Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 119.426 | EURUSD 1.13213 | EURJPY 135.202 | AUDUSD 0.7771 | NZDUSD 0.74104 | USDCAD 1.25893 | EURCHF 1.04863 | USDCHF 0.92649 | GBPUSD 1.52539 | EURGBP 0.74214 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               119.67 | 119.29

EUR/USD             1.13315 | 1.1310

EUR/JPY               135.47 | 135.055

AUD/USD            0.7795 | 0.7763

NZD/USD             0.7448 | 0.7398

USD/CAD             1.2594 | 1.2572

EUR/CHF              1.0497 | 1.0483

USD/CHF             0.9274 | 0.9258

GBP/USD             1.5268 | 1.5240

EUR/GBP             0.7428 | 0.7416
For today

  • EUR: The market opened around the 1.1315 level and the news that an agreement has been reached between Russia and the Ukraine for the moment moved the market instantly nowhere and seems to be ignored, with the move into a bank holiday in Tokyo the market started a steady rise to the 1.1330 levels however, the move was without any conviction and having reached the levels the market held for several hours before drifting back, trading moved back to the opening levels and looks to be heading towards London little different with only light volumes going through. Light offers into the 1.1350 levels with a push through the 1.1360 level likely to see light stops but opening the market for another test through 1.1400 levels, further into the level will see better offers into the 1.1480 levels and only a strong push opens up the market above 1.1500 levels. Downside bids light into 1.1300 levels with stronger bids into the 1.1280 levels with likely stops beyond the 1.1270 levels leading to a test lower to the 1.1220-30 areas and into the 1.1200 levels.
  • GBP: Cable moved a little higher from the opening pushing into the Tokyo session off the opening 1.5255 levels to just below the 1.5270 levels before reversing quickly as the market ran out of impetus and dropped back to the opening levels and then a steady push through 1.5250 and down to the 1.5240 levels mirroring the move of the Euro however, in light trading conditions the EURGBP rose slightly. Topside sees offers into the 1.5280 levels but nothing too strong with possible stops through the 1.5300 levels and stronger offers into the 1.5350 area. Downside bids for the moment are reasonable into the 1.5200 but not earth shattering and a push through level will possibly see light stops and a move to the 1.5150 level possibly stronger.
  • JPY: The market dipped in the early part of the session moving away from the 119.50 levels and to 119.30 and into the Tokyo session (notwithstanding the bank holiday) and the market again started to rise quietly pushing through the 119.50 levels and eventually after several hours to touch into the 119.65 areas and slightly through the previous day’s highs, the market then started to drift lower from that point and is moving towards London only just above the 119.50’s. Offers from above the highs are likely to go back into the 120.00 levels and possibly beyond, a push through the 120.30 levels opens the market only slightly and offers are likely to continue to appear building in size to the 121.00 areas and option barriers. Downside 119.20 is probably the first line in the sand and not likely to be too strong however; those bids are likely to extend to the 118.80 areas before stops start to appear opening the market to a push to the 118.00 levels.
  • AUD: A very quiet session for the Oz with the market moving around the 0.7770 level before extending to the 0.7780’s into the Tokyo session as retail players entered the market and light carry trade buying, the market eventually saw the highs above 0.7790 however, it was a long drawn out rise and was only beaten by the drop back to the opening levels once the initial interest was expended leaving the market just off the opening levels. Topside offers into the 0.7840 levels and likely to extend through to the 0.7860 before opening up for a test of the 79 cent levels. Downside sees light bids into the 0.7750 areas, with possible weak stops through the levels and an opening to test the 0.7650 areas with strong support likely to be in the area.

