Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 112.918 | EURUSD 1.10291 | AUDUSD 0.72272 | NZDUSD 0.67219 | USDCAD 1.37067 | USDCHF 0.9996 | GBPUSD 1.41499 |

LMAX Highs and Lows 6am

                                High | Low

EURUSD               1.10210 | 1.1049

USDJPY                 113.050 | 111.966

GBPUSD               1.41554 | 1.41073

AUDUSD              0.72437 | 0.72128

USDCHF               1.00000 | 0.99624

USDCAD               1.37269 | 1.36962

NZDUSD               0.67134 | 0.66885

EURGBP               0.78301 | 0.77902

EURJPY                 124.620 | 123.709

EURCHF                1.10287 | 1.09953

 

For Today

• EUR: A quiet steady session with the Euro’s lifting off the lows just above the 1.1020 levels and pushing towards the 1.1050 level, the market held above the 1.1040 levels for several hours before Middle Eastern traders moved into to drift the market lower and down towards the opening 1.1030 opening area. Topside light offers through the 1.1040 levels and likely to continue through to the 1.1060 levels with weakness then beyond with patches of offers likely to be around the 1.1090 areas and likely weak stops on a push through the 1.1100 areas before slightly stronger offers appear as the market approaches the 1.1120 area, a move towards the 1.1140-60 area is likely to find better offers however a squeeze through the 1.1200 levels again opens up the topside for further tests. Downside bids into the 1.1020 areas and on suspects that the bids are likely to be superficial at best with the level being more sentimental than anything else and the market quickly opening on a break through the 1.0980 areas for a likely test to the 1.0920 areas and better bids.
• GBP: A very quiet session with the market opening around the 1.4150 levels and slowly drifting down to the 1.4120 levels on Brexit weakness, the market then broadly held around the level until the grey hours, Downside bids light through the 1.4100 levels having already pushed through on the previous session however, better bids are likely to appear on a move towards the 1.4050 areas with strong sentimental and technical levels around the 1.4000 levels with the 2010 lows becoming vulnerable. Topside offers are likely to be very week through to the 1.4250 levels with this level likely to become a target if the market moves through the 1.4200 levels, a lush through the 1.4250 area could see a small squeeze higher with congestion around the 1.4300 level but likely to be weak.
• JPY: USDJPY opened around the 112.90 levels and initially tested through the 113.00 levels before the Tokyo opening however, that strength soon disappeared, with doubts about whether a supplementary budget is likely in early March left the market quickly running lower and continuing the move, with Yields falling ahead of the 40 year debt auction today the market eventually tested the 112.00 levels for several hours before lifting quickly back to above the 112.50 on a small squeeze before holding into the grey hours just short of the level. Downside bids into the 112.00 now very light with a push through the 111.80 level likely to see stops appearing and the 111.20 areas possibly the stronger bidding area. Topside offers through the 112.50 level is likely to be light with better offers into the 113.00-20 levels and then patchy through 113.40-60 before the market opens to the 114.00 levels and a similar story.
• AUD: A quiet session for the Oz with the market struggling to expand on yesterday’s highs and holding around the 0.7230 levels for the most part in a quiet session with only limited news for the Oz. However a push through the 0.7260 level will likely see weak stops appearing and the market again testing the 0.7300 levels however, a push through the level is likely to see a mixture with the offers likely to prove stronger, with a well-tested and failed 0.7300-0.7400 range over the past few months. Downside bids light into the 72 cent level and the bids start to stiffen only slightly on a move back to the 71 cent levels,

Overnight News

JPY:

Kuroda: Simply Increasing Monetary Base Won’t Raise Prices

Abe Govt. Targets Early March to Send TPP Deal to Japan’s Diet

Aso: Can’t Say If Govt. Will Compile Another Supplementary Budget

Kuroda: BOJ and Govt. Officials Didn’t Contact Media on Neg. Rate

Japan Considers Partial Tax Waiver for New-Car Buyers: Nikkei

CNY:

China Says Sharp Yuan Drop Not to Benefit Exporters, Importers

CSRC’s Liu Said to Urge Supervision in First Comments as Chair

GBP:

200 Business Leaders Warn Against Brexit in Letter: Times

AUD:

