Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 120.066 | EURUSD 1.08336 | AUDUSD 0.76539 | NZDUSD 0.7508 | USDCAD 1.26764 | USDCHF 0.96708 | GBPUSD 1.48109 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               120.37 | 119.99

EUR/USD             1.0846 | 1.07835

EUR/JPY               130.25 | 129.63

AUD/USD            0.7665 | 0.7619

NZD/USD             0.7511 | 0.7475

USD/CAD             1.2711 | 1.2672

EUR/CHF              1.0485 | 1.0460

USD/CHF             0.9704 | 0.9655

GBP/USD             1.4817 | 1.4772

EUR/GBP             0.73205 | 0.7302
For today

• EUR: The market moved into the Asian session holding its own and gaining slightly to push through the 1.0840 level into early Tokyo, real money sellers moved into the market and the market quickly made its way through the 1.0820 level and triggered weak stops on the break through the 1.0810 level and the impetus took the market into the mid 1.0780’s before finding sufficient bids to hold the market in the run to the grey hours. A push through the 1.0780 level opens up a move towards the 1.0700 level with 1.0720-30 likely to be a little bit stubborn before opening up a little, through the 1.0700 level area though the market is likely to find bids and profit taking moving in and with congestion into the 1.0650 levels and through to 1.0600 the market is likely to take its time pushing through those levels. Topside offer into the 108.50 area are likely to be light and the stronger offers are likely to be around the 1.0880-1.0900 areas with a push through to the topside a possibility once through 1.0950. Today is employment numbers and CPI and both could cause upset if they continue to weaken.
• GBP: Dragged by the Euro lower, the Cable moved quietly around the 1.4810 level only to push quickly into the 1.4790 levels as the Euro broke lower the Cable continued to drift lower over the course of the next few hours however, the movement was limited as the EURGBP cross slipped lower to test the 0.7300 levels again and Cable remained around the 1.4780 levels. Downside bids close to the market and becoming a little stronger from the 1.4750 areas and through to 1.4700, while the market has been through the level subsequent tests of the level have usually found sufficient support however, for the moment the GBP is being led by the nose by the Euro and while it may gain against the Euro the drag continues to dominate.
• JPY: USDJPY initially saw light profit taking in the early part before the Tokyo session kicked off with a solid move and fixing demand taking the market to above the 120.30 level however, overall the market was back to being contained in a narrow range with the downside bids into the 120.00 level holding the downside and a steady market holding the 120.20 levels. Topside offers are reasonably light until the market moves through the 120.50 area and then patches of resistance appear with offers every few pips on a move to the 120.80 area where they start to increase in size in front of the 121.00 levels, a push through the level will likely see strong selling in the areas up to the 121.50 levels with stops likely through the level and a move towards the 122.00 level and likely very strong offers. Downside bids are likely to be fairly weak and a push through the 119.80 level again opens up the downside 119.00 areas with likely bids into the area but weakness into the 118.50 levels.
• AUD: The early part of the session the market held in place rising only slightly through the 0.7660 levels before fresh selling from real money eased into the market and steadily pushing against hedge buying from Corp’s, the market through the 0.7640 areas was little more than a steady drift as the pressure was soaked up but one would guess good two way flows eventually saw those corp hedges winning. Downside bids continue into and through the 76 cent level and only a strong break through the 0.7560 level will open up fresh moves to the downside and the elusive 73-74 cent level all the banks were talking about before the end of the year, stops likely on the break through with weak joining break out types, Topside offers are light into the 77 cent level with weak stops through the 0.7730-40 area and opening the market for further tests to the 78 cent level however, it is becoming very congested up there and a full break out above 79 cent would be the only thing to watch for.

Overnight News

JPY:

Japan Cabinet Approval Rating Rises 0.8 Ppt to 53.6%: Sankei

Japan Exchange Group to Tighten IPO Rules: Nikkei

Aso Says Japan Cautious on AIIB; Questions Not Answered

’Impossible’ for Japan to Join AIIB at This Point in Time: Suga

Amari Says Proper Governance, Transparency Important for AIIB

Japan Won’t Join China-led AIIB for Time Being, NHK Says

USD/CNY:

Summers Says U.S. IMF Inaction Gives China’s AIIB Legitimacy

USD/JPY:

U.S., Japan have “significant gaps” on auto market access -U.S. official

CNY:

China Expects Capital, Fin. Accounts Two-Way Movement in 2015

China 4Q Current Account Surplus Revised to $67b from $61.1b

China End-2014 Overseas Financial Assets $6.41t, SAFE Says

USD:

Fed’s Fischer Says Regulators Must Keep Watch on Shadow Banking

NZD:

N.Z. Home-Building Approvals Decline for a Third Month

N.Z. Revises 4Q Labour Force Participation to 69.4% From 69.7%

N.Z. Business Confidence Gains, Adding to Signs of Growth: ANZ

AUD:

Australia’s Feb. Private New Home Sales Rise 1.1% M/m

Australia Annual Housing Credit Rises at Fastest Pace Since 2010

Australia ANZ Weekly Consumer Sentiment Rises 0.8% to 112.3

GBP:

U.K. March GfK Consumer Confidence +4 vs Est. +2

EUR:

