Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 119.756 | EURUSD 1.07629 | AUDUSD 0.75998 | NZDUSD 0.74607 | USDCAD 1.26235 | USDCHF 0.96698 | GBPUSD 1.48237 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               119.76 | 119.515

EUR/USD             1.07775 | 1.075

EUR/JPY               128.97 | 128.615

AUD/USD            0.7610 | 0.7568

NZD/USD             0.7477 | 0.7425

USD/CAD             1.2627 | 1.2600

EUR/CHF              1.0410 | 1.03965

USD/CHF             0.96745 | 0.96495

GBP/USD             1.4855 | 1.4817

EUR/GBP             0.7263 | 0.72535
For today

• EUR: A tough day with early closing in Oz and NZ with light volumes for the most part with only minor strength appearing around the 1.0750 level and then to the topside, just above 1.0775 in a very range bound session. Topside offers from the highs onwards however, the stronger offers appear around the 1.0800 level and a clear break through the 1.0810 areas should see weak stops appearing before running into further congestion from the 1.0820 level and likely offers every 20 pips or so before being close to test the 1.0900 levels, these are likely to be fairly weak and the 1.1000 levels could open up for testing in a last gasp attempt before the long weekend in Europe. Downside bids appear into the 1.0750 levels with a push through the level likely to run into further support in the 1.0720 levels and into the 1.0700 levels, a break through the 1.0680 levels will see the market open for a test lower and a push towards the 1.0600 level will leave the 1.1000 level all but a memory.
• GBP: Cable opened around the 1.4825 level and drifted through the session touching on slightly below the 1.4820 level before rising in late trading to test the 1.4840 levels in very light volumes. Light offers around the 1.4850 levels opens up further tests to the 1.4870 level and better offers running to 1.4900 levels and then a possible break to the 1.5000 levels, Downside 1.4800 level is less likely to have decent amounts however, what there are, are likely to only slow a move to the better bids into the 1.4700 levels and the market is likely to be dominated by the Euro’s again.
• JPY: USDJPY has fallen into a very narrow range as the markets start to close for the week and liquidity falls off, moving from the opening around the 119.70 and trading into the mid 119.50’s and back to the 119.70’s and continuing to move between the two in very quiet trading with cross Yen doing particularly more than the straight USDJPY. Topside offers light into the well traversed 119.90-120.10 areas with a break above those levels only likely to run into further resistance into the 120.40 levels from exporters. Downside bids into the 119.50 levels have held for the past 24hrs but a concerted effort would break the level fairly easily and open up stronger bids into the 119.20-119.00 levels a dip through the 118.80 will see weak stops appearing in the market however, whether today would have the strength to move that far is debatable and yield players are likely to take advantage.
• AUD: With liquidity drying up for the long weekend the market tested the lows pushing against the resting bids in the market on two separate pushes, and for the moment the downside still holds above the 0.7560 lows from earlier in the month, downside bids are still likely to be strong however, what was there may have been pulled exposing the downside and a push through the lows and possibly through the 0.7550 level will trigger stops and a break out to the downside and 73-74 cents will be only limited by possible option plays around 75 cent. Topside offer are light through 76 cents and only once the market is through and testing above 0.7650 will the market start to find sufficient resistance starting to form.

Overnight News

EUR:

ECB raised emergency funding cap for Greek banks

NZD:

Fonterra’s global dairy trade price index falls 10.8% 2^nd largest fall since Jly 2010

AUD:

Australia job vacancies hit 30 month high in Feb Qtr.

Today’s data

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

AUD       TD Securities Inflation M/M Mar A 0.40% | P 0.00%

JPY         Monetary Base Y/Y Mar  A 35.20% | C 35.30% | P 36.70%

AUD       Trade Balance (AUD) Feb A -1.26B | C -1.25B | P -0.98B | R -1.00B

GBP       Construction PMI Mar C 60.4 | P 60.1

11:30     USD       Challenger Job Cuts Y/Y Mar P 20.90%

12:30     CAD       International Merchandise Trade (CAD) Feb C -1.80B | P -2.45B

