Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 103.07 | EURUSD 1.38603 | EURJPY 142.865 | AUDUSD 0.90901 | NZDUSD 0.84899 | USDCAD 1.09864 | EURCHF 1.22035 | USDCHF 0.88046 | GBPUSD 1.67401 | EURGBP 0.82798 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               102.980 102.985 103.17   102.87

EUR/USD             1.38600 1.38610 1.3868   1.3856

EUR/JPY               142.730 142.748 142.99   142.55

AUD/USD            0.90910 0.90920 0.911     0.9069

NZD/USD             0.84870 0.84890 0.8488   0.8467

USD/CAD             1.09960 1.10000 1.1          1.0984

EUR/CHF              1.21870 1.21890 1.22045 1.2185

USD/CHF             0.87925 0.87940 0.8806   0.8792

GBP/USD             1.67420 1.67450 1.6745   1.6728

EUR/GBP             0.82775 0.82785 0.8285   0.8278

 

For today

  • EUR: While not exactly quiet the market belays the volumes going through, with the Euro opening and trading from the 1.3860 levels to almost 1.3868 on the topside and meeting EURJPY profit taking the market gradually eased back to slip below the 1.3856 level for a big range. For the moment the market holds around the opening, at least we are in a fresh range and option barrier territory. With a mixture from the 1.3670 area with a bias to offers getting stronger towards 1.3900, light stops through the level and then all offers from 1.3920 to 1.3960 before the size steps up a little and option barriers around the 1.4000 level appear. Downside has bids to the 1.3800 levels nothing special, with weak stops below the level and again through 1.3780 very little then until the 1.3730-00 area with stronger bids.
  • GBP: Cable has been very quiet even more so than the Euro, opening around the 1.6740 levels the market drifted into the Tokyo session where we saw light GBPJPY profit taking hitting the market in early Tokyo before moving back to those opening levels from just below the 1.6730 levels. With upside resistance still intact the market has reasonable offers in front of the 1.6800 level and key level now seems to be the 1.6880-90 level which will open up a move through the 1.7000. However, we first would have to clear 1.6800 and that for the moment is all dependent on what the Euro may do I think. Downside has light bids 1.6690-1.6700 with light stops below there. Stronger bids are towards 1.6620 levels. For the moment requires more input on the economic front.
  • JPY: USDJPY drifted having reached the offers from exporters the market was subject to some strong selling in the face of the rise and has for the moment given up the ghost, profit taking in the crosses added to the light pressure downwards and the market moved from its opening levels in the 103.15 area to below 102.90 before the selling desisted and meagre rises back to the figure level. Strong offers from 103.20-50 area is closely followed by more above the 103.70 levels with option barriers coming into play not large but given the offers from exporters is likely to be a struggle however, through 104.00 sees some larger stops from break out players with a mix after that too 104.50 and more stops. Downside see’s light bids through to 102.70 levels with weak stops just below down to the 102.50 areas then patchy until the 102.30 area where some more light stops appear, better bids then start appearing on the 101 handle from fresh bidders.
  • AUD: The move through the 91 cent level ran into some willing offers in late NYK and having drifted a little from there the market saw early sellers to the 0.9080 level before early Tokyo players started to buy, only to run into the very same offers which seem lumpy at the moment. With comments from Steven’s that AUD over 90 cents is higher than the RBA’s assessment sending the pair quickly to the 0.9070 levels before recovering a little into the 0.9090 levels for the rest of the session. Topside still sees some heavy offers above the highs and then thinning out as you move through the 0.9160-0.9200 levels with suspected barriers involved and really no stops showing. Downside has weak stops through 0.9070 with a mix of light bids down to 0.9040 with smaller bids into the 0.9030 levels. 0.8990 is the first area that stops start to appear.

Overnight News

RUB/USD:

Putin says still differences on Ukraine after talking to Obama

CNY:

China May Expand Yuan Trading Band This Year: Securities Journal

PBOC Adviser Says China Trust Default Risk Controllable: Xinhua

China confident of making 2014 trade target -commerce minister

Chaori Solar Says It Can’t Make Full Interest Payment Due Today

CNY/AUD:

China Commerce Minister ‘Optimistic’ on Australia Trade Accord

AUD:

Stevens: A$ Over 90 U.S. Cents Is Higher Than RBA’s Assessment

RBA’s Stevens Reiterates Sees Period of Stability in Cash Rate

RBA’s Stevens Says Jawboning Has Limited Effect on Currency

RBA’s Stevens Says Asking for Trouble If Household Debt Steps Up

USD/JPY:

Obama, Japan’s Abe agree Russia moves in Ukraine threaten world peace
Today’s data

