Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close Wellington open

USDJPY 119.012 118.91-119.145 | EURUSD 1.1379 1.1370-98 | EURJPY 135.444 135.201-801 | AUDUSD 0.7844 0.7820-45 | NZDUSD 0.75262 0.7515-55 | USDCAD 1.25343 1.2521-47 | EURCHF 1.06782 1.0565-0798 | USDCHF 0.9381 0.93715-0.9450 | GBPUSD 1.54002 1.5370-1.5414 | EURGBP 0.73889 0.7385-95 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               119.27 | 118.88

EUR/USD             1.1411 | 1.1358

EUR/JPY               135.94 | 135.29

AUD/USD            0.7849 | 0.7829

NZD/USD             0.7540 | 0.7511

USD/CAD             1.2561 | 1.2523

EUR/CHF              1.0740 | 1.0692

USD/CHF             0.9443 | 0.9393

GBP/USD             1.5409 | 1.5370

EUR/GBP             0.74045 | 0.73895

 

For today

• EUR: With the weekend news that the Greek/Eurozone saga is not over by a long chalk with the broadsheets talking about Greek government instability already starting to appear as they come to the table to discuss the terms of the bailout again. In the meantime the ECB and Central banks are talking in the hope of shoring up any potential fallout from a Grexit. This in mind the Euro opened around the 1.1390 levels before dropping to the 1.1360 levels into the Tokyo session before gradually rising back to the opening levels into mid-session and then drifting back into the mid 1.1370’s as the market moves towards the close. Offers into the 1.1420-50 areas, those offers looking particularly strong, a move through that level will likely see some light weak stops before the offers reappear moving in and likely to slow the move to the 1.1500 where better offers appear again, through that level 1.1520 is likely to see some stops appearing.
• GBP: The market has been particularly quiet with GBP losing ground against the Euro early in the session and Cable drifting back to the 1.5370 levels before rising back to 1.5390 levels again as the gains in the EURGBP was eroded into the second half of the session. Light offers into the 1.5400 levels do little to protect the topside and the opening to the 1.5450 level remains lightly defended a strong move through the 1.5470 level will likely see weak stops trigger and then stronger offers into 1.5500. Downside bids into the 1.5350 are only tentative before opening up the market to test the 1.5250 levels and the stronger 1.5200 level.
• JPY: USDJPY opened around the 119.05 areas on the official opening and traded higher only on the opening in Tokyo to the 119.15 levels, the market then started to see EURJPY selling moving into the market and dominating a quiet session and the UDJPY again drifted through the 119.00 areas to trade off the 118.90 levels. Topside offers run from the 119.20 levels and likely to go back into the 119.50 areas, a push through will again open a test of the 120.00 areas and likely weak stops before offers reappear towards the 119.80 areas. Downside bids into the 118.50 areas a push through the 118.40’s will see a break towards the 118.00 and then from then strong congestion to the 117.00 likely to see slow movement if busy trading.
• AUD: Opening around the 0.7845 levels and holding a very narrow range in slow trading with the Oz unable to push through the topside offers, and has remained basing off the 0.7830 levels. Topside offers 0.7840-50 and only a push through the 0.7870 will see weak stops and an attempt on the 79 cent level, downside bids are light into the 78 cent level before giving away to better bids into 0.7750 but as we’ve seen in the past the downside is not that strongly defended until the market moves below 77 cents and the yearly lows around the 0.7640 are the better bids.

Overnight News

JPY:

Yen at ‘Comfortable’ Level, BOJ Needn’t Act for Now: Abe Adviser

Some BOJ Members: Cos Moving Output Back to Japan on Weak Yen

Japan Cabinet Approval Rating Little Changed at 50%: Nikkei

Japan’s Top Union Body Aims for Biggest Pay Rise in Two Decades

Japan’s GPIF Seeks Consultants for Portfolio, Asset Management

JPY/USD:

Japan PM Abe to Address U.S. Congress in April: Kyodo

JPY/KRW:

Japan’s Abe Says He Wants a Summit Meeting with South Korea

EUR:

Portugal Early IMF Loan Repayment Credit Positive, Moody’s Says

HUF:

Hungary’s Orban Loses Supermajority after By-Election Defeat

PLN:

Polish Benchmark Rate Is Set for Long Term at 2%, Winiecki Says

Today’s data

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

09:00     EUR        German IFO – Business Climate Feb C 107.2 | P 106.7

09:00     EUR        German IFO – Current Assessment Feb C 112.7 | P 111.7

09:00     EUR        German IFO – Expectations Feb C 103.3 | P 102

11:00     GBP       CBI Reported Sales Feb C 42 | P 39

15:00     USD       Existing Home Sales Jan C 5.00M | P 5.04M

Weekend News

EUR:

Tsipras Gears Up for ‘Real’ Fight After Initial Aid Extension
Greek FinMin Says Reforms List to Be Submitted by Sunday: AP
Syriza Lawmakers Would Support Tsipras Measures, Minister Says
JPY/GBP:

Sosei to Pay Up to $400 Million for Heptares Therapeutics
JPY/EUR:

Hitachi to Make Final Bid for AnsaldoBreda, STS: Messaggero
USD:

U.S. Oil-Worker Union Widens Biggest Plant Strike Since 1980
USD/RUB:

Russia May Face Further Sanctions after Kerry, Hammond Talks
RUB:

Russia Gets Second Junk Rating from Moody’s on Ukraine, Oil
RUB/AUD:

Putin Targeted Australia in Boosting Spy Operations: Australian
CNY:

China Communist Party Names 855 Violating Officials: Xinhua
EUR/CNY:

Deutsche Bank Considers Chinese Hua Xia Bank Stake Sale: WiWo
CNY/INR:

China Summonses India Envoy on Modi’s Visit to Disputed Region
SEK:

Riksbank’s Skingsley Says Sweden Needs Measures on Private Debt

Harry Hindsight

• EUR: Early trading was quiet through Asia however, once the market moved into the grey hours it started to sag, breaking out of the 1.1360-70 range we’d seen through Asia and dipping to the 1.1340 levels, London opening saw the market drop quickly to the 1.1320 after a brief recovery. European figures disappointed and the market headed into some reasonable bids below the 1.1310 levels and bounced of the level, the market was unable to move higher than the 1.1350 levels and from that area the market drifted down into the NYK session and tripped through the 1.1300 level to bounce of the 1.1280 levels and hold around the 1.1300, agreement of a 4 month extension to Greece triggered a recovery in the market as everyone jumped on the good news however, this is tempered by more wrangling’s to come especially on Monday when a letter of intent from Greece is needed  to placate the Germans. The bounce moved to the opening levels on the initial recovery and then squeezed through the highs to trigger weak stops into the 1.1400 level sand pushing to the 1.1430 and the first sign of offers, profit taking in the last couple of hours saw the market dip back through 1.1400 level and holding 1.1380 areas into the close.
• GBP: Cable worked its way a little higher during the Asian session moving from the opening 1.5415 levels and moving to around the 1.5435 areas before dropping quickly on the London opening, triggering some weak stops through the 1.5400 levels and a lack of strong bids until the market moved towards the 1.5350 and the market based off the that level for most of the day, eventually pushing back through the 1.5400 levels and holding around the areas into the close. The early losses in the Cable were mostly down to the EURGBP cross in which the market moved higher.
• JPY: USDJPY attempted a rally early before Tokyo however; the market ran out of Steam below the 119.10 levels and dropped back to the 118.90 levels before holding steady for the move into the London session. London opening saw strong selling and the market dropped back to the 118.60 levels mostly driven by selling in the EURJPY cross. The opening was no better and the selling continued pushing down through the 118.60 levels and trading steadily to the 118.30 in limited action as the EURJPY continued its selloff as the market moved away from the Euro generally until the release of the agreement and the Euro bounced and so did the EURJPY moving quickly higher USDJPY pushing through the 118.80 and continuing after the London close to push to the 119.20 areas before settling back to finish the day unchanged.
• AUD: The Oz was uninspiring for the most part trading higher from the opening, moving off the 0.7790 levels and to the 0.7810 areas before holding for several hours into the London session and the buying moved in and pushed to the 0.7840 areas and several hours of trading around the area never quiet able to push into the 0.7850 level as the selling to the level continued to hold, the news in Europe dropped the market back to the 0.7810 areas before again heading to test the highs and again failing the topside.

Friday’s premiership results

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

EUR        German PPI M/M Jan A -0.60% | C -0.30% | P -0.70%

EUR        German PPI Y/Y Jan A -2.20% | C -2.00% | P -1.70%

EUR        France Manufacturing PMI Feb (P) A 47.7 | C 49.7 | P 49.2

EUR        France Services PMI Feb (P) A 53.4 | C 49.9 | P 49.4

EUR        Germany Manufacturing PMI Feb (P) A 50.9 | C 51.8 | P 50.9

EUR        Germany Services PMI Feb (P) A 55.5 | C 54.3 | P 54

EUR        Eurozone Manufacturing PMI Feb (P) A 51.1 | C 51.6 | P 51

EUR        Eurozone Services PMI Feb (P) A 53.9 | C 53.2 | P 52.7

GBP       Public Sector Net Borrowing (GBP) Jan A -9.4B | C -9.5B | P 12.5B | R 9.9B

GBP       Retail Sales M/M Jan A -0.30% | C -0.10% | P 0.40% | R 0.20%

CAD       Retail Sales M/M Dec A -2.00% | C -0.30% | P 0.40%

CAD       Retail Sales Less Autos M/M Dec A -2.30% | C -0.70% | P 0.70%

Stay lucky

Andy

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