Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 102.358 | EURUSD 1.37582 | EURJPY 140.842 | AUDUSD 0.90277 | NZDUSD 0.83094 | USDCAD 1.09498 | EURCHF 1.22186 | USDCHF 0.88808 | GBPUSD 1.66831 | EURGBP 0.82473 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               102.43 | 102.14

EUR/USD             1.37735 | 1.37575

EUR/JPY               140.90 | 140.62

AUD/USD            0.9027 | 0.8989

NZD/USD             0.8313 | 0.8280

USD/CAD             1.0958 | 1.0931

EUR/CHF              1.2218 | 1.2213

USD/CHF             0.8880 | 0.88685

GBP/USD             1.6697 | 1.6677

EUR/GBP             0.82545 | 0.8245

 

For today

  • EUR: The complete opposite to yesterday with the market looking bid from the start and the volumes massively lower, opening around the 1.3760 we pushed a couple of times in the Tokyo session to above the 1.3770 levels running into some substantial offers and dipping back to the 1.3765 level. The market saw some weak EURJPY selling as USDJPY drifts further to make the lows in Euro’s below 1.3760 however, very subdued but then it is FOMC day. Topside has offers from the 1.3780 levels back through 1.3810 with some Asian stops in the mix but with a bias to the offers, beyond that see’s offers building up to the 1.3850 area and then a batch of stops which one suspect are weak stops from the offers. Downside has some light bids through 1.3720 area with light stops mixed in towards 1.3700 before stronger bids appear just below that area. A silly comment will send it higher and we know how some politicians and bureaucrats like to speak out of turn however, the downside again looks to be the weak side for the moment but it’s all down to the FOMC one would say.
  • GBP: The market saw a shake out from the highs of last week and now that the market is flat again any good news will help it move higher and with little in the way to stop it now with resistance being above the 1.6820-40 area where range players will attempt to sell the top however, this would leave weak stops to close and cause a little short squeeze at a guess. Downside still has light bids from technical types having seen near term levels broken until there is a move back through the 1.6650 area the move higher for them is still valid one suspects. For the moment those bids are from here to the 1.6650 area with medium term stops below the 1.6600 levels now. As for the day its been a slow day with the market basing of the 1.6680 levels and unable to make that little push through light offers around the 1.6700 area. We hover for the moment just below the figure as we move to the grey hours.
  • JPY: USDJPY as more or less remained becalmed taking a step down from the quiet NYK closing range of 102.30-40 to the 102.20-30 level in Tokyo. With the only real movement coming from AUDJPY profit taking from the Tokyo opening sending the carry to below the 92.00 area briefly. The topside remains with strong offers from 102.70-103.00 with light stops behind only for larger offers to materialise above the 103.20 area. From there is not too much to surprise. Downside sees bids to the 102.00 area before some weak stops kick in before better bids appear around the 101.50 levels.
  • AUD: As mentioned above the Oz has been dominated with selling in the AUDJPY carry for the most part and particularly around the Tokyo opening helping to push the AUD to below the 0.9000 levels before finding its legs, the market managed to claw its way to the opening levels however, it has been slow going. Some weak stops on the topside make an appearance around the 0.9040/50 area, offers remain thin on the ground however, range players hang around the 0.9070 levels and better offers building above that level with stops not really showing until deep into the 91c areas. Downside has light bids from today’s lows around the 0.8990 area and mostly light bids from that point on, the pair is likely to be dominated by cross trading for the time being and something in the FOMC is the only fly in the ointment.

Overnight News

G20/USD:

Lew Tells G-20 Risks Linger as Emerging Markets Cloud Outlook

USD/JPY:

U.S. concerned about Japan domestic demand outlook

Japan Says Abe Aide’s Disappointment with U.S. Not Official View

JPY:

BOJ’s Kuroda Urges Japan Govt to Proceed with Structural Reforms

CNY:

China Lowers Industrial-Growth Target to 9.5%

AUD/G20:

Australia aims for global growth agreement at G20 meeting

AUD:

Australia Wages Rise 0.7% in Fourth Quarter

AUD/MYR:

Australia’s Seek to buy Malaysia’s Jobstreet for $524 mln
Today’s data

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

AUD       Conference Board Leading Index Dec A 0.80% | P 0.20%

JPY         All Industry Activity Index M/M Dec A -0.10% | C 0.20% | P 0.30% | R 0.40%

09:30     GBP       Bank of England Minutes C 0–0—9 | P 0–0–9

09:30     GBP       Jobless Claims Change Jan C -18.3K | P -24.0K

09:30     GBP       Claimant Count Rate Jan P 3.70%

09:30     GBP       ILO Unemployment Rate 3M Dec C 7.10% | P 7.10%

10:00     CHF        ZEW (Expectations) Feb C 40 | P 36.4

13:30     CAD       Wholesale Sales M/M Dec P 0.00%

13:30     USD       Housing Starts Jan C 0.975M | P 0.999M

13:30     USD       Building Permits Jan C 0.995M | P 0.986M

13:30     USD       PPI M/M Jan C 0.10% | P 0.40%

13:30     USD       PPI Y/Y Jan C 1.20% | P 1.20%

13:30     USD       PPI Core M/M Jan C 0.20% | P 0.30%

13:30     USD       PPI Core Y/Y Jan C 1.40% | P 1.40%

19:00     USD       FOMC Minutes

 