Australia ANZ Weekly Consumer Confidence Rises 0.6% to 114.3

Today’s data

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

07:00     EUR        German GDP Q/Q Q4 (F) C 0.30% | P 0.30%

09:00     EUR        German IFO – Business Climate Feb C 106.8 | P 107.3

09:00     EUR        German IFO – Current Assessment Feb C 112.2 | P 112.5

09:00     EUR        German IFO – Expectations Feb C 102 | P 102.4

14:00     USD       S&P/Case-Shiller Composite-20 Y/Y Dec C 5.60% | P 5.80%

15:00     USD       Consumer Confidence Feb C 97.5 | P 98.1

15:00     USD       Existing Home Sales Jan C 5.42M | P 5.46M

Harry Hindsight              

• EUR: Opening slightly lower than Fridays close the market traded in a tight range through the Asian session moving from the opening 1.1120 levels to drift into the 1.1105 areas and then held around the 1.1110 areas into the grey hours, the selling that started in Cable infected the Euro market and the drag lower saw the market move into the official opening in London below the 1.1100 level and although the market held for the first two hours once all the data was out the market dropped quickly lower and triggered weak stops on the move through the 1.1080 levels and then a brief supportive period before slowly giving way and pushing through to the 1.1040 levels and stronger bids moved in around the 1.1020 areas and through to the 1.1000 just below the lows, the lows were made at the start of the NYK session and from that point on the market moved quietly through the session trading in the 1.1010-30 through to the close.
• GBP: Early pre market saw the Cable collapse to the 1.4250 areas as the market absorbed the comments from the Mayor of London Boris Johnson and his allegiance to the Brexit camp, the official opening saw the Cable open just below the 1.4300 levels and then dip towards the pre-opening levels and then hold in a quiet market through to the grey hours, early London were quick sellers and the market again dipped quickly this time to the 1.4200 levels before slowing and drifting steadily lower through the session into the NYK session testing below the 1.4100 levels towards the 1.4060 levels before finding some steady buying emerge to bring the market back to the 1.4150 levels and a quiet trading range around those levels to the close. EURGBP saw very little action when compared to the relative moves with the range moving off the 0.7770 levels to top above 0.7840 before dropping back to trade quietly sub 0.7800.
• JPY: While Cable dropped on the opening the opening for the USD was steady until the move into the Tokyo session and the USDJPY pushed quickly through to the 113.00 levels and then trading in a narrow range through to the London session for the most part between the 112.80-113.00 levels, the move into the London session saw the USD steadily rise through to the pre-NYK area testing the 113.40 levels before drifting through the session in a very quiet day overall with the market focused on the chances of Brexit.
• AUD: With the commodity markets found themselves moving steadily higher through the day following the track of the Crude market, opening initially around the 0.7150 levels the market traded to the 0.7140 levels before steadily starting to climb through the Asian session to test the 0.7180 resistance level, buyers into the London session pushed the market towards the 72 cent levels and the market held through early London and into the NYK session before renewing the move and a continuing steady climb through towards the 0.7250 levels, however, a quiet market saw the end to the rally in both the Oz and the Crude and the Oz held the 0.7230 levels to the close.

Yesterday’s premiership results

JPY         PMI Manufacturing Feb (P) A 50.2 | C 52 | P 52.3

EUR        France Manufacturing PMI Feb (P) A 50.3 | C 49.9 | P 50

EUR        France Services PMI Feb (P) A 49.8 | C 50.4 | P 50.3

CHF        Producer & Import Prices M/M Jan A -0.40% | C -0.20% | P -0.40%

CHF        Producer & Import Prices Y/Y Jan A -5.30% | P -5.50%

EUR        Germany Manufacturing PMI Feb (P) A 50.2 | C 52.1 | P 52.3

EUR        Germany Services PMI Feb (P) A 55.1 | C 54.8 | P 55

EUR        Eurozone Manufacturing PMI Feb (P) A 51 | C 52.1 | P 52.3

EUR        Eurozone Services PMI Feb (P) A 53 | C 53.4 | P 53.6

GBP       CBI Trends Total Orders Feb A -17 | C -12 | P -15

Good Luck,

Andy

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