Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 101.439 | EURUSD 1.39334 | EURJPY 141.341 | AUDUSD 0.91258 | NZDUSD 0.86312 | USDCAD 1.11367 | EURCHF 1.2167 | USDCHF 0.87315 | GBPUSD 1.65919 | EURGBP 0.83984 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               101.64 | 101.30

EUR/USD             1.3935 | 1.3916

EUR/JPY               141.48 | 141.08

AUD/USD            0.9138 | 0.9109

NZD/USD             0.8627 | 0.8604

USD/CAD             1.1145 | 1.1122

EUR/CHF              1.2167 | 1.2160

USD/CHF             0.8741 | 0.87285

GBP/USD             1.6604 | 1.6584

EUR/GBP             0.8400 | 0.83895

 

For today

  • EUR: Steady selling pressure was the name of the game and while the market has moved only around 15 pips there has been constant resistance to attempts higher, with reasonable volumes seen. From the 1.3935 levels the market has moved steadily into the high teens and currently holds in the areas. Offers congregate from the 1.3950 level back into the 1.3980 and then larger size as option barriers materialize to the 1.4000 levels a break through the level will see some stops triggered however, temper that with those pushing through the barriers then covering longs. More regular type offers then starts to appear from the 1.4020 areas only light. The downside has bids through the 1.3900 levels to around 1.3870 which has been fairly supportive over the past couple of days and likely to have attracted weak stops below, better bids now appear around the 1.3830/50 area.
  • GBP: A fairly quiet session for the GBP with the EURGBP slipping slightly from close to the 0.8400 to levels to below 0.8390 initially giving the Cable enough room to move above the 1.6600 levels to make the highs before drifting a little to hold around the opening levels of 1.6590. For the moment downside seems lightly supported around the 1.6550 with a mix below the level and some stops appearing below the 1.6500. The topside remains the same with offers around the 1.6670 levels and again 1.6720 before stops appear for a breakout play above 1.6750. Technically the market looks to be rejecting the topside however; this market is more focused on the Euro still, so maybe today’s unemployment and BoE minutes can stir the water up a little.
  • JPY: USDJPY struggled in the early part of the session unable to move much above the opening 101.42/43 area and once Tokyo opened dropping back to the 101.30 levels. A worsening trade balance for Feb stirred the market and the USDJPY rallied quickly through the highs and triggering weak stops on its way to above the 101.60 level, from the rally the market has drifted as we moved into the Tokyo lunch period and moves into the grey hours around the 101.50 areas. Offers congregated from the 101.70-102.00 area with light stops behind and then further offers appearing from 102.30-50 likely to be connected to repatriation for the end of year. Downside needs to move through 101.00 for the stops and has some reasonable bids into that level further stops building below the figure to around the 100.80 levels.
  • AUD: A better than expected NZD current account balance saw AUDNZD cross selling in the market and with movements higher in the USDJPY the Oz has remained under pressure for the session even if it’s been a reasonably quiet session, moving from the opening 0.9125 levels the market moved to the high 0.9130’s before drifting lower into the Tokyo session and pushing to below the 0.9110 levels. Accumulation of break out stops above the 0.9140-60 levels see’s offers thickening as we move to the 0.9200 levels and likelihood of verbal intervention from RBA officials if we do. Downside is still a little bare however, bids appear below 0.9100 and although light seem to be spread over the next 50 pips before becoming patchy.

Overnight News

CNY:

Yuan Falls below 6.2000 Per Dollar, Weakest Since April

China May See Yuan Weakness Leading to Capital Outflows: MNI

China to Speed up Development of Smaller Cities, Official Says

China Aims to Create Large-Scale Mining Groups, Bus. News Says

China Housing Sector to See Further Defaults: Fitch

JPY:

Kuroda: Gaining Confidence Easing Transmission Mechanism Working

BOJ’s Kiuchi sees high hurdles to additional QE

BOJ’s Kiuchi: Japan exports likely to remain weak

BOJ’s Kiuchi: Have Room to Reconsider Level of 2% Price Target

Yen Reaching Level Close to That Before Financial Crisis: Suga

Japan Reports Bigger-Than-Forecast Trade Deficit for February

Tokyo Feb. Condominiums Put Up for Sale Fall 24.1% on Year

NZD:

