Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close Wellington open

USDJPY 102.825 102.77-89 | EURUSD 1.37525 1.3750-605 | EURJPY 141.41 141-309-582 | AUDUSD 0.92499 0.9240-55 | NZDUSD 0.86651 0.8650-79 | USDCAD 1.10592 1.1057-79 | EURCHF 1.21951 1.2185-99 | USDCHF 0.88677 0.88465-70| GBPUSD 1.6640 1.6645-54 | EURGBP 0.82641 0.8260-895 |

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               102.975 | 102.73

EUR/USD             1.3768 | 1.3744

EUR/JPY               141.74 | 141.325

AUD/USD            0.9270 | 0.9219

NZD/USD             0.8677 | 0.8647

USD/CAD             1.1072 | 1.1044

EUR/CHF              1.22005 | 1.2185

USD/CHF             0.88755 | 0.88555

GBP/USD             1.6663 | 1.6628

EUR/GBP             0.8270 | 0.8258

Overnight News

CNY:

China Sets Yuan Reference Rate at Weakest Since Sept. 18

China End-Dec. Outstanding Foreign Debt $863.2b, SAFE Says

JPY:

Japan’s Industrial Output Falls in February

Japan Pension Panel Calls for Less Bond-Heavy Strategy

Japan to Create Unified Model Portfolio for GPIF, 3 Other Funds

Japan fund managers raise bond weightings amid geopolitical woes

Japan Feb housing starts up 1.0% YoY

AUD:

Australia Feb new home sales jump 4.6%-HIA

Australia inflation gauge steadies in March -TDMI

NZD:

N.Z. Treasury Sees Economy Keeping Significant Momentum in 1H

NZ Business Confidence Dips Slightly in March

For today

• EUR: The Euro opened slightly higher than Friday’s close around the 1.3760 areas before dropping immediately back to fill the gap in the Charts and hold the 1.3745 levels, and this set the range for the day with a brief move higher with light EURJPY buying entering the market to take the market to the top again before that flow ran out. From there it’s been reasonably quiet and the market has gravitated towards the lows again. With only the patting of backs for news one would suspect its all over however, I’ve seen no overly large ladies singing about the Euro recently and one actually suspects that someone is putting a brave face on before taking there medicine. Topside has a succession of light offers to the 1.3800 levels with weak stops above that level before running into better offers around the 1.3830-50 areas, 1.3880-1.3900 holds suspected offers however, and the stops look a bit vague at best. Downside has light bids in the 1.3720’s before better bids holding the 1.3700 area, stops below the 1.3700 from weak longs with nothing showing until the 1.3650 area and light bids. For me the market is now open in either direction and with no real data for the day is likely to remain quiet.
• GBP: Opening in line with Fridays close the market struggled to make any impact for several hours holding around the 1.6645 levels with the high of 1.6650 traded close to the opening, minor adjustments to the market after the CNY fix moved the Cable to the low 1.6630’s before dipping through before holding as we run into the grey hours. Offers 1.6690-1.6720 before light stops appear above this is short lived with deeper set of offers then running from 1.6750 to the 1.6800 levels and not likely to be affected by any of the data expected. Downside light bids into the 1.6590 area and stops below 1.6580 then the market is open to last week’s low end of the range and nothing more.
• JPY: USDJPY opened higher around the 102.93 area and although the market looked as if it may attempt to move higher holding and pushing through the 102.95 levels after a few hours it gave up as the market started to drift down into the mid 102.80’s, still its close enough to try again at least. Good offers remain around the 103.00 level and barely a break into the next set of exporter offers around the 103.30 level only then do we start to see some light stops appearing but they are light. Downside has a mixture on the way down through 102.50 with scattered bids dominating and changing to stops as you move down through the 102.30 levels however, the word is light and really uninteresting for the moment on the 102 handle; below the level better stops are seen on a break through the 101.80 levels.
• AUD: The Oz opened unchanged moving around the 0.9250 levels in early trading before drifting lower in trading deep into the session as AUDJPY sellers moved into the market as USDJPY struggles to break higher. Moving the Oz from the levels around 0.9250 to just through the 0.9220 levels in a steady move, volumes were a little lacklustre and you’d be forgiven for thinking it was a bank holiday somewhere. Offers still remain around the 93 cent area with some weak stops building above that level and then more offers of better size from the 0.9320 onwards. Downside has nothing special left in it with some light bids into the low 0.9200 and light stops through the level.

Today’s data

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

NZD       Building Permits M/M Feb A -1.70% | P -8.30% | R -8.60%

JPY         Markit/JMMA Manufacturing PMI Mar A 53.9 | P 55.5

JPY         Industrial Production M/M Feb (P) A -2.30% | C 0.50% | P 3.80%

NZD       NBNZ Business Confidence Mar A 67.3 | P 70.8

JPY         Housing Starts Y/Y Feb A 1.00% | C 6.10% | P 12.30%

07:00     CHF        KOF Leading Indicator Mar C 2.05 | P 2.03

08:30     GBP       Mortgage Approvals Feb C 75.0K | P 76.9K

08:30     GBP       M4 Money Supply M/M Feb C 0.50% | P 0.30%

09:00     EUR        Eurozone CPI Estimate Y/Y Mar C 0.60% | P 0.70%

12:30     CAD       GDP M/M Jan C 0.40% | P -0.50%

13:45     USD       Chicago PMI Mar C 58.5 | P 59.8

Weekend News

RUB:

Russia Sees Progress on Ukraine as Putin Shifts to Diplomacy
CNY:

Minister Says China Faces Downward Economic Pressure: Caixin
Xi Says China’s Military Expansion Not Aimed at Asian Hegemony
China Seizes Assets From Family of Ex-Security Head: Reuters
China’s Fujian Province Relaxes One-Child Policy, Xinhua Says
PHP/CNY:

Philippines Sues China to Assert Claim over Resource-Rich Waters
JPY/CNY:

China President Remarks on Nanjing Deaths Regrettable, Suga Says
JPY:

GE to Build Japan’s Biggest Solar Power Plant, Nikkei Reports
Daikin to Add Three Factories in Central, South America: Nikkei
Japan to Allow Families of Abductees to Visit N. Korea: Sankei
Toyota to Recall 119,140 2003-04 Avalons Vehicles, NHTSA Says
Honda Recalls 9,816 2014 Model Civics for Tire Damage
EUR:

ECB Rate Increase Seen by German Finance Ministry, Spiegel Says
Weidmann: ECB Should Only react to a 2nd-Round Disinflation Effect
Schaeuble Praises ECB for Price Stability, Helping Save the Euro
Greece’s Samaras Expects Debt Relief Deal by Autumn: Real News
Greek Poll Puts Ruling New Democracy Party Ahead of Syriza
Bank of Italy’s Visco Says Economy Showing Signs of Recovery
GBP:

Scotland Can Only Keep Pound by Staying in U.K., Osborne Says
AUD:

Australia’s Abbott Says Govt Faces ‘Massive’ Budget Repair Job

Harry Hindsight

• EUR: Asia was reasonably quiet with a gradual gain from the opening 1.3740 areas moving slightly higher to rest around the 1.3750 area for a great portion of the session before entering into the grey hours. Minor selling was seen from early leveraged players and the market dipped back to the lows. The market dropped quickly in the early London session as ECB comments again surfaced on the subject of negative rates rehashing previous Wiedmann’s comments. The market held around the 1.3705 levels with reasonable bids moving in and then profit taking from early sellers helped to move it away from the lows and into the NYK session with barely a blip from the Eurozone numbers. With the US numbers in line with expectations the market in USD’s weakened against the Euro and the market managed to reverse its losses and touch above the 1.3770 before settling back to the 1.3750 for a quiet finish to the day once London had left.
• GBP: From the opening 1.6620 area the market limped into the Asian session drifting lower before finding its feet and rising to above the 1.6620 levels in quiet trading. The numbers were little to write home about and the market held into the Eurozone numbers. EURGBP made a move lower trading from the 0.8270 levels to below 0.8250 in a quick move that had little impact on the GBP however, the resultant rally from the lows in the cross left the GBP a little vulnerable to a pull back from its 1.6625 areas and the market made its lows just below the 1.6600 levels, from there though although the GBP lost ground against the Euro it continued to rise against the USD moving to touch above the 1.6650 levels before settling around the 1.6645 levels.
• JPY: With a quiet Asian session with the retail market seemingly unwilling to go against any repatriation flows that may have been hanging around the market soon changed direction as we moved into the London session with the chances of such flows disappearing with a setting sun in Japan. Early London took the market to the 102.30 area having opened in the mid 102.15 levels. As it moved into the NYK session the buying started in earnest rising quickly to the 102.70 levels and the area where the market had seen a congregation of offers previously to push to just below the 103.00 level before running out of steam as the London session closed and the NYK market ran towards the second half of its day. The market eventually settled just off from the highs.
• AUD: After a quiet start to the session opening around the 0.9260 levels the market moved quickly higher on AUDJPY buying while the USDJPY remained static and unable to push higher. Having touched above the 0.9295 levels it slowly started to turn and the inevitable move lower while not as quick set the tone for the day as the markets perceptions of the chances of a rate hike seemed to wane, add to which some half decent offers in front of the 93 cent level. Dropping back into the London session around the opening levels the move into mid-London saw the Oz again drifting and triggering weak stops as the market moved down through 0.9260 and fell slowly to the 0.9240 areas, from that point the market halted its declines and spent much of the remainder of the day drifting in the 0.9240/50 channel into the close.

Friday’s premiership results

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%

GBP       GDP Q/Q Q4 (F) A 0.70% | C 0.70% | P 0.70%

GBP       Current Account (GBP) Q4 A -22.4B | C -13.8B | P -20.7B | R -22.8B

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

EUR        Eurozone Economic Confidence Mar A 102.4 | C 101.3 | P 101.2

EUR        Eurozone Industrial Confidence Mar A -3.3 | C -3.5 | P -3.4

EUR        Eurozone Consumer Confidence Mar (F) A -9.3 | C -12.5 | P -12.7

EUR        Eurozone Services Confidence Mar A 4.2 | C 3.8 | P 3.2 | R 3.3

USD       Personal Income Feb A 0.30% | C 0.30% | P 0.30%

USD       Personal Spending Feb A 0.30% | C 0.30% | P 0.40%

USD       PCE Deflator M/M Feb A 0.10% | C 0.10% | P 0.10%

USD       PCE Deflator Y/Y Feb A 0.90% | C 0.90% | P 1.20%

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

USD       PCE Core Y/Y Feb A 1.10% | C 1.10% | P 1.10%

EUR        German CPI M/M Mar (P) A 0.30% | C 0.40% | P 0.50%

EUR        German CPI Y/Y Mar (P) A 1.00% | C 1.10% | P 1.20%

USD       U. of Michigan Confidence (MAR) (F) A 80 | C 80.5 | P 79.9

Stay lucky

Andy