Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 117.558 | EURUSD 1.16069 | EURJPY 136.445 | AUDUSD 0.82123 | NZDUSD 0.77737 | USDCAD 1.19404 | EURCHF 1.02128 | USDCHF 0.87954 | GBPUSD 1.51128 | EURGBP 0.7679 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               118.40 | 117.58

EUR/USD             1.1608 | 1.1572

EUR/JPY               137.12 | 136.45

AUD/USD            0.8214 | 0.8160

NZD/USD             0.7782 | 0.7716

USD/CAD             1.1980 | 1.1940

EUR/CHF              1.0209 | 1.0160

USD/CHF             0.8805 | 0.8774

GBP/USD             1.5111 | 1.5058

EUR/GBP             0.76925 | 0.7680
For today

  • EUR: Euro’s drifted from the opening around the 1.1610 areas sinking through into the Tokyo opening before dropping to below the 1.1580 areas and holding around the level for much of the session and quiet trading. Light offers into the 1.1640 areas building to slightly stronger into 1.1650 before the market opens up to a limited move to the 1.1700 areas, through there the market is likely to see only a limited amount of stops before further offers and congestion appear through and into the 1.1750 levels. Downside has bids into the 1.1550 levels with stronger areas now around the 1.1500 areas but limited in appeal given last week’s action with the market being nervous.
  • GBP: The market continued to see a follow through of the late selling with Cable opening around the 1.5100 level gradually easing into the Tokyo session through the level, USDJPY continued its rise and the resultant USD strength. Cable dropped quickly through the 1.5080 level as stops were triggered before stabilizing in the 1.5060 area and holding for the balance of the session. Bids from current levels through to 1.5000 with suspected option plays are likely to calm the market for the moment, through the level see’s lows of last year to be tested however, the market is still likely to be dominated by events in Euroland (that’s like Disneyland only the characters there are more believable). The drag of the Euro aside a move through 1.5000 could see a quick stab lower as the market remains nervous however; any meaningful moves are still tempered by a growing economy. Topside is likely to run into only light offers to the 1.5100 area and the market again moves into the congested 1.5150 areas and it will require a little more impetus to push through the 1.5180-1.5200 areas that sees offers, weak stops through those levels still run into offers in the mid-range and there remains no clear move to the 1.5300 levels for the moment.
  • JPY: USDJPY proved to be the biggest gainer moving steadily higher from the opening 117.80 and moving into the Tokyo session triggering light stops to push through the 118.00 levels. The market headed steadily through to the 118.20 areas and struggled in two way traffic for several hours before heading a little higher into the grey hours. A push through the limited offers around the 118.50 levels will open a fresh attempt to the 119.00 levels and ultimately the 120.00 levels however, during the London hours the Euro is dominating the market and EURJPY selling is always a strong possibility. Downside bids are light until the 117.50 areas where light bids are likely to slow a move to the 117.00 areas, through that level the market again opens for a test to the 116.00 areas and this is the strong point in the market.
  • AUD: The Oz range has not been spectacular however, the CNY releases did spark the market a little having seen the market slide back from the opening areas of 0.8210 touching through in Tokyo to 0.8170 levels and then a leap back on the news, given the rise in the USDJPY and the steady performance of the AUDJPY it didn’t take long for the Oz to touch through the lows and push to the 0.8160 level before finding sufficient support to hold the market. Topside offers from the 0.8240 levels contain the topside for the moment with offers continuing to 0.8260 before light appears however, we have only pushed towards the 83 cent level once this month and it will take something better than we have marked for the day to do that one would suspect. Downside has bids into the 81 cent levels but this has now been well traversed and the market will need to test through the support 0.8040 levels.

 

Overnight News

CNY:

China’s Economy Grew 7.3% in 4Q Y/y; Est. 7.2%

China 2014 Property Development Investment Rises 10.5%

Yuan May Depreciate Slightly This Yr: Sec. Journal Commentary

China Working-Age Population Drops to 915.8m as of End-2014

China Meets About 7.5% Growth Target in 2014, NBS Head Says

China 2014 GDP Growth Broadly in Line With Expectation: Fitch

JPY:

Japan Ruling Party Lawmaker Says He’ll Press for BOJ Law Target

Japan Pension Fund Proxies Sell Record Bonds Amid Reallocations

Amari: BOJ May Explain Its Views If Price Goal Isn’t Achieved

Japan Keidanren Shows ‘Positive’ Stance on Wage Increases: Kyodo

Japan Should Enshrine Fiscal Goal in Law, Tax Panel’s Doi Says

JPY/THB/CNY:

