Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close Wellington open

USDJPY 120.809 120.735-84 | EURUSD 1.08423 1.0830-31 | EURJPY 130.99 130.80-131.18 | AUDUSD 0.77164 0.7705-20 | NZDUSD 0.73623 0.7355-75 | USDCAD 1.26232 1.2609-1.2624 | EURCHF 106916 1.06705-1.07045 | USDCHF 0.98605 0.9855-0.9870 | GBPUSD 1.50377 1.5030-49 | EURGBP 0.72094 0.72005-195 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               121.14 | 120.615

EUR/USD             1.08555 | 1.0822

EUR/JPY               131.29 | 130.71

AUD/USD            0.7727 | 0.7684

NZD/USD             0.7370 | 0.7323

USD/CAD             1.2625 | 1.2597

EUR/CHF              1.0702 | 1.0670

USD/CHF             0.9874 | 0.9839

GBP/USD             1.5068 | 1.5025

EUR/GBP             0.72055 | 0.7194

 

For today

• EUR: A little bit of a choppy opening with the market opening some 10 pips lower and moving further down to breach the 1.0820 level before bouncing back and holding in the 1.0830’s, Tokyo saw the market move back to Friday’s closing levels and the market peaked through the 1.0850 areas before drifting for the balance of the session back into the 1.0830’s. New lows with the market opening to test the downside support is likely to start around the 1.0820 areas and run through to below 1.0800, weak stops probably kick in around the 1.0780 levels however, the market is already at record levels short wise for the Euro, so while the market will see the first of the QE movements today the question one needs to ask is will the QE counter the good figures we saw last week? Chances are QE holds sway however, as time goes by the news will play a stronger part as the market becomes used to the easing. Through the 1.0780 levels the market is likely to see support moving into a technical support area below the 1.0740 level with that likely to be a target initially. Topside offers light resistance into the 1.0900 areas before opening to a short squeeze through the 1.0910 levels and a potential attempt on the 1.1000, while this is a possibility with the number of shorts in the market the potential is limited by a lack of numbers today and one has to look at the continuing Greek situation.
• GBP: Early trading was unchanged from Fridays close but made headway early in the session to move above the 1.5060 from the openings around the 1.5040 areas and then slowly pushing to the 1.5070 level in limited trading. Topside potential remains with limited offers into the 1.5100 areas and a push through the level is likely to see weak stops however, the drag of the Euro remains and the ever present cross EURGBP buying into weakness. Downside buying likely into the 1.5000 levels and likely to continue until the 1.4970 level breaks and opens up a fresh attempt on the downside and 2014 July lows and stronger bids around those low 1.4800 areas.
• JPY: NFP on Friday chased the USD higher across the board and the USDJPY was no different moving off the 119.90 levels and pushing quickly through the 120.20 areas and the stops around the area, today saw the market open a little higher than the close and although early trading saw the market slip a little pushing from the opening 120.85 areas to just above 120.60 into Tokyo as the GDP figure weighed on the market, although the number was weaker than expected the recovery for the moment continues, having already broken higher on Friday today’s market had no trouble in pushing through to the 121.10 areas with news that Nippon Life is to add Yen 1T investments loans over the next 3yrs, having touched the top the market then drifted around the 121.00 areas for the session. Topside light offers into the 121.30 levels with the offers likely to strengthen as the market approaches the 122.00 areas where the market struggled, a push through that level though opens up 124-125 levels which have not been seen since 2007. Downside is against the flow to some extent however, the possibility of a sharp move to the 120.00 area is possible with bids into the 120.60 levels likely to be light and the stronger supportive areas around 120.00.
• AUD: The market opened slightly lower and early trading tilled the gap to push from the 0.7710 areas and into the high 0.7720’s before minor job ads numbers hit, with sellers then appearing in the market from real money and equity players and a steady drop to below 77 cents and into the mid 0.7680’s before holding into the later part of the session. Topside offers are light into the 0.7730 levels with weak stops likely through the 0.7750 areas opening up only to the 0.7780 areas before more light offers. With the drop in Iron ore prices a principle commodity for the Ozzie’s and several others the market in Iron has started to see the major shippers increasing the amounts being sold and those increasing amounts of the product will affect the price further and likely impact on the Oz economy. Downside market is now open for a test of those 0.7640 lows from Feb with the best support in that area, a push towards the 76 cent level is likely to see option interest appearing in the market before the market breaks quickly lower opening up further downside pressure to the 75 cent levels.

