Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 102.529 | EURUSD 1.35934 | EURJPY 139.372 | AUDUSD 0.90274 | NZDUSD 0.83174 | USDCAD 1.1002 | EURCHF 1.22427 | USDCHF 0.90061 | GBPUSD 1.65961 | EURGBP 0.81906 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               102.58 | 102.02

EUR/USD             1.3618 | 1.3585

EUR/JPY               139.37 | 138.89

AUD/USD            0.9031 | 0.8928

NZD/USD             0.8333 | 0.8292

USD/CAD             1.1018 | 1.0987

EUR/CHF              1.2250 | 1.2219

USD/CHF             0.9010 | 0.8974

GBP/USD             1.6623 | 1.6594

EUR/GBP             0.81985 | 0.8180

 

For today

  • EUR: The Euro moved from the close in NYK quietly with some early retail selling taking the market to below the 1.3590 levels before starting a steady climb higher as EURGBP and EURAUD buying entered the market, the slow climb pushed to just below the 1.3620 levels and we have held around the 1.3610 since the highs with little interest for Euro’s overall. Continuing comments from various ECB officials and French ministers on the subject of the strength of the Euro and why its occurring, couldn’t be that you held it up as an alternative currency to the USD all those years ago, guess you got what you wanted. For the moment we have weak offers from here to the 1.3630 levels with stronger offers above the 1.3650 levels and really no stops till deep into the 1.3700 area. Stops begin to appear on the downside with break out players parked with range buyers on stops below the 1.3580 levels these weak stops run for about 30 pips before we start to see some light bids appearing and stronger bids below 1.3530 running to the figure area.
  • GBP: The opening in Asia saw further buying and the market rising slowly through the 1.6600 levels to reach above 1.6620, this matches more or less the highs this year and we wait to see if it has the resolve to move through the 1.6650 levels where the first offers await. Even then it’s likely to be a little bit of a struggle with all the news really out of the way and one suspect the offers will have their day without Euro dragging it somewhere. Downside has some light bids with those that missed the move trying to join in however, waiting for a rallying market to come back to your level is a fools game at best for the moment I can only see it struggling to the topside and while sentiment is with it, it has possibilities however, downside is weak.
  • JPY: Comments from the Oz really set this one back a bit, the market opened around the 102.50’s and moved to above 102.55 from the opening before drifting off as comments about the high rate of the Oz particularly in the carry trade started to impact the market, as been an aberration to the general trend, how they work that out I’ve not idea. The release of the Oz data though was the catalyst for a deeper USDJPY move with the market dropping from the opening levels as the carry trade was sold aggressively and in the light of the comments didn’t really stop over the session moving the USDJPY to the waiting bids around the 102.00 levels we moved in two steps and currently hold on the lows into the grey hours.  Topside still sees the offers from 102.70-103.00 building to larger offers above there. With the 103.50 levels and above seeing light stops building. 102.00 has bids still and with only light stops below to the 101.70 areas it’s hard to imagine it doing much on its own until the NYK session.
  • AUD: Poor employment numbers set the market on its heels dropping from the 0.9030 opening levels to below 0.8950 in a quick move, with the carry trade being hit aggressively from the retail sector as comments of it being out of line sent the pair crashing more than the AUDUSD. The market continued to fall a little after the initial selling and touched below the 0.8920 levels having taken out most of the stops around the 0.8950 levels we start to see the market firmer from here to the 89cent area with weak stops behind that level. For the moment the stops that were present to the topside above 0.9060-90 are now just above the 90 cent levels and some offers appear mixed in the area.

Overnight News

AUD:

Australia jobless rate climbs to highest since 2003

IMF: Australian dollar should trade at ‘low US80¢’ (Laughable)

JPY:

Takeda Most-Bought by Japan NISA Investors as Safer Bet in Slump

Japan Jan wholesale prices rise 2.4% YoY

JPY/USD:

Japan’s Suga Hopes to Discuss Freedom of the Seas with Obama

KRW/AUD:

S.Korea says aims to sign free trade deal with Australia in first-half 2014

GBP:

BOE’s Dale Says Market Pricing for 2015 Rate Rise ‘Reasonable’ (he should have a job with the IMF)

UK House Prices Continue to Rise in January

NZD:

