Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close Wellington open

USDJPY 101.811 101.75-88 | EURUSD 1.36928 1.3683-85 | EURJPY 139.421 139.225-423 | AUDUSD 0.90331 0.9050-57 | NZDUSD 0.83698 0.8375-87 | USDCAD 1.09848 1.0968-89 | EURCHF 1.2222 1.2209-25 | USDCHF 0.89257 0.8908-71 | GBPUSD 1.67477 1.6743-59 | EURGBP 0.81764 0.8176-0.8203 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               101.93 | 101.38

EUR/USD             1.37245 | 1.3685

EUR/JPY               139.45 | 138.96

AUD/USD            0.9070 | 0.9041

NZD/USD             0.8393 | 0.8360

USD/CAD             1.1000 | 1.0958

EUR/CHF              1.2223 | 1.2213

USD/CHF             0.8920 | 0.8900

GBP/USD             1.6823 | 1.6743

EUR/GBP             0.8180 | 0.8157

 

Overnight News

JPY: Japan’s economy grows at slower pace in Q4, misses expectations

GPIF Should Own $600 Billion of Stocks in Asset Revamp, Ito Says

Japan Pension Fund Head Balks at Pressure from PM Abe: FT

BOJ Said to Consider Refraining From 2015 Monetary-Base Forecast

Japan PM Abe’s Cabinet Support Rate Falls 2% points to 60%: Yomiuri

Amari: Must Monitor Decline in Consumer Demand after Tax Boost

Suntory head says Beam purchase to aid expansion in BRIC markets

EUR:

German Court Doubts Over ECB Bond-Buying Negative, Moody’s Says

G20:

G-20 May Discuss U.S. Tapering, Market Instability, S.Korea Says

CNY/TWD:

China says keen on meeting with Taiwan president, but no rush

 

For today

  • EUR: A US bank holiday and a lack of data for the markets to digest left the market quiet for the most part. Euro’s opened higher than Friday’s close as the Asian market digested the poor IP numbers and the better than expected GDP numbers from Europe. Opening around the 1.3705 levels the market initially filled the gap on the charts moving to the 1.3695 level before rising steadily to test the topside above the 1.3720 for the moment we hang around the opening levels looking for direction. With light offers seen above the highs the market turns a little patchy with a mixture of stops and offers around the mid 1.3700’s rising to stronger offers the closer you get to 1.3800 weak stops are likely to make an appearance above the level as range players pick out the sentimental values. Downside sees light bids through 1.3690 which becomes a small technical support level however; stops are mixed with some light bids on the way down to better bids around the 1.3630 levels.
  • GBP: Cable continues to make headway and was responsible for the Euro’s test higher as the pair moved from the opening 1.6760 levels to push through the 1.6800 level triggering some stops on its way to just above the 1.6820 areas. Once we’d run the course the market slipped quietly back to below the figure area and holds just around the 1.6790 areas after a strong house price number. For the moment with the charts having to go back to 2009 to find comparable levels and 1.7000 now becomes the next target level with likely resistance being strong. The downside sees light bids back through the 1.6700 level and stops mixed to the 1.6650 levels.
  • JPY: USD weakness filters through from Friday’s IP numbers however, should that have been a surprise? Not really with the amount of inventories we have seen building over the last couple of months it’s not surprising that IP has drifted off again as the industries adjust their production. USDJPY opened below Fridays close with early play filling the small gap on the charts from the opening 101.70 levels before dropping quickly on the GDP numbers which show a decline against expected and fall in line with the previous quarter. The market dropped into the Tokyo session bottoming out around the 101.40 levels and slowly crawling back to the 101.60 as the retail sector still sees room on the topside for the USD to go in a more favourable direction. With a light mix from the 101.80 levels the market is likely to struggle without any impetus to push up and with the US mostly out it will be a struggle for today, above the 102.00 level we start to see some light offers making an appearance, before the market seems to become patchy into the 103.00-103.50 stronger offers. To the downside bids appear from the 101.30 area and seem to be scaled down to the 100.80 levels getting stronger as you move lower however, there is a number of stops starting to show below 101.00 and the picture may become more mixed as the day wears on if range players pick the levels to buy.
  • AUD: The Oz opened around the 0.9055 levels and drifted off the 0.9060 high in a light attempt to fill the gap, only to stop just above the 0.9040 levels as fresh buying of the Oz entered the market to run it to the 0.9070 level as the USDJPY decline allowed the pair to continue to rise. The market holds for the moment around the opening levels having failed to push through the 0.9070 levels with rumours of strong offers sitting in front of several levels of stops through 0.9080 going back to the 0.9120 areas. The downside has very little now showing with most of the orders left behind on the 0.8800 levels with light bids in the 0.8900 levels holding in front of the stops for a break lower.

