Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 102.181 | EURUSD 1.3741 | EURJPY 140.41 | AUDUSD 0.92614 | NZDUSD 0.86729 | USDCAD 1.10295 | EURCHF 1.21825 | USDCHF 0.88654 | GBPUSD 1.66114 | EURGBP 0.82719 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               102.25 | 102.025

EUR/USD             1.3752 | 1.3738

EUR/JPY               140.53 | 140.245

AUD/USD            0.9296 | 0.9256

NZD/USD             0.8697 | 0.8660

USD/CAD             1.1037 | 1.1006

EUR/CHF              1.2197 | 1.2180

USD/CHF             0.88745 | 0.88635

GBP/USD             1.6623 | 1.6600

EUR/GBP             0.82755 | 0.82685

 

For today

  • EUR: Another quiet day in the heady markets of Asia, opening around the 1.3740 levels the market steadily rose of the lows just below the opening to trade above the 1.3750 levels in quiet trading. Light offers show just above here around the 1.3760 moving back 1.3780 where the market broke down from. Above that weak stops show through that 1.3780 level running into light offers around the 1.3800 level, more offers around the 1.3830 area kick in and while light continue in the same fashion through to 1.3900. Downside has some decent bids down to 1.3700 from the 1.3730 levels and light stops through the levels and a similar showing of bids 1.3650-80 area.
  • GBP: The market attempted the downside from the opening pushing briefly below the 1.6600 levels before making its way higher once Tokyo moved into the market properly. The market then made its way up steadily over the session to hold around the 1.6620 levels where the market currently rests going into the grey hours. The next target to the topside is the 1.6650/60 areas with offers for the moment with weak stops through the level, this opens up the 1.6720 levels and a breach of that opens 1.6800 and another attempt for the top. Offers rest in front of each level and stronger the higher you go. Downside sees light bids to 1.6550 levels with stops through 1.6500 however from there it seems to be a little mixed as the congestion continues to hold the range.
  • JPY: With the last likely day for repatriation flows to occur, the market opened aroud the 102.15 levels and dipped into Tokyo opening to move below 102.05 before the supply ran out. The market then rebounded to the 102.20 areas and has remained quiet for the session with buyers reluctant to go long and any supply hanging back rather than start chasing the market lower. Stops now appear around the 102.30 area and the offers seem to have disappeared until the 102.70-103.00 levels were one suspects are connected to normal market activities, more offers above the 103.30 area becoming a little patchy until you get closer to the 104.00 levels where option protection begins to appear however, this is only light given we’ve been above the level this year. Downside has light bids down to the 101.70 levels mirroring yesterday’s action with weak stops through the 101.50 areas, market then is a little mixed down to the 101.10 area and stops begin to take over the play.
  • AUD: After a steady start around the 0.9260 levels the market moved quickly higher as AUDJPY buying kicked in with a static USDJPY market. Oz moved to above the 0.9285 levels and struggled slightly higher to just above 0.9295 where strong offers held the market for the moment. Having traded there the market then started to retrace the levels steadily as the market took in the market consensus that the RBA is not likely to raise rates so quickly and the market moved back towards the opening levels where we move into the grey hours. Offers still stand lightly in the way of 93cent however better offers kick in around the 0.9350 area with a patchy period in front. Breakout above 0.9420 opens up a further range level of 96 cent, something I’m sure the RBA would dislike. Downside has only limited bids and looks mixed to say the least until deep into the 91cent level with bids around the 0.9150 areas.

 

Overnight News

JPY:

Japan May Reduce Bonds in Public Employee Pension Funds: Nikkei

Japan to Reconsider GPIF Portfolio in Investment Plan: Abe

Japan’s Govt to Front-Load Spending in FY14 Budget, Says Aso

Abe: Important to Limit Risk of Long-Term Japan Yield Jump

Japan February Core CPI Rises 1.3% Matching Expectations

Japan jobless rate falls, labour demand improves again

Japan Feb household spending falls 2.5% vs. yr. ago

Japan Feb Overall Retail Sales +3.6% On Year

CNY:

China to Use Monetary Policy Tools to Help Companies: Li

China Premier Li Confident of Growth in ‘Reasonable Range’

USD:

Fed’s Evans Says He Would Wait Until Early 2016 to Raise Rates

Tarullo Defends Fed’s Move to Supervise Foreign Bank Units

EUR/GBP:

EU’s Non-Euro States Need Equal Say: Osborne, Schaeuble in FT

EUR/RUB:

West Must Be Ready to Forgo Business with Russia, Gabriel Says

GBP:

U.K. March GfK Consumer Confidence -5 vs. Est. -6

 

