Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 118.948 | EURUSD 1.13675 | EURJPY 135.215 | AUDUSD 0.77922 | NZDUSD 0.75265 | USDCAD 1.24956 | EURCHF 1.07943 | USDCHF 0.94948 | GBPUSD 1.5415 | EURGBP 0.73743 |

 

Interbank Ranges as of 6am London time

Highs    Lows

EURUSD               1.13725 | 1.1357

USDJPY                 119.09 | 118.855

GBPUSD               1.5433 | 1.5415

USDCHF               0.94995 | 0.9483

AUDUSD              0.7812 | 0.7789

NZDUSD               0.7535 | 0.7515

CADUSD               1.2498 | 1.2480

EURCHF                1.0798 | 1.0782

EURGBP               0.7370 | 0.7365

EURJPY                 135.33 | 135.045
For today

  • EUR: A very quiet session with the Chinese New Year really biting into the market, moving from the 1.1370 levels the market pushed lightly through the 1.1360’s to move back into the 1.1370’s and so the range has remained with the market anticipating the EG/Greek decision today one way or the other it could be interesting with PMI numbers across Europe in the mix as well. Topside offers into the 1.1400 levels are light and the market would need to push through the 1.1450 levels to trigger stops and an opening to test the 1.1520 areas with offers from the 1.1480 likely. Downside sees bids and congestion from the 1.1340 areas to the 1.1280 likely with stops through that level for a run to the 1.1220 areas with slightly stronger bids before opening for another test of the 1.1100 areas.
  • GBP: Cable has been only slightly more active with EURGBP selling lightly lower, this took the Cable towards the 1.5435 areas from the opening 1.5415 and then remaining in a 1.5425-35 areas. Light offers from the 1.5465 areas and building towards the 1.5500 area before the market is likely to see some stops however, through the area and the market opens up with 1.5600 then becoming a target for the market. Downside bids into the 1.5400 are not substantial however, without impetus the market is going to struggle through the level and again into the 1.5350 areas and the pattern repeated every 50 pips and unless the PBSR comes in massively lower than expectations and it being January and the final month for tax payments for the previous year it would be unusual.
  • JPY: USDJPY held a very tight range as the market moved from the opening 118.98 areas to just below the 119.10 in early trading only to slump back as light cross selling moved into the market in early Tokyo however, the flow was limited at best and slipped only to the 118.90 levels before holding steady for the rest of the session. USDJPY now sees light offerings into the 119.30 areas before the market opens a little however, while there may be weak stops around above that level offers are likely to thicken as it pushes to the 119.50 and through towards the 120.00 levels probably being the strong point for the moment, movement through 120.20-30 is likely to see better stops however the likelihood of even stronger offers from then on. Downside bids a light into the 118.50 levels and opens up for a test through the 118.00 which I don’t believe is particularly strong and the strength really picks up through the level with plenty of congestion to 117.00 areas and strong bids particularly around that area.
  • AUD: The Oz edged up slightly in very quiet day with probably a third of yesterday’s volume going through and I thought that was quiet, moving off the opening 0.7790 levels the market moved higher to the 0.7810 areas before holding in that area to the grey hours. The topside is still dominated by that strong 0.7840-60 area and only a push through the topside will open up a move to 79 cents however, for the moment there is nothing strong enough on the face of the data and only EURAUD could upset the apple cart, Downside has light bids from the 0.7760 levels with those bids increasing into the 0.7740 levels through that level 77 cent holds little interest and the 0.7650-40 area becomes the target for new lows for the year.

 

Overnight News

JPY:

Kuroda keeping options open helps calm bond market

Japan’s manufacturing activity expands at slowest pace in seven months in Feb

EUR:

French Government survives no-confidence vote

Germany holds up Greek bid for Eurozone loan extension

IMF:

Confident of $40B package for Ukraine will come together

Says all parties seek to avoid risks to system from Greece

AUD:

NE coast braces for destructive cyclone as two head towards Australia

 

