Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 112.99 | EURUSD 1.10182 | AUDUSD 0.72371 | NZDUSD 0.66976 | USDCAD 1.35297 | USDCHF 0.99034 | GBPUSD 1.39618 |

LMAX Highs and Lows 6am

                                High | Low

EURUSD               1.10683 | 1.10141

USDJPY                 113.224 | 112.687

GBPUSD               1.40132 | 1.39493

AUDUSD              0.72563 | 0.72238

USDCHF               0.99070 | 0.98726

USDCAD               1.35498 | 1.35290

NZDUSD               0.67751 | 0.67221

EURGBP               0.79225 | 0.78917

EURJPY                 125.008 | 124.400

EURCHF                1.09289 | 1.09130

 

For Today

• EUR: Early G20 commentary helped the early Euro rise with the market pushing from the opening levels to trade steadily into the 1.1060 levels from the opening in Tokyo, however, once above the level the market struggled to push much further and held for the most part above that 1.1060 levels into the grey hours, Topside offers likely to be fairly strong on a move towards the 1.1100 levels for the moment with offers likely to extend through the level and stronger congestion as the market moves into the 1.1140-60 areas with light stops possible through those levels before running into the 1.1200 areas and further offers, Downside bids likely to be light to the 1.1000 areas with possible weak stops appearing if the market can break cleanly through the 1.0970 areas before renewed buying interest as the market approaches the weeks lows. Plenty of data today to watch for with Eurozone confidence numbers before the Trade balance and GDP numbers in the US.
• GBP: Cable saw steady buying into the Tokyo session after a dull pre-market session, with the market opening around the 1.3960 levels and moving steadily to the 1.3980 areas however, GBP was unable to keep pace with the Euro as it moved higher and although into the mid-session some light stops were triggered on a move through the 1.4000 areas the market couldn’t maintain its levels and started to drift from the highs into the grey hours dipping quickly to the 1.3960 opening area again before finding some light buying. Topside offers light through the 1.4000 levels and a push through the 1.4050 areas could see some light stops building as the 1.4100 levels becomes vulnerable with possibly only light offerings into the area and an opening to the 1.4150 levels and a glimmer of light to the topside however, this is dependent on the ever present Brexit talk as well as the numbers in Europe and US today, downside bids into the 1.3900 levels are possibly light and more speculative than anything else for the moment with a move through the level exposing further downside potential with limited bids into the 1.3850 areas and sentimental levels until the market moves onto the 1.37 handle where the likelihood of better bids may appear.
• JPY: The USD was better bid from the Sydney market onwards with the market pushing through the opening 113.00 level and trading into the Tokyo opening to above the 113.20 levels before running out of steam and drifting back slowly through the 113.00 and triggering weak stops to test to the 112.70 areas, the movement after that was reasonably quiet and the market remained around the 112.85 for a few hours before again dropping back and dipping lightly through the 112.60 areas and into the grey hours. Topside offers likely to be very limited into the 113.20 areas and only limited possibilities of stops on a move through the highs and then weakness into the 113.80 levels, and further offers likely to appear on a move through the 114.00 areas. Downside bids light down to the 112.50 areas and a push through the 112.40 level is likely to see some weak stops and the 112.00 possibly tested again however, if everything remains in line the USDJPY is likely to be very quiet and only the US numbers could upset the apple cart.
• AUD: Early gains in the Oz saw the market start to rise from its lows around the 0.7220 areas and push through the 0.7250 levels into the Tokyo session before slipping back and hold the 0.7240 areas for a long proportion of the session, however the closer the market came to the end of Sydney the weaker it became and the market drifted into the grey hours testing the day’s lows. Topside offers remain into the 0.7270-0.7300 levels with the market struggling for the weak every time it approached the 0.7260 levels and running out of impetus on those moves, a push through the 73 cent levels see’s those offers likely to continue and the prospect of RBA chatter appearing in the market, Downside is light through to the 71 cent levels and could see light bids building along the way however, once the market moves through the 70 cent level the bids grow dramatically and are likely to continue through the 69 cent level.