Today’s data

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

JPY         Household Spending Y/Y Feb A -2.50% | C 0.10% | P 1.10%

JPY         Unemployment Rate Feb A 3.60% | C 3.70% | P 3.70%

JPY         National CPI Core Y/Y Feb A 1.30% | C 1.30% | P 1.30%

JPY         Tokyo CPI Core Y/Y Mar A 1.00% | C 0.90% | P 0.90%

JPY         Retail Trade Y/Y Feb A 3.60% | C 3.50% | P 4.40%

09:30     GBP       GDP Q/Q Q4 (F) C 0.70% | P 0.70%

09:30     GBP       Current Account (GBP) Q4 C -13.8B | P -20.7B

09:30     GBP       Index of Services (3M/3M) Jan C 0.90% | P 0.80%

10:00     EUR        Eurozone Economic Confidence Mar C 101.3 | P 101.2

10:00     EUR        Eurozone Industrial Confidence Mar C -3.5 | P -3.4

10:00     EUR        Eurozone Consumer Confidence Mar (F) P 9.3

10:00     EUR        Eurozone Services Confidence Mar C 3.8 | P 3.2

12:30     USD       Personal Income Feb C 0.30% | P 0.30%

12:30     USD       Personal Spending Feb C 0.30% | P 0.40%

12:30     USD       PCE Deflator M/M Feb C 0.10% | P 0.10%

12:30     USD       PCE Deflator Y/Y Feb C 0.90% | P 1.20%

12:30     USD       PCE Core M/M Feb C 0.10% | P 0.10%

12:30     USD       PCE Core Y/Y Feb C 1.10% | P 1.10%

13:00     EUR        German CPI M/M Mar (P) C 0.40% | P 0.50%

13:00     EUR        German CPI Y/Y Mar (P) C 1.10% | P 1.20%

13:55     USD       U. of Michigan Confidence (MAR F) C 80.5 | P 79.9

 

Harry Hindsight

  • EUR: The Euro held steadily during the Asian session opening around the 1.3780 levels and rising to above 1.3795 in early Tokyo before trading for the most part around the 1.3785 levels into the grey hours. Late Asia bought EURJPY into the grey hours taking the market again to the 1.3795 levels before dropping quickly as early Europeans reversed the move and some, triggering light stops through the 1.3780 levels and taking the market into London and another round of selling to 1.3755. The market then held in anticipation of M3 numbers. No movement from the numbers allowed the pair to again move a little lower and the market moved towards the 1.3740 areas with bids close to hand, the market slowly moved higher as leveraged types took advantage of the close bids and the market moved back to above the 1.3775 level however, the market was unable to move through the 1.3780 levels. US numbers failed to stimulate the market and only once we reached the NYK fix did dropping the market back to the 1.3730 support area and from there a quiet session to the close holding the 1.3740/50 levels. Talk in the early session of European regulators are preparing to ease rules on asset backed securities in a bid to revive the market and provide lending to credit starved small businesses.
  • GBP: As with the Euro the market held steady through Asia with Cable rising in early trading to slightly above the opening levels, before dipping into the last part of Asian session and the grey hours. The dip lower moved the market to just below the 1.6560 level into the opening London session and the release of a large retail sales number sent the market quickly higher to above the 1.6640 level. Although the market traded a little higher it was unable to make the break through the 1.6650 levels and failing dipped back to the 1.6610 levels and held the area into the close.
  • JPY: Early sellers set the tone for the Asian session and although the market managed a late move higher into the session. The move lower was made as soon as the Japanese moved to the desk and seemed to be real money repatriation into the end of year, the market moved to just below the 101.75 levels and waiting bids. Once the fix supply finished the market started to reverse the move and while time remains for further repatriation flows one assumes most will now be over which is probably why the market was able to rally quickly back to the 102.15 levels and into the former range area we’ve seen over the next week or so. London opening saw some further selling however, nothing as strong as seen in Asia holding the 102.00 before trying the topside resistance failing in the mid 102.40’s into NYK, although the market remained choppy for a short period the market dropped back to the 102.15 levels to hold into the close.
  • AUD: The Oz opened around the 0.9225 levels and struggled pre Tokyo dipping to set the low at 0.9215 areas before a rising USDJPY dragged the Oz with it as retail Japan took the opportunity to get in for bargain basement plays. The Oz moved to the 0.9235 levels and moved sideways for much of the day, and into NYK where a weak GDP number helped it make the next leg up to the 0.9270 levels and into minor resistance in front of the 93 cent level. Holding from that point around the 0.9260 level in a quiet close once the London market disappeared.

Yesterday’s premiership results

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

NZD       Trade Balance (NZD) Feb A 818M | C 600M | P 306M | P 286M

EUR        Eurozone M3 Y/Y Feb A 1.30% | C 1.30% | P 1.20%

GBP       Retail Sales M/M Feb A 1.70% | C 0.50% | P -1.50% | R -2.00%

USD       GDP (Annualized) Q4 (T) A 2.60% | C 2.70% | P 2.40%

USD       GDP Price Index Q4 (T) A 1.60% | C 1.60% | P 1.60%

USD       Initial Jobless Claims (MAR 21) A 311K | C 325K | P 320K | R 321K

USD       Pending Home Sales M/M Feb A -0.80% | C 0.00% | P 0.10% | R -0.20%

 

Good Luck,

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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