Today’s data

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

JPY         Manufacturing PMI Feb (P) A 51.5 | C 52.6 | P 52.2

07:00     EUR        German PPI M/M Jan C -0.30% | P -0.70%

07:00     EUR        German PPI Y/Y Jan P -1.70%

08:00     EUR        France Manufacturing PMI Feb (P) C 49.7 | P 49.2

08:00     EUR        France Services PMI Feb (P) C 49.9 | P 49.4

08:30     EUR        Germany Manufacturing PMI Feb (P) C 51.8 | P 50.9

08:30     EUR        Germany Services PMI Feb (P) C 54.3 | P 54

09:00     EUR        Eurozone Manufacturing PMI Feb (P) C 51.6 | P 51

09:00     EUR        Eurozone Services PMI Feb (P) C 53.2 | P 52.7

09:30     GBP       Public Sector Net Borrowing (GBP) Jan C -9.5B | P 12.5B

09:30     GBP       Retail Sales M/M Jan C -0.10% | P 0.40%

13:30     CAD       Retail Sales M/M Dec C -0.30% | P 0.40%

13:30    CAD       Retail Sales Less Autos M/M Dec C -0.70% | P 0.70%

 

Harry Hindsight              

  • EUR: A quiet day through the Asian session and deep into London with the market in the Euro rising quietly to the 1.1420 levels from 1.1400 areas during Asia and ranging in the 1.1410-20 areas for the bulk of Asia. Chinese New Year impacted greatly on the flows during the early part of the session before London moved in and the Euro rallied on the official opening to test the 1.1450 levels before rejecting the areas and dropping back through the 1.1400 levels and generally holding the 1.1390 areas into the NYK session. Another drop in initial claims sent the Euro’s down to the 1.1360 levels and although there was a slight rally from that point once the London session ended the market moved back from just below the 1.1400 areas and back to the lows to trade out just above the lows.
  • GBP: Cable had a more of a choppy session opening quietly in Asia around the 1.5435-40 areas the market moved deep into the Tokyo session with general USD weakness the Cable headed to the 1.5460 levels with a bit of chop in between however, the move into London saw the moves become more exaggerated as flows away from the European area saw Cable buffeted one way then the other, unable to break through the 1.5465 levels the market then reversed on the initial claims in the US trading down to 1.5405 before recapturing most of the losses and running out of the London session and a steady return to the lows, only managing to finish around the 1.5415 areas after the strong early session. EURGBP lost ground again as GBP remained in better light than the Euro and its continuing Greek saga. Asia was quiet for the cross but the market moved to above the 0.7400 levels and topped just short of the 0.7410 levels into the London session, European current account numbers declined and EURGBP dropped quickly to below the opening 0.7385 levels and through eventually to the 0.7360 areas and recovering only slightly as the GBP and USD became the chosen currencies for the day.
  • JPY: USDJPY in Asia was particularly weak as the market moved quietly through the session moving from the opening 118.70 slightly higher before slipping steadily lower however, the move into the London session saw buyers return and move the market away from the lows and steadily into the NYK session to back above the light offers above 119.00, not quiet hitting 119.20 the market from that point drifted over the remainder of the session finishing the day just below the figure and only lightly traded.
  • AUD: As the USDJPY drifted lower in early trading and a general USD weakness in the market Oz managed to push off the 0.7810 lows and head for what looked like a test of the 0.7840-50 levels however, although we reached the bottom end the comments from S&P and the risk of Australia losing its AAA status sent the market quickly lower trading to the 0.7790 from just off the highs and after a bounce London took the market further and to the 0.7760 levels, what bounce occurred moved the market to the 78 cent levels as profit taking moved in however, from that point it was only lightly traded moving for the most part around the 0.7790 level when the market finished the day.

 

Yesterday’s premiership results

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 -0.20% | C -0.20% | P 0.10% | R 0.00%

CHF        Trade Balance (CHF) Jan A 3.43B | C 1.23B | P 1.52B

EUR        Eurozone Current Account (EUR) Dec A 17.8B | C 23.3B | P 18.1B | R 19.9B

GBP       CBI Trends Total Orders Feb A 10 | C 7 | P 4

USD       Initial Jobless Claims (FEB 14) A 283K | C 305K | P 304K

USD       Philly Fed Survey Feb A 5.2 | C 8  | P 6.3

EUR        Eurozone Consumer Confidence Feb (A) A -7 | C -8 | P -8.5

USD       Leading Indicators Jan A 0.20% | C 0.30% | C 0.50% | P 0.40%

USD       Crude Oil Inventories A 7.7M | C -1.8M | P 4.9M

 

Good Luck,

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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