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

JPY         Leading Index Jan (P) A 112.2 | C 112.4 | P 111.7

06:45     CHF        Unemployment Rate Feb C 3.20% | P 3.20%

08:00     CHF        Foreign Currency Reserves Feb P 437.7B

08:15     CHF        CPI M/M Feb C 0.40% | P -0.30%

11:00     EUR        German Industrial Production M/M Jan C 0.70% | P -0.60%

13:30     USD       Change in Non-farm Payrolls Feb C 150K | P 113K

13:30     USD       Unemployment Rate Feb C 6.60% | P 6.60%

13:30     USD       Trade Balance Jan C -39.1B | P -$38.7B

13:30     CAD       International Merchandise Trade (CAD) Jan C -1.6B | P -1.66B

13:30     CAD       Net Change in Employment Feb C 16.9K | P 29.4K

13:30     CAD       Unemployment Rate Feb C 7.00% | P 7.00%

13:30     CAD       Labour Productivity Q/Q Q4 C 0.60% | P 0.20%

 

Harry Hindsight

  • EUR: Asia was very quiet in the run up to the ECB chatter and rate announcement, opening around the 1.3735 levels the market dipped into the mid 1.3720’s before a slow recovery into the London session. As was expected there was no change and the usual Rhetoric however, the market seemed to punish the one quantifiable notation Draghi pointed out, in that the high rate of the Euro was costing 0.4pp off inflation however, he did go onto to say that 2016 should see inflation at 1.5% rising in the Q4 to 1.7%, that is if everything goes to plan. Men and Mice spring to mind, while he was more specific and in light of the fact that interest rates are not likely to rise until inflation starts to move the other way the Euro rose quickly. The market moved through the 1.3800 level triggering stops along the way and ploughing through some decent offers through the figure slowing as it moved through 1.3850 and topping just above the 1.3870 levels before slowing and holding the 1.3860 levels into the close. Volumes were brisk as the Euro changed hands but a day where Draghi may have wished he was less forthcoming with specifics.
  • GBP: Cable held a 18 pip range for half of the session moving from the opening 1.6720’s in Asia to stop just below the 1.6730 and around the 1.6710 levels in a very quiet session for the pair, the BoE announcement was as usual no different than previous and apart from a brief spike to above the 1.6750 and back again did very little, the move towards the ECB announcement saw the EURGBP going bid with pre announcement Euro buyers lining themselves up and GBP was forced lower to push through the 1.6690 level before being dragged back higher by the over the top movement in the Euro to peak above the 1.6775 levels deep into NYK, for the most part the US data was ignored with only minor fluctuations and a drop back to the 1.6740’s.
  • JPY: Steady buying in USDJPY throughout the day with cross buying being particularly strong from early carry trade AUDJPY buying as both the USDJPY and AUDUSD moved quickly after the Oz numbers, the market continued to rise pushing through into the London session around the 102.80 level and struggling for several hours after that into the ECB announcement. EURJPY was the next mover taking the USDJPY higher again to above the 103.15 levels and into waiting offers from exporters who have been waiting patiently for the move. Having reached the level the market offers topped the market and it was unable to get through those offers for the time being, The rest of the session was a drab affair with the market slipping back to trade around the 103.00 levels and finishing only just above there.
  • AUD: A decent day for the AUD depending on your perspective, we opened around the 0.8990 levels and struggled in pre-Tokyo trading however, the release of better expected figures in both retail sales and Trade balance numbers stirred the pot and AUDJPY buyers from the retail sector jumped in with both feet, with USDJPY already bid the AUD followed suit and rose quickly to the 0.9030 level, we then struggled for the rest of the session as offers in the pair held the market in check until we moved into the London session. Fresh buying appeared in the new session and the market then went on a steady rally through the session in a tight channel as we broke through the previous holding area and slowly ground to above the 0.9110 levels. As with the other pairs once the London session left for the day the market started to drift slowly lower to below the 91 cent levels and closed in the 0.9090 area.

Yesterday’s premiership results

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

AUD       Trade Balance (AUD) Jan A 1.43B | C 0.11B | P 0.47B | R 0.59B

AUD       Retail Sales M/M Jan A 1.20% | C 0.50% | P 0.50% | R 0.70%

EUR        German Factory Orders M/M Jan A 1.20% | C 1.10% | P -0.50% | R -0.20%

GBP       BoE Rate Decision A 0.50% | C 0.50% | P 0.50%

GBP       BoE Asset Purchase Target A 375B | C 375B | P 375B

USD       Challenger Job Cuts Y/Y Feb A -24.40% | P 11.60%

EUR        ECB Rate Decision A 0.25% | C 0.25% | P 0.25%

CAD       Building Permits M/M Jan A 8.50% | C 1.90% | P -4.10%

USD       Non-Farm Productivity Q4 (F) A 1.80% | C 2.60% | P 3.20%

USD       Unit Labour Costs Q4 (F) A -0.10% | C -1.00% | P -1.60%

USD       Initial Jobless Claims (FEB 28) A 323K | C 336K | P 348K | R 349K

CAD       Ivey PMI Feb A 57.2 | C 56.7 | P 56.8

USD       Factory Orders Jan A -0.70% | C 0.00% | P -1.50%

 

I’m away for a week to terrorize the fish again. Good Luck, and I’ll be back

 

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.