Harry Hindsight

  • EUR: Early trading was dominated by the BoJ’s no change broadly speaking and the market having dipped from the 1.3705 area to test below the figure then moved steadily higher to the 1.3715 levels with plenty of two way flow going through the market. The moved into the London market was uneventful and the market stayed within a tight 1.3705/15 area until the inflationary numbers for the UK were released, the Euro’s then saw a succession of EURGBP buying rounds taking the market from below the 0.8200 to above 0.8240 into the NYK session, with Cable giving the most ground. A mixed ZEW set of numbers did very little one way or the other and the Euro was now moving on sentiment and technical trading and continuing to push higher through NYK to peak above the 1.3770 levels before settling down to range around the 1.3755/60 levels into the close.
  • GBP: After a reasonably quiet session in Asia rising slowly from the 1.6715 levels to just above the 1.6740 into the grey hours as a weakening Yen dominated the trading, the market focused on the inflationary numbers, while the numbers were not overly surprising, the fact that Carney has already stated that a rise in interest rates is not on the table for the year the market took the better than expected numbers it does not change the fact of where the economy is at. So the selloff was founded on an excuse rather than a reason, and was likely to occur without the fundamental. The market hit 1.6660 post numbers however, the market was already pushing lower before the numbers and having peaked above the 1.6740 level had run out of steam the previous day when it posted its highs. The market did perform a small bounce back above 1.6700 later in the NYK session but the Cable in general was empty and the market gravitated back towards the lows finishing the day around the 1.6680 level just above the day’s lows.
  • JPY: USDJPY having opened below the 102.00 level saw a large rise on a no change from the BoJ, while they’ve double the growth supporting funding facility this should have had little impact on the market so one can only assume the market wanted an excuse to buy and they got it. Moving into the Tokyo session we moved off the opening to above 102.15 before slipping back into the announcement before dropping initially to set the low below 101.80 before rallying quickly as details filtered out. The market touched above 102.40 in a rush then took its time to push above the 102.70 to set the highs. The market then drifted from the highs into the London opening and struggled basing for the most part off the 102.30 levels for much of the day, playing a waiting game as the Euro and GBP dominated the plays.
  • AUD: While the Oz quickly rose with the movement of USDJPY from the opening 0.9030 it was unable to push through the waiting offers above the 0.9080-0.9100 levels and slowly slipped lower as we moved towards London and profit taking in AUDJPY started to kick in. London were big sellers from the opening and the market dropped to just above the 90 cent level before starting a steady recovery into mid-NYK around the opening levels. Even so it began to drift into the back end of the session and settled just below the 0.9030 levels.

Yesterday’s premiership results

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

EUR        Eurozone Current Account (EUR) Dec A 21.3B | C 19.8B | P 23.5B

GBP       CPI M/M Jan A -0.60% | C -0.60% | P 0.40%

GBP       CPI Y/Y Jan A 1.90% | C 2.00% | P 2.00%

GBP       Core CPI Y/Y Jan A 1.60% | C 1.90% | P 1.70%

GBP       RPI M/M Jan A -0.30% | C -0.50% | P 0.50%

GBP       RPI Y/Y Jan A 2.80% | C 2.70% | P 2.70%

GBP       PPI Input M/M Jan A -0.90% | C -0.20% | P 0.10%

GBP       PPI Input Y/Y Jan A -3.10% | C -2.90% | P -1.20%

GBP       PPI Output M/M Jan A 0.30% | C 0.10% | P 0.00%

GBP       PPI Output Y/Y Jan A 0.90% | C 0.80% | P 1.00%

GBP       PPI Output Core M/M Jan A 0.50% | C 0.10% | P 0.10%

GBP       PPI Output Core Y/Y Jan A 1.20% | C 0.80% | P 1.00%

GBP       DCLG UK House Prices Y/Y Dec A 5.50% | C 5.80% | P 5.40%

EUR        German ZEW (Economic Sentiment) Feb A 55.7 | C 61.7 | P 61.7

EUR        German ZEW (Current Situation) Feb A 50 | C 44 | P 41.2

EUR        Eurozone ZEW (Economic Sentiment) Feb A 68.5 | C 73.9 | P 73.3

CAD       International Securities Transactions (CAD) Dec A -4.28B | C 9.97B | P 8.66B

USD       Empire Manufacturing Feb A 4.5 | C 9.5 | P 12.51

USD       Net Long-term TIC Flows Dec A -45.9B | C -24.7B | P -$29.3B

USD       NAHB Housing Market Index Feb A 46 | C 57 | P 56

 

Good Luck

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.