Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 119.248 | EURUSD 1.18394 | EURJPY 141.186 | AUDUSD 0.80773 | NZDUSD 0.7753 | USDCAD 1.18159 | EURCHF 1.20099 | USDCHF 1.01433 | GBPUSD 1.51115 | EURGBP 0.78347 |

 

Interbank Ranges as of 6am London time

Highs    Lows
For today

  • EUR: While the market has been reasonable quiet movement wise the flow has been consistent with the rest of the week and the Euro continues to hold some 20 pips away from the lows having failed to push to the 1.1850 areas. A push through the 1.1880 level will probably trigger some light stops and possibly sufficient to set the market through the 1.1900 levels and opening up the topside however, 1.1960 is likely to be more of a sticking point and possibly tough to push through in one movement. The downside sees strong bids into the 1.1800 level still but a breakthrough will open a deeper move with good sized stops likely especially through the 1.1780 areas. The market is then left with just sentimental levels for a deeper move lower possibly into 1.1730 before finding sufficient support to hold the market in some manner.
  • GBP: Cable saw some strong buying in GBPJPY into the Tokyo opening and the Cable pushing towards the 1.5120 levels however, that was the only glimmer on the topside and the market has been on a steady descent since then pushing back through the 1.5100 level and into the mid 1.5080’s. It would seem some bids into the 1.5050 will have to be cleared if the movement lower is to continue however, any movement today is likely to be in relation to the Euro and the 0.7800 level remains supportive at the moment for the Euro so any movement in Euro’s lower is likely to drag on the GBP, with 1.5000 likely to be a stronger level as it’s a large sentimental level, but that is pure guess work. Topside has limited offers into the 1.5150 level and a push through there will open a test to the 1.5200 areas however, without some good news it’s difficult to see the market being able to travel that much for the time being.
  • JPY: USDJPY continues its recovery after the weeks start, pushing from the opening to the 119.40 level before the Tokyo opening, Tokyo bought steadily over the session taking the market to the 119.80 and although it pushed slightly through the level struggled with a lack of impetus to penetrate the level fully and has since ranged around the 119.70 levels as we move towards the grey hours. Offers stacked up from the 119.80 levels and a mixture through the 120.00 areas however, the market is likely to open a little through the 120.00 areas and the market is likely to struggle in the 120.20-120.80 area before hitting stronger offers building into the 121.00 levels. Downside will see bids into the 119.20 areas now with some weak stops through the level a push through 118.80 again will see strong stops and margin call cut outs appearing in the market and the 118.20 level is likely to be the point where the market struggles.
  • AUD: Today has been about the carry trade moving from the low 96.00 levels moving with as the cross JPY buying started its in earnest and following the general market for the JPY. Oz moved off the opening 0.8080 levels and a good Building approval number helped to underpin the market sending it higher and into the Tokyo opening quickly pushing through the 81 cent level and continuing the move steadily to the 0.8115 areas over the course of the day so far. 0.8120 still remains offered and a push through that level and into the 0.8140 areas will open up the market for a test of the stronger 0.8150 levels however the topside would seem to be more technically dominated and a stronger JPY would need to be in play for the room for the Oz to push through, Downside see’s light bids into the 0.8080 levels and the movement to 0.8060 is likely to be slow going with possible two way interest, through those levels though the market is limited to the 0.8030 area where the stronger bids await, and only a push through 0.7980 is likely to see strong stops.

 

Overnight News

USD:

Hilsenrath: Fed wary of overseas growth risks

EUR/RUB/UAH:

Soros comments in the FT suggest that the Ukraine/Russia crisis poses more threat to the EU than Greece FT

JPY:

Japanese bought Net 19.7B Yen of overseas debt from Dec22 Jan 2

EUR:

Youngest of three suspects in Paris attack surrenders to police as the hunt continues for the other 2.

