Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close Wellington open

USDJPY 116.851 116.84-117.10 | EURUSD 1.1159 1.1150-67 | AUDUSD 0.70673 0.7065-80 | NZDUSD 0.66268 0.6610-35 | USDCAD 1.39155 1.3891-1.3915 | USDCHF 0.9911 0.9905-25 | GBPUSD 1.45003 1.4470-1.4520 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               117.47 | 116.78

EUR/USD             1.1155 | 1.1128

EUR/JPY               130.66 | 130.275

AUD/USD            0.7103 | 0.7068

NZD/USD             0.6643 | 0.6617

USD/CAD             1.3910 | 1.3870

EUR/CHF              1.10745 | 1.1055

USD/CHF             0.9942 | 0.99155

GBP/USD             1.4516 | 1.4485

EUR/GBP             0.7692 | 0.7670

For today

• EUR: opening a little lower than Friday’s close the market drifting from the opening and although there was light buying through into the Tokyo session with the market continuing its steady drift lower to test the 1.1130 levels into the grey hours, topside offers light through the 1.1200 level with stronger offers appearing from the 1.1240-60 level and likely to continue into the 1.1280 areas, with Chinese New Year and only limited data for today the market is likely to continue to consolidate for the moment, through the 1.1320 levels the market is likely to look on the USD weakness as a green light and target the 1.1500-1.1600 areas, downside bids light through to the 1.1050 areas where bids are likely to start appearing with better bids into the 1.1020 level however, its moved a little too far and while there is likely to be light offers to the 1.1100 levels these are likely to be insignificant to the market.
• GBP: A steady rise through the session having opened just below the 1.4510 levels and pushing into the 1.4520 levels as the EURGBP cross gave a little ground but it was a quiet day over all for Cable with little interest in the pair. Topside offers light through the 1.4550 levels with the 1.4600 likely to see stronger offers moving in with those offers likely to continue into the 1.4650 areas and possible weak stops beyond. Downside bids light through the 1.4500 level and likely to be stronger on a move to the 1.4450 levels with a push here opening a test of possibly stronger still around the 1.4400 level.
• JPY: USDJPY opened around the 116.90 levels and never really looked back, trading sideways between the opening and the 117.00 level the opening in Tokyo saw the market move steadily higher through the session with weakness in labour cash earnings helping the USDJPY to steadily make its way towards the 117.50 levels however, it has been a quiet session overall, Topside offers into the 117.50 area are likely to be light and then a push through to 117.80 areas will see light offers running until the market pushes through the 118.30 level and weak stops on a break through there, and while there is some congestion through to the 118.50-119.00 levels they are likely to be minor and could give way easily. Downside bids light through the 117.00 level with better bids appearing into the 116.80-50 areas and the lows last week, a push through the level though will likely see stronger bids in the 116.00 areas.
• AUD: The Oz opened around the 0.7070 levels and with rise in Job adverts the market pushed steadily through to the 71 cent level into the Tokyo session, and while the AUDJPY did move higher the majority of the movement was accounted for by the JPY leg and the Oz remained in a quiet 0.7080-0.7100 range for the session, topside offers thing through the 71 cent level and are likely to see stronger offers only once the market starts to push towards the 0.7180-0.7200 areas with offers likely to continue through the levels, downside bids into the 0.7060-0.7040 area before the likelihood of a little weakness below there and then better bids on a move through the 70 cent level and in particular below 0.6950.

Overnight News

JPY:

BOJ Releases Summary of Opinions at January Board Meeting

Japanese Buy Record 13.85 Tln Yen Long-Term Treasuries in 2015

Japan 2015 Wage Growth Slows to 0.1% Y/y, Real Wages Drop

Japan Posts 18th Straight Current-Account Surplus in December

DBJ, 3 Japan Regional Banks to Invest in Overseas Funds: Nikkei

Suga: Japan Has No Plan Now to Introduce Thaad Missile Defence

AUD:

Australia Jan. ANZ Job Ads Rise 1.0% vs -0.1% in Dec.

USD/EM:

Emerging-Market Borrowers See Dollar Flows Stall, BIS Says

KRW:

1. Korean Patrol Boat Intrudes W. Sea Border, Retreats: Yonhap

Today’s data

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

23:50     JPY         Current Account (JPY) Dec A 1.64T | C 1.59T | P 1.42T

01:30     JPY         Labour Cash Earnings Y/Y Dec A 0.10% | C 0.70% | P 0.00%

05:00     JPY         Eco Watchers Survey: Current Jan A 46.6 | C 48.5 | P 48.7

07:00     EUR        German Industrial Production M/M Dec C 0.20% | P -0.30%

09:30     EUR        Eurozone Sentix Investor Confidence Feb C 7.2 | P 9.6

13:30     CAD       Building Permits M/M Dec P -19.60%

15:00     USD       Labour Market Conditions Index Change Jan P 2.9

Weekend News

CNY:

