Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 118.457 | EURUSD 1.12378 | EURJPY 133.116 | AUDUSD 0.79233 | NZDUSD 0.74083 | USDCAD 1.24747 | EURCHF 1.01491 | USDCHF 0.90292 | GBPUSD 1.50808 | EURGBP 0.74516 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               118.66 | 118.125

EUR/USD             1.1258 | 1.1230

EUR/JPY               133.445 | 132.78

AUD/USD            0.7949 | 0.7906

NZD/USD             0.7443 | 0.7409

USD/CAD             1.2495 | 1.2470

EUR/CHF              1.01675 | 1.01245

USD/CHF             0.9048 | 0.9008

GBP/USD             1.5109 | 1.5079

EUR/GBP             0.7457 | 0.74395
For today

  • EUR: The Euro was on hold through the session opening around the 1.1240 areas and trading around that level for the whole session, a brief move towards the 1.2460 levels was sold back and remains quiet into the grey hours. Offers from the 1.1290 level go to the 1.1300 and while the likelihood of stops behind the figure area the market is not likely to find any particular momentum until pushing above and through the 1.1350 level where I would suspect larger stops and the market opening for a possible short squeeze higher. Downside bids into the 1.1100 level area are likely to be a little more stiffer than yesterday’s attempts and until Greece make a play and the Europeans reply the market is likely to remain in the this status quo.
  • GBP: GBP still remains fairly buoyant and while the market in the Euro has dragged on the GBP over a significant period the fall in inflation is likely to have an impact on retail sales as purse strings slacken, this will also limit costs for companies and hopefully the exporting market will be a little more effective as long as the ECB QE does its job. The market today has done very little pushing to the 1.5110 areas over the session from and opening around the 1.5080 areas in steady buying. Topside offers are likely to struggle around the 1.5120 levels and congestion before opening up for a test through the 1.5150 and likely weak stops, 1.5200 sees stronger offers and the market will need to break through the 1.5220 areas to open up a bigger move to the topside. Downside bids into the 1.5000 levels are again building and those limited bids run through to the 1.4950 areas.
  • JPY: The USDJPY was quiet today and the moves in early pre Tokyo to push towards the 118.80 level were quickly squashed above the 118.60 levels and once the market broke back down through the opening levels around the 118.40’s weak stops were triggered and the market fell back to the 118.20 areas. The downside bids into the 118.20 extend to the 118.00 level even through the level bids appear again around the 117.80 levels and into the 117.50 areas and again to 117.20 where the likelihood of stops will appear for another tumble to test the 116.00 areas.
  • AUD: Early trading was very quiet moving around the 0.7920 areas for much of the session, weakness in USDJPY saw the Oz begin to arrive pushing towards the 0.7950 levels as the AUDJPY balanced itself. A push through limited offers around the 0.7960 areas will see the market move towards the 0.8000 levels with weak stops likely to be above the 0.8020 areas and then the market opens to the 81 cent. Downside sees bids appearing below the 0.79 cent level and a break towards the 0.7860 could very well trigger strong stops through the levels.

 

Overnight News

JPY:

Amari: Govt. BOJ Haven’t Committed to Exact Schedule for 2% Goal

Japan Power Cos. to Raise Rates in March on Weak Yen: Mainichi

Aso: Watching the Situation in Europe After Greece’s Election

Suga Says Japan Has Had No Direct Contact From Islamic State

Toyota Plans Overhaul to Seniority-Based Japan Pay Structure

GOLD:

Turkey Cuts Gold Reserves in Dec. as Netherlands Adds: IMF

CNY:

China Premier Pledges to Create 10m New Jobs, China Daily Says

China Dec. Industrial Profits Fall 8%; Down 4.2% in Nov.

