Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 118.787 | EURUSD 1.13966 | EURJPY 135.373 | AUDUSD 0.78122 | NZDUSD 0.75247 | USDCAD 1.24548 | EURCHF 1.0739 | USDCHF 0.94236 | GBPUSD 1.54358 | EURGBP 0.73832 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               118.82 | 118.42

EUR/USD             1.14245 | 1.1397

EUR/JPY               135.52 | 135.285

AUD/USD            0.7843 | 0.7786

NZD/USD             0.7574 | 0.7543

USD/CAD             1.2457 | 1.2438

EUR/CHF              1.0750 | 1.07345

USD/CHF             0.9424 | 0.94075

GBP/USD             1.5457 | 1.5435

EUR/GBP             0.73915 | 0.7383
For today

  • EUR: Euro’s opened quietly and traded around the 1.1400 from the opening and then broke a little higher as a broad based weakening of the USD moved into early Tokyo trading, the market pushed to the 1.1420’s before slowing and trading quietly in the 1.1410-20 area for the balance of the session. Topside offers still remain in the 1.1440 area with a break through the 1.1460 levels and an opening for a test of the 1.1500 areas with offers likely to continue through the level. Downside bids weak into the 1.1400 level and light stops likely to appear through 1.1380 again and stronger bids into the 1.1320-1.1280 levels.
  • GBP: Cable has been quiet again, with little movement in the market pushing from the 1.5440 areas to towards the 1.5460 levels and as we move towards the grey hours remains just off the highs. Topside offers now reside around the 1.5480-1.5500 levels with a push through likely to see stops and an opening to the 1.5600 level. Downside has light bids into the 1.5400 levels with weak stops likely just through the area and a move to the 1.5350 levels and stronger bids available.
  • JPY: USDJPY opened around the 118.70 levels and touched briefly above the 118.80 levels from demand into the fix in Tokyo before again slipping back as a consequence of USD weakness to trade below the 118.50 levels. The market since that point struggled back to the opening levels over the rest of the session and is only just off those levels heading into the grey hours. Topside offers light into the 118.80 levels and a push through 119.00 areas is likely to see weak stops and another attempt to push through the 119.40 areas. Downside bids light into the 118.20 levels and through to 117.80 however, a push through there sees possible strong stops and then a better level into the 117.20 for the bids.
  • AUD: The Oz rallied steadily in the first half of the session moving from the lows of 0.7805 area pushing back through the opening 0.7815 and heading to above the 0.7845 as strong buying moved into the market, this was then tempered as S&P warned of the risk of losing its AAA rating as the budget creaks from the pressure of the current economics with commodities struggling at ever lower prices and squeezing the previous expectations of inflows. The Oz dropped quickly through the 78 cents level and into the 0.7790 levels before holding and finding a small bounce to leave the market unchanged as the market heads into the grey hours.

 

Overnight News

JPY:

Japan Yen-Language Shift Is Seen Linked to April Vote Concern

BOJ to Consider Delaying Timing of 2% Price Target, Sankei Says

Japanese Bought Net 435.2 Billion Yen Overseas Debt Last Week

Japan Jan. Exports Rise 17% Y/y; Est. +13.5%

Japan’s Nikkei 225 Rises 0.4% to Highest Close Since May 2000

AUD:

Australia’s AAA Rating at Risk on Budget Strain, Warns S&P: WSJ

S&P: Doesn’t See Large Risk of Rating Change Over Next 2 Years

NZD:

N.Z. Producer Output Prices Drop on Milk Powder, Payouts

New Zealand Job Ads Fall for Third Time in Four Months, ANZ Says

New Zealand Consumer Confidence Declined in February, ANZ Says

USD:

Fed’s Powell Urges ’High Bar’ for Intervening in Credit Cycle

 

Today’s data

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

NZD       PPI Inputs Q/Q Q4 A -0.40% | C -0.20% | P -1.50%

NZD       PPI Outputs Q/Q Q4 A -0.10% | C -0.30% | P -1.10%

JPY         Trade Balance (JPY) Jan A -0.41T | C -0.60T | P -0.71T | R -0.62T

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

07:00     CHF        Trade Balance (CHF) Jan  C 1.23B | P 1.52B

09:00     EUR        Eurozone Current Account (EUR) Dec C 23.3B | P 18.1B

11:00     GBP       CBI Trends Total Orders Feb C 7 | P 4

13:30     USD       Initial Jobless Claims (FEB 14) C 305K | P 304K

15:00     USD       Philly Fed Survey Feb C 8 | P 6.3

15:00     EUR        Eurozone Consumer Confidence Feb (A) C -8 | P -8.5

15:00     USD       Leading Indicators Jan C 0.30% | P 0.50%

15:30    USD       Crude Oil Inventories P 4.9M

 