Japan traders Itochu and Thai group mull investment in China’s Citic

IMF:

IMF Cuts Global Economic-Growth Forecast by Most in Three Years

IMF: IMF Says SNB Action Shows It’s Difficult to Exit Currency Pegs

CHF:

Uncertainty over Franc Rate May Last Months: Swiss Eco Minister

EUR:

ECB Bond Buying Program Will Stall Reforms, Feld Tells Bild

AUD:

Australia ANZ Weekly Consumer Sentiment Rises 1.4% to 113.6

NZD:

ANZ Bank Cuts Forecast For Fonterra Milk Pay out to NZ$4.35/kg

N.Z. Institute Says Drought May Be Imminent in Some Regions

 

Today’s data

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

CNY        Fixed Assets Ex Rural YTD Y/Y Dec A 15.70% | C 15.70% | P 15.80%

CNY        Retail Sales Y/Y Dec A 11.90% | C 11.80% | P 11.70%

CNY        Industrial Production Y/Y Dec A 7.90% | C 7.40% | P 7.20%

CNY        GDP Y/Y Q4 A 7.30% | C 7.20% | P 7.30%

7:00        EUR        German PPI M/M Dec C -0.40% | P 0.00%

7:00        EUR        German PPI Y/Y Dec C -1.40% | P -0.90%

10:00     EUR        German ZEW (Economic Sentiment) Jan C 40 | P 34.9

10:00     EUR        German ZEW (Current Situation) Jan C 13 | P 10

10:00     EUR        Eurozone ZEW (Economic Sentiment) Jan C 37.6 | P 31.8

13:30     CAD       Manufacturing Shipments M/M Nov C -0.50% | P -0.60%

15:00    USD       NAHB Housing Market Index Jan C 58 | P 57

 

Harry Hindsight              

  • EUR: With a bank holiday in the US and the aftermath of Thursdays now subduing the market somewhat Asia was a very quiet affair opening around the 1.1560 levels and trading around that level all the way into the London session. The grey hours saw some limited buying as day traders sat down at the desks with a view to surely nothing else can happen today and of course that was correct however, the early buyers were quickly pushed out again having pushed above 1.1580 and then quickly back to the start line, the move into the official opening saw the market moving steadily higher from the opening and with no real tier1 news for the day the market made its way to above the 1.1620 level, the market then drifted for several hours before pushing to the 1.1640 levels before drifting steadily back to the 1.1600 areas for the close.
  • GBP: Cable was as quiet as the Euro for much of the session however, after a little glitz at the opening with a range equal to anything in the next 10hrs the market stayed around the 1.5140 levels into the London session moving steadily higher to touch just below the 1.5180 levels, and that was the high the market then stumbled around the 1.5150 levels for several hours and once the late desk jockey’s in London left for the day and the Sydney guys arrived early the market slipped slowly but steadily lower with a lack of buyers in the market and a close just above the 1.5100 areas.
  • JPY: USDJPY opened around the 117.50 areas and pushed a little higher into the Tokyo session before dropping back to trade around the 117.00 areas for several hours into London session and a gradual rise there after pushing gradually to the 117.80 before slipping a little lower into the close during a very quiet session.
  • AUD: The Oz initially rose higher to above the 0.8240 levels from the opening 0.8230 before dipping back to the 82 cent levels and trading quietly between the 0.8200-30 in a quiet Martin Luther King bank holiday.

 

Yesterday’s premiership results

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

AUD       TD Securities Inflation M/M Dec A 0.00% | P 0.10%

GBP       Rightmove House Prices M/M Jan A 1.40% | P -3.30% | R -2.20%

JPY         Industrial Production M/M Nov (F) A -0.50% | C -0.50% | P -0.60%

JPY         Consumer Confidence Dec A 38.8 | C 38.5 | P 37.7

CHF        Producer & Import Prices M/M Dec A -0.40% | C -0.80% | P -0.70%

CHF        Producer & Import Prices Y/Y Dec A -2.10% | C -2.40% | P -1.60%

EUR       Eurozone Current Account (EUR) Nov A 18.1B | P 20.5B | R 19.5B

 

Good Luck,

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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