N.Z. Current Account Deficit Is Narrowest Since 1Q 2012
Today’s data

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

NZD       Current Account Balance Q4 A -1.43B | C -1.44B | P -4.78B | R -4.88B

AUD       Westpac Leading Index M/M Feb A -0.10% | P -0.20% | R -0.10%

JPY         Trade Balance (JPY) Feb A -1.13T | C -0.89T | P -1.82T | R -1.76T

JPY         All Industry Activity Index M/M Jan A 1.00% | C 1.20% | P -0.10% | R -0.30%

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

09:30     GBP       Claimant Count Change Feb C -25.0K | P -27.6K

09:30     GBP       Claimant Count Rate Feb C 3.50% | P 3.60%

09:30     GBP       ILO Unemployment Rate 3M Jan C 7.20% | P 7.20%

10:00     CHF        ZEW (Expectations) Mar  P 28.7

12:30     CAD       Wholesale Sales M/M Jan C 1.00% | P -1.40%

12:30     USD       Current Account Balance Q4 C -$88.0B | P -$94.8B

14:30     USD       Crude Oil Inventories P 6180K

18:00     USD       FOMC Rate Decision C 0.25% | P 0.25%

 

Harry Hindsight

  • EUR: Asia struggled to move in any particular direction opening around the low 1.3920’s and rising to just above the 1.3935 level into the Tokyo session before drifting back into the 20’s. A poor set of ZEW numbers only added to the general decline falling back to the 1.3890’s however, the support around the 1.3880 held the market after a NYK short squeeze to test the 1.3940’s and dropping back. The rest of the session has been a gradual climb higher from the lows with Crimea dominating the news again. The market looks to be closing just above the opening levels with market participants still eyeing the 1.4000 levels.
  • GBP: Cable was very quiet within the Asian session trading around the 1.6640 in a tight range, some light buying in the grey hours took the market to its highs just short of the 1.6650 levels from the opening 1.6635 areas. However, weakness started to appear in the run into London and having held the same range for several days the market made its way to the 1.6590 levels and although the market held during London the NYK opening saw fresh selling and the break triggered weak stops down through the level and we made a move to the 1.6550 helped by a push for the 0.8400 levels in EURGBP which made minor gains over the day. For the moment the market has made its way back to the 1.6590 levels as we near the end of the day.
  • JPY: Having started to recover from the safe haven flows, opening around the 101.80 area and pushing towards the 101.95 levels further revelations hitting the news as Putin makes his play had the market scampering again to safe havens with the USDJPY dropping from the 101.85 levels to 101.55 in the grey hours and then a follow through on the London opening to the 101.40 areas. The market then generally held the area with bids supporting the downside and although we rallied sharply at the NYK opening period the market soon gave up those gains to dip to 101.30 before holding into a 101.40 area close. Although the CNY widened the band on the Renminbi the Yen was less affected than one would have expected.
  • AUD: The AUD opened around the 0.9085 area and moved quietly into the RBA minutes, which were a little more upbeat on the economic front if nothing different to previous releases, the market reacted less volatile than usual with a spike to the 0.9110 area triggering some stops along the way before moving back to the opening levels and then dropping to trigger the weak longs. The market didn’t really recover from the quick moves and gradually moved down to the 0.9065 levels in the grey hours to make the lows. Only once the USDJPY started to weaken did the AUD start to rally from its lows as AUDJPY stayed in line while safe haven flows indirectly bought the carry. The Oz moved to the highs and then finally pushed to the 0.9135 areas before running into better offers and running out of steam and holding into the close above the 0.9125.

Yesterday’s premiership results

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

EUR        German ZEW (Current Situation) Mar A 51.3 | C 52 | P 50

EUR        German ZEW (Economic Sentiment) Mar A 46.6 | C 52 | P 55.7

EUR        Eurozone ZEW (Economic Sentiment) Mar A 61.5 | C 67.3 | P 68.5

CAD       Manufacturing Shipments M/M Jan A 1.50% | C 1.00% | P -0.90%

USD       CPI M/M Feb A 0.10% | C 0.10% | P 0.10%

USD       CPI Y/Y Feb A 1.10% | C 1.20% | P 1.60%

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

USD       CPI Core Y/Y Feb A 1.60% | C 1.60% | P 1.60%

USD       Housing Starts Feb A 0.907M | C 0.92M | P 0.88M

USD       Building Permits Feb A 1.018M | C 0.97M | P 0.94M

 

Good Luck,

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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