China Dec. Leading Economic Index Rises 1.1% M/m to 311.6

CHF:

Danthine Says Cap Couldn’t Have Withstood ECB QE: TagesAnzeiger

NZD:

Key Says N.Z. Interest Rates Look Set to Stay Low for Longer

AUD:

Australia Dec. Business Confidence Rises 1 Pt to 2

 

Today’s data

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

AUD       NAB Business Confidence Dec A 2 | P 1

09:30     GBP       Index of Services 3M/3M Nov C 0.90% | P 0.70%

09:30     GBP       GDP Q/Q Q4 (A) C 0.60% | P 0.70%

13:30     USD       Durable Goods Orders Dec C 0.50% | P -0.70%

13:30     USD       Durables Ex Transportation Dec C 0.60% | P -0.40%

14:00     USD       S&P/Case-Shiller Composite-20 Y/Y Nov C 4.32% | P 4.50%

15:00     USD       New Home Sales Dec C 450K | P 438K

15:00    USD       Consumer Confidence Jan C 95 | P 92.6

 

Harry Hindsight              

  • EUR: The quick action was on the opening with news that Greek anti austerity party was on course to claim an overall majority, and as the market does it sold the rumour from the opening taking the market from the 1.1180-90 levels to push down to the 1.1140 with a slight bounce the market renewed the selling as Euro cross selling moved into the market and the Euro touched briefly below the 1.1100 level before a quick and solid bounce moving from the level and trading straight to the 1.1200 level in the opening of Tokyo, the market then stabilized and traded quietly over the course of Asia never quiet breeching the 1.1200 level but remaining in a 1.1160-1.1200 level for several hours. The move into London saw the market move easily through the 1.1200 level this time and the market moved steadily higher with mixed IFO numbers having little impact on the market and the fact that the Syriza party fell 2 short of the overall majority needed. The market moved through early London to the 1.1260 level and early NYK took the market higher as some weak shorts were turned out pushing to just above the 1.1290 level. As the London market closed the Euro started to drift with the market dropping quickly to the 1.1240 level late in the session and finishing the day around that area.
  • GBP: EURGBP selling on the opening pushed the Euro higher to the 1.5010 and although the market was a little choppy the market in the early part of Asia traded around the 1.5000 levels and remained in that range until the move into the grey hours where the market again pushed higher and through the 1.5040 levels not as spectacular as the Euro recovery however, having reached the level the market drifted and held the 1.5010 level for several hours into the NYK session before again going bid and pushing to the 1.5100 level were the market remained for the remainder of the session. EURGBP having dropped sharply on the opening falling to below the 0.7410 level the market recovered to the 0.7450 level into the Tokyo opening and although the market in the cross moved to above the 75 cent level it eventually dipped back to the 0.7450 levels in line with the initial bounce.
  • JPY: Cross Euro selling saw most of the majors dropping as the Euro dragged on the market the USDJPY was no exception dropping from the opening to move to the Tokyo opening holding the 117.30 area and a bounce back to where the market finished on Friday around the 117.80 levels and weak offers. The move into the grey hours saw good buying moving in pushing quickly through to the London opening and a push to above the 118.30 levels before drifting into the NYK session trading slowly higher over the course of the session to hold around the 118.50 levels into the close on a rather quiet day.
  • AUD: The Oz was dominated by the Euro over the course of the day with initial EURAUD selling dragging the Oz lower from the opening and trading into the Tokyo opening off the 0.7860 levels to recover most of the initial losses to 0.7900 levels, the market dipped a little before heading into the London session and moving firmly back to above the 0.7920 level and holding the area into the close.

 

Yesterday’s premiership results

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

JPY         Trade Balance (JPY) Dec A -0.71T | C -0.74T | P -0.93T | R -0.83T

EUR        German IFO – Business Climate Jan A 106.7 | C 106.5 | P 105.5

EUR        German IFO – Current Assessment Jan A 111.7 | C 110.8 | P 110

EUR       German IFO – Expectations Jan A 102 | C 102.5 | P 101.1

 

Good Luck,

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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