealand food prices surge in January

NZ consumer confidence rises to 32-mth high in Feb – ANZ survey

·         EUR: Another day in paradise or so the saying goes, Euro opened around the 1.3450 area and traded in a very tight range moving to about 5 tics north before sliding slowly to trade below 1.3440 before holding around the area for the remaining run in to the London session.

·         GBP: We opened around the 1.5535 level gapping 5 or 6 tics on the open and trading down to below 1.5530 as some suspected GBPJPY weekend roll play seemed to occur, never a good one to play with interest rates so low and in this case one assumes they lost, the market took Cable back to the closing levels filling the gap on the chart, before some minor GBPJPY crosses went through to take us back to the 1.5520 with Euro’s trading on its trading on its lows the EURGBP still remains quietly bid at the current levels for the moment pressuring the Cable even lower

·         JPY: USDJPY opened just above 10tics lower as suspected weekend roll play occurred where they buy just before the end of the session and then sell on the opening, thus capturing the interest differential if they can cover at cost, with both Cable and USDJPY opening lower than the close one suspects that it wasn’t a very successful ploy, fourth quarter GDP was worse than expected and the market rallied quickly from its lows of 93.13 to above the 93.60 level before falling back to consolidate around the 93.50 area, we spiked lower as profit taking from some macro players kicked in however, it was nothing large and we soon moved back to the 93.50 and attempted another run above 93.60 as we moved towards the grey hours before London.

·         AUD: The Oz traded as normal moving quickly up early on as the USDJPY traded lower on the opening to set the high above 1.0370 then only to start drifting over the remainder of the session as USDJPY strengthened moving to a low below 1.0346 before finally holding the level.

Today’s data

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

JPY         BoJ Rate Decision A 0.10% | C 0.10% | P 0.10%   

JPY         GDP Q/Q Q4 (P) A -0.10% | C 0.10% | P -0.90%  

JPY         GDP Deflator Y/Y Q4 (P) A -0.60% | C -0.60% | P -0.80% 

AUD       Consumer Inflation Expectation Feb A 2.20% | P 2.00% 

06:30     EUR        French GDP Q/Q Q4 (P) C -0.20% | P 0.10%         

07:00     EUR        German GDP Q/Q Q4 (P) C -0.50% | P 0.20%       

09:00     EUR        ECB Monthly Bulletin                                                     

09:00     EUR        Italian GDP Q/Q Q4 (P) C -0.50% | P -0.20%         

10:00     EUR        Eurozone GDP Q/Q Q4 (A) C -0.40% | P -0.10%  

13:30     USD       Initial Jobless Claims (FEB 10) C 361K | P 366K     

15:30     USD       Natural Gas Storage P -118B                       

 

Ranges as of 6am London time

                                Highs    Lows

USD/JPY               93.65 | 93.14

EUR/USD             1.3456 | 1.34305

EUR/JPY               125.95 | 125.22

AUD/USD            1.0369 | 1.0345

NZD/USD             0.8493 | 0.8450

USD/CAD             1.0018 | 1.0012

EUR/CHF              1.2346 | 1.2327

USD/CHF             0.91785 | 0.9169

GBP/USD             1.5544 | 1.55125

EUR/GBP             0.86655 | 0.8653

Good luck

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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