Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close Wellington open

USDJPY 118.517 118.50-52 | EURUSD 1.18427 1.18255-47 | EURJPY 140.346 140.055-705 | AUDUSD 0.82036 0.8201-09 | NZDUSD 0.78335 0.7810-50 | USDCAD 1.18627 1.1853-79 | EURCHF 1.20098 1.2010-115 | USDCHF 1.01422 1.01305-795 | GBPUSD 1.51594 1.5165-87 | EURGBP 0.78116 0.7803-245 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               118.52 | 118.10

EUR/USD             1.1871 | 1.1835

EUR/JPY               140.44 | 140.03

AUD/USD            0.8253 | 0.8201

NZD/USD             0.7866 | 0.7831

USD/CAD             1.1865 | 1.1839

EUR/CHF              1.2012 | 1.2009

USD/CHF             1.0141 | 1.0118

GBP/USD             1.5195 | 1.5160

EUR/GBP             0.7825 | 0.7800

 

For today

  • EUR: After Fridays little whipsaw the market opened just above the close and continued in initial trading pushing to the 1.1870 levels and testing the level on a couple of occasions as the market resets after Friday. After several hours though the market again settled back into the 1.1850 areas and traded in between the 1.1850-60. Offers into the 1.1880-1.1900 levels likely to slow any moves however, with no tier1 data the market is likely to struggle on the topside, a move through the 1.1920 areas only really opens up a test of the 1.1950-60 area which is likely to be more formidable that the 1.1900 levels. Downside has been well traversed and any move towards the 1.1800 levels will find very little until below the level where stronger bids are likely to move in on movements below the 1.1770 areas, a push through the 1.1750 levels is likely to see a mix on its way to 1.1720 levels and likely better bids.
  • GBP: Cable headed higher in early trading moving from the opening 1.5160 area to highs just above the 1.5190 level in the first hour before slipping back steadily over the course of the session back to the lows. Offers into the 1.5200 levels and a push through the level will likely see some weak stops from the break down earlier in the month and a push towards the 1.5250 areas and a mixture beyond that level. Downside sees better bids towards the 1.5100 level with only minor stops below the level before larger bids start to appear into the 1.5050.
  • JPY: The USDJPY opened just below the closing levels and the market drifted to just below the 118.20 levels pre-Tokyo, Tokyo saw some initial buying to take the market off the lows again and although the market pushed to the 118.50 areas the market continued to struggle throughout the session with the Oz making reasonable gains and the carry trade moving towards the highs on Friday. The market again slipped back to the 118.20 levels and slowly pressed through the areas and saw two way movements over the last couple of hours into the grey hours. Bids remain into the 117.80 areas however; a push through that level will see the potential for a deeper move and into the 116.50 levels.
  • AUD: The Oz moved more on the Carry trade than anything else. With the only piece of data coming in weaker than expected and the market chattering about a rising risk of recession for Australia, the market moved from just above the 82 cent level on the opening and into Tokyo very little changed however, a few rounds of AUDJPY buying appeared in the market and 0.8230 broke and triggered some light stops and the market pushed to the 0.8250 in a gradual rise. Current levels hold light offers with the bulk likely to be above the 83 cent level and into the 0.8350 before movement to the topside opens a little, downside bids are likely to be light into 82 cent before weak stops make an appearance through the level and the market is likely to find patchy bids until the 0.8140 areas where it’s likely to slow its decent a little.

 

Overnight News

JPY:

Japan Raises FY15 Real GDP Growth Forecast to 1.5% From 1.4%

Japan’s Aso Says FY2015 Budget Proposal Is 96.3t Yen

JPY/INR:

Japan to Play Role in India State City Construction: Nikkei

KRW/JPY:

Park Says Any Summit with Japan Should Yield Meaningful Progress

KRW:

S. Korea to Propose Joint DMZ Concert With N. Korea: JoongAng

S. Korea Park Urges N. Korea to Come for Talks, Family Reunions

EUR:

Greek Financing Needs Are Acute in March, Finance Ministry Says

AUD:

Australia Nov Home-Loan Approvals Fall 0.7% M/M; Est. 1.7% Rise

Australia Dec.  ANZ Job Ads Rise 1.8% vs 0.7% in Nov.

CNY:

China Said to Consider Replacement for Yi Gang at FX Regulator

PBOC to Intervene When Exchange Rate Moves Out of Range: Caixin

$4 Trillion Peak for China’s FX Hoard Seen Freeing PBOC’s Hands

CNY/JPY:

China Opposes Japanese Defence Minister’s Comment on Military

 

Today’s data

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

AUD       Home Loans Nov A -0.70% | C 1.80% | P 0.30% | R 0.20%

15:30     CAD       BoC Business Outlook Survey

 

Weekend News

EUR:

Paris Rally Marking Terrorist Attacks Drawing Netanyahu, Merkel
Greece Gains Support for Debt Relief in EU Commission: Bild

Greece’s Syriza Leads New Democracy by 2.6 Points in Kapa Poll
Greece Will Repay Debt Maturing March, Tsipras Tells Real News
Syriza Program Will Deal With Greek Human Crisis, Tsipras Says
Greek Euro Exit Would Be Less Risky, Belgian Minister Tells Echo
Spain’s Podemos Party Leads in El Pais Electoral Poll
Germany Arrests Islamic State Suspect Who Returned From Syria
GBP:

Osborne Says ‘More Action’ Needed to Help Oil Industry: Times
RUB:

