Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 103.09 | EURUSD 1.37418 | EURJPY 141.672 | AUDUSD 0.92702 | NZDUSD 0.86085 | USDCAD 1.09724 | EURCHF 1.22017 | USDCHF 0.88793 | GBPUSD 1.66049 | EURGBP 0.82753 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               103.12 | 102.74

EUR/USD             1.3749 | 1.3741

EUR/JPY               141.72 | 141.22

AUD/USD            0.9290 | 0.9263

NZD/USD             0.8637 | 0.8601

USD/CAD             1.0978 | 1.0966

EUR/CHF              1.2202 | 1.21955

USD/CHF             0.8879 | 0.8871

GBP/USD             1.6622 | 1.6605

EUR/GBP             0.8275 | 0.82705

 

For today

  • EUR: Euros dare I say it has been as dull as dishwater, with a range less than 10 pips, the market did try the topside early on before fading back to hold around the opening levels just off the lows. With light offers moving back to the 1.3765 areas and then weak stops and better offers above the 1.3800 level the market surely needs a big shake up to clear the staleness in the market. Downside has light mix to the 1.6700 area with bids below that dominating however, either side has just light interest and nothing special showing in the market to suggest anything to stop a strong move in either direction, leaving me to believe the market is only long lightly while the ECB ponders its navel.
  • GBP: Cable moved off the opening lows pushing to above the 1.6620 briefly but as with the Euro business was slow and the cross EURGBP barely moved. As with previous day’s 1.6550 remains the support area to the downside with some bids around the area and again to the 1.6500 with patches of stops. Topside is open to the 1.6720 levels and with some tier 1 numbers out today either side could be tested but don’t hold your breath until September when they change the way they calculate GDP, somewhat reminiscent of the changes in 1983. Large off the book projects now get shifted onto the productivity side hmm one smells a rat.
  • JPY: USDJPY moved lower once the market moved into the Tokyo session having opened around the 103.10 level it held into the Tokyo fix where supply quickly sent the market through the 103.00 level and down to the waiting bids sub 102.80 however, there is a mixture below that level and impetus will decide which would win. With 102.30 areas showing stronger support now. Topside is open with light offers showing to the 103.40 levels before giving way to weak stops, larger offers then make an appearance above 103.60 going back to the 104.00 levels one suspects that the offers previously above 104.20 have been lowered. As an afterthought BoJ did nothing as has been a forgone conclusion for a couple of decades now.
  • AUD: With near term support the opening around the 0.9270 saw early selling taking it a little lower, the market then moved up from the lows as it digested the NAB business number which were not the best, the market caught a bid and started to move higher it pushed to above the 0.9280 before settling down again for several hours, before again attempting the topside and moving towards the grey hours above the 0.9285 levels. For the moment the topside is dominated by offers running to the 0.9320 area before any meaningful stops make and appearance however, these are fairly light until above the 0.9370 levels with strong offers remaining around the 94 cent levels. Downside has some light bids around the 0.9250 levels and likely to be joined by day traders with tight weak stops below. Stronger bids appear in front of the 0.9200 areas, with stops building below that area, and not a lot else.

 

Overnight News

USD/CNY:

Treasury Warns On China’s Currency

JPY:

BOJ keeps policy on hold, maintains upbeat view on outlook

Japan public funds to adopt new stock index, invest in inflation-linked bonds

Japan GPIF Has Already Purchased Inflation-Linked Bonds: Reuters

Japan Current account returns to surplus but outlook still weak

Japan says its fiscal consolidation not too quick

Amari: Consumption May Not Slump Significantly After Tax Hike

Japan, fresh from Australia pact, says U.S. trade talks “difficult”

JPY/USD:

Takeda, Lilly Jury Awards $9 Billion Actos Punitive Damages

CNY:

China relaxes M&A rules for insurance industry, facilitates consolidation

AUD:

Australia business conditions edge up in March-survey

NZD:

N.Z. Treasury Paper Suggests Immigration May Boost Rates, Dollar

NZ business confidence stays near 14-yr high in Q1 survey

EUR:

Germany Aims to Lower Debt/GDP Ratio to Below 60%: Handelsblatt

 