NZ manufacturing activity eases in January
Today’s data

Actual = A | Consensus = C | Previous = P | Revised = R All timings GMT

NZD       Business NZ Manufacturing Jan A 56.2 | P 56.4

JPY         Domestic CGPI Y/Y Jan A 2.40% | C 2.40% | P 2.50%

AUD       Consumer Inflation Expectation Feb A 2.30% | P 2.30%

GBP       RICS House Price Balance Jan A 53% | C 57% | P 56%

AUD       Employment Change Jan A -3.7K | C 15.0K | P -22.6K | -23K

AUD       Unemployment Rate Jan A 6.00% | C 5.90% | P 5.80%

07:00     EUR        German CPI M/M Jan (F) C -0.60% | P -0.60%

07:00     EUR        German CPI Y/Y Jan (F) C 1.30% | P 1.30%

08:15     CHF        Producer & Import Prices M/M Jan C 0.00% | P 0.00%

08:15     CHF        Producer & Import Prices Y/Y Jan C -0.30% | P -0.40%

09:00     EUR        ECB Monthly Bulletin

13:30     CAD       New Housing Price Index M/M Dec C 0.10% | P 0.00%

13:30     USD       Advance Retail Sales Jan C 0.00% | P 0.20%

13:30     USD       Retail Sales Less Autos Jan C 0.20% | P 0.70%

13:30     USD       Initial Jobless Claims (FEB 8) C 330K | P 331K

15:00     USD       Business Inventories Dec C 0.40% | P 0.40%

15:30     USD       Fed’s Yellen Testifies to Senate

Harry Hindsight

  • EUR: After a quiet start in Asia moving from the opening 1.3640 levels to below 1.3630 in a very tight trading range before the London session, a weaker than expected IP number for the Eurozone led the way with the Euro dropping from its highs above 1.3650, this then led into the BoE inflation report which set EURGBP moving, the market eventually found a base below the 1.3570 levels. The market never really recovered and with a weak downside, and continuing commentary on the strength of the Euro particularly from the French the market held into the 1.3590’s for the close. With the ever increasing comments of negative rates being the answer or so they say.
  • GBP: A dull affair through Asia opening around the 1.6450 levels and looking to move higher on technical trading however, with no impetus until the market moved into the grey hours and early buyers of cross GBP were seen, the market moved to the mid 1.6470’s before dropping back triggering weak stops below 1.6450, then the market waited for the news. With the market half expecting and adjustment on the forward guidance, as it was he maintained the 7% employment threshold while stating that rates would not be changing this year, add to which an upward revision for this year’s GDP to 3.4% sent Cable racing higher, the market moved off the 1.6450 levels and rallied sharply finding some offers just below the 1.6500 level but again moving higher to the 1.6540 levels purging the recent shorts. The market continued to rally over the course of the remainder of the day and although 1.6600 was breached late in the session we still struggle with plenty of congestion showing between here and 1.7000 over the past decade. The market ended the day around the 1.6600 level with a proper push through yet to materialize.
  • JPY: The USDJPY was pinned in a 20 pip range for most of the day with very little going through the market after the initial selling into the Tokyo opening, moving from the 102.65 areas steadily to just below 102.45 the market later recovered with some weak numbers and commentary from BoJ officials. Having made its way back to the opening levels sentiment in front of European and UK numbers forced the USD lower and moving into the London session again saw the pair on its lows albeit a narrow range, just prior to the UK number was started to see EURJPY and to some extent GBPJPY selling in the market however, having forced USDJPY to the 1.0235 levels the market stalled until early NYK arrived to send it to its low area of 102.25. The market sat for a couple of hours before finding USD interest and moving back towards the 102.50 area where the market remained into the close.
  • AUD: The Oz opened weaker than the close in NYK around the 0.9035 areas before dipping to the 0.9010 levels after a weaker consumer confidence number, the market found some legs with EURAUD selling entering the market rather aggressively while the Euro stayed still the AUD was forced quickly higher to push above the 0.9050 levels and into a mixture of stops and offers, it eventually stalled around the 0.9065 areas and drifted into the London session from that point. The movements in GBP and Euro had little effect on the Oz in general however; it continued to drift back towards the opening levels and closed just below the 0.9030 level in quiet trading.

Yesterday’s premiership results

Actual = A | Consensus = C | Previous = P | Revised = R All timings GMT

AUD       Westpac Consumer Confidence Feb A -3.00% | P -1.70%

JPY         Tertiary Industry Index M/M Dec A -0.40% | C -0.30% | P 0.60% | R 0.80%

JPY         Japan Money Stock M2+CD Y/Y Jan A 4.40% | C 4.20% | P 4.20% | R 4.30%

JPY         Machine Orders M/M Dec A -15.70% | C -3.80% | P 9.30%

JPY         Machine Tool Orders Y/Y Jan (P) A 39.60% | P 28.10%

CHF        CPI M/M Jan A -0.30% | C -0.30% | P -0.20%

CHF        CPI Y/Y Jan A 0.10% | C 0.10% | P 0.10%

EUR        Eurozone Industrial Production M/M Dec A -0.70% | C -0.30% | P 1.80%

USD       Crude Oil Inventories A 3.3M | C 2.5M | P 0.4M

USD       Monthly Budget Statement Jan A -10.4B | C -10.0B | P 2.9B
Good Luck

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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