Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 113.22 | EURUSD 1.1179 | AUDUSD 0.7454 | NZDUSD 0.66567 | USDCAD 1.33447 | USDCHF 0.98506 | GBPUSD 1.42804 |

LMAX Highs and Lows 6am

                                High | Low

EURUSD               1.12101 | 1.11631

USDJPY                 113.588 | 112.763

GBPUSD               1.42919 | 1.42630

AUDUSD              0.74989 | 0.74464

USDCHF               0.98584 | 0.98290

USDCAD               1.33579 | 1.32655

NZDUSD               0.66998 | 0.66588

EURGBP               0.78471 | 0.78208

EURJPY                 126.823 | 126.069

EURCHF                1.10171 | 1.10030

 

For Today

• EUR: Not quite as quiet as yesterday’s Asian session with the market opening around the 1.1180 levels the market limped through into the Tokyo session testing to the 1.1170 level and then steadily climbing as EURJPY buying moved into the market and the Euro tested through the 1.1200 areas again and to the 1.1210 level, after the early buying dried up the market started to drift steadily moving back through to test to new lows for the day around the 1.1165 areas, Topside offers through the 1.1220 areas with possibly stronger offers through to the 1.1240-60 areas and then the target of 1.1300 opening for the market, Downside has limited bids into the 1.1120 areas and weakness likely through the 1.1080 areas and into the 1.1040 areas with stronger bids likely into the 1.1000 areas.
• GBP: Opening around the 1.4290 areas the market cantered around the 1.4280 for the session drifting into the 1.4260’s but unable to challenge those opening levels. Topside offers through the 1.4300 levels remain in play with congestion likely to continue through to the 1.4350 areas with offers likely to increase through into the 1.4400, Downside bids are limited into the 1.4250 levels and the increasing on a move to the 1.4200 areas with some limited congestion to the 1.4150. Trade balance numbers could decide the movement on the day.
• JPY: A steady recovery over the course of the day so far however, early selling in the EURJPY cross saw the USDJPY testing back to the 112.80 areas before the Tokyo opening and a steady move through the session to test to the 113.60 areas and then drifting to the grey hours holding the 113.40 areas. Topside offers are likely to reappear through the 114.00 areas and increasing into the 114.40-50 areas before stronger offers again appear towards the 115.00 areas. Downside bids are light into the 112.80-113.00 areas however, with stops likely below the level the 112.40-60 level is possibly key to any deeper move into the 112.00 levels and beyond.
• AUD: The Oz recovered much of its losses on its limited action yesterday, with the market pushing off the 0.7450 levels and testing to the 0.7490 areas into the Tokyo session with AUDJPY buying a focus for the market however, the 75 cent level again seemed to be elusive through the session with the market just falling short of the level and the possibility of weak stops not likely until through the 0.7540 areas, downside bids light through the 0.7450-30 levels and a push through the 74 cent level likely to see stops appearing and the market opening to a possibility of a slow grind lower through the 73 cent levels.

Overnight News

JPY:

Some Japan Officials Call for 10t Yen Stimulus Package: Reuters

Japan big manufacturers’ mood worsens in Jan-March -govt RTRS

Abe Aide Etsuro Honda Named Japan Envoy to Switzerland

CNY:

PBOC’s Yi Reiterates Monetary Policy Direction Unchanged: Rtrs

PBOC Has No Plan to Print Yuan in Large Denominations: News

GBP:

U.K. GDP Forecasts Cut by BCC; ICAEW Says Investment Will Fall

NZD:

New Zealand February Home Sales Rise 5.7% From Year Ago

NZ Housing Market More Active Outside Auckland, REINZ Says

Today’s data

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

NZD       Business NZ Manufacturing Index Feb A 56 | P 57.9 | R 58

JPY         BSI Large Manufacturing Q/Q Q1 A -7.9 | C 4.2 | P 3.8

07:00     EUR        German CPI M/M Feb (F) C 0.40% | P 0.40%

07:00     EUR        German CPI Y/Y Feb (F) C 0.00% | P 0.00%

09:30     GBP       Visible Trade Balance (GBP) Jan C -10.3B | P -9.9B

09:30     GBP       Construction Output M/M Jan C 0.40% | P 1.50%

13:30     CAD       Net Change in Employment Feb C 10.1K | P -5.7K

13:30     CAD       Unemployment Rate Feb C 7.20% | P 7.20%

13:30     USD       Import Price Index M/M Feb C -0.80% | P -1.10%

Harry Hindsight              

• EUR: Opening around the 1.1000 areas the market drifted through the Asian session with light selling as the market adjusted ahead of the ECB announcement with the market drifting through the 1.0980 levels and triggering some weak stops to trade to the 1.0970 levels and then holding through into the London session, London remained quiet with the market struggling for volume until the rate announcement, another movement in the deposit rate by -0.1% and the lending rate reduced to 0.0%, with non-bank bonds eligible for the pool of QE buying, however, it was the headline cuts initially sent the market quickly lower through the 1.0900 levels and pushing steadily through the 1.0850 areas to touch into the 1.0820 level, and into the commentary, with the announcement of a deeper pool of eligible bonds the market turned quickly this produced strong buying and the move back to the opening levels was as quick as the fall, the move through those levels caught the market by surprise and the weak shorts were soon scrambling to cover and the market moving quickly through the 1.1100 areas, while the market calmed a little the market again started to rally after the short squeeze was over and the market pushed steadily on through to the end in London with the market close to the 1.1200 areas pushing steadily through to the 1.1220 areas before running out of steam and then drifting to the 1.1180 levels into the close.
• GBP: After a quiet Asian session the Cable moved into the London session not to far from the opening levels around the 1.4220 areas, London extended the range with the market trading into the 1.4200-40 areas into the NYK session and the release of the ECB announcement, Cable dropped quickly through to the 1.4120 with the drag of the Euro, EURGBP cross selling saw a quick move from the 0.7730 level and just below 0.7660 areas, with Cable not doing so much movement to the downside the move to the commentary saw a similar movement to the Euro however, not as strong or as far with the EURGBP cross testing above the 0.7840 levels and Cable only just moving through the 1.4300 levels and failing to test the 1.4320 areas before slipping back to trade the 1.4280 areas for the move to the close.
• JPY: Slight weakness from the opening dipping from the 113.40 opening levels and testing the 113.20 area before moving into the Tokyo session and trading steadily higher through the next couple of hours with small weak stops through the opening, the end of the cross selling saw the market testing to the 113.80 areas and the market drifted off that level as it moved into the grey hours, London were light sellers as the market held quietly for the announcements, the release saw the move higher from the 113.60 areas and quickly pushed to the 114.40 area before minding sufficient offerings with the market dipping back to the 113.60 as the commentary started, with the move in the Euro continuing through the session the USDJPY was eventually pushed lower as EURJPY offers impacted on the USDJPY leg and the move saw the USDJPY dipping all the way back to the 112.60 areas in what had originally felt like a strong market and more to do with the Euro than the USD, there was a bounce and the market ended the day only just short of the opening levels.
• AUD: While much of the market gyrated wildly especially in the major pairing the Oz saw limited movements overall when compared, opening around the 0.7480 areas the market limped through the Asian session to close to the 75 cent level to ignore but unable to challenge the level for the most part until the London session opened, the move through to the ECB release saw the market tempted by the upside and EURAUD selling saw a little move through before dropping back to the 0.7470 levels, the market again tested the topside as the market continued selling the EURAUD into the Draghi commentary which in hindsight was not the greatest idea and was quickly reversed with the Oz quickly heading to the 0.7430 areas and then a steady trade through to the close holding the 0.7450 areas.

Yesterday’s premiership results

NZD       RBNZ Rate Decision A 2.25% | C 2.50% | P 2.50%

JPY         Domestic CGPI Y/Y Feb A -3.40% | C -3.40% | P -3.10%

AUD       Consumer Inflation Expectation Mar A 3.40% | P 3.60%

GBP       RICS House Price Balance Feb A 50% | C 51% | P 49% | R 48%

CNY        CPI Y/Y Feb A 2.30% | C 1.80% | P 1.80%

CNY        PPI Y/Y Feb A -4.90% | C -4.90% | P -5.30%

EUR        German Trade Balance (EUR) Jan A 18.9B | C 19.2B | P 19.4B | R 20.3B

EUR        ECB Minimum Bid Rate A 0.00% | C 0.05% | P 0.05%

EUR        ECB Deposit Rate A -0.40% | C -0.40% | P -0.30%

USD       Initial Jobless Claims (MAR 5) A 259K | C 272K | P 278k

CAD       New Housing Price Index M/M Jan A 0.10% | C 0.20% | P 0.10%

USD       Monthly Budget Statement Feb A -$192.6B | C -198.3B | P 55.2B

Good Luck,

Andy

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