Overnight News

G20:

Zhou Says G20 to Improve Coordination on Global Recovery

Germany’s Schaeuble Opposes Any G-20 Fiscal Stimulus Package

IMF:

IMF’s Lagarde Says Growth Still Seen Even as Risks Materialize

IMF/CNY:

IMF Recommends China Growth Rate Target of 6-6.5%: Lagarde

CNY:

PBOC’s Zhou Says China Has Monetary Policy Space, Tools

PBOC Says Monetary Policy Is Prudent With Slight Easing Bias

PBOC Governor Zhou Says Currency Basket Becoming More Important

Banks’ Yuan Positions No Longer Reflect Capital Flow: PBOC

China’s Individual Home Loans Are Safe, PBOC’s Zhou Says

China’s Lou: We Have Fiscal Space, Deficit Will Be Expanded

PBOC Governor Urges Emphasis on Fiscal, Structural Policies

JPY/CNY:

BOJ’s Kuroda Says Chance of Hard Landing for China Is Low

JPY:

Kuroda: No Plan to Cut Negative Rates Based on Fixed Schedule

Ishihara: Cabinet Office Will Check Progress of Extra Budget

Japan’s Aso: Not Considering Another Supplemental Budget Now

Japan Opposition DPJ, Innovation Party Agree to Merge, NHK Says

Japan Former FX Chief: Debate on Stimulus Should Begin Soon

Japan Jan. Core Consumer Prices Unchanged Y/y; Est. 0%

Japan Census Shows First Decline in Population on Record

GBP:

BOE’s Carney Says Limits to What Negative Rates Can Achieve

U.K. Feb. GfK Consumer Confidence Zero vs Est. +3

BOE’s Carney Sees ‘Sizable Downside Risks,’ Telegraph Reports

NZD:

New Zealand Posts Trade Surplus as Dairy Exports Rise

New Zealand Central Bank Says It Sold Net NZ$1 Mio in January

Today’s data

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

NZD       Trade Balance (NZD) Jan A 8M | C -250M | P -53M | R -38M

JPY         National CPI Core Y/Y Jan A 0.00% | C -0.20% | P 0.10%

JPY         Tokyo CPI Ex-Fresh Food Y/Y Feb A -0.10% | C 0.00% | P -0.10%

GBP       GfK Consumer Sentiment Feb A 0 | C 3 | P 4

10:00     EUR        Eurozone Business Climate Indicator Feb P 0.29

10:00     EUR        Eurozone Economic Confidence Feb P 105

10:00     EUR        Eurozone Industrial Confidence Feb P -3.2

10:00     EUR        Eurozone Services Confidence Feb P 11.6

10:00     EUR        Eurozone Consumer Confidence Feb (F) P -8.8

13:00     EUR        German CPI M/M Feb (P) C 0.50% | P -0.80%

13:00     EUR        German CPI Y/Y Feb (P) C 0.20% | P 0.50%

13:30     USD       Goods Trade Balance Jan C -61.1B | P -61.5B

13:30     USD       GDP (Annualized) Q4 (S) C 0.30% | P 0.70%

13:30     USD       GDP Price Index Q4 (S) C 0.80% | P 0.80%

15:00     USD       Personal Income Jan C 0.40% | P 0.30%

15:00     USD       Personal Spending Jan C 0.20% | P 0.00%

15:00     USD       PCE Deflator M/M Jan P -0.10%

15:00     USD       PCE Deflator Y/Y Jan P 0.60%

15:00     USD       PCE Core M/M Jan C 0.10% | P 0.00%

15:00     USD       PCE Core Y/Y Jan P 1.40%

15:00     USD       U. of Michigan Sentiment Feb (F) C 91.1 | P 90.7

Harry Hindsight              

• EUR: Opening around the 1.1015 levels the market held in a tight range into the Tokyo session and quiet buying took the market above the 1.1020 levels into the mid-session then edging slightly higher as the market moved towards the grey hours, light early London selling saw the market moved the market lower and the selling continued into the opening levels however, the market continued to hold the 1.1000 levels into the European numbers and while the numbers were unimpressive the market managed to reject the level and quietly move back towards the high through to the NYK session and EURGBP selling moved in and the Euro dropped down through the 1.1000 levels and making lows into the 1.0980’s before bouncing, the move back was as quick as the drop and the market was again into the 1.1020 areas and ranging tightly through the session, a weak break higher to the 1.1050 levels was quickly sold back and the market settled towards the opening levels.
• GBP: Early trading was quiet and the range increased through the session however, the market remained centred on the 1.3930 areas for the move into the grey hours, very little excitement into the UK numbers saw the market dip close to the 1.3900 levels before holding and moving quietly into the NYK session and EURGBP selling and the Cable was able to rise as the market squeezed through the 1.3950 levels and trading towards the 1.4000 levels before reversing those gains and attempting the downside again with the lows being rejected the market again made its way quietly to the 1.3950 levels and slowly this time pushed higher but with little volume to sustain the rally and the market finishing around the 1.3960 areas.
• JPY: USDJPY stuttered at the beginning dipping to the 111.90 levels before early Tokyo started to move into the market and the tentative recovery began moving into the Tokyo session pushing to the 112.20 levels and light offers the market eventually broke through triggering some weak stops and the market pushed to the 112.40 levels and another period of light offers before again moving 20 pips higher and to the 112.60 areas, the move into the grey hours saw the gains quickly lost and the London session again saw the market back on the 112.00 areas for much of the early London session, the move into NYK saw the USD strengthening before pushing through the 112.50-60 areas and quickly through to the 112.90’s before running out of steam and as a quiet meandering market to the close with the market extending the highs only slightly on a push to 113.00 and finishing close to those highs.
• AUD: Opening just below the 72 cent levels the market drifted into the Private Capital expenditure numbers with a better number the number moved quickly above the 72 cent levels before dropping back quickly as the good sentiment was ignored and the market traded around the 0.7170 levels, whether the market believes that the good number is offset by the weakening mining industry remains to be see however, while early London remained flat and in line with the Asian session the move towards the NYK session saw solid buying moving in to take the market through the 72 cent levels and hold through the bulk of the NYK session above that level and from there the Oil market took over with a quick rise from the $32 levels to test towards $34 and the Oz quickly followed the move pushing above the 0.7240 levels and finishing the day just short of the highs.

Yesterday’s premiership results

AUD       Private Capital Expenditure Q4 A 0.80% | C -3.00% | P -9.20% | R -8.40%

EUR        German GfK Consumer Sentiment Mar A 9.5 | C 9.2 | P 9.4

EUR        Eurozone M3 Y/Y Jan A 5.00% | C 4.70% | P 4.70%

GBP       GDP Q/Q Q4 (P) A 0.50% | C 0.50% | P 0.50%

GBP       Index of Services 3M/3M Dec A 0.70% | C 0.70% | P 0.60%

EUR        Eurozone CPI M/M Jan A -1.40% | C 0.00% | P 0.00%

EUR        Eurozone CPI Y/Y Jan (F) A 0.30% | C 0.40% | P 0.40%

EUR        Eurozone CPI – Core Y/Y Jan (F) A 1.00% | C 1.00% | P 1.00%

USD       Initial Jobless Claims (FEB 20) A 272K | C 271K | P 262K

USD       Durable Goods Orders Jan (P) A 4.90% | C 3.00% | P -5.00%

USD       Durables Ex Transportation Jan (P) A 1.80% | C -0.30% | P -1.00%

USD       House Price Index M/M Dec A 0.40% | C 0.50% | P 0.50%

Good Luck,

Andy

Any opinions, news, research, analyses, prices or other information contained on this Blog, whether by LMAX, its employees, partners or contributors, does not constitute investment advice nor has it been prepared in accordance with legal requirements designed to promote the independence of investment research. Further, the material contained within this Blog does not contain (and should not be construed as containing) investment advice or an investment recommendation, or an offer of, or solicitation for, a transaction in any financial instrument. Whilst information provided on this Blog may help with your investment research you must consider carefully whether you should make (or refrain from making) investment or other decisions based on what you see without doing further research on the investments you are interested in. Participating in this Blog cannot be a substitute for obtaining advice from an appropriate expert independent adviser who takes into account your circumstances and specific investment needs in selected investments that are appropriate for you. LMAX has not verified the accuracy or basis-in-fact of any claim or statement made by any third parties as comments for every Blog entry.

LMAX will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. No representation or warranty is given as to the accuracy or completeness of the above information. While the material produced in this Blog was obtained from sources deemed to be reliable, LMAX does not provide any guarantees about the reliability of such sources.

Consequently any person acting on it does so entirely at his or her own risk.

If you currently hold an account with LMAX for the purposes of trading FX and CFD’s, you are encouraged to use a different Username and Password to access the Blog or any other online systems. The Blog is a place to learn, discuss and share information and ideas with Blog followers. It is not a place to slander, use unacceptable language or to promote LMAX or any other FX, Spread Betting and CFD provider and any such postings, excessive or unjust comments and attacks will not be allowed and will be removed from the site immediately.