Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 102.259 | EURUSD 1.38261 | EURJPY 141.384 | AUDUSD 0.91658 | NZDUSD 0.85734 | USDCAD 1.11662 | EURCHF 1.22042 | USDCHF 0.8827 | GBPUSD 1.6530 | EURGBP 0.83638 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               102.40 | 102.25

EUR/USD             1.38275 | 1.3805

EUR/JPY               141.50 | 141.21

AUD/USD            0.9202 | 0.9155

NZD/USD             0.8597 | 0.8570

USD/CAD             1.1170 | 1.1150

EUR/CHF              1.22105 | 1.22025

USD/CHF             0.8842 | 0.8826

GBP/USD             1.6540 | 1.6517

EUR/GBP             0.83645 | 0.83525

 

For today

  • EUR: A steady decline over the Asian period with no great volume and EURJPY selling dominating the market somewhat, from the opening 1.3826 levels the market has moved steadily to rest in the 1.3805 areas for the moment as we head into the grey hours, with offers beginning to thicken in the 1.3850-75 levels the resistance is beginning to stiffen and with only the German consumer confidence number of import its likely to struggle to the topside without commentary from ECB officials who seem intent on turning the market the wrong way (for them that is) above that we see only limited stops and more offers around the 1.3900 level and better from then on. Downside has limited bids on a break below the 1.3750 with the market patchy at best in between. Through the 1.3730 is likely to be a little sticky with a mixture showing strength to the bids and then light stops appear on a break of the figure level.
  • GBP: Cable opened around the 1.6528/30 area and interest from late comers pushed the market to above the 1.6540 as GBPJPY cross buying kicked in just after the Tokyo open, it was short lived and having made it just above that level the market has been in a steady decline since. We currently hold around the 1.6518 levels as we head into the grey hours, with Euro leading the way on the selling and EURGBP drifting a little lower. For the moment 1.6550 level has offers running over 20 pips or so but nothing to strong, light stops through the 1.6600 level with some better offers appearing further towards the next sentimental level. Downside has some light bids below 1.6500 however the majority now sit towards the 1.6450 levels.
  • JPY: If it wasn’t for the opening in Tokyo I’d have sworn that they were on holiday, the market opened around the 102.25 level and drifted a little higher into the Tokyo opening, retail buying of AUD/JPY carry and straight USDJPY took the market quickly to the 102.40 level holding for a few minutes as the buying was absorbed before starting a steady drift back to the opening levels over the course of the session. With time starting to run out for the end of month the topside offers we’ve seen over the past week have now started to creep lower in the market and a push above the 102.40 level runs slap bang into decent offers, more offers continue all the way up now with barely a stop showing with offers every few tics to 103.00 and beyond. Downside still has a few bids from the 102.10 level however, weak stops now appear below the figure and fresh bidding appears below the 101.80 to around 101.50, patchy after that with a light mixture down to 101.20 areas.
  • AUD: With Steven’s giving very little away the market was reasonably quiet until he started to speak, edging down from the opening 0.9160 areas to the 0.9155 over the course of several hours, with Governor Stevens delivering a speech in Hong Kong it sparked the market higher, having passed on comments from one individual on giving the Oz a kick lower. The market moved off its lows and pushed quickly to the 92 cent level peeking through and touching some reasonable offers above. Having made new highs for the year the market has now backed away a little and holds just below that level. Immediate offers above 92 cent  and very little in the way of stops with more offers appearing in patches to the 0.9240 area before they start to thicken a little, downside now has weak stops through 0.9175 level and again below 0.9150 slightly larger however, light support sits in between those two levels and again around the 0.9110 areas.

Overnight News

AUD:
RBA’s Stevens says Oz direction from here depends on view of fundamentals

Stevens says surprising if the Oz didn’t drop with terms of trade.

RBA China liberalising the renminbi to be a seismic event

USD:
Obama hosts summit in Sth Korea as the North Korea test fires medium range missiles.

CNY:

China cabinet pledges capital market opening, IPO reform

 

Today’s data

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

JPY         Corporate Service Price Y/Y Feb A 0.70% | C 0.80% | P 0.80% | R 0.70%

07:00     EUR        German GfK Consumer sentiment Apr C 8.5 | P 8.5

07:00     CHF        UBS Consumption Indicator Feb P 1.44

12:30     USD       Durable Goods Orders Feb C 1.00% | P -1.00%

12:30     USD       Durables Ex Transportation Feb C 0.10% | P 1.10%

14:30     USD       Crude Oil Inventories C 2.5M | P 5.9M

21:45     NZD       Trade Balance (NZD) Feb C 600M | P 306M

 

