Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 117.589 | EURUSD 1.13397 | EURJPY 133.36 | AUDUSD 0.78023 | NZDUSD 0.73007 | USDCAD 1.2568 | EURCHF 1.05225 | USDCHF 0.92793 | GBPUSD 1.5037 | EURGBP 0.7541 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               117.745 | 116.87

EUR/USD             1.1351 | 1.1322

EUR/JPY               133.43 | 132.40

AUD/USD            0.7833 | 0.7650

NZD/USD             0.7319 | 0.7190

USD/CAD             1.2645 | 1.2564

EUR/CHF              1.0545 | 1.0473

USD/CHF             0.9296 | 0.92425

GBP/USD             1.5043 | 1.5015

EUR/GBP             0.7545 | 0.7540
For today

  • EUR: The Euro moved slightly higher from the opening around the 1.1340 level and pushing slightly through the 1.1350 level before returning to the opening. The market then broke down through the level to fall to the 1.1330 areas as the Oz rate announcement hit the news wires and currently holding those levels as we move to the grey hours in a very quiet market place. Downside see’s light bids into the 1.1280 levels for the moment with the market opening only a little through that level with weak stops just below then the 1.1220 area provides the next bid area. Topside is likely to see some offerings into the 1.1380 areas before the market moves to stronger offers above the 1.1420 areas this level is likely to need a strong bid tone to push through as technically the move opens up a bigger move to the topside.
  • GBP: Trading quietly in line with the Euro the market moved between the 1.5030-40 areas in the early part of trading, the Oz rate announcement dragged everything lower, dropping through to the mid teen areas in limited trading. Downside sees the bids from 1.5010 levels and through to the 1.4990 area a strong test through the level and 1.4950 bids cleared will open up a deeper move with the 1.4800-20 levels likely to be strong support. Topside sees only light offers into the 1.5100 levels with likely weak stops through the 1.5120-30 areas and opening up the 1.5200 levels and strong offers to the 1.5220.
  • JPY: Having opened around the 117.60 levels the market remained steady until the Tokyo opening and then the selling appeared in the market as weak longs in the AUDJPY carry started to cut positions, this took the USDJPY down into the supportive 117.20 areas and after the Oz had collapsed this initially gave the USDJPY room to rally however, it was short lived as margins on the AUDJPY ran into trouble and AUDJPY selling kicked in with vengeance dropping from the 91.60 levels to below 88.60 and the lowest since the beginning of last year. USDJPY halted its slide dipping through to 116.90 before finding sufficient interest to arrest the test lower. Downside bids around the 116.80-90 level for the moment hold the market, through that level the market opens a little and light bids into the 116.50 area are not likely to be particularly strong however, they may be sufficient if the market doesn’t see too much difference in the Factory order number. Topside offers initially into the 118.00 level will likely give way to stronger offers from the 118.50 level and into 118.80 weak stops are likely through the 119.00 areas before further offers appear for a repeat of the previous level.
  • AUD: The Oz opened around the 78 cent level and traded quietly into the Tokyo session with quick buying mid-way to the data release pushing through to trigger weak stops above 0.7830, the market again settled back to above the 78 cent level and the release hit the wires with a 0.25% cut to the cash rate taking it to 2.25%, the market reacted as you would expect and the Oz dropped straight down from above the 78 cent level to 0.7680 before finding some light bids and a slowing of the descent, the market eventually traded into the mid 0.7650’s and has held in the 0.7660’s as we move towards the grey hours. Light offers into the 0.7760 areas with stops likely through 0.7820, through there sees only limited offers until the 0.7850-0.7900 level where further offers make an appearance. Downside has limited benefit from the charts however, the market is now open to the 0.7580 areas where there may be sufficient bids to stop any further slide with 75 cent likely to provide option barrier interest.

 

Overnight News

AUD:

RBA’s Stevens Cuts Benchmark Interest Rate to 2.25% (Full Text)

Hockey Says RBA Has ‘More Room to Move’ on Interest Rates

Australia Dec. Building Approvals Fell 3.3% M/M; Est 5.0% Fall

Australia ANZ Weekly Consumer Sentiment Falls 0.7% to 112.4

CNY:

China Sees Biggest Outflow of Capital since at Least 1998

China to Continue Agricultural Target Prices to Ease Stocks

Ex-PBOC Adviser Says Yuan Fixing Rate Should Weaken: Sec. News

JPY:

JGB 10-Year Auction Draws Lowest Bid-to-Cover Ratio in 19 Mos.

