Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 113.46 | EURUSD 1.10136 | AUDUSD 0.74677 | NZDUSD 0.68135 | USDCAD 1.32822 | USDCHF 0.99559 | GBPUSD 1.42643 |

LMAX Highs and Lows 6am

                                High | Low

EURUSD               1.10291 | 1.10096

USDJPY                 113.516 | 112.747

GBPUSD               1.42704 | 1.42428

AUDUSD              0.74729 | 0.74180

USDCHF               0.99589 | 0.99250

USDCAD               1.33360 | 1.32841

NZDUSD               0.68011 | 0.67603

EURGBP               0.77407 | 0.77208

EURJPY                 125.010 | 124.252

EURCHF                1.09673 | 1.09440

 

For Today

• EUR: While not as quiet as yesterday the Euro found it difficult to find any independent movement and only a weakening USDJPY saw the market move out of the 1.1010-20 levels however, the move was limited and unable to push through the 1.1030 levels before slipping back and back into the previous range, Topside offers into the 1.1040-60 areas are likely to see weak stops on a push through the level before further offerings move into the market as it approaches the 1.1100 areas with the market likely to remain offered through a rally into the 1.1150 before weakening a little into the 1.1200 areas. Downside bids light through the 1.1000 levels and seeing only minor bids into the 1.0950 areas to open a fresh test through the 1.0920-00 levels.
• GBP: A steady drift from the opening around the 1.4270 levels to test to the 1.4250 areas sneaking through as the market moves into the grey hours, Topside offers into the 1.4300 levels with a little bit of congestion as the market grinds to the 1.4400 areas then the market opens up a little with a break through the level with the possibility of light stops through the level, downside light through the 1.4200 levels and likely better bids into the 1.4150 areas however, a push through the 1.4100 level will likely see stops appearing and the market seeing further weakness into the 1.4000.
• JPY: USDJPY opened just short of the 113.50 levels and drifted steadily to the 113.30 levels before the Tokyo session opened, quick buying after the poor GDP numbers saw the market drop quickly back as local banks hit the market with retail selling moving in on top of them sent the market quickly down to test the 112.80 areas before starting a steady recovery to move back above the 113.00 levels and peaking at 113.20 and a quiet second half to the session and moving into the grey hours holding in those areas. Topside offers light through the 113.80 areas with the offers becoming stronger as the market moves through the 114.00 levels, concentrations around the 114.20-50 areas will likely give way to a quick test to the 114.80 levels and further strong offerings. Light bids into the 112.70 areas will likely see weak stops through the level and then bids likely reappear as the market pushes through the 112.60 areas with better bids from the 112.20 areas.
• AUD: The Oz slipped away from the opening 0.7470 as the Sydney market saw fresh and while talk of Australian business confidence improving, the fact that the CNY trade balance was far below expectations sent the Oz slip steadily lower as the AUDJPY carry came under pressure from USDJPY selling and the CNY numbers, the market eventually found a base around the 0.7420 areas however, there was really no bounce and the market remains towards that 0.7420 areas into the grey hours. Topside offers light through the 0.7460 areas before stronger offers start to appear on a move to the 0.7480 areas and into the 75 cent levels, a break here is likely to see weak stops appearing and the market beginning to think the RBA are side lined for the time being, Downside bids into the 74 cent level are likely to be weak and any push through will likely see weak stops close to the level and the market open for a slow return to the levels at the beginning of last week with only limited support likely around the 0.7250 areas.

Overnight News

CNY:

China’s Feb. Exports Fall 25.4% Y/y in Dollar; Est. 14.5% fall

China Exports Fell Against All Trading Partners in February

CNY/JPY:

China Says Japan ‘Double Dealing;’ Not Optimistic on Ties: Wang

NZD:

Fonterra Says Exchange Rate Is High Relative to Dairy Prices

Fonterra Cuts 2015/16 Milk Pay-out Forecast Amid Global Glut

N.Z. Manufacturing Volumes Rise on Dairy, Meat, Mining

JPY:

Japan mulls second tax-hike delay as spending falls RTRS

Aso: to Weigh Both Good, Bad Factors When Raising Sales Tax

Ishihara: No Change to Picture Japan Eco Fundamentals Are Good

Japan to Set Guidelines on GPIF Investment Disclosure: Yomiuri

Japan Asset Managers to End Money Market Funds: Nikkei

Japan Revised 4Q Annualized GDP Falls 1.1%; Est. -1.5%

USD:

Bloomberg Says He Will Not Run for U.S. President in 2016

EUR:

EU Draft Foresees Speeding up EU3 Bln for Turkey to End-March

GBP/EUR:

Cameron Says EU Leaders Have Basis for a Migration Breakthrough

GBP:

