Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 101.446 | EURUSD 1.3735 | EURJPY 139.328 | AUDUSD 0.89369 | NZDUSD 0.83659 | USDCAD 1.10761 | EURCHF 1.21297 | USDCHF 0.88313 | GBPUSD 1.6666 | EURGBP 0.82412 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY             101.74 | 101.4

EUR/USD             1.37385 | 1.3718

EUR/JPY             139.715 | 139.28

AUD/USD             0.8970 | 0.8909

NZD/USD             0.8377 | 0.8353

USD/CAD             1.1108 | 1.1073

EUR/CHF             1.2139 | 1.21275

USD/CHF             0.88425 | 0.88285

GBP/USD            1.6669 | 1.6640

EUR/GBP            0.82475 | 0.82415

 

For today

  • EUR: The day started slowly with the market around the 1.3735 levels and holding steady into Tokyo before slipping lower as cross selling met USDJPY buying, Euros slipped to just above the 1.3720 levels before recovering and moving back to the opening levels. Light offers top off the market just above the highs yesterday of 1.3750 stretching back some 30 pips to the 1.3780 area here the market becomes a little mixed however, above the 1.3800 level the market sees stops building into offers from range players. The downside has bids down to the 1.3700 levels with smaller bids around the 1.3660 areas with less showing than yesterday.
  • GBP: A tight range for Cable moving from the opening 1.6665 areas sideways into the Tokyo session before cross selling started to kick in and forcing Cable lower to just above the 1.6640 levels in the first couple of hours, from there the market has moved up a little and currently holds around the 1.6655 levels in quiet trading. For the moment we hold in a congested area with offers now seen above the 1.6750 levels and 1.6820-30 area, stops weak stops behind both levels and likely break out players above the 1.6880. Downside sees light bids around the 1.6620 levels creating weak stops below the 1.6580 levels which will open up the 1.6550 breakup point from last month.
  • JPY: Having struggled during the previous session to move higher against the safe haven flow the Tokyo market came in strongly after a lacklustre couple of hours. Opening around the 101.45 the market moved quickly from Tokyo pushing initially to the first set of offers in the crosses around the 101.55 area and then to the 101.70 levels on the second wave, the market has again tested the highs and extended it only slightly and is resting just off those 101.70’s having triggered near term stops. With Light offers from the 101.80 level until above the 102.10 the market struggles for the moment and will need fresh impetus from the London session to push through to stops through the 102.30-50 levels before exposing the 102.70-103.00 offers that are becoming a bit dated. Downside has a light mixture from the 101.20 areas through to 100.80-50 stops however, once that level is breached and better stops make their first appearance.
  • AUD: The market opened quietly as players positioned themselves for the no change announcement from the RBA, opening around the 0.8935-40 area the market slipped back to the 0.8925 area before Tokyo entered the market with AUDJPY carry trade doing a bit of work to take the Oz up to 0.8955. The market settled down into a 0.8935-45 range into the release, and then the fun started with the market rising quickly to the 0.8970 levels before the details started to hit and a quick reversal to hurt all those that had just got into their positions. With little change to the overall tone the one added comment of no interest in changing the rate and that current decline in the currency assist in achieving a balanced growth, rather than mentioning the uncomfortable levels as in the previous Feb announcement. The market dropped from the highs quickly to touch through the 0.8910 level, before support kicked in. With near term stops triggered and out of the way either side of the market all that is left is light offers above the 0.8980 levels into the 90cent area, light stops above 0.9030 with more building above 0.9050. On the downside for the moment it is all bids from the current lows to 0.8860 and then patchy and nothing really showing until closer to the 88 cent level where there is more bids starting to build.

Overnight News

USD:

Senate Panel Postpones Fischer Confirmation Hearing for Fed Post

Fed’s Williams: ‘We Haven’t Really Changed Our Basic Outlook for the Economy’ FT

JPY:

Kuroda: Difficult to Say How Much Volume of Yen-Carry Trade Has Increased

Takenaka: June-August Critical for BOJ Judgment on More Easing

Japan Jan wages fall in blow to battle against deflation

GPIF Can Cut Japan Bond Holdings to 52% Under Current Rules: Ito

Japan Funds Should Review Investing Just in Stocks, Bonds: Ito

JPY/USD:

Japan’s Aso Agreed With Treasury’s Lew to Cooperate on Ukraine

AUD:

Australia CB plots steady rate course as housing revives

Australian Home-Building Approvals Rise

Australia Current Account Deficit Narrows

CNY:

PBOC Governor Says Recent Forex Rate Moves ‘Normal’: Xinhua

China’s Chongqing to Set up Free-Trade Zone: Securities Journal

NZD:

