Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 119.145 | EURUSD 1.13145 | EURJPY 134.76 | AUDUSD 0.7796 | NZDUSD 0.73666 | USDCAD 1.25208 | EURCHF 1.04821 | USDCHF 0.92657 | GBPUSD 1.52459 | EURGBP 0.74215 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               118.665 | 118.40

EUR/USD             1.13455 | 1.1322

EUR/JPY               134.43 | 134.17

AUD/USD            0.7842 | 0.7792

NZD/USD             0.7440 | 0.7395

USD/CAD             1.2480 | 1.2454

EUR/CHF              1.0480 | 1.04585

USD/CHF             0.92525 | 0.9225

GBP/USD             1.5249 | 1.5214

EUR/GBP             0.7445 | 0.74365
For today

  • EUR: Another quiet session with the market moving slightly higher from the opening 1.1315 areas to above the 1.1340 before holding in the mid 1.1330’s as the market moved towards London, the official view is that although the Greek claim on reparations from the WWII may be legitimate the fact that under the 1960 reparation agreement the Germans did repay that forced loan, and so the wrangling is likely to continue, Topside now sees light offers into the 1.1360 area before opening up to a test of the 1.1400 levels again and possible weak stops through the level, further on better offers are likely to appear in the 1.1460 levels and building into the 1.1500 areas. Downside bids into the 1.1280 levels with likely stops just beyond for a test to the 1.1250 and stronger bids, through the area a push to the 1.1200 is likely to find weak bids and an opening for a retest of the 1.1100 areas.
  • GBP: A slow rise from the 1.5215 levels opening to push through to test the 1.5250 levels in before retreating slightly into the 1.5240’s with sufficient offers at the 1.5250 level to deflect the market. A push through the level will again open up a test above the 1.5300 level with better offers likely into the 1.5350 areas. Bids into the 1.5200 areas and continuing into the 1.5150 areas, a push through this level opens up the downside 1.5050-1.5000 and stronger bids.
  • JPY: Having opened around the 118.60 levels the market held into the Tokyo session and the market dropped on fixing supply in Tokyo to drop to the 118.40 levels and then held for the balance of the session around the 118.50 in very quiet trading over the session and into the grey hours. Offers now reasonably strong again on a move to the 119.00 levels and likely to continue to the 119.20 levels, a move through the 119.30 levels will likely see weak stops and a move through to test the 119.80 areas and  very strong offers. Downside sees the market bids into the 118.00 levels with weak stops through the level opening up another test of the 117.20-117.00 areas, a dip through the 116.80 will likely see strong stops triggered and another attempt to the 116.00 areas.
  • AUD: The market opened around the 78 cent level with the market sparking a little higher after the confidence number but running higher once the CNY CPI numbers were released moving to above the 0.7820 levels and then a second run once the level broke and 0.7840 levels traded before drifting back in quiet trading, and that quiet trading was across the market. Downside bids into the 0.7760-50 area give way to light stops and a test to the 77 cent levels however, the market has held this area for over a weak and looks for more impetus from the RBA. Topside has probably light offers into the 0.7840 areas again with a stronger offering area into 0.7880-0.7900.

 

Overnight News

G20:

G-20 Draft Calls for Easy Monetary Policy in Some Economies

USD:

Fed’s Powell Sees ‘Slack’ in U.S. Economy and Room for Patience

Fed’s George Sees Benefits of ‘Modestly’ Tighter Policy Sooner

CNY:

China Jan. Consumer Prices Rise 0.8% Y/y; Est. 1% Gain

China SAFE Official Says Outflow ‘Within Expectation’: Sec. News

CSRC Speeds Up IPO Application Processes: Securities Journal

China Studies Linking Bond Markets with Hong Kong, SCMP Reports

EUR:

Merkel Says she’s waiting for Concrete Proposals from Greece

Germany Rejects Greek Demand for Repayment of Wartime Loan: Bild

GBP/EUR:

Osborne Sees Growing Danger of Very Bad Outcome in Greek Crisis

NZD:

English Says RBNZ Looking at Property Investment Curbs: Fairfax

JPY:

Japan’s Farm Lobby Concedes to Abe’s Agriculture Reform Plans

Japan’s Cabinet Approves Charter to Allow Aid for Foreign Armies

Japan’s National Debt Was 1,030t Yen at End-Dec.