Today’s data

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

JPY         Current Account (JPY) Feb A -0.04 | C -0.04T | P -0.59T

AUD       NAB Business Confidence Mar A 4 | P 7

JPY         Eco Watchers Survey: Current Mar A 57.9 | C 53.3 | P 53

05:45     CHF        Unemployment Rate Mar C 3.20% | P 3.20%

07:15     CHF        Retail Sales (Real) Y/Y Feb C 0.90% | P 0.30%

08:30     GBP       Industrial Production M/M Feb C 0.30% | P 0.10%

08:30     GBP       Industrial Production Y/Y Feb C 2.20% | P 2.90%

08:30     GBP       Manufacturing Production M/M Feb C 0.30% | P 0.40%

08:30     GBP       Manufacturing Production Y/Y Feb C 3.10% | P 3.30%

12:15     CAD       Housing Starts Mar C 192.0K | P 192.1K

12:30     CAD       Building Permits M/M Feb C -2.00% | P 8.50%

14:00     GBP       NIESR GDP Estimate Mar P 0.80%

 

Harry Hindsight

  • EUR: Asia was stuck around the 1.3700 and seemed reluctant to move either way and only once the market moved into the grey hours did we start to see movement, first with German IP figures coming in better than expected however, this was only by the amount overstated the month before, it’s only a preliminary number it’s not as if it’s a final number which would be accurate! What did seem to keep the market buoyant were the many faces of the ECB popping up on the tapes with Nowotny helping the Euro higher with “further rate cuts not ruled out but no immediate need for further ECB action” this left the tone for the day and the Euro headed higher through the session to top just below the 1.3750 area into mid NYK before settling down for a quiet finish with lacklustre volumes for the day.
  • GBP: With no data and UK politics mired once again in expenses claims by MP’s the market was dominated by movements in the Euro and a general weakness in the USD. Moving from the opening 1.6575 area the market in Asia slowly moved lower to before moving into the grey hours and a recovery from the mid 1.6560’s to the starting point, as with the Euro the market in Cable started to rise steadily through the day to reach the 1.6600 level into early NYK and a quirk move higher as weak stops were triggered through the levels to peak just below 1.6625. The back end of the session was a slow affair with the market drifting back a little to the 1.6605 levels close to where the market went out.
  • JPY: The USDJPY drifted as the market digested the fall on Friday and an unwillingness to become involved in the market, data released was uninspiring and the ever present safe haven flows as the Ukrainian situation intensified somewhat over the weekend. From the opening 103.30 areas the market did briefly flirt with the topside in Tokyo before steadily drifting off and dipping into the grey hours to the 102.95 levels and close bids. The market moved off the lows into the London session begrudgingly pushing back to the 103.30 levels into early NYK and then holding around the 103.10 areas for the bulk of the session in slow trading in the pair. The lack of a follow through is more likely to be the bid tone in EURJPY, the market eventually went out around the 103.10 level with the near term support remaining intact.
  • AUD: The early part of the session the Oz managed to hold in a fairly tight range moving from the opening 0.9287/88 levels, to just above the 0.9295 level and only just below the 0.9285 area, some strong AUDJPY selling pre Tokyo lunch saw the market drop away in the Oz falling to below the 0.9275 levels in what was still a tight range. The grey hours reversed the move as fresh but nervous buying crept in before moving properly into the London session. The market began to move steadily lower as we moved into the NYK session and although some weak stops were triggered through the lows the market bounced of the near term supportive bids around the 0.9250 levels and held the area for the rest of the session, moving to finish the day around the 0.9270 levels with a very quiet day overall.

Yesterday’s premiership results

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

EUR        German Industrial Production M/M Feb A 0.40% | C 0.30% | P 0.80% | R 0.70%

CHF        Foreign Currency Reserves Mar A 437.9B | C 434.5B | P 433.5B | R 433.6B

CHF        CPI M/M Mar A 0.40% | C 0.20% | P 0.10%

CHF        CPI Y/Y Mar A 0.00% | C -0.10% | P -0.10%

EUR        Eurozone Sentix Investor Confidence Apr A 14.1 | C 13.9 | P 13.9

 

Good Luck,

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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