Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 102.274 | EURUSD 1.37188 | EURJPY 140.306 | AUDUSD 0.90067 | NZDUSD 0.82842 | USDCAD 1.11006 | EURCHF 1.22018 | USDCHF 0.8895 | GBPUSD 1.66521 | EURGBP 0.82385 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               102.61 | 102.27

EUR/USD             1.37215 | 1.37145

EUR/JPY               140.75 | 140.34

AUD/USD            0.9015 | 0.8982

NZD/USD             0.8316 | 0.8297

USD/CAD             1.1130 | 1.1094

EUR/CHF              1.2206 | 1.21955

USD/CHF             0.8898 | 0.88895

GBP/USD             1.6666 | 1.6637

EUR/GBP             0.8244 | 0.8234

 

For today

  • EUR: Dead in the water would be an understatement, the market has been stuck in a very narrow range opening around the 1.3720 and deviating barely 7 pips for the whole session with a day marked by the lack of FOMC, rate announcement or anything newsworthy for the USD or Euro. Topside now sees some weak stops from sellers from yesterday around the 1.3730-50 area with a mixture into the 1.3780-1.3800 with offers building the closer you get to the figure and providing the resistance to a light move up, larger stops are now beginning to build for a breakout above 1.3800 however, we’d have to get there with some conviction first. Downside has weak stops through the 1.3700 level with a mix to 1.3670 before bumping into a light support area 1.3630 areas.
  • GBP: While the range in Cable has been wider, the market is still fairly quiet with EURGBP making slight gains as the Cable slips below the 1.6650 area having initially moved to above 1.6664. Having made it do the mid 1.6640’s the market looks for direction with bids holding the 1.6600-30 levels and protecting a larger move lower for the moment, light stops on a break of the support and then more starting to appear beyond the mid 1.65’s Topside sees some average looking offers around the 1.6700 levels with stops few and far between below 1.6800.
  • JPY: USDJPY dipped on the close in NYK before reopening around the 102.30 area and slowly rising 5 pips before the Tokyo market opened. Into the opening saw strong buying as the market rebalances again for the weekend and the market made its way above the 102.50 levels with stops close at hand cleared, a final move pushed the market to 102.60 as I start this report and close now to the strong offers from 102.70-103.00, with light stops behind this area, they seem a little miss placed given that stronger offers are above 103.20 and continue higher for a good distance. Downside while looking empty having been to 101.70 areas in the previous 24hrs shows a stubborn level of support on moves downwards so maybe we need a good clear out on USDJPY if not across the whole market before deciding on the next movement.
  • AUD: The market opened around the 0.9010 levels and held steady into the Tokyo session before fixing supply in AUDJPY seemed to upset the market and we saw Oz drop back over the early part of Tokyo to trade between the 0.8980-0.9000 and stayed in a close range around the 0.8990 for several hours before the bottom was rejected and we moved back above the 90cent level. To be honest though the financial markets of the world are not a blaze and a night light candle could eclipse today. With very little on the topside until the offers above the 0.9080 levels the market struggles for the time being and a push through the 0.9110 level would see the stops triggered however, its not far before light offers appear although I suspect they are spread around the market and may be larger than can be seen plainly. Downside and we have to move to yesterday’s lows before seeing anything really and light bids are all that shows on the 89cent handle and better bids start to appear below there.

Overnight News

CNH:

Offshore Yuan Set for Worst Week Since 2011 on Growth Concerns

G20:

G-20 Draft Urges Global Monetary Policy Clearly Communicated

CNY/USD:

China urges Obama to cancel meeting with Dalai Lama

CNY:

PBOC May Allow Non-Banks to Conduct Cross-Border Business: News

USD/CNY:

Obama to meet Dalai Lama on Friday as U.S. urges talks with China

China Wants to Move in Right Direction, U.S.’s Lew Says

USD/JPY/CAD:

U.S. trade chief to focus on farm barriers in Japan, Canada

JPY/USD:

Japan, U.S. remain far apart on TPP trade talks Amari

JPY:

BOJ’s Kuroda: Too early to debate exit strategy from QE

Aso: Want to Explain Japan Economic Situation, Growth Strategy

Japan FinMin: Wants U.S. to communicate with market on tapering

BOJ minutes: Sales tax effect on growth factored into forecasts

AUD/CHF:

Shell sells Australian business to Vitol for A$2.9blln
Today’s data

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

09:30     GBP       Retail Sales M/M Jan C -0.90% | P 2.60%

09:30     GBP       Public Sector Net Borrowing (Pounds) Jan C -9.3B | P 10.4B

13:30     CAD       Retail Sales M/M Dec C -0.50% | P 0.60%

13:30     CAD       Retail Sales Less Autos M/M Dec C -0.10% | P 0.40%

13:30     CAD       CPI M/M Jan C 0.10% | P -0.20%

13:30     CAD       CPI Y/Y Jan C 1.30% | P 1.20%

13:30     CAD       BoC CPI Core M/M Jan C 0.10% | P -0.40%

13:30     CAD       BoC CPI Core Y/Y Jan C 1.30% | P 1.30%

15:00     USD       Existing Home Sales Jan C 4.75M | P 4.87M

 