AUD:

Australia Jan. Business Confidence Rises 1 Pt to 3

Australia ANZ Weekly Consumer Sentiment Falls 0.6% to 111.7

Australian 4Q House Prices Rise 1.9% Q/Q; Est. 1.8% Gain

RUB/G20:

G-20 agrees It’s Wrong to Artificially Change FX Rates: Russia

GBP:

U.K. LFL Jan. Retail Sales Up 0.2 Y/y, BRC Says

 

Today’s data

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

JPY         Tertiary Industry Index M/M Dec A -0.30% | C 0.10% | P 0.20%

JPY         Japan Money Stock M2+CD Y/Y Jan A 3.40% | C 3.60% | P 3.60%

GBP       BRC Sales Like-For-Like Y/Y Jan A 0.20% | P -0.40%

AUD       NAB Business Confidence Jan A 3 | P 2

AUD       House Price Index Q/Q Q4 A 1.90% | C 2.00% | P 1.50% | 1.40%

CNY        CPI Y/Y Jan A 0.80% | C 1.10% | P 1.50%

CNY        PPI Y/Y Jan A -4.30% | C -3.80% | P -3.30%

06:45     CHF        Unemployment Rate Jan C 3.20% | P 3.20%

08:15     CHF        CPI M/M Jan C -0.50% | P -0.50%

08:15     CHF        CPI Y/Y Jan C -0.60% | P -0.30%

09:30     GBP       Industrial Production M/M Dec C 0.10% | P -0.10%

09:30     GBP       Industrial Production Y/Y Dec C 0.80% | P 1.10%

09:30     GBP       Manufacturing Production M/M Dec C -0.10% | P 0.70%

09:30     GBP       Manufacturing Production Y/Y Dec C 2.00% | P 2.70%

15:00     USD       Wholesale Inventories Dec C 0.10% | P 0.80%

15:00    GBP       NIESR GDP Estimate Jan P 0.60%

 

Harry Hindsight              

  • EUR: The Euro traded quietly over the session with Greece commentary driving the limited action over the day. Moving from the opening 1.1310 areas in a steady grind through Asia to just below the 1.1340 levels holding steady into a slight dip in the grey hours to 1.1320’s before rallying for an opening in London just short of the 1.1360 levels, as the market reacted to the limited news that Greece is to reject the bailout program the market moved steadily to below the 1.1280 before a steady bounce back again into the NYK session with no news really in the US the market was bland having moved to the 1.1320 levels where the market based through to the close.
  • GBP: Asia took the market higher over the course of the Asian session however, the run from the 1.5235 area was slow and only managed to push through to the 1.5265 areas before running out of steam and the opening of the London session chased the market lower as Government officials met to work out a contingency plan for Grexit, while the ECB is playing this off as less important than it was previously the fact that Greece is possibly heading for the door would mean that the door exists for Spain who seem to be moving to the same point politically. The market moved off the highs from the London opening dropping down through into the NYK session to just above the 1.5200 level before ranging over the next 10hrs or so between the 1.5200-1.5240 areas eventually quietening into the last could of hours to trade below the 1.5220.
  • JPY: USDJPY drifted from the opening pushing from an open around the 119.10 levels to below the 118.80 through the early part of Asia before finding some light bidding to hold the market in place, the markets move into London saw the market again make its way to the 119.00 areas however, the opening in London saw the market drop quickly through the 118.80 and into the 118.60 areas, the market then remained around the area with a brief move to the 118.40 levels before finishing the day around the 118.60’s
  • AUD: The Oz opened lower after the weekend where a confidence vote in Abbott took place with him winning with a strong majority and after the initial selling the market based around the 0.7770 areas through to the London opening and quick buying to push to the 0.7790 areas and then a steady climb through the day and into the NYK session touching above the 0.7830 levels before the profit taking from day plays dipped the market back to the 78 cent levels.

 

Yesterday’s premiership results

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

CNY      Trade Balance Jan A $60.03B | C $48.20B | P $49.61B

JPY         Consumer Confidence Jan A 39.1 | C 39.4 | P 38.8

JPY         Eco Watchers Survey: Current Jan A 45.6 | C 45.7 | P 45.2

EUR        German Trade Balance (EUR) Dec A 21.8B | C 18.2B | P 17.7B | R 17.9B

EUR        Eurozone Sentix Investor Confidence Feb A 12.4 | C 3.4 | P 0.9

CAD       Housing Starts Jan A 187K | C 184K | P 180.6K | R 180K

 

Good Luck,

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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