China’s Foreign-Exchange Reserves Decline to $3.23 Trillion
PBOC to Explore Rate Corridor in Step Toward Liberalization
PBOC Seeks ‘Targeted Reserve Ratio Cut’ Measures
China to Continue Exchange-Rate Liberalization Reform: Premier
Premier Li Says China to ‘Appropriately’ Expand Total Demand
China to Promote Urbanization to Spur Domestic Demand
JPY:

New Securities Accounts in Japan Halved in January, Nikkei Says
Four Coal Plants in Japan Expected to Be Approved, Nikkei Says
USD:

Obama Says Falling Jobless Rate Shows His Policies Worked
KRW:

Defiant North Korea Launches Rocket Weeks After Nuclear Test
Impact of Rocket Launch on Market Will Be Limited: Ministry
S. Korea’s Park Calls N. Korea Rocket ’Unacceptable Provocation’
KRW/USD/JPY:

1. Korea to Talk with U.S., Japan on ’Unified Measures’: Yun
   USD/KRW:

U.S. Strongly Condemns N. Korea Missile Launch Today, Kerry Says
JPY/KRW:

Japan’s Abe Criticizes North Korea’s Long-Range Rocket Launch
RUB/CNY/KRW:

Russia, China Concerned by North Korean Rocket Plans: Ministry
OIL:

Iran Sees Oil Exports to Europe at 300,000 Barrels/Day: Shana
Iran Seeks Payment for Oil Exports in Euros: Shana
SGD:

Singapore Watching Economic Conditions Closely, PM Lee Says
RUB:

Russia Targets Deficit 3%/GDP w/Avg. Oil at $40/BBL: Siluanov
AUD:

Australia’s Turnbull Yet to Be Convinced of GST Lift Benefit

 

Harry Hindsight

• EUR: The move through the Asian session and for the most part of London was contained within a tight range as the market waited for the NFP, trading around the 1.1200 levels the market was unable to break through the 1.1220 through the Asian session and then trade below the 1.1200 levels for the most part and held above the 1.1180 area, a drop in the headline unemployment rate saw the market rise quickly to test above 1.1240 only for the NFP number show weakness and the market quickly drop back to the 1.1180 levels and then weak stops kicked in to take the market to the 1.1120 levels and bids quickly appearing to hold the market, and although there was a bounce it was limited and the market settled down to trade around the 1.1140 areas rising slowly into the close around the 1.1160 levels.
• GBP: A steadily drifting market with the opening around the 1.4580 areas slipping slowly to the 1.4560 area into the grey hours saw early London sellers pushing the market to the 1.4520 levels before the official opening and then the market traded off that level through to the NFP, a similar reaction with the market spiking into the 1.4590 levels before dropping back quickly and triggering weak stops on the move through the 1.4520 levels to trade quickly to the 1.4460 levels and basing off the level to the close regaining the 1.4500 levels.
• JPY: Apart from the NFP the USDJPY remained in a tight range through the day and into the London session unable to push beyond the 117.00 levels and tipping to its lows in Asian around the 116.60 level, the market on the release of NFP moved quickly lower on the NFP numbers and then bounced on the Unemployment rate and a rise in the Average hourly earnings numbers dipping to 116.30 and immediately snapping back to the 117.00 level and continuing to rise to above 117.40 as the follow through continued, the market then settled back to trade just below the 117.00 levels and held in the area to the close.
• AUD: Opening around the 72 cent level the market drifted in the 0.7180-0.7200 levels through to the NFP, the market initially moved to the 0.7220 level on the releases before dropping quickly back to the 0.7120 level and after a brief pause continued trading lower to push through 71 cent and gradually find support into the 0.7060 levels.

Friday’s premiership results

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

AUD       Retail Sales M/M Dec A 0.00% | C 0.40% | P 0.40%

AUD       RBA Statement on Monetary Policy

JPY         Leading Index Dec (P) A 102 | C 102.8 | P 103.5

EUR        German Factory Orders M/M Dec A -0.70% | C -0.40% | P 1.50%

CHF        Foreign Currency Reserves Jan A 575B | P 560B

USD       Trade Balance Dec A -43.4B | C -42.8B | P -$42.37B | R -43.2B

USD       Change in Non-farm Payrolls Jan A 151K | C 192K | P 292K | R 262K

USD       Unemployment Rate Jan A 4.90% | C 5.00% | P 5.00%

USD       Average Hourly Earnings M/M Jan A 0.50% | C 0.30% | P 0.00%

CAD       Trade Balance (CAD) Dec A -0.6B | C -2.2B | P -2.0B | R -1.6B

CAD       Net Change in Employment Jan A -5.7K | C 5.2K | P 22.8K

CAD       Unemployment Rate Jan A 7.20% | C 7.10% | P 7.10%

CAD       Ivey PMI Jan A 66 | C 50.3 | P 49.9

Stay lucky

Andy

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