Harry Hindsight

  • EUR: With the almost daily slow start through Asia the market opened around the 1.3840 levels and slowly drifted through the session to move into the grey hours just below the 1.3830 area, early Europeans reversed the meagre losses and posted a high around the 1.3847 levels before the London session opened and the release of the IFO numbers, while the numbers were a little mixed expectations was down a fair bit and the market took it moderately poorly dropping to the 1.3810 level and light support. The market held up until the NYK session before again turning south and triggering light stops through the 1.3800 levels to bounce of the 1.3780 areas. Again movement around the NYK fixing period saw the market move off a spike lower to 1.3750 and squeeze back after comments from several ECB members culminating with Makuch telling the market that they had many tools at hand including adding liquidity. Having made its way back to the starting point one assumes some of the ECB members would have been better going for a liquid lunch. The last few hours were probably as dull as the Asian session with the market holding in the mid 1.3820’s to the close.
  • GBP: With a range no larger than the Euro throughout the Asian session the market moved from the 1.6500 levels to the low 1.6480’s into the grey hours and while the market became a little choppier, the range didn’t improve until after the inflationary numbers were released. The headline number was slightly higher than expected and those that had sold into the number looking for the continuation of falling inflation started to cover, the difference was marginal so the reaction was merely a reversal of the shorts in the market. The market steadily rose to above the 1.6535 levels into NYK, with a shift in the EURGBP rate as the GBP gained ground across the board with the cross dropping from the 0.8390 levels to below 0.8340 into the NYK session. Movement around the NYK fix with commentary from the ECB left the market whipping around a little however apart from the spike below 1.6500 the market pushed to just below the 1.6550 levels and held the 1.6530 areas into a quiet close.
  • JPY: USDJPY had a reasonably quiet day with the market slipping in early trading before Tokyo before rising steadily over the course of the Asian session to touch the 102.35 from 102.15. London saw USDJPY selling as the USDJPY came under pressure from late sellers into the grey hours pushing the pair to the 102.10 and the current support area. Failing to break lower or the fact it ran out of steam the market rallied from then until into the NYK session pushing towards the 102.50 levels however, as with the downside the market is covered by downside interest to buy USD’s mostly leverage and topside repatriation orders keeping a lid on the range, the market ended the day hardly changed and holding in the 102.20/30 level for several hours.
  • AUD: A generally quiet day for the Oz moving up on the opening in Tokyo as technical levels gave way allowing the market a quick glimpse towards the 0.9160 levels before settling back to the 0.9140 level, the market having failed the topside started to drift and the move into the grey hours saw volumes and the Oz sagging a little and touching the 0.9120 levels. Early Europeans were happy to buy with the so called 0.9150 level out of the way the market soon made its way back to the level however, it struggled to make its way cleanly through the level a second time and the market held into the NYK session before moving quickly to above the 0.9170 level with the gyrations in the Euro causing EURAUD sellers to appear. From there it was as quiet as the other pairs with London out of the way and the market drifted to a close around the 0.9160 levels.

Yesterday’s premiership results

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

CNY        Conference Board Leading Index Feb A 0.90% | C 1.20% | P 0.30%

EUR        German IFO – Business Climate Mar A 110.7 | C 110.9 | P 111.3

EUR        German IFO – Current Assessment Mar A 115.2 | C 114.6 | P 114.4

EUR        German IFO – Expectations Mar A 106.4 | C 107.7 | P 108.3

GBP       CPI M/M Feb A 0.50% | C 0.50% | P -0.60%

GBP       CPI Y/Y Feb A 1.70% | C 1.70% | P 1.90%

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

GBP       RPI M/M Feb A 0.60% | C 0.50% | P -0.30%

GBP       RPI Y/Y Feb A 2.70% | C 2.60% | P 2.80%

GBP       PPI Input M/M Feb A -0.40% | C 0.30% | P -0.90%

GBP       PPI Input Y/Y Feb A -5.70% | C -5.30% | P -3.10% | R -2.90%

GBP       PPI Output M/M Feb A 0.00% | C 0.20% | P 0.30%

GBP       PPI Output Y/Y Feb A 0.50% | C 0.70% | P 0.90%

GBP       PPI Output Core M/M Feb A 0.10% | C 0.00% | P 0.50%

GBP       PPI Output Core Y/Y Feb A 1.10% | C 1.00% | P 1.20%

GBP       DCLG UK House Prices Y/Y Jan A 6.80% | C 6.60% | R 5.50%

GBP       BBA Mortgage Approvals Feb A 47.55K | C 50K | P 49.97K

GBP       CBI Reported Sales Mar 13 A 28 | P 37

USD       House Price Index M/M Jan A 0.50% | C 0.70% | P 0.80%

USD       S&P/Case-Shiller Composite-20 Y/Y Jan A 13.20% | C 13.34% | P 13.42%

USD       Consumer Confidence Mar A 82.3 | C 78.6 | P 78.1

USD       New Home Sales Feb A 440K | C 445K | P 468K | R 455K

 

Good Luck,

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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