NZ commodity prices hit record in February – ANZ survey
Today’s data

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

JPY         Monetary Base Y/Y Feb A 55.70% | C 54.20% | P 51.90%

AUD       Building Approvals M/M Jan A 6.80% | C 0.70% | P -2.90% | R -1.30%

JPY         Labour Cash Earnings Y/Y Jan A -0.20% | C 0.30% | P 0.80% | R 0.50%

AUD       RBA Rate Decision A 2.50% | C 2.50% | P 2.50%

09:30     GBP       PMI Construction Feb C 63.6 | P 64.6

10:00     EUR        Eurozone PPI M/M Jan C 0.00% | P 0.20%

10:00     EUR        Eurozone PPI Y/Y Jan C -1.20% | P -0.80%

 

Harry Hindsight

  • EUR: A mixed PMI result across some parts of Europe helped to balance the flight to safe havens. Opening slightly lower in Asia from the close on Friday as the weekend news upset the market, with an opening price around the 1.3775 the market attempted to fill the gap early in the session but found the going tough as cross selling met straight buying. For the most part Asia was limited however, volumes were strong and the market maintained the 1.3770-80 levels into the grey hours. We again tried the topside above the 1.3790 however, East European selling tipped the market and we pushed below the 1.3770 levels. London session was contained as the numbers balanced the selling and not until NYK was the market marked lower to 1.3760 and then later in the session another push to the 1.3750. Each point was met with support for the pair and took time to break lower with good volumes. Late into the session another round of selling forced the market through 1.3740 for the largest move of the day as stops this time were taken out and we moved to the 1.3730 levels where we have remained into the close.
  • GBP: The market in Cable was pinned to a narrow range for much of the day, unable to push through the 1.6750 level convincingly. Opening close to the closing rates on Friday the market was balanced between safe haven flows and wanting to follow the Euro. In the end much of the Asian session was traded in the 1.6740-50 areas and only into the grey hours did the market dip below those levels. Market dipped again on the opening in London and we fell to the 1.6700 levels before again testing the topside and failing another two attempts to the topside. The drop in the Euro dragged the Cable lower to the point that it took the lead and triggered some healthy sized stops through the 1.6700 level taking the market through the 1.6660 levels in mid NYK and we held just off the lows into the close.
    JPY: USDJPY was very limited in movement with safe haven flows impacting the market, we began the day around the 101.60 levels, the market moved to the 101.30 level before the Tokyo market opened and we then traded the 101.30-50 levels for the Asian session. Early London extended the range to the downside and we touched just above the 101.20 levels into the NYK opening, from there much of the day was spent regaining the meagre range we had been in and apart from a brief move into the 101.50’s on the ISM numbers the market traded around the 101.40 in a dull range full of two way plays.
  • AUD: The Oz opened adrift of Friday’s close around the 0.8905 levels and although the market initially flirted with the downside 0.8890 levels it was short lived and as long as the USDJPY was on the back foot the AUDJPY carry remained the main buying opportunity for the retail Asian session with it gradually rising. By the time we moved into the London session the market had made limited gains in a somewhat balanced market pushing to the 0.8940 levels into London and then drifting back to the opening levels however, with the gap on the charts filled the market was free to move in either direction but again recaptured the highs into late NYK and holding in the 0.8930 in a quiet session for the AUD.

Yesterday’s premiership results

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

NZD       Terms of Trade Index Q/Q Q4 A 2.30% | C 1.90% | P 7.50%

AUD       TD Securities Inflation M/M Feb A 0.20% | P 0.10%

JPY         Capital Spending Q4 A 4.00% | C 5.10% | P 1.50%

CNY        Non-manufacturing PMI Feb A 55 | P 53.4

CNY        HSBC/Markit Manufacturing PMI Feb (F) A 48.5 | C 48.5 | P 49.5

CHF        SVME PMI Feb A 57.6 | C 57.2 | P 56.1

EUR        Italian PMI Manufacturing Feb A 52.3 | C 53.7 | P 53.1

EUR        Eurozone PMI Manufacturing Feb (F) A 53.2 | C 53.2 | P 53

GBP       PMI Manufacturing Feb A 56.9 | C 56.9 | P 56.7

GBP       Mortgage Approvals Jan A 77K | C 74K | P 71.6K | R 73K

GBP       M4 Money Supply M/M Jan A 0.30% | C 0.30% | P -1.40%

CAD       Industrial Product Price M/M Jan A 1.40% | C 0.90% | P 0.70% | R 0.60%

CAD       Raw Materials Price Index M/M Jan A 2.60% | C 2.30% | P 1.90% | R 1.80%

USD       Personal Income Jan A 0.30% | C 0.30% | P 0.00%

USD       Personal Spending Jan A 0.40% | C 0.10% | P 0.40%

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

USD       PCE Core Y/Y Jan A 1.20% | C 1.10% | P 1.20%

USD       ISM Manufacturing Feb A 53.2 | C 52 | P 51.3

USD       ISM Prices Paid Feb A 60 | C 57.2 | P 60.5

USD       Construction Spending M/M Jan  A 0.10% | C -0.30% | P 0.10% | R 1.50%

 

Good Luck

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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