Harry Hindsight

  • EUR: A steady rise through Asia saw the market peak above the 1.3760 levels into the grey hours after starting the day around the 1.3735 levels. Helped by the selloff in the AUD after poor CNY numbers it was a steady rise holding for a few hours around the 50 before breaking through, London cam e in though and the selloff started with a poor set of PPI numbers to start the day and struggling across the board in all the PMI figures to send the pair down to the 1.3690 levels and waiting bids which held the markets for the day. For a change though it was not all day trading that set the moves and several medium and longer term sellers were seen lightening there long positions. Light profit taking into the NYK session didn’t stop the market from dipping below that 1.3690 level into the NYK option cut and the market barely made it back to the 1.3720 area as we move into the close.
  • GBP: With little in the way of data for the Cable the market tracked the Euro loosely gaining slightly over the course of the day. Asia held its own with some light selling after the CNY numbers the market had opened around the 1.6680 level and held into the Tokyo session before dipping a little to below the 1.6670 area before holding between the two levels for a good chunk of the session, the grey hours saw the market peak above the 1.6690 levels however, the drag of the Euro took the pair to the immediate support area of 1.6650 the market dipped a couple of times to below the 1.6640 levels but generally held in the area before bouncing back and briefly moving through the 1.6700 level on the US numbers. The market backed off from that point and made new lows through the 1.6630 levels before moving back to the 1.6650 areas into the close. Holding its levels against the Euro the market was dominated by that currency.
  • JPY: With a record trade deficit the Abenomics seem to be falling apart a little, obviously the answer is to print more money however, this has been tried over the past 20yrs and is as likely to work as it has in the past. The market in USDJPY started to move lower as soon as Tokyo stepped in moving from the highs above 102.40 to 101.90 in the first couple of hours with plenty of two way trading occurring, even so the market made several more attempts pushing through the bids and triggering some stops to push below the 101.70 into the London session. From the opening though the USD had started to reverse losses across the board and it was a steady rise into the NYK session pushing initially in London to the 102.00 level before moving higher again into NYK, with mixed numbers from the US, a strong US PMI preliminary number some 2 points above expectations helped the USD continue to rise and the market apart from a brief blip lower moved to above the 102.30 levels to reverse the losses and finish almost unchanged on the day.
  • AUD: Having started the day looking flat the market moved from the 0.9000 levels to just above the 0.9010 levels when the HSBC number was released and the market instantly fell some 60 pips to the 0.8950 levels as everybody and his dog dumped the pair. The market held fairly well on the 0.8940-50 levels into mid-session before starting a recovery which lasted deep into London pushing to the 0.8990 levels. NYK took its time before starting to buy with futures sellers setting the market back to the 0.8960 levels before the market renewed its move higher triggering weak stops through the 90 cent level to touch above 0.9020 and then settling around the 0.9010 levels.

Yesterday’s premiership results

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

NZD       PPI – Inputs Q/Q Q4 A -0.70% | C 0.90% | P 2.20%

NZD       PPI – Outputs Q/Q Q4 A -0.40% | C 1.40% | P 2.40%

JPY         Trade Balance (JPY) Jan A -1.82T | C -1.56T | P -1.15T | R -1.26T

CNY        HSBC/Markit Flash Manufacturing PMI Feb A 48.3 | C 49.4 | P 49.5

CHF        Trade Balance (CHF) Jan A 2.59B | C 1.47B | P 0.50B | R 0.52B

EUR        German PPI M/M Jan A -0.10% | C 0.20% | P 0.10%

EUR        German PPI Y/Y Jan A -1.10% | C -0.80% | P -0.50%

EUR        French PMI Manufacturing Feb (P) A 48.5 | C 49.8 | P 49.3

EUR        French PMI Services Feb (P) A 46.9 | C 49.2 | P 48.9

EUR        German PMI Manufacturing Feb (A) A 54.7 | C 56.5 | P 54.3 | R 56.5

EUR        German PMI Services Feb (A) A 55.4 | C 53.5 | P 53.1

EUR        Eurozone PMI Manufacturing Feb (A) A 53 | C 54.3 | P 54

EUR        Eurozone PMI Services Feb (A) A 51.7 | C 51.9 | P 51.6

EUR        Eurozone PMI Composite Feb A 52.7 | C 53.2 | P 52.9

GBP       CBI Trends Total Orders Feb A 3 | C 6 | P -2

USD       CPI M/M Jan A 0.10% | C 0.10% | P 0.30%

USD       CPI Y/Y Jan A 1.60% | C 1.60% | P 1.50%

USD       CPI Core M/M Jan A 0.10% | C 0.10% | P 0.10%

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

USD       Initial Jobless Claims (FEB 15) A 336K | C 335K | P 339K

USD       Philly Fed Survey Feb A -6.3 | C 10 | P 9.4

USD       Markit US PMI (P) Feb A 56.7 | C 53.6 | P 53.7

USD       Leading Indicators Jan A 0.30% | C 0.40% | P 0.10%

EUR        Eurozone Consumer Confidence Feb (A) A -13 | C -11 | P -11.7

USD       Crude Oil Inventories A 1.0M | C 2.1M | P 3.267M

 

Good Luck

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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