 

Overnight News

JPY:

Kuroda Signals Confidence on Easing With No G-20 Backlash on Yen

AUD:

Australian Consumer Sentiment Jumps 8% on Rate Cut: Westpac

Australia Dec. Home-Loan Approvals Rise 2.7% M/M; Est. 2% Rise

Abbott Tightens Scrutiny of Foreign Purchases of Farm Land

USD:

U.S. Suspends Embassy Operations in Yemen

EUR:

Greek Government Wins Vote of Confidence Motion: Tally

NZD:

English Says RBNZ Free to Make Sensible Use of Prudential Tools

N.Z. House Price Inflation Led by Auckland’s 15.1% Gain

CNY:

China to Monitor Property Mkt, Shadow Banking Risks: PBOC’s Yi

Former SAFE Official Chen Suggests Further RRR Cut: Sec. Journal

CNY/USD:

Xi Tells Obama about China’s Concerns on Tibet, Taiwan: Xinhua

EUR/MYR:

EU Says Anwar Conviction in Malaysia Raises ‘Serious Questions’

GBP:

U.K. Commercial-Property Investment Jumps to Record $108 Billion

 

Today’s data

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

AUD       Westpac Consumer Confidence M/M Feb A 8.00% | P 2.40%

AUD       Home Loans Dec A 2.70% | C 2.30% | P -0.70% | R -0.40%

15:30     USD       Crude Oil Inventories P 6.3M

19:00    USD       Monthly Budget Statement Jan C -2.6B | P 1.9B

 

Harry Hindsight              

  • EUR: The market opened around the 1.1325 levels and slowly rose over the early part of the session to just below the 1.1350 levels before dipping back to the 1.1330’s, London were quick sellers as various news items buffeted the market and the Euro broke lower in early trading pushing through the lows of the grey hours and breaking through the 1.1300 levels and pushing to the 1.1280 levels, the move into the NYK session saw the market recovering quickly pushing to the 1.1340 with the market nervous about the next slip of mud to be cast by either side in test of wills between the new Greek government and in particular Germany. The market continued through the session in a choppy fashion but generally moving steadily higher for a finish not far short of the opening levels.
  • GBP: Cable rose over the day however, there was a small set back as the USD rose into the London session negating the rise in early trading in Tokyo, the market opened from around the 1.5215 levels pushing to the 1.5250 levels and into light resistance, the movement of the Euro dragged on the Cable in early London however, the downward pressure increased with a bad set of IP numbers impacting the market a leading number against a back drop of improving manufacturing a lagging indicator. The bounce in the Euro helped the GBP higher and the market then moved into the NYK session trading in a tight range until the market moved towards the NYK option cut, there must have been interest as the market quickly pushed to and through the 1.5250 levels pushing to the 1.5265 levels, the market then held 1.5250 before spiking higher again with what looks like an option writer caught short and touching above 1.5275 before settling back again, the market finished the day around the 1.5255 levels with volumes in the market surprisingly strong considering the slow start.
  • JPY: The USDJPY was strong throughout the session with only a minor setback during the fixing in Tokyo where the market dipped to the 118.40 levels before rising steadily through into a London opening beyond the opening 118.60 areas, a Japanese holiday today would explain the dip and the move into the London saw the market rising quickly through the 118.80 levels with the market initially holding for a period around the 119.00 areas. A gentle rise into NYK saw the floodgates open and a quick run to the 119.50 levels pushing through in a rush and attempting a second time before drifting back as it rejected the levels, although the market dipped back to the 119.30 levels a gentle rise saw the market again at the 119.50 levels into the close.
  • AUD: The market was quiet in the run to the Tokyo session, opening around the 78 cent levels and holding in the area into the Tokyo session before jumping on the CNY numbers to push through the 0.7840 levels, the spike was limited and the market started to drift from the highs into the London session where the opening saw the market sold off quickly to just above the 0.7800 levels, weak stops through the level sent the market again lower and the market pushed to the 0.7770 levels and traded around that level with one minor dip to the 0.7750 level just before the NYK option cut before finishing the day on that 0.7770 levels.

 

Yesterday’s premiership results

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% | R 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%

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

CHF        CPI M/M Jan A -0.40% | C -0.50% | P -0.50%

CHF        CPI Y/Y Jan A -0.50% | C -0.60% | P -0.30%

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

GBP       Industrial Production Y/Y Dec A 0.50% | C 0.80% | P 1.10%

GBP       Manufacturing Production M/M Dec A 0.10% | C -0.10% | P 0.70% | R 0.80%

GBP       Manufacturing Production Y/Y Dec A 2.40% | C 2.00% | P 2.70% | R 3.00%

USD       Wholesale Inventories Dec A 0.10% | C 0.10% | P 0.80%

GBP       NIESR GDP Estimate Jan A 0.70% | C 0.60% | P 0.50%

 

Good Luck,

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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