Overnight News

JPY:

BOJ Needn’t Act If CPI Heading Toward 2% as Trend: Nakaso

Desirable for FX to Be Stable, Reflect Fundamentals: BOJ Nakaso

Japan’s revised 4Q GDP Rose Annualized 1.5%; Est +2.2%

Nippon Life Plans Up to 1t Yen Investment, Loans Over 3 Yrs: NHK

Japan Jan. Current-Account Surplus 61.4b Yen; Est. +270.4b

Japan Corporate Bankruptcies in Feb. Fall 12% Y/y: Survey

CNY:

China Lowered Growth Target Is Credit Positive, Moody’s Says

NZD:

Key Says RBNZ Looking at New Tools So Doesn’t Have to Tighten

N.Z. Manufacturing Boosted by Petroleum, Meat, Dairy

AUD:

Australia Feb. ANZ Job Ads Rise 0.9% vs 1.2% in Jan.

TRY:

Turkey PM, Central Bank Chief Discuss Rising Dollar

Today’s data

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

NZD       Manufacturing Activity Q4 A -0.70% | P -1.20% | R -1.10%

JPY         Current Account (JPY) Jan A 1.06T | C 1.16T | P 0.98T | R 0.85T

JPY         GDP Q/Q Q4 (F) A 0.40% | C 0.50% | P 0.60%

JPY         GDP Annualized Q4 (F) A 1.50% | C 2.20% | P 2.20%

JPY         GDP Deflator Y/Y Q4 (F) A 2.40% | C 2.30% | P 2.30%

JPY         Eco Watchers Survey: Current Feb A 50.1 | C 46.5 | P 45.6

7:00        EUR        German Trade Balance (EUR) Jan C 20.4B | P 21.8B

9:30        EUR        Eurozone Sentix Investor Confidence Mar C 15 | P 12.4

12:15     CAD       Housing Starts Feb C 175.0K | P 187.3K

Weekend News

CNY:

China Exports Jump Amid U.S. Recovery and Trade Distortions
PBOC Governor Says China Must Address High Savings Rate: Xinhua
China Minister Says TPP to Have ‘Far-Reaching Impact’
China’s Guo Says Speculation of Him Moving to PBOC Is Rumour
China to Revise Air Pollution Law This Year, Work Report Says
China to Give More Cities Legislative Power: NPC Work Report
China Faces ‘Relatively Large’ Downward Pressure on Growth: Liu
EUR:

ECB’s Coene Says Syriza Must Accept Budget Austerity: De Tijd
ECB’s Coene Says Greeks ‘Deceived’ By Syriza Promises: Le Soir
Greece to Hold Referendum If Creditors Raise Pressure: Minister
Greece Will Use Bank Fund Reserves for Financing: Kathimerini
Support for Greek Govt. Declines in Poll: Efimerida Syntakton
Dijsselbloem Reply to Greek Letter Was Positive: Govt. Official
Dijsselbloem Tells Greece to Continue Talks With Institutions
Tsipras Said He Respects ECB’s Independence in Call With Draghi
CHF:

SNB May Boost Deposit Charge to 1.5% If Franc Strengthens: SamS
JPY:

Japan’s Abe Says No Doubt Economic Policies Producing Results
CNY/JPY:

China Overtakes North Korea as Japan’s Top Security Concern
CAD:

Bank of Canada’s Poloz Sees Early Impact of Oil Slide
Derailed BNSF Train Still Burning as Second Crash Catches Fire
CNY/HKD:

Shanghai Bourse Sees Time to Expand H.K. Stock Connect: Xinhua
RUB:

Russian Jan-Feb. Imports Fall 37% on Ruble Drop: Kommersant
Russia Arrests Two Men Linked to Putin Foe Nemtsov’s Murder
TRY:

Turkey’s Weakening Lira Nearing Real Value, Zeybekci Says
TRY: Erdogan Warns Turkish Banks Against Calling Back Loans: Hurriyet

Friday’s premiership results

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

JPY         Leading Index Jan (P) A 105.1 | C 105.9 | P 105.6

EUR        German Industrial Production M/M Jan A 0.60% | C 0.50% | P 0.10% | R 1.00%

CHF        Foreign Currency Reserves Feb A 509.3B | P 498.4B | R 498.5B

CHF        CPI M/M Feb A -0.30% | C 0.00% | P -0.40%

CHF        CPI Y/Y Feb A -0.80% | C -0.60% | P -0.50%

EUR        Eurozone GDP Q/Q Q4 (P) A 0.30% | C 0.30% | P 0.30%

CAD       Building Permits M/M Jan A -12.90% | C 5.50% | P 7.70% | R 6.10%

CAD       International Merchandise Trade (CAD) Jan A -2.45B | C -1.15B | P -0.65B | R -1.22B

CAD       Labour Productivity Q/Q Q4 A -0.10% | C 0.20% | P 0.10%

USD       Change in Non-farm Payrolls Feb A 290K | C 240K | P 257K | R 239K

USD       Unemployment Rate Feb A 5.50% | C 5.60% | P 5.70%

USD       Average Hourly Earnings M/M Feb A 0.10% | C 0.20% | P 0.50%

USD       Trade Balance Jan A -41.8B | C -$41.8B | P -$46.6B | R -45.6B

Stay lucky

Andy

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