All talk of EU’s deflation woes

 

Today’s data

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

AUD       Building Approvals M/M Nov A 7.50% | C -3.00% | P 11.40%

07:00     EUR        German Factory Orders M/M Nov C -0.80% | P 2.50%

10:00     EUR        Eurozone PPI M/M Nov C -0.10% | P -0.40%

10:00     EUR        Eurozone PPI Y/Y Nov C -1.40% | P -1.30%

10:00     EUR        Eurozone Retail Sales M/M Nov C 0.20% | P 0.40%

10:00     EUR        Eurozone Business Climate Indicator Dec C 0.16 | P 0.18

10:00     EUR        Eurozone Services Confidence Dec C 4.6 | P 4.4

10:00     EUR        Eurozone Industrial Confidence Dec C -4 | P -4.3

10:00     EUR        Eurozone Economic Confidence Dec C 101.2 | P 100.8

10:00     EUR        Eurozone Consumer Confidence Dec (F) C -10.9 | P -10.9

12:00     GBP       BoE Interest Rate Decision C 0.50% | P 0.50%

12:00     GBP       BoE Asset Purchase Target C 375B | P 375B

12:30     USD       Challenger Job Cuts Y/Y Dec P -20.70%

13:30     CAD       New Housing Price Index M/M Nov C 0.10% | P 0.10%

13:30    USD       Initial Jobless Claims C 290K | P 298K

 

Harry Hindsight              

  • EUR: The market moved on the opening again, dropping down some 40 pips during the thin market as it changes over to the new day and most of the banks are on the side line. Having traded to the 1.1860 levels the market moved into the 1.1870-80 range for a quiet Asian session. The move into the grey hours again saw the downside tested pushing into the 1.1850’s but unable to break lower and the early London dealers reversed the selling into the official opening to post the highs for the day. Monthly CPI numbers made the headlines more than the others and the Euro was sold gradually over the session to push to the 1.1805 areas into the NYK session, strong support materialized and although the US trade balance numbers improved a little the Euro could not break any lower and gradually moved back to the 1.1840 level briefly moving through 1.1850 but spending the rest of the session around 1.1840.
  • GBP: Cable like the Euro was fairly quiet after the initial opening move, ranging around the 1.5140 level for much of the Asian session and testing the lows created at the opening into the grey hours, with the Cable following the pattern of the Euro. The selling in the NYK session was driven initially by the decent ADP numbers and the market pushed through the suspected strong bids around the 1.5100 levels, maybe not that strong after all. The NYK option cut saw the market move off the lows and back above the 1.5100 for a quiet close just above there.
  • JPY: USDJPY spent the day recovering some of its losses from Monday, pushing from the 118.40 levels to just through the 119.00 level before finding enough resistance to keep the market in a reasonably quiet range into the London session, early fresh buying was quickly halted and a small move lower ensued triggering weak stops through the 119.00 levels before again slowly making its way back to the 119.20 area, the US numbers triggered strong buying through the level and the market triggered light stops into the 119.50 levels before struggling for the balance of the London session before dropping off after the close testing briefly below 119.00 but eventually finishing around the 119.20 areas.
  • AUD: The Oz had a reasonably steady day, after the initial selling in the market taking the market to the 0.8080 levels and trading around the 0.8070 levels through London and into NYK, the carry trade gradually moved through the 96.00 levels having traded around the area for most of the session. The only brief upset was the US numbers which took the market down to just below the 0.8040 levels before recovering over the balance of the session to finish almost unchanged on the day.

 

Yesterday’s premiership results

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

GBP       BRC Shop Price Index Y/Y Dec A -1.70% | C -1.80% | P -1.90%

CHF        Foreign Currency Reserves Dec A 495.1B | C 472.0B | P 462.4B | R 462.7B

EUR        German Unemployment Change Dec A -27K | C -6K | P -14K | R -16K

EUR        German Unemployment Rate Dec A 6.50% | C 6.60% | P 6.60%

EUR        Eurozone PMI Retail Dec A 47.6 | P 48.9

EUR        Eurozone CPI Estimate Y/Y Dec A -0.20% | C -0.10% | P 0.30%

EUR        Eurozone CPI – Core Y/Y Dec (A) A 0.80% | C 0.70% | P 0.70%

EUR        Eurozone Unemployment Rate Nov A 11.50% | C 11.50% | P 11.50%

USD       ADP Employment Change Dec A 241K | C 226K | P 208K | R 227K

CAD       International Merchandise Trade (CAD) Nov A -0.6B | C -0.20B | P 0.10B | R -0.3B

USD       Trade Balance Nov A -39.0B | C -$42.0B | P -$43.4B | R -42.2B

CAD       Ivey PMI Dec A 55.4 | C 52 | P 56.9

USD     Crude Oil Inventories A -3.1M | C 0.9M | P -1.8M

 

 

Good Luck,

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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