U.K. LFL Feb. Retail Sales Up 0.1% Y/y, BRC Says

AUD:

RBA’s Lowe Says Low Inflation Provides Scope for Easier Policy

RBA’s Lowe Says Would Be Helpful to Have Slightly Lower Currency

Australia ANZ Weekly Consumer Confidence Rises 3.1% to 114.8

Australia Feb. Business Confidence Unchanged M/M at 3

Today’s data

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

CNY        Trade Balance Feb A $32.59B | C $50.75B | P $63.29B

NZD       Manufacturing Activity (4Q) A -1.90% | P 4.20% | R 3.60%

JPY         GDP Q/Q Q4 (F) A -0.30% | C -0.40% | P -0.40%

JPY         GDP Deflator Y/Y Q4 (F) A 1.50% | C 1.50% | P 1.50%

JPY         Current Account (JPY) Jan A 1.49T | C 1.66T | P 1.64T

GBP       BRC Sales Like-For-Like Y/Y Feb A 0.10% | C 0.40% | P 2.60%

AUD       NAB Business Confidence Feb A 3 | P 2 | R 3

JPY         Consumer Confidence Index Feb A 40.1 | C 42.2 | P 42.5

JPY         Eco Watchers Survey: Current Feb A 44.6 | C 47.5 | P 46.6

06:45     CHF        Unemployment Rate Feb C 3.50% | P 3.40%

07:00     EUR        German Industrial Production M/M Jan C 0.50% | P -1.20%

08:15     CHF        CPI M/M Feb C -0.10% | P -0.40%

08:15     CHF        CPI Y/Y Feb C -1.10% | P -1.30%

10:00     EUR        Eurozone GDP Q/Q Q4 (P) C 0.30% | P 0.30%

13:15     CAD       Housing Starts Feb C 181K | P 165.9K

13:30     CAD       Building Permits M/M Jan P 11.30%

Harry Hindsight              

• EUR: The Asian session was very quiet with the market opening around the 1.0990 areas and then holding in the area all the way through to the grey hours, early London selling then impacted the market with the market taking a dislike to the better than expected German factory order numbers and the market dropping from the 1.0990 levels to test the 1.0950 areas into the London opening, the market was then stuck on the level until the release of the US data and a worsening number saw the USD drop across the board and the Euro making steady gains into the London close testing once again above the 1.1000 areas eventually testing above the 1.1020 levels before moving quietly into the evening session trading in the 1.1010-20 areas.
• GBP: Cable was very little different to the Euro with no real news the market was pulled around in a limited fashion by the Euro in the morning session with the market drifting a little from the opening in Asia around the 1.4225 levels and pushing into the 1.4200-10 areas for the bulk of the Asian session, as with the Euro the Cable dipped as the early London dealers settled in and the market dropped back to the 1.4140 levels before the USD buying had run its course, poor labour market conditions in the US saw the USD fall back steadily over the next hour or so and Cable pushed back through the opening levels to test the 1.4280 areas as it recovered its losses and more, the late session saw GBP start to gain a little against the Euro with the cross EURGBP drifting to the 0.7715 areas having held in the 0.7735-45 areas for most of the day.
• JPY: USDJPY steadily lost ground throughout the day, with the market opening around the 113.90 levels the day was probably one of the quietest for the past 2 yrs with the market drifting steadily lower over the day, trading into the London session to just below the 113.50 areas the market held the areas through the NYK session however, once London was out of the way the market eventually tested the 113.20 areas before finishing the day around that 113.50 areas again. Even the US labour number had little impact on the pair.
• AUD: One of the bigger gainers on the day, which isn’t surprising given the amount of movement overall in the FX Markets, trading quietly from a low opening to the week, with the market opening around the 0.7410 areas and some 30 pips adrift of the closing rates on Friday the Oz drifted in the Asian session around those opening levels with only minor attempts to the 74 cent level until moving into the London session, dipping below the 74 cent levels a couple of times before moving towards the NYK session and some light buying reappearing to take the market back to the 0.7420 levels and filling the gap on the charts from the opening, the poor US numbers then gave the Oz further impetus to the topside and the market rallied steadily over the course of the session to reach above the 0.7480 levels and holding to the close just below there.

Yesterday’s premiership results

JPY         Leading Index Jan (P) A 101.4 | C 101.6 | P 102.1

EUR        German Factory Orders M/M Jan A -0.10% | C -0.40% | P -0.70%

CHF        Foreign Currency Reserves Feb A 571B | P 575B

EUR        Eurozone Sentix Investor Confidence Mar A 5.5 | C 8.5 | P 6

USD       Labour Market Conditions Index Change Feb A -2.4 | P 0.4 | R -0.8

Good Luck,

Andy

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