Russia May Demand Payment of Ukraine Bailout Bond Amid IMF Talks
Russia Cut to One Step Above Junk by Fitch on Oil, Sanctions
CHF:

SNB Could Ease Cap Policy, Jordan’s PhD Supervisor Says: NZZamS
CNY:

Former PBOC Adviser Li Sees 2015 China GDP at 7.2%
China Agrees to Finance EU2.6 Billion Iran Oil Refinery: Mehr
JPY:

Japan to Seek Parliament FY15 Budget Approval by April 10: Asahi
Japan Targets Record 4.98 Trillion Yen Defence Budget: Mainichi
Sony Has No Plans to Sell Music Publishing Business, Lynton Says

 

Harry Hindsight

  • EUR: The market moved steadily back through the 1.1800 levels in early Tokyo having opened around the 1.1795 areas holding in the 1.1800-10 areas into the grey hours. Early sellers moved in and pushed the market back through the 1.1790 levels as the German industrial production figures led several bad numbers over the next hour. With NFP numbers to come the Euro’s again managed a rise pushing into the 1.1810-20 levels and a quiet period. The market jumped higher initially to above the 1.1830 level before dropping back quickly back through the 1.1800 level and touching just below 1.1770 before chopping around on the lows and then moving quickly higher on a short squeeze and increasing inventories it would seem. Moving back quickly to the 1.1840 levels and holding around that level into the close and really trading in the area it probably should have after the NFP number.
  • GBP: While the pattern is similar to the Euro the subtle difference was that although the Cable struggled in the Asian session holding in the 1.5090-1.5100 area until the London official open and the market moved steadily higher as EURGBP slowly drifted over the course of the session. Cable moved higher as manufacturing production numbers showed good gains against the weak IP numbers. Cable moved through the 1.5100 level quickly and pushed to the 1.5150 level where offers held the market for the move towards the NFP. The release had the same effect as the reaction in Euro’s with the market moving quickly through the offers to above the 1.5170 level before dropping back to 1.5100, the market recovered later and pushed back to the 1.5160 levels and heading into a slow period to the close.
  • JPY: USDJPY opened around the 119.70 areas and the market initially attempted the topside pushing through the 119.80 levels and into the waiting offers but unable to get any traction quickly dropped back as the market lost interest with the topside and successive levels broke until the market hit the 119.20 before holding into the London session just off those lows. While NFP initially pushed the USDJPY back towards those offers the reversal was a steady affair and the market dropped off and pushed through to the 118.40 levels after a few hours with the market then holding into the close just off the lows.
  • AUD: The Oz made minor gains in early Tokyo pushing from the opening levels of 0.8115 areas to push through to the 0.8130 area and light offers, the market held in the area into the London session before slipping a little into the grey hours. London opened just above the opening levels and held in the areas until all the early data was out of the way. The market saw a gentle rise into the NFP and although there was a similar pattern to the rest of the with a spike to the 0.8170 levels before dropping back to the 0.8130 levels and a bounce back and continuing the move over the next few hours to above the 0.8190 levels before grinding through the 82 cent level towards the close.

 

Friday’s premiership results

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

NZD       Building Permits M/M Nov A 10.00% | P 8.80% | R 9.80%

AUD       Retail Sales M/M Nov A 0.10% | C 0.20% | P 0.40%

CNY        CPI Y/Y Dec A 1.50% | C 1.50% | P 1.40%

CNY        PPI Y/Y Dec A -3.30% | C -3.20% | P -2.70%

JPY         Leading Index Nov (P) A 103.8 | C 104.9 | P 104.5

CHF        Unemployment Rate Dec A 3.20% | C 3.10% | P 3.10% | R 3.20%

EUR        German Industrial Production M/M Nov A -0.10% | C 0.30% | P 0.20% | R 0.60%

EUR        German Trade Balance (EUR) Nov A 17.7B | C 20.5B | P 21.9B

EUR        French Industrial Production M/M Nov A -0.30% | C 0.30% | P -0.80% | R -0.70%

EUR        French Trade Balance (EUR) Nov A -3200M | C -4500M | P -4608M | R -4300M

CHF        CPI M/M Dec A -0.30% | C -0.30% | P 0.00%

CHF        CPI Y/Y Dec A -0.50% | C -0.20% | P -0.10%

GBP       Visible Trade Balance (GBP) Nov A -8.848B | C -9.500B | P -9.620B | R -9.842B

GBP       Industrial Production M/M Nov A -0.10% | C 0.20% | C -0.10% | P -0.30%

GBP       Industrial Production Y/Y Nov A 1.10% | C 1.60% | P 1.10%

GBP       Manufacturing Production M/M Nov A 0.70% | C 0.30% | P -0.70%

GBP       Manufacturing Production Y/Y Nov A 2.70% | C 2.30% | P 1.70%

CAD       Housing Starts Dec A 181K | C 190.0K | P 195.6K

CAD       Building Permits M/M Nov A -13.80% | C 0.80% | P 0.70%

CAD       Net Change in Employment Dec A -4.3K | C 10.0K | P -10.7K

CAD       Unemployment Rate Dec A 6.60% | C 6.60% | P 6.60%

USD       Change in Non-farm Payrolls Dec A 252K | C 243K | P 321K | R 353K

USD       Unemployment Rate Dec A 5.60% | C 5.70% | P 5.80%

USD       Wholesale Inventories Nov A 0.80% | C 0.30% | P 0.40%

GBP       NIESR Gross Domestic Product Estimate Dec A 0.60% | P 0.70%

 

Stay lucky

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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