Tsipras Says Greek Airports Concession Deal Needs to Be Reviewed

Today’s data

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

NZD       Building Permits M/M Feb A -6.30% | P -3.80% | R 4.60%

GBP       GfK Consumer Sentiment Mar A 4 | C 1 | P 1

NZD       NBNZ Business Confidence Mar A 35.8 | P 34.4

JPY         Labour Cash Earnings Y/Y Feb A -3.10% | C 0.70% | P 1.30%

05:00     JPY         Housing Starts Y/Y Feb A | C -7.00% | P -13.00%

07:55     EUR        German Unemployment Change Mar C -10K | P -20K

07:55     EUR        German Unemployment Rate Mar C 6.40% | P 6.50%

08:00     EUR        Italian Unemployment Rate Feb (P) C 12.50% | P 12.60%

08:30     GBP       Current Account (GBP) Q4 C -21.2B | P -27.0B

08:30     GBP       GDP Q/Q Q4 (F) C 0.50% | P 0.50%

08:30     GBP       Index of Services 3M/3M Jan C 0.70% | P 0.80%

09:00     EUR        Eurozone Unemployment Rate Feb C 11.20% | P 11.20%

09:00     EUR        Eurozone CPI Estimate Y/Y Mar C -0.40% | P -0.30%

09:00     EUR        Eurozone CPI – Core Y/Y Mar (A) C 0.70% | P 0.70%

12:30     CAD       GDP M/M Jan C -0.20% | P 0.30%

13:00     USD       S&P/Case-Shiller Composite-20 Y/Y Jan C 4.60% | P 4.46%

13:45     USD       Chicago PMI Mar C 52 | P 45.8

14:00    USD       Consumer Confidence Mar C 96.3 | P 96.4

Harry Hindsight              

• EUR: The Euro drifted through the session with the opening in Tokyo seeing strong cross selling entering the market and pushing the market to below the 1.0860 level before trading around the 1.0870 level for the bulk of the session, the market never recovered to the opening 1.0890 levels and then moving into early London the market again dropped with the background concerns over Greece’s ability to pay its way over the next couple of weeks and today’s deadline for reforms to appease creditors and Euro’s dipped to the 1.0820 levels and then the market moved into a choppy session through to the NYK session and only once London stepped out of the arena leaving the market trading on the 1.0810 level with none of the numbers figuring to much in the market.
• GBP: Opening around the 1.4890 level early buying saw the Cable peak through the 1.4900 level before Tokyo appeared in the market and cross selling against the Yen sent the cable lower and into the 1.4860 levels before holding around the level for several hours in slow trading, the move into the grey hours saw the market drop quickly and hold the 1.4800 areas bouncing back to that 1.4860 level. Euro’s weakness eventually dragged on the GBP as the cross maintained the opening levels for the most part and no real data for independent movement. The market started to dip further and pushed through the 1.4800 levels and triggered light stops in a move continued into the opening of the NYK session falling to the 1.4780 levels and into reasonable support, there was a brief push lower and the market tested below the 1.4760 level before snapping back and trading around the 1.4800 level for the balance of the session.
• JPY: With a quiet Asian session the market struggled to find any direction leading into the grey hours and London were quick buyers of the market and the market quickly pushed to the 119.70 area and into the first light offers and holding for the next set of buyers to appear in the NYK session, the market struggled for several hours peeking through 120 on three separate occasions before fully braking through to push at the 120.20 levels late into the session.
• AUD: With commodities still under pressure the Oz again came under steady and constant pressure through the session, opening slightly lower the market drifted through the session ever lower, the move into the London session saw an increase in the move lower and the market pushed through 77 cents with ease and then weak stops through the 0.7680, early NYK saw those stops and the market then spent most of the session basing off the 0.7640 levels with reasonable bids supporting the market as volumes dropped away into the late part of the session.

Yesterday’s premiership results

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

JPY         Industrial Production M/M Feb (P) A -3.40% | C -1.50% | P 3.70%

CHF        KOF Leading Indicator Mar A 90.8 | C 89.3 | P 90.1 | R 90.3

GBP       Mortgage Approvals Feb A 62K | C 62K | P 60.8K

GBP       M4 Money Supply M/M Feb A -0.20% | C -0.20% | P -0.80% | R -0.70%

EUR        Eurozone Business Climate Indicator Mar A 0.23 | C 0.18 | P 0.07

EUR        Eurozone Industrial Confidence Mar A -2.9 | C -4.2 | P -4.7

EUR        Eurozone Consumer Confidence Mar (F) A -3.7 | C -3.7 | P -6.7

EUR        Eurozone Economic Confidence Mar A 103.9 | C 102.5 | P 102.1 | R 102.3

EUR        Eurozone Services Confidence Mar A 6 | C 5 | P 4.5 | R 5.3

EUR        German CPI M/M Mar (P) A 0.50% | C 0.50% | P 0.90%

EUR        German CPI Y/Y Mar (P) A 0.30% | C 0.30% | P 0.10%

CAD       Industrial Product Price M/M Feb A 1.80% | C 0.50% | P -0.40% | R -0.30%

CAD       Raw Materials Price Index M/M Feb A 6.10% | C 5.00% | P -7.70% | R -7.80%

USD       Personal Income Feb A 0.40% | C 0.30% | P 0.30% | R 0.40%

USD       Personal Spending Feb A 0.10% | C 0.20% | P -0.20%

USD       PCE Deflator M/M Feb A 0.20% | C 0.20% | P -0.50% | R -0.40%

USD       PCE Deflator Y/Y Feb A 0.30% | C 0.30% | P 0.20%

USD       PCE Core M/M Feb A 0.10% | C 0.10% | P 0.10%

USD       PCE Core Y/Y Feb A 1.40% | P 1.30%

USD       Pending Home Sales M/M Feb A 3.10% | C 0.40% | P 1.70% | R 1.20%

Good Luck,

Andy

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