Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 102.042 | EURUSD 1.3783 | EURJPY 140.647 | AUDUSD 0.9226 | NZDUSD 0.86028 | USDCAD 1.11022 | EURCHF 1.21984 | USDCHF 0.88499 | GBPUSD 1.65832 | EURGBP 0.83111 |

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               102.265 | 101.71

EUR/USD             1.3797 | 1.3778

EUR/JPY               141.04 | 140.28

AUD/USD            0.9243 | 0.9214

NZD/USD             0.8637 | 0.8590

USD/CAD             1.1106 | 1.1086

EUR/CHF              1.22065 | 1.2197

USD/CHF             0.88565 | 0.8844

GBP/USD             1.6587 | 1.6570

EUR/GBP             0.8321 | 0.8311

For today

• EUR: With the market opening around the 1.3785 level we saw only slightly better ranges over the course of the session than we’ve seen all week with the market attempting a move through the 1.3800 levels and then dipping back to the low 1.3780’s in what may be called as reasonable volumes EURJPY selling seemed to be a large factor in the movements. Light offers from the 1.3800 moving back into the 1.3830 however, it is light. Better offers from the 1.3840 levels and although it only sees 20 pips or so some weak stops are likely to build above the area. Downside sees a mixture on a break through 1.3780 with a bias to the sell side and then bids around the 1.3730 falling away towards the figure levels.
• GBP: Next to no change for Cable following yesterday’s rally to the 1.6580 level, the market has been stuck with light buying kicking in around the 1.6570 level but still not enough impetus to push through the 1.6600 levels. Downside light bids 1.6570-50 before weak stops make an appearance through there. Topside has offers around the 1.6600 level and then a little mixed above with some light stops around the 1.6660 areas.
• JPY: As with yesterday the market was initially dominated by repatriation flows on the penultimate day for month/year end flows seeing strong sellers in both the USDJPY and EURJPY from early in the session, moving the market from the opening levels around the 102.05 area to stretch below 101.75 before the supply ran out and the market started to rally again, the market stalled at the 101.90 levels with one suspects a hangover of offers from the real money only to break up once the supply was exhausted and back to the 102.20 levels. For the moment still offers abound above the 102.30 area strengthening in size the higher you go with light to 102.50 and then stronger thereafter to the 103.00 levels, a mix above these levels still leaves a bias to offers however, it’s a change from the past week. To the downside we a light mix to the 101.60 area with bids kicking in below 101.50 and running to the 101.20 area, nothing major can be seen just in case the market needs to convert quickly I’d guess, through the 101.00 we now see stops running over 40 pips or so and may be connected to the offers on the topside so one will likely remove the other side.
• AUD: After the USDJPY’s dip lower the Oz found itself moving off the lows as AUDJPY buying kicked in as the chance for a bargain never goes amiss, the Oz lifted from just below the 0.9220 levels running steadily to the 0.9240 levels before holding and trading sideways over the course of several hours. Offers dominate the topside until above the 0.9270 levels with a light pattern above, a break through 93 cent will likely see stops triggered however, it will be a struggle to get there without some news to help it. Downside has a set of weak stops through the 0.9175 levels falling to 0.9150 before bids start to creep in however, they are patchy and could more than likely be profit taking from current shorts.

Overnight News

USD:

Fed’s Bullard: Limited Value In Central Bank International Coordination — WSJ Blog

Fed’s Bullard Says Not a Good Idea to Raise Inflation Goal to 4%

FOMC Can Cease Reinvestment at Any Time, Fed’s Bullard Says

JPY:

Japan Amari: BOJ can maximize policy impact by ‘surprising’ markets

ANA Makes Big Order for Airbus, Boeing Planes

CNY:

China Has Sufficient Reserves to Deal with Outflows: Market News

China Jan-Feb industrial profits up 9.4 pct y/y

China Developers to Maintain Adequate Liquidity: Moody’s

CNY/HKD:

China’s Citic to Move Billions of Assets to Hong Kong Unit

NZD:

New Zealand Trade Surplus Highest in Nearly Three Years in February

Spencer Says RBNZ Loan Limits May Have Curbed Pressure on NZ$

GBP:

U.K. Loosens Pension Restrictions in Move toward 2015 Overhaul

Today’s data

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

NZD       Trade Balance (NZD) Feb A 818M | C 600M | P 306M

09:00     EUR        Eurozone M3 Y/Y Feb C 1.30% | P 1.20%

09:30     GBP       Retail Sales M/M Feb C 0.50% | P -1.50%

12:30     USD       GDP (Annualized) Q4 (T) C 2.70% | P 2.40%

12:30     USD       GDP Price Index Q4 (T) C 1.60% | P 1.60%

12:30     USD       Initial Jobless Claims (MAR 21) C 325K | P 320K

14:00     USD       Pending Home Sales M/M Feb C 0.00% | P 0.10%

Harry Hindsight

• EUR: Apart from the varied commentary from the ECB the day before the market has had very little to absorb and generally weakened over the day, Asia opened around the 1.3825 levels and slipped steadily to the lows just before the grey hours at 1.3805 levels. Some weak buying into the London open managed to force the pair back to the 1.3820 level however, an unassuming Consumer confidence number out of Germany left the market weaker trading down to the 1.3790 quickly. The market remained choppy through the session moving between 1.3780-1.3805 on the wide but generally holding down below the 1.3790 for the most part before finishing the day just below that area.
• GBP: Cable edged lower with the Euro during Asia only to meet early comments just before the London opening taking the pair off the lows of 1.6510 and running back through 1.6530 opening areas and through the 1.6555 levels. BoE’s Weale spoke on the subject of rising wages likely to trigger a movement in rates. The market held for a period into NYK before gradually pushing higher to move through the 50DMA and touch just short of the 1.6600 levels before closing around the 1.6580 levels
• JPY: A flat trading session in Asia moving from the 102.30 area to above 102.40 on the opening in Tokyo before slipping back to the opening levels and holding that area for the whole of the Asian session and into the London market. London slowly took the market higher to the 102.45 level in a slow attempt to test the offers before NYK walked in. The market drifted until late into the London session with a quick drop just after the close in what appeared time related selling. The market moved to the 102.00 areas pushing briefly below 101.90 before settling above the figure level.
• AUD: The Oz started quietly moving from the opening range around 0.9165 to 10 pips lower before RBA’s Steven’s made comments to upset the market, probably not what he intended. Having bypassed a question on intervening, the market triggered a quick move higher pushing through the 200DMA and continuing at a slower pace to the 92 cent level and into the London market. Continuing pressure built to push through and the market slowly rose over the next few hours to above 0.9240 before drifting back a little to hold around the 0.9220 levels into the close.

Yesterday’s premiership results

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%

EUR        German GfK Consumer sentiment Apr A 8.5 | C 8.5 | P 8.5

CHF        UBS Consumption Indicator Feb A 1.57 | C 1.44 | P 1.49

USD       Durable Goods Orders Feb A 2.20% | C 1.00% | P -1.00% | R -1.30%

USD       Durables Ex Transportation Feb A 0.20% | C 0.10% | P 1.10% | R 0.90%

USD       Crude Oil Inventories A 6.6M | C 2.9M | P 5.9M

Good Luck,

Andy