Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close SYD open

USDJPY 93.50 93.75-85 | EURUSD 1.33626 1.3362-67 | EURJPY 124.955 125.30-40 | AUDUSD 1.0306 1.0295-1.0305 | NZDUSD 0.84494 0.8435-45 | USDCAD 1.00642 1.0065-75 | EURCHF 1.23166 1.2310-20 | USDCHF 0.92172 0.9210-20 | GBPUSD 1.55163 1.5510-20 | EURGBP 0.86101 0.8610-20 |

 

Weekend News

G20:

G-20 Takes Harder Line on Currencies Without Singling Out Japan
JPY:

BOJ Nominees to Be Announced by March 9, Cabinet Official Says
Abe Says He’ll Take Balanced Approach in BOJ Selections: Jiji
OECD’s Padoan Says Japan Is Pursuing Domestic Objectives
JPY/AUD:

Japan May Share Submarine Technology With Australia, Nikkei Says
CNY:

China New Year Retail Sales Growth Slows on Xi’s Frugality Drive
Xie Says China to Keep Positive Fiscal Policy, Xinhua Reports
China Misses ‘Hard Landing’ as Government Spends, Li Daokui Says
AUD:

Currency Manipulators Check Global Growth, Australia’s Swan Says
SGD:

Singaporeans Protest Plan to Increase Population by Immigration
EUR:

Weidmann Says Adjustment Processes Are far From Over in Europe
Merkel’s CDU to Present Election Manifesto June 24, Focus Says
USD:

Summers Says Tax-Law Uncertainty Weighing on Businesses Spending
GBP:

Weale Says U.K. Exports May See More Benefit from Pound Drop 
U.K.’s Cable Asks BOE to Improve Lending Program for Companies

 

Harry Hindsight

·         EUR: The market was quiet during the Asian session with the last of the holidays going through all will be better next week he says tongue in cheek, we opened around the 1.3360 levels, opening slightly higher than the NYK close, before then drifting off for several hours trading just below 1.3350 several times before JPY IP figures came in slightly worse than expected giving EURJPY a little boost and taking the Euro to just below 1.3370 once the excitement in Asia was over we slumped back to the 1.3350 level holding into the grey hours before London were the market had a run higher as early Europeans opened buying strongly triggering minor stops in both EURUSD and EURJPY and we traded up to the 1.3395 area before running into a few offers, we drifted from that point only for the market to squeeze out the early longs and drop back sharply as comments with the market reading lots of things from comments from ECB officials in front of the G20 meeting, along the lines of Euro fairly valued, to which the market took that as any appreciation would be view unfavourably, makes you wonder what would have happened if they’d said something negative. We dropped to below 1.3320, and for several hours struggled to make back any of the losses dropping slowly to below 1.3310 into the NYK open, Lugarde made comments that the so called currency war was overblown and between the lines media hype, to which the Euro started to make inroads on the losses moving quickly to above the 1.3360 starting area and extending to above 1.3375 before settling down into a sideways pattern over the remaining handful of hours settling close to the opening levels.

·         GBP: Cable opened around the 1.5490 area and traded upwards steadily over the course of the Asian session touching the 1.5550 level a couple of times just before the London opening before being dragged lower by the Euro, to below 1.5470 we bounced a little to move back above the opening levels and once we moved into the NYK session the market was effected by the same comments as the Euro and moved back above 1.5530 touching briefly above 1.5540 before settling down for a gain on the day above the 1.5520 level.

·         JPY: Concerns throughout the Asian session over the forthcoming G20 and what would be said were found to be a storm in a teacup when the meeting was held however, on the day USDJPY reacted poorly as they believed that Japan would be censored in some way over the Economic policies it has planned for the future, we opened around the 92.80 level and traded higher in front of some expected demand for the fix only to drop off having moved to 93.10 area as the demand turned into supply and concerns started to manifest themselves in the retail market, we dropped down to just above the 92.20 level a couple of times however, the market didn’t seem to have the impetus to push any lower and we moved into London trading between 92.20-92.80, before NYK open were the market was snapped up probably because the NYK seemed savvy enough to realise that whatever the Media says about a G20 or G whatever, they’re always wrong and the subject hardly ever becomes talked about or it’s never passed onto the outside world if they do discuss it. USDJPY rallied in the latter part of the NYK session pushing above 93.80 before settling back to 93.40 areas into the close.

·         AUD: As the USDJPY strengthened through the session so AUD weakened as the pressure in AUDJPY was relieved by a weakening Yen, the Oz held its opening levels of 1.0360 into the early part of London having touched above 1.0370 during Asia but from the London open it was under pressure and started to drift lower over the course of the session and into NYK we paused at the 1.0300 level however, late NYK pushed it briefly through the level to below 1.0290 before it managed a slight recovery above 1.0300 into the close.

