Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close Wellington open

USDJPY 113.831 113.575-88| EURUSD 1.11492 1.1145-58 | AUDUSD 0.75622 0.7547-78 | NZDUSD 0.6745 0.6730-50 | USDCAD 1.32147 1.3202-40 | USDCHF 0.98262 0.9786-0.9858 | GBPUSD 1.43832 1.4372-1.4415 |

 

LMAX Ranges 6am London time

Highs    Lows

EURUSD               1.11767 | 1.11344

USDJPY                 114.008 | 113.643

GBPUSD               1.43898 | 1.43701

USDCHF               0.98391 | 0.98224

AUDUSD              0.75939 | 0.75393
USDCAD               1.32441 | 1.32111

NZDUSD               0.67563 | 0.67224

EURCHF                1.09732 | 1.09603

EURGBP               0.77699 | 0.77399

EURJPY                 127.153 | 126.862

For today

• EUR: Opening slightly lower the market moved up from the 1.1140 levels and steadily tested the 1.1170’s into the Tokyo opening before slipping back and trading in a quiet range between the 1.1150-60 areas with the market holding those levels into the grey hours, topside congestion through the 1.1200 areas and likely to continue through the levels with 1.1230 likely to see some weak stops before the offers again appear and the market is likely to struggle through to the 1.1300 areas where the market is likely to open up a little however, with little data the market will be hanging on for commentary from the ECB, seen as the resent interest changes and monetary policy seem to have had the opposite effect on the Euro. Downside bids light into the 1.1120 areas and then the market sees bids into the 1.1080before the downside opens up a little and the 1.1000 again becomes a target with expectations of better bids into the 1.1020 levels and through to the 1.0970 areas.
• GBP: Very quiet for Cable with the market holding in a tight range through the 1.4380 areas and continuing into the grey hours pretty much unchanged on the day, Topside offers through the 1.4440 levels and likely to continue through to the 1.4460 levels with suspected weak stops on a move through the level and a test to the 1.4500 areas, limited offers from there with sentimental levels continuing before the key level around 1.4600 area appears, Downside bids light through to the 1.4200 areas and stronger bids then make an appearance with the market limited to some degree and a push through the 1.4150 level again opens the downside for further tests.
• JPY: Similar to the Asian session from Friday with early gains into the Tokyo session to test the 114.00 levels however, it was less convincing than normal and the market has remained in a tight range. Topside offers through the 114.00 area likely to continue with patches of resistance through to the 114.50 areas and then stronger offers are likely to appear as the market moves towards the 115.00 level with the level likely to be key to an upside move back above the 117.00 levels. Downside bids light into and through the 113.00 having now spent the past month moving around this areas, with bids into the 112.50 levels and then continuing from the 112.20 areas and through onto the 111.70 levels.
• AUD: A steady climb from the opening just below 0.7550 and trading quietly through the session to touch above the 0.7590 levels before dropping quickly back from the attempt and pushing back to the opening 0.7550 levels into the grey hours, Topside offers through the 0.7580-0.7600 levels with the likelihood of some weak stops and stronger offers then coming into play a move through the 0.7620 level is likely to see the topside opening a little and a possible move into Jun/July ranges. Downside is likely to be a little weak until closer to the 0.7400 levels with bids likely into the 0.7450 and then better showings to the 0.7400 levels however, the RBA have been a little quiet of recent which is unusual.

Overnight News

JPY:

Japan Jan. Machine Orders Have Record Increase in January

IMF Says It’s Time for Japan to Fire a 4th Arrow of Wage Hikes

CNY:

China State Council to Review Expanding VAT Reform Plan: Daily

NZD:

RBNZ: Need to Rethink Rate Outlook If Expectations Fall Further

Wheeler Says No Mystery That RBNZ Cut Rates Last Week: Herald

N.Z. Economists Forecast Lower Inflation, More Growth: NZIER

New Zealand Services Growth Accelerated in February, PSI Shows

TRY:

Suicide Car Bomb Rocks Turkey’s Capital, Killing at Least 34

GBP:

Cameron Announces Plan to Help U.K. Savers and Younger Workers

Today’s data

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

JPY         Machine Orders M/M Jan A 15.00% | C 2.00% | P 4.20%

10:00     EUR        Eurozone Industrial Production M/M Jan C 1.70% | P -1.00%

Weekend News

CNY:

China PBOC Governor Zhou Xiaochuan’s Press Conference Round-Up
No Need for China to Use Forex Rate for Competitiveness: Zhou
China Jan.-Feb. Industrial Output Rises 5.4% Y/y; Est. +5.6%
China Jan.-Feb. Property Dev. Investment Rises 3% on Year
Zhou Says No Big PBOC Stimulus Needed as Data Suggest Otherwise
PBOC Governor Says Interest Rate Takes Inflation into Account
China’s Capital Flows to Be in Normal Range, PBOC’s Yi says
China’s Monetary Policy Far From Losing Space, Jin Says
New China Stocks Chief Vows Decisive Intervention If Needed
China Stock Market Faced Critical Situation Last Year: CSRC Head
China Plans to Merge State Companies While Avoiding Job Cuts
China Paying Close Attention to U.S. Export Limits on ZTE: Gao
PBOC Governor Says China’s Property Prices Are Diverging
JPY:

Japan Survey Shows 103 Yen Is Exporter Break-Even Level: Nikkei
Japan’s Ruling LDP Says Will Take All Measures to Boost Economy
Smaller Pay Hike Seen for Japanese Machinery Workers: Nikkei
Nissan Likely to Grant Raise Sought by Workers: Nikkei
JPY/BRL:

Japan Shipbuilders to Exit Brazil Amid Economic Issues: Nikkei
EUR: Merkel Faces Triple Challenge as States Vote Amid Refugee Crisis
Finland Loses AAA Rating From Fitch as Growth Prospects Wane
German Borrowing for Real-Estate Purchases Surges: Focus
USD/GBP:

Obama Said to Visit London April to Prevent Brexit: Independent
GBP:

U.K.’s Labour Party Says Its Economic Policies Now ‘Mainstream’
U.K. May Sell Major Rail Stations in GBP1.8 Billion Plan: FT
U.K.’s Osborne Planning Tax Raise for Car Insurance, Times Says
U.K. to Cut Welfare by GBP1.2b by 2020: Telegraph
USD:

Trump Calls Off Chicago Campaign Rally After Large Protests
Trump: ‘I Think We Did the Right Thing’ Canceling Chicago Rally
Clinton Seeks Rust Belt Rebound, Targets Automaker ‘Rules of Origin’
U.S. Condemns Iranian Missile Launches, Power Says
INR/USD:

Trump Visa Policy Threatens India Growth Model, Modi Aide Says
KRW/USD:

South Korea, U.S. Begin Largest-Ever Landing Drill: Yonhap
HKD:

Hong Kong’s Tsang Defends Economic Outlook after Moody’s Cut
RUB:

Russia’s Finance Ministry Proposes Easing FX Control: RIA

Harry Hindsight

• EUR: The move into the Asian session was flat around the opening 1.1180 and into the Tokyo session was the final attempt to push through the 1.1200 areas for the day with the market again stalling just above the 1.1210 levels and then drifting back to hold the 1.1170 levels in quiet trading through to the grey hours, Early Europeans were quick steady sellers and the push through the 1.1150 areas saw early London joining the sellers and the market pushed through into the London session testing through the 1.1100 levels with German numbers unchanged and in line with expectations, the move to the NYK session saw the market bottom out around the 1.1080 levels and holding into the NYK session before lifting off the lows and a steady climb through the early part of the session into the 1.1190’s before settling back to trade quietly to the close holding the 1.1150 levels.
• GBP: A quiet session through Asia and into the early parts of London with the market trading around the 1.4280 levels initially and making the lows into the opening in London as the market probed the 1.4260 levels, decent EURGBP selling held the Cable in place as the Euro dipped and EURGBP moved off the 0.7830 levels having peaked in early Asia just short of the 0.7850 areas and traded down into the early morning in London to test the 0.7750 level, Cable managed to move up to the 1.4300 levels however, while the Cable remained fairly strong across the board however, it wasn’t until the NYK session when the USD started to see strong selling that the Cable broke through and pushed steadily over the next couple of hours to push above the 1.4400 levels with little resistance to touch just below the 1.4440 areas before drifting for the remainder of the session to trade quietly around the 1.4380 levels to the close.
• JPY: Most of the work done through the Asian session the USDJPY opened around the 112.90 levels and pushed steadily through the session to push to the 113.50 levels into the grey hours, with the early London session joining the buying the USDJPY continued to the Tokyo close testing the 113.90 levels in a very lacklustre day for USDJPY as the pair took second fiddle to the Euro, the USD selling in NYK had little impact on the USDJPY with the market drifting to the 113.35 areas before again trading back to hold the 113.80 areas into the close.
• AUD: The Oz struggled steadily higher from the opening around the 0.7450 level, with the buying taking the Asian session to the 75 cent level and this with the help of early Europeans, struggling into the London session the added impetus did eventually push through to the 0.7515 levels and only once the NYK session did the market truly break through the level and test to the 0.7580 areas before drifting over the balance of the session to the close.

Friday’s premiership results

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

EUR        German CPI M/M Feb (F) A 0.40% | C 0.40% | P 0.40%

EUR        German CPI Y/Y Feb (F) A 0.00% | C 0.00% | P 0.00%

GBP       Visible Trade Balance (GBP) Jan A -10.3B | C -10.3B | P -9.9B

GBP       Construction Output M/M Jan A -0.20% | C 0.40% | P 1.50% | R 2.10%

CAD       Net Change in Employment Feb A -2.3K | C 10.1K | P -5.7K

CAD       Unemployment Rate Feb A 7.30% | C 7.20% | P 7.20%

USD       Import Price Index M/M Feb A -0.30% | C -0.80% | P -1.10%

Stay lucky

Andy

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