Japan’s Amari Says Substantial Progress Made in TPP Negotiations

NZD:

New Zealand House-Price Inflation Accelerates, Quotable Says

N.Z. Export Commodity Prices Fall for 11th Month, ANZ Says

 

Today’s data

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

JPY         Monetary Base Y/Y Jan A 37.40% | C 40.10% | P 38.20%

AUD       Trade Balance (AUD) Dec A -0.44B | C -0.85B | P -0.93B | R -1.02B

AUD       Building Approvals M/M Dec A -3.30% | C -4.80% | P 7.50%

AUD       RBA Rate Decision A 2.25% | C 2.50% | P 2.50%

07:00     CHF        Trade Balance (CHF) Dec P 3.87B

09:30     GBP       Construction PMI Jan C 56.9 | P 57.6

10:00     EUR        Eurozone PPI M/M Dec C -0.70% | P -0.30%

10:00     EUR        Eurozone PPI Y/Y Dec P -1.60%

13:30     CAD       Industrial Product Price M/M Dec C 0.30% | P -0.40%

13:30     CAD       Raw Materials Price Index M/M Dec C -4.60% | P -5.80%

15:00    USD       Factory Orders Dec C -0.30% | P -0.70%

 

Harry Hindsight              

  • EUR: The market opened a little higher from the Friday close and traded quietly through the Asian session moving to the 1.1325 level into the Tokyo session before dropping back to the opening levels and then dipping further into the grey hours to set the low of the day in the mid 1.1290’s before a steady rise as European numbers came in on target or a little better for the individual numbers. The fact that Greece has retreated for the moment from its stance and a possible way forward for the situation. Talk over the weekend about SNB setting a band of 1.05-1.10 for the EURCHF was initially ignored as speculative talk however, from the opening in Wellington the market moved higher in line with that idea and the day saw the EURCHF above 1.05 having rallied some big figure over the session, Euro’s was moved steadily higher in the London session to above the 1.1350 levels before dropping back and running higher into a poor set of US numbers to push the second time through the 1.1360 levels before settling back to a steady evening session around the 1.1340 levels.
  • GBP: Cable opened only slightly higher in Asia and remained in a tight range around the 1.5080 levels through to the grey hours when the market started a steady move lower as EURGBP buying moved into the market taking the cross quickly higher moving from below the 0.7500 areas to just above the 0.7560 level, while the Euro did move higher the GBP was the main loser pushed from the comfortable 1.5080’s and down to the 1.5010 level with even the better reading of the Manufacturing PMI briefly reversing the losses the market dropped back just as quickly and then rested on those lows into the NYK session. NYK were steady buyers however, the same EURGBP buyers appeared in the market during the NYK session and the market ran to the highs for the second time before again moving to hold in the 1.5030 areas for a quiet close.
  • JPY: Movement in the EURCHF in the pre-market caused some liquidity problems and USDJPY dropped quickly from the opening in Wellington to drop down through to the 116.60’s before bouncing back and opening in the 117.10 level some 40 pips away from the close on Friday, the market moved quietly in the pre-Tokyo session unable to press ahead without the Tokyo liquidity however, when it appeared it moved steadily in the first three hours back to the offers above the 117.80 level and remained in contact with the area throughout the Asian session and into London holding around the 117.60 levels before dropping back quickly in the NYK session as the poor numbers were released, the move sent the market back to the 117.20 levels and held around the level for several hours. Late profit taking and light liquidity saw the market gain and a run to above the 117.60 levels into the close but it was light.
  • AUD: The Oz moved off a slightly lower opening around the 0.7760 level and pushed steadily higher to moving into the London session to above the 78 cent level, with the market slowly pushing into NYK and above the 0.7820 levels before dipping into a close around that 78 cent level in very quiet trading with the normal to and fro caused by the AUDJPY totally side lined as the market held its positions and nerve for the day.

 

Yesterday’s premiership results

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

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

CNY        HSBC Manufacturing PMI Jan (F) A 49.7 | C 49.8 | P 49.8

CHF        SVME-PMI Jan A 48.2 | C 54.5 | P 54

EUR        Italy Manufacturing PMI Jan A 49.9 | C 49.3 | P 48.4

EUR        Eurozone Manufacturing PMI Jan (F) A 51 | C 51 | P 51

GBP       PMI Manufacturing Jan A 53 | C 52.9 | P 52.5 | R 52.7

USD       Personal Income Dec A 0.30% | C 0.20% | P 0.40%

USD       Personal Spending Dec A -0.30% | C -0.30% | P 0.60%

USD       PCE Deflator M/M Dec A -0.20% | C -0.30% | P -0.20%

USD       PCE Deflator Y/Y Dec A 0.70% | P 1.20%

USD       PCE Core M/M Dec A 0.00% | C 0.00% | P 0.00%

USD       PCE Core Y/Y Dec A 1.30% | C 1.40% | P 1.40%

USD       Construction Spending M/M Dec A 0.40% | C 0.70% | P -0.30% | R -0.20%

USD       ISM Manufacturing Jan A 53.5 | C 55 | P 55.5

USD       ISM Prices Paid Jan A 35 | C 40 | P 38.5

 

 

 

Good Luck,

Andy

 

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

Any opinions, news, research, analyses, prices or other information ("information") contained on this Blog, constitutes marketing communication and it has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Further, the information contained within this Blog does not contain (and should not be construed as containing) investment advice or an investment recommendation, or an offer of, or solicitation for, a transaction in any financial instrument. LMAX Group has not verified the accuracy or basis-in-fact of any claim or statement made by any third parties as comments for every Blog entry.

LMAX Group will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. No representation or warranty is given as to the accuracy or completeness of the above information. While the produced information was obtained from sources deemed to be reliable, LMAX Group does not provide any guarantees about the reliability of such sources. Consequently any person acting on it does so entirely at his or her own risk. It is not a place to slander, use unacceptable language or to promote LMAX Group or any other FX and CFD provider and any such postings, excessive or unjust comments and attacks will not be allowed and will be removed from the site immediately.