Friday’s premiership results

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

NZD       Retail Sales Q/Q Q4 A 2.10% | C 1.10% | P -0.40% | R -0.20%

JPY         Industrial Production M/M Dec (F) A 2.40% | C 2.50% | P 2.50% 

GBP       Retail Sales M/M Jan A -0.60% | C 0.50% | P -0.10% | R -0.30%

EUR        Eurozone Trade Balance (EUR) Dec A 12.0B | C 10.7B | P 11.0B | R 10.5B

CAD       Manufacturing Shipments M/M Dec A -3.10% | C -0.40% | P 1.70%          

USD       Empire Manufacturing Feb A 10 | C -3 | P -7.78 

USD       Net Long-term TIC Flows Dec A 64.2B | C 34.3B | P 52.3B              

USD       Industrial Production Jan A -0.10% | C 0.30% | P 0.30%  

USD       Capacity Utilization Jan A 79.10% | C 78.90% | P 78.80% 

USD       U. of Michigan Confidence Feb (P) A 76.3 | C 74.6 | P 71.3

For today

USDJPY:
Topside: 94.10-94.50 light offers 94.75-94.90 light offers
Downside: 93.40-9360 light bids 93.00-93.30 light bids 92.70-93.00 light bids

EURUSD:
Topside: 1.3370-1.3400 light mix 1.3410-1.3440 light buy stops 1.3440-1.3470 light offers
Downside: 1.3280-1.3320 light bids 1.3250-1.3290 light bids

EURJPY:
Topside: 125.70-125.80 light buy stops
Downside: Nothing significant

AUDUSD:
Topside: 1.0330-1.0360 light offers 1.0370-1.0400 light buy stops
Downside: 1.0240-1.0270 light mix 1.0200-10220 light bids

 

JPY:

Govt Aims to Present BOJ Nominees by End-Feb., Suga Says: Nikkei

Japan PM says BOJ easing a key factor driving FX

Abe: Need To Consider BOJ Law Change If Inflation Target Can’t Be Achieved Under BOJ Mandate

Abe Says Purpose of Monetary Easing Is to Escape Deflation

Abe Has No Intention of Saying What Level for Yen Is Good

Japan PM Abe: BOJ’s mandate is to keep prices stable at 2 pct

Amari Says Must Keep Trust in JGBs to Avoid Yield Increase

BOJ Nishimura: Employment Part Of BOJ Sustainable Econ Growth Goal

S&P: Will take time to measure success of Japan Abe’s policies

SGD:

Singapore Jan Non-Oil Exports +0.5% on Year; +2.6% Expected

CNY:

China widens investor access to over-the-counter market

China starts first nuclear power plant since Fukushima -paper

EUR:

Spain’s Rajoy Prepares Stimulus Package to Boost Economy -Report

German Companies Seen Adding 150,000 New Jobs This Year -Report

GBP:

U.K. Home Asking Prices Rise to Five-Year High, Rightmove Says

NZD:

New Zealand Prime Minister: High NZ Dollar Has Upside

New Zealand Rural Property Prices Continue To Rise

 

·         EUR: The market moved from the Sydney opening to set the general market up for a gap on the charts if you can count that, we opened just above the 1.3350 level and steadily drifted lower, as the G20 was its usual not worth the mention, we moved down to just below 1.3330 before finding some support in the market, but you’d hardly notice that the market is again full and we’ve just had a meeting of minds.

·         GBP: With weekend news that Weale is not concerned about the GBP weakness, the market saw fit to take him at his word and we opened barely above the 1.5500 level and was sold further in the first couple of hours to trade below 1.5475 before finding any support however, it bounced like a dead cat moving only to the 1.5490 area before trading sideways around the 1.5485 levels for the greater part of the session.

·         JPY: The USDJPY for our session opened high on the news that there was none for Japan from the G20 with no single currency pointed at, we opened around the 83.90 area and drifted in the first couple of hours back to the 93.70 level, once Tokyo opened it was one way traffic for the first few hours taking us above the 94.20 levels before holding during the middle part of the session and then we saw some light profit taking the market back below 94.00 but holding just below as we move towards the London session on light volumes.

·         AUD: With JPY weakening over the course of the session AUD languished after its initial moves from 1.0290 to above 1.0300, Tokyo stepped in and movements of retail flow away from the Oz and into EM currencies seems to be the name of the game at the moment, and we traded to a low of 1.0275 before the JPY started to strengthen in late trading moving the Oz back to above the opening levels and threatening the 1.0300 levels again.

 

 

Today’s data

Actual = A Consensus = C  Previous = P Timings GMT

GBP       Rightmove House Prices M/M Feb A 2.80% | P 0.20%     

09:00     EUR        Eurozone Current Account (EUR) Dec C 15.3B | P 14.8B 

 

Ranges as of 6am London time including Sydney open

                                Highs    Lows

USD/JPY               94.22 | 93.62

EUR/USD             1.33655 | 1.3326

EUR/JPY               125.675 | 125.01

AUD/USD            1.0305 | 1.0276

NZD/USD             0.8464 | 0.8424

USD/CAD             1.0081 | 1.0055

EUR/CHF              1.2340 | 1.2314

USD/CHF             0.9259 | 0.9223

GBP/USD             1.5510 | 1.5473

EUR/GBP             0.8625 | 0.8605

 

 Stay lucky

Andy