Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 93.97 | EURUSD 1.3351 | EURJPY 125.455 | AUDUSD 1.03051 | NZDUSD 0.84515 | USDCAD 1.01068 | EURCHF 1.23272 | USDCHF 0.9233 | GBPUSD 1.54664 | EURGBP 0.86324 |

 

Harry Hindsight

·         EUR: The Euro dropped from the Asian open as the market turned after the G20 meeting over the weekend which passed with the murmur it usually does, why we listen to the media building it up is beyond me but we do, we opened around the 1.3350 area and declined slowly over the session down to below 1.3330 before finding any support moving back to the starting point in late Asia as the dominant currency JPY stopped rallying, from there we again climbed to the starting area before London walked in and started the move lower again in the grey period before the opening trading down below 1.3325, London officially opened and again the market moved off its lows trading into the Current account numbers which obviously the market liked even if it was below expectations rallying quickly to just below 1.3380 in a quick move before settling back into a steady decline to the starting area again, with the US market closed for the day we then went quietly into a sideways market trading in an ever decreasing range to the close at the around the opening levels. Spanish public debt increased over the 2012 period by 146B which was largely ignored by the market, while results in Italy’s election went quietly through. 

·         GBP: While the Euro traded lower during Asia the Cable tended to keep fairly firm having opened around the 1.5495 level we spent the greater part of the session just off those levels around 10 tics lower, we moved towards London just below 1.5500 are and the market began to drift lower as the London guys came to their desks pushing us to the lows just after the official opening below 1.5440 before bouncing back to around the 1.5470 level, one can only assume that some people took the Weale comments to heart and believe everything they hear, the spike in the Euro’s helped take the Cable to its highs even if it was a brief venture above the 1.5500 level topping just below 1.5510 before sagging back below with the US out the market was weak and speculation took the market back lower but not much beyond 1.5460 this time as it ran out of ideas and players with the US out for the day.

·         JPY: From the opening in Sydney the market moved higher and was trading in the 93.75 when the official market opened and moving quickly from that point to above 94.00, with several comments from the MoF, Abe and the BoJ we pushed to a high above 94.20 before running into exporter offers which dampened the market, we traded above the 94.00 for a couple of hours before it started to breakdown having failed to move on at the top with S&P affirming its AA but with a negative outlook still hanging over Japans economy the market dropped back to 93.85, we saw small buying in the early London market but the trend overall was downwards as the market took a more sardonic appraisal of G20 and the comments from Japan itself, as with everything else as we moved into late London the market ran out of ideas and the day traders wrapped up their books leaving the market to hold the 93.95 level for several hours into the close of what should have been the NYK market.

·         AUD: As the USDJPY rallied in Asia so the Oz declined as a general USD day appeared to be on the cards after the G20 conclusions that coffee is best served hot (totally irrelevant), we opened just below the 1.0300 area and traded slowly lower to touch just above 1.0275 before the market began to turn and we started a long rally back to above the opening levels, pushing to above the 1.0315 by midday in London, as the close in London came up we saw some profit taking from day traders dominating the market taking us to the starting areas and we traded sideways up until early Sydney players started to buy in the closing stages for a finish above 1.0300 on the day.

Yesterday’s premiership results

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

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

EUR        Eurozone Current Account (EUR) Dec A 13.9B | C 15.3B | P 14.8B | R 15.9B

 

For today

USDJPY 
Topside: 94.00-94.30 medium offers  94.40-94.50 large offers 94.50-70 mix 94.80-95.10 decent buy stops 
Downside: 93.50-93.60 light bids 93.50-93.30 light sell stops 93.00-93.30 light bids 

EURUSD 
Topside: 1.3370-1.3400 light offers  1.3390-1.3430 light buy stops  1.3440-1.3470 light offers 
Downside: 1.3300-1.3330 light bids 1.3250-1.3290 light bids 

EURJPY 
Topside: 125.70-126.00 light buy stops  126.00-126.30 light buy stops 
Downside: 125.00-125.30 light bids 124.70-125.00 light sell stops  AUDUSD 
Topside: 1.0340-1.0370 light buy stops  1.0380-1.0410 medium buy stops 
Downside: 1.0270-1.0300 light bids 1.0240-1.0270 light sell stops 1.0200-1.0230 light bids