12:30     USD       Initial Jobless Claims (MAR 28) C 285K | P 282K

12:30     USD       Trade Balance Feb C -$41.0B | P -$41.8B

14:00    USD       Factory Orders Feb C 0.40% | P -0.20%

Harry Hindsight              

• EUR: A choppy day overall but range bound, opening around the 1.0735 areas and trading quietly into the Tokyo session and rising quickly on the back of the Chinese release effected by movements in the Asian markets, just prior to the release the S&P saw quick selling in a suggestive move and the rest as they say was history with the Euro moving to the 1.0780 levels before finding offers sufficient to slow the ascent. The market held for a few hours around the level before slowly pushing through to the 1.0790 levels before moving into the grey hours and the inevitable sellers as the Greek situation rumbles on. PMI numbers in Italy and the Eurozone did very little to support the Euro and the market dropped quickly through to the London opening around 1.0750 and continuing to touch the 1.0720 bids. The market then moved off the lows and pushing to the 1.0770 levels. The move into the NYK session saw the market gap with a poorer than expected ADP employment number in the US and touching the 1.0800 in a quick stab higher before reversing to the 1.0770 level again, poor ISM numbers did little to help however, this choppiness persisted with the market dropping away to recover again before narrowing down to the 1.0760-70 areas into the close and reasonable volume over the course of the day.
• GBP: Early trading saw the Cable rising as USD saw a set back after the CNY numbers, the market moved off the 1.4820 levels and quickly pushed to the 1.4870 levels before holding above the 1.4860 levels until slowly slipping lower into the London opening with initial EURGBP selling moving in before the Cable broke through 1.4820 and weak stops triggered and an empty market and the fall continued to 1.4740 before finding enough to hold the market, PMI numbers were partially to blame with a slightly weak reading on present and past, the market did eventually recover however it took most of the session to push back to the 1.4820-30 areas and GBP lost ground against the EURGBP which made its way towards the 0.7300 levels before slipping back to the 0.7260’s as Cable slowly made it back with a long run holding the levels into the close.
• JPY: A larger range than the previous 24hrs however, the result was the same with the market unable to break through either side, The market opened around the 120.10 levels before moving lower as the USD dropped quickly after the CNY numbers, dipping to make the lows just below the 119.50 level and holding into the grey hours in the area before moving back towards the opening levels as the market reversed, London opening was a slow affair and the USDJPY held just below the 120.00 areas that is until the European numbers boosted the USD higher and a quick push to above the 120.30 to make the highs, US numbers again sent the market lower as the USD fell back over the course of both sets and the market then struggled around the 11960-70 levels for the rest of what became a dull session for the pair.
• AUD: CNY numbers set the tone for the early part moving from the opening around 0.7610 levels and heading quickly to the 0.7660 levels on the release, the market to the topside and ran out of steam and the general movement was again lower, moving to the early range and then moving into London with strong sellers appearing in the market and weak stops triggered in a move to the 0.7590 level and the waiting bids. The market moved off the lows and gradually made its way back to the opening levels with small jumps on the US data releases but spent the end of the session drifting back to the 76 cent level again.

Yesterday’s premiership results

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

JPY         Tankan Large Manufacturers Index Q1 A 12 | C 14 | P 12

JPY         Tankan Non-Manufacturing Index Q1 A 19 | C 17 | P 16

AUD       Building Approvals M/M Feb A -3.20% | C -6.00% | P 7.90% | R 5.90%

CNY        Manufacturing PMI Mar A 50.1 | C 49.7 | P 49.9

CNY        Non-manufacturing PMI Mar A 53.7 | P 53.9

JPY         Manufacturing PMI Mar (F) A 50.3 | C 50.4 | P 50.4

CNY        HSBC China Manufacturing PMI Mar (F) A 49.6 | C 49.4 | P 49.2

CHF        SVME-PMI Mar A 47.9 | C 47.9 | P 47.3

EUR        Italy Manufacturing PMI Mar A 53.3 | C 51.9 | P 51.9

EUR        Eurozone Manufacturing PMI Mar (F) A 52.2 | C 51.9 | P 51.9

GBP       PMI Manufacturing Mar  A 54.4 | C 54.5 | P 54.1 | R 54

USD       ADP Employment Change Mar A 189K | C 225K | P 212K | R 214K

USD       Construction Spending M/M Feb A -0.10% | C 0.00% | P -1.10%

USD       ISM Manufacturing Mar A 51.5 | C 52.5 | P 52.9

USD       ISM Prices Paid Mar A 39 | C 37 | P 35

USD       Crude Oil Inventories A 4.8M | C 4.2M | P 8.2M

Good Luck,

Andy

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