Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close Wellington open

USDJPY 103.302 103.35-44 | EURUSD 1.37028 1.3695-99 | EURJPY 141.561 141.435-68 | AUDUSD 0.92929 0.9291-0.9303 | NZDUSD 0.85964 0.8575-0.8600 | USDCAD 1.09777 1.0977-85 | EURCHF 1.22283 1.2216-35 | USDCHF 0.89221 0.89015-415 | GBPUSD 1.65748 1.6565-90 | EURGBP 0.82656 0.8258-75 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               103.43 | 103.075

EUR/USD             1.3705 | 1.3695

EUR/JPY               141.65 | 141.22

AUD/USD            0.9303 | 0.9271

NZD/USD             0.8616 | 0.8574

USD/CAD             1.0983 | 1.0959

EUR/CHF              1.2227 | 1.2215

USD/CHF             0.8923 | 0.89135

GBP/USD             1.6589 | 1.6570

EUR/GBP             0.82685 | 0.8258

 

Overnight News

AUD:

Australia job ads rise 1.4% in March: ANZ

AIG performance of Construction index grew 2.0

JPY/AUD:

Japan, Australia to seal trade pact as US-Tokyo talks heat up: Media

World Bank:

World Bank trims China, East Asia 2014 growth forecasts

CNY/GBP:

Sir Tom Hunter sells 11% stake in House of Fraser to Mike Ashley Sports Direct on the back of scepticism that the Sanpower bid will go through

 

For today

  • EUR: Another dull day with little to excite the market holding around the opening 1.3700 levels for the session, with light offers to the topside moving through the 1.3730 level into better offers around the 1.3780 region and very little in the way of stops. Downside has light bids with a mixture from the 1.3690 level to 1.3650 before bids thicken getting stronger to the 1.3620 areas.
  • GBP: Only slightly more movement for Cable as the market holds around the 1.6575 areas, touching above the 1.6580 levels in pre Tokyo before gradually easing back into the low 1.6570’s, for the moment the market top and bottom remains the same as it was all last week near enough, with bids from here to the 1.6550 levels before turning into weak stops and break out sellers, even then the bids while light remains constant to the 1.6500 levels. Topside has light offers to the 1.6700 level with stronger offers just above that level before weak stops appear above the 1.6720 areas and then more offers.
  • JPY: USDJPY remains pinned to the downside, with the market reluctant to move through the 103.40 in early trading and dropping off from the level once the fix was over with. The market hit the 103.20 areas and bounced weakly from the supportive levels before drifting for a good portion of the session. In the run into the data releases the market saw some strong selling enter the market forcing the pair lower and clearing more of the bids to the 103.10 levels. Topside offers have moved back into the 103.80-104.10 areas again and larger offers remain above the 104.20 levels. Downside bids have been thinned out today but remain down to the figure area before stops start to kick in, nothing large however there seem to be a number of them down to the 102.80 level before bids start to appear in the market.
  • AUD: As with the rest of the market the Oz was going nowhere fast holding to a tight range for the most part of 0.9280’s topping around the 0.9295 level in early trading. Some strong USDJPY selling as we moved towards the JPY data took the AUDJPY by surprise and triggered a quick move in the carry and a slower drift for the AUD to make lows just above the 0.9270 levels. Light offers dominate the topside from just above the 93 cent levels and continue higher, there are some scattered stops on the way but for the most part the market seems to have better offers. Downside is a little light with the market struggling to match the amounts to the tops. Bids seen the 0.9230 areas falling away to the 92 cent level with slightly bids to 0.9180 before any real stops appear on a break through there.

Today’s data

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

JPY         Leading Index Feb (P) A 108.5 | C 108.8 | P 113.1

JPY         Coincident index Feb (P) A 113.4 | C 113.4 | P 115.2

06:00     EUR        German Industrial Production M/M Feb C 0.30% | P 0.80%

07:00     CHF        Foreign Currency Reserves Mar C 434.5B | P 433.5B

07:15     CHF        CPI M/M Mar C 0.20% | P 0.10%

07:15     CHF        CPI Y/Y Mar C -0.10% | P -0.10%

08:30     EUR        Eurozone Sentix Investor Confidence Apr C 13.9 | P 13.9

14:30     CAD       BoC Business Outlook Survey

 

Weekend News

Asean:

Asean Finance Ministers Say Private Consumption to Drive Growth
IMF:

IMF’s Lagarde Says U.S. Job Numbers Fall Short amid Uncertainty
JPY:

Amari: Too Soon to Discuss Adjusting Spending After Tax Increase
Japan Considers Boosting Employment of Foreigners: Nikkei
Japan Supermarket Gauge Shows Price Gains After Sales-Tax Move
Mitsui Group Expands Southeast Asia Power Investments: Nikkei
Japan Clears Way for Quick Response to N. Korea Attack: Asahi
USD/JPY:

U.S. to Add Missile Defences in Japan for N. Korean Threat
Hagel: Making Progress on Moving U.S. Marine Base in Okinawa
CNY/GBP:

China’s Sanpower Buys 89% Stake in House of Fraser: FT

USD:

Obamacare Can Be Repealed Even With Enrolment Surge, Ryan Says
EUR:

Greece May Still Need Third Bailout, Schaeuble Tells Kathimerini
EUR/TRY:

Merkel’s CDU Rejects Stopping Turkey’s EU Membership Talks
MYR/CNY:

China Detects Second Acoustic Noise in Hunt for Missing Jet

 

Harry Hindsight

  • EUR: A quiet session overall, with little movement on the whole day. Opening around the 1.3720 area the market slowly moved lower with no real size showing through the Asian session. The grey hours saw some weak selling however, the market held the 1.3700 areas into the London session and a light recovery into the German Factory orders, with Non-Farm Payrolls still to be released the market struggled until the release dipping quickly to the 1.3685 area before revising its move as the market took on board the Unemployment number and a mini short squeeze to above the 1.3730 level occurred. The next hour saw some choppy action as the market reacted more to the HFT’s moving in the market than the actual figures themselves, and only once the market moved the other side of the NYK option cut did the market stabilize a little to trade around the 1.3700 levels into the close.
  • GBP: Cable like the Euro was unable to move much during the Asian session the market sat above the 1.6595 level for several hours however, it was unable to push back through the 1.6600 level and eventually started to drift lower, the move into the grey hours left the market around the 1.6585 levels and early selling touched below the 1.6580 levels. The market eventually moved back to the opening levels in early London. Some light buying in the EURGBP cross on the release of the German numbers left the GBP moving lower and trading below the 1.6570 levels and then the wait for the NFP and unemployment numbers, as with the Euro the market was a little choppy around the releases however, with a range of 1.6555/1.6606 the Cable moved a little more and moving until like the Euro the market in London closed and we settled into a slow 1.6580 area until the close saw sellers appear to chase it lower.
  • JPY: USDJPY having opened around the 103.95 area struggled to move higher as offers continued to show on the topside, we drifted over the course of the session to a low into the grey hours of 103.85 areas and continued in that range into the US numbers, initially the market sparked higher to above the 104.00 level before widening and trading as low as the 103.55 from above the 104 levels, we again pushed to the topside running into offers above the 104.10 level before turning to the downside as the market absorbed the data trading through the lows and triggering minor stops along the way falling eventually to the 103.20 level and finding sufficient support to hold the market in place. With the new sales tax implementation today one has to wonder what the point is, someone suggested to restrict buying from offshore, not the brightest idea, to boost inflation ok maybe in the short term, but then the sales numbers are more likely to drop off in the long term.
  • AUD: A steady rise through Asia from the 0.9230 areas to ohhh the 0.9240 areas, the market didn’t really awaken until the US numbers and the dropping USDJPY, with the USDJPY initially moving higher the market seemed to be temporarily awash with AUDJPY carry trade buying with the carry moving 40 pips higher, even as the USDJPY started to fall the market remained bid in the AUDJPY and the AUD was the main move in the pair in that direction moving from the 0.9250 levels to above 0.9307 peak before starting to slip back as the USDJPY started to drag on the carry. The Oz only slipped some 25 pips from its highs and ended the day around the 0.9290 levels with solid gains and a light penetration of the 93 cent level.

Friday’s premiership results

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

EUR        German Factory Orders M/M Feb A 0.60% | C 0.30% | P 1.20% | R 0.10%

CAD       Net Change in Employment Mar  A 42.9K | C 25.3K | P -7.0K

CAD       Unemployment Rate Mar A 6.90% | C 7.00% | P 7.00%

USD       Change in Non-farm Payrolls Mar A 192K | C 190K | P 175K | R 197K

USD       Unemployment Rate Mar A 6.70% | C 6.60% | P 6.70%

CAD       Ivey PMI Mar A 55.2 | C 58.3 | P 57.2

 

Stay lucky

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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