 

JPY:

FinMin Aso: Not Thinking About Foreign Bond Purchases, BOJ Law Change

Japan’s Abe: not appropriate to comment on currencies

Amari Says Abe Referred to BOJ Foreign Bond Buys as One Theory

Suga: Likely to Propose BOJ Candidates Next Week after PM Abe Returns From US

Japan EconMin: will decide BOJ governor candidate after PM Abe trip

BOJ Jan minutes: Some members proposed buying longer-dated JGBs

BOJ’s Sato, Kiuchi: Not Enough to Just Set 2% Inflation Target

Japan May Upgrade Economic Assessment on Weakened Yen: Yomiuri

AUD:

Australia’s RBA Open to More Rate Cuts

Australia Government Loses Key Ally Ahead of Election

SGD/MYR:

Singapore, Malaysia Announce Plan to Build High Speed Rail

CNY:

China May Introduce Policy to Curb Home Prices Next Month: News

NZD:

Fonterra Says None of Its Products Have Been Destroyed in China

N.Z. Says Tourist Spending in 2012 Fell to 11-Year Low

 

·         EUR: We opened and immediately moved higher running to 1.3356 as the market positioned itself in front of both RBA and BoJ minutes to be released in the early part of the session and early comments from FinMin Aso, we moved into the Tokyo opening, and EURJPY is sold off fairly aggressively having had the Euro spike up first to just below 1.3360 it dropped quickly to below 1.3340 as the EURJPY triggered minor stops on the way down. Once Tokyo opened the market stabilized in the Euro and it started slowly to recover over the course of the session ticking back up to the opening levels and holding around the 1.3350 level as we move to London.

·         GBP: As with the Euro we opened in Cable around the 1.5465 level and immediately moved up to above 1.5480 as Tokyo opened GBPJPY selling took the market down 10 tics and the market continued to look weak over the next few hours holding just above the 1.5460 level before pushing up slightly towards Tokyo lunch to above the 1.5670 level which we’ve held in a quiet market as we move towards London.

·         JPY: USDJPY opened around the 93.90 level and moved in a tight 5 tic range however; comments from Aso left the market vulnerable when he spoke about not considering BoJ law change on the point of buying foreign debt instruments, the market dropped quickly to below 93.60 before bouncing back a little once weak stops had been triggered as the day has progressed several helpful comments were released to the market from the minutes however, it would seem the damage was done and although we clawed back to the opening levels it wasn’t long before the market turned back south again to test the 93.60 levels where we hold for the moment as we move to London.

·         AUD: Oz overall remained quiet range wise with everything contained within a 30 tic range pretty much, we had the RBA minutes released and while there was minor jostling in the market it was fairly tidy, moving higher on JPY strength opening around the 1.0300 area and moving to the 1.0320 area pre-Tokyo open and while we dipped as retail guys were whipped out of the market due to falls in EURJPY and AUDJPY it was immediately back trading high just as quickly touching above the 1.0330 level several times but not really having the impetus to push on with talk of rate cuts in the market, most at the moment see it remaining at current levels. As we move towards London we hold onto the 1.0325-30 area.

Today’s data

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

10:00     EUR        German ZEW (Economic Sentiment) Feb C 35 | P 31.5    

10:00     EUR        German ZEW (Current Situation) Feb C 7.5 | P 7.1            

10:00     EUR        Eurozone ZEW (Economic Sentiment) Feb C 35.5 | P 31.2              

13:30     CAD       International Securities Transactions (CAD) Dec C 7.21B | P 5.62B             

13:30     CAD       Wholesale Sales M/M Dec C -0.40% | P 0.70%    

15:00     USD       NAHB Housing Market Index Feb C 48 | P 47                      

 

Ranges as of 6am London time

                                Highs    Lows

USD/JPY               93.965 | 93.56

EUR/USD             1.3366 | 1.33395

EUR/JPY               125.45 | 124.87

AUD/USD            1.0331 | 1.0302

NZD/USD             0.8465 | 0.8405

USD/CAD             1.0114 | 1.0102

EUR/CHF              1.23325 | 1.2324

USD/CHF             0.92425 | 0.9224

GBP/USD             1.5480 | 1.5461

EUR/GBP             0.86325 | 0.86235

Good luck

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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