Harry Hindsight              

  • EUR: Asia was reasonably quiet with the BoJ not surprising and limited data running into the Chinese New Year, opening around the 1.1410 areas the market drifted a little as EURJPY selling moved into the market and the market spent several hours moving back away from the 1.1400 level and back to the opening levels on the move into the grey hours. Early London sold the Euro off before the official opening and the market spent the first couple of hours heading to below the 1.1380 level in a steady decline as the Greek situation continued to bubble. Good employment figures in the UK led the way back higher for the Euro but touching the 1.1410 levels the market again started to drift lower this time however, the move through the 1.1380 level saw weak stops triggered and the market traded another 20 pips lower and so it continued with a couple of more break downs around the US numbers and again into the London close to touch the 1.1340 levels, and then came a dovish FOMC commentary with the Euro quickly regaining the 1.1410 levels and then finishing the day just short of the opening.
  • GBP: Cable opened around the 1.5350 areas and was very quiet through the Asian session with little to motivate any moves, and so it remained into the London session with 20 pips covering the levels until the Employment figures were released, with claimant rates falling again and the unemployment rate to 5.70 the Cable rallied quickly trading to the 1.5420 levels from the 1.5350 areas and pushing quietly to the 1.5440, the market then ranged in between the 1.5420-40 levels for several hours until the FOMC sent the USD slightly lower and Cable extended to the 1.5480 levels, once the market settled  Cable drifted back to the 1.5440 level and a quiet closing period.
  • JPY: USDJPY saw light selling in crosses before the Tokyo opening and although the market recovered on the opening and headed to above the 119.30 levels comments from Kuroda was enough to strength the JPY and the market dropped quickly to the 119.00 areas in a shallow but quick dip before gradually moving slowly through the 119.00 levels. GBPJPY buying after the UK numbers saw the market moving back to its previous levels in exaggerated moves and really a tight range. The market then continued in the 119.20 areas deep into the NYK session and the FOMC commentary, USDJPY dropped particularly hard falling back triggering weak stops through the 118.80 levels and then holding around the 118.60 area and a slow move back to the 118.80.
  • AUD: The Oz dipped at the beginning of the session to the 0.7805 areas before moving into Tokyo and a steady rise the Asian session to above the 0.7830 levels as the JPY strengthened over the course of the session, eventually though the strength translated into AUDJPY weakness and the Oz was dragged lower as a consequence, GBPAUD buying translated into general Oz selling into the London session and the market was dragged lower to the 0.7780 levels where it eventually held in a quiet session, FOMC saw the market rise quickly as the USDJPY backed off and the Oz quickly moved to above the previous highs before spending time drifting in the late part of the session.

 

Yesterday’s premiership results

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

AUD       Conference Board Leading Index Dec A 0.40% | P 0.10%

AUD       Westpac Leading Index M/M Jan A 0.10% | P 0.00%

GBP       Jobless Claims Change Jan A -38.6K | C -25.2K | P -29.7K | R -35.8K

GBP       Claimant Count Rate Jan A 2.50% | P 2.60%

GBP       ILO Unemployment Rate 3M Dec A 5.70% | C 5.80% | P 5.80%

GBP       Bank of England Minutes

GBP       MPC Official Bank Rate Votes A 0–0—9 | C 0–0—9 | P 0–0–9

GBP       MPC Asset Purchase Facility Votes A 0–0—9 | C 0–0—9 | P 0–0–9

CHF        ZEW (Expectations) Feb A -73 | P -10.8

CAD       Wholesale Sales M/M Dec A 2.50% | C 0.40% | P -0.30%

USD       Housing Starts Jan A 1065M | C 1070K | P 1089K | R 1087M

USD       Building Permits Jan A 1050M | C 1066K | P 1032K | R 1060M

USD       PPI M/M Jan A -0.80% | C -0.40% | P -0.30%

USD       PPI Y/Y Jan A 0.00% | C 0.30% | P 1.10%

USD       PPI Core M/M Jan A -0.10% | 0.10% | P 0.30%

USD       PPI Core Y/Y Jan A 1.60% | C 2.00% | P 2.10%

USD       Industrial Production Jan A 0.20% | C 0.40% | P -0.10%

USD       Capacity Utilization Jan A 79.40% | C 79.90% | P 79.70%

USD       Net Long-term TIC Flows Dec A $45.9B | C 41.3B | P $33.5B

 

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.