Today’s data

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

NZD       Retail Sales Ex Inflation Q/Q Q4 A 1.20% | C 1.70% | P 0.30% | R 0.20%

JPY         GDP Q/Q Q4 (P) A 0.30% | C 0.70% | P 0.30%

JPY         GDP Deflator Y/Y Q4 (P) A -0.40% | C -0.20% | P -0.30%

GBP       Rightmove House Prices M/M Feb A 3.30% | P   1.00%

JPY         Industrial Production M/M Dec (F) A | C 1.10% | P 1.10%

 

Weekend News

CNY:

China Record New Credit Boosts Outlook for Economic Growth
China Banks’ Bad Loans Reach Highest Since Financial Crisis
EUR:

Italy Bond Rating Outlook to Stable From Negative: Moody’s
Merkel Suffers Setback as Farm Minister Quits Amid Legal Probe
Samaras Says 2013 Primary Surplus Above Target, To Vima Reports
Greek Debt Relief Decisions Aren’t Urgent, EU’s Rehn Tells Welt
Italian President Puts Off Premier Choice as PD Pushes for Renzi
USD:

U.S. Sees Some Nations’ Exports as Return to Pre-Crisis Plan
Summers Offers General Support for Yellen’s First Weeks at Fed
Kerry Burnishes His Green Badge in Asia Ahead of Keystone Call
Biden Said to Defend Trade Pacts in Meeting With House Democrats
Obama Signs Debt-Limit Measure Along With Military Retiree Boost
JPY:

Snowfall Snarls Tokyo Area Transport, Power for Second Weekend
Japan to Decide State Energy Plan by March-End, Takaichi Says
Japan May Propose March Summit With South Korea: Nikkei
CNY/TWD:

China Rejects Xi Meeting With Taiwanese President Ma at APEC
GBP:

London Commuter Towns Face More Flooding After Storm Dumps Rain
AUD:

Treasurer Joe Hockey backs second Sydney airport

 

Harry Hindsight

  • EUR: The Euro’s remained quiet through the Asian session moving from the opening 1.3680 area to above 1.3690 before failing and settling back to trade around the 1.3680 levels into the grey hours. The market eventually broke higher on the back of the German GDP number showing better than expected rising to the 0.40% on the preliminary reading for the 4th Quarter. Euro’s touched the 1.3700 before jumping to the mid-teens as the stops were triggered through the level, it was short lived and the market dropped back as other readings left a stale taste but with both the big countries doing better than expected the market remained bid for the most part. NYK bought early on the back of the news and again ran the market to the mid-teens into the opening before the market settled back to the 1.3690’s and a slow evening session into the close only just above the opening levels. When the IP numbers for the US were released you would have half expected the USD to come off far more than it did over the course of the day however, whether the market had suspected the number would contract or whether the market was in weekend mode already remains to be seen.
  • GBP: Cable rose steadily once we moved out of the Asian session where it held the 1.6650-60 levels for pretty much the day. Once into the London session we saw steady weakening in the EURGBP moving from its highs in the grey hours above 0.8225 to a dip below 0.8200 into the London session with real money being seen initially, the market held around the figure for several hours before the selling was renewed taking the market to below 0.8180, Cable continued to hedge higher in a steady move to the close around the 1.6750 levels for a neigh on big figure rise and breaking into the next levels technically.
  • JPY: Yen strength dominated the Asian session with the market peaking on the opening in Tokyo around the 102.40 levels from the opening 102.20 levels having reached the highs it was once way for the next few hours as sellers appeared from medium term players chasing it lower and eventually squeezing out the retail players as the market pushed down through the 102.00 levels. Even so the impact was limited and by the time we moved into the grey hours the situation had stabilised and the market was moving off the 101.60 lows and basing from the 101.80 levels for the rest of the session to finish the day on the 101.80 levels.
  • AUD: As the USDJPY dropped the more space the Oz seemed to have to rise, moving from the opening 0.8970 to the 0.8990 into the Tokyo session and continuing to push after the numbers out of China to above the 0.9020 levels. AUDJPY selling into the session sent the Oz a little lower however, the market seemed to be well bid around the 0.8990 after moving up through the levels and London came in as strong buyers to push the pair above 0.9040 before it ranged for the rest of the day between 0.9020-0.9040 in a slow evening session.

 

Friday’s premiership results

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

CNY        CPI Y/Y Jan A 2.50% | C 2.40% | P 2.50%

CNY        PPI Y/Y Jan A -1.60% | C -1.60% | P -1.40%

EUR        French GDP Q/Q Q4 (P) A 0.30% | C 0.20% | P -0.10% | R 0.00%

EUR        German GDP Q/Q Q4 (P) A 0.40% | C 0.30% | P 0.30%

EUR        Italian GDP Q/Q Q4 (P) A 0.10% | C 0.10% | P 0.00%

EUR        Eurozone GDP Q/Q Q4 (A) A 0.30% | C 0.30% | P 0.10%

CAD       Manufacturing Shipments M/M Dec A -0.90% | C 0.50% | P 1.00% | R 0.50%

USD       Import Price Index M/M Jan A 0.10% | C 0.10% | P 0.00% | R 0.20%

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

USD       Capacity Utilization Jan A 78.50% | C 79.40% | P 79.20% | R 78.90%

USD       U. of Michigan Confidence Feb (P) A 81.2 | C 80.5 | P 81.2

 

Stay lucky

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

Any opinions, news, research, analyses, prices or other information ("information") contained on this Blog, constitutes marketing communication and it has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Further, the information contained within this Blog does not contain (and should not be construed as containing) investment advice or an investment recommendation, or an offer of, or solicitation for, a transaction in any financial instrument. LMAX Group has not verified the accuracy or basis-in-fact of any claim or statement made by any third parties as comments for every Blog entry.

LMAX Group will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. No representation or warranty is given as to the accuracy or completeness of the above information. While the produced information was obtained from sources deemed to be reliable, LMAX Group does not provide any guarantees about the reliability of such sources. Consequently any person acting on it does so entirely at his or her own risk. It is not a place to slander, use unacceptable language or to promote LMAX Group or any other FX and CFD provider and any such postings, excessive or unjust comments and attacks will not be allowed and will be removed from the site immediately.