Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 113.831 | EURUSD 1.11492 | AUDUSD 0.75622 | NZDUSD 0.6745 | USDCAD 1.32147 | USDCHF 0.98262 | GBPUSD 1.43832 |

LMAX Highs and Lows 6am

                                High | Low

EURUSD               1.11157 | 1.10932

USDJPY                 114.175 | 113.223

GBPUSD               1.43051 | 1.42562

AUDUSD              0.75274 | 0.74793

USDCHF               0.98765 | 0.98604

USDCAD               1.33082 | 1.32608

NZDUSD               0.66833 | 0.66453

EURGBP               0.77878 | 0.77608

EURJPY                 126.750 | 125.780

EURCHF                1.09657 | 1.09520

 

For Today

• EUR: Opening around the 1.1105 areas the market has struggled through the session with very little independent movement, early sellers took the market to below the 1.1100 levels however, with USDJPY movement effecting the EURJPY the Euro was able to move back higher and test above the 1.1110 areas and hold around that level into the grey hours, Topside offers light through the 1.1120 areas with only slightly better offers likely into the 1.1140-60 areas however, through that level the market sees stronger offers again building through to the 1.1200-20 levels before weak stops open the topside. Downside bids remain into the 1.1080 areas with the likelihood of stops then coming close behind and the market opening to test the 1.1000-20 areas, a strong move through the 1.0980 areas is still likely to run into bids further down and into the 1.0950 areas before the market sees weakness and the 1.0900-1.0850 areas become a target for the sellers.
• GBP: Cable opened around the 1.4300 levels and looked to be trading quietly until the BoJ monetary policy meeting, once this was released strong selling in the GBPJPY cross saw the Cable dip quickly to the 1.4280 areas before steadying and holding the level deep into the session, a second bout of cross selling again moved the Cable 20 pips lower as the market moved towards the grey hours and before again slowing and holding the level, Topside offers light through the 1.4300 levels and with concerns of Brexit still in the market and USDJPY concerns several banks have shown a willingness to recommend selling the cross however, this needs to be taken with a pinch of salt as the vote in the UK is still some distance away and is likely to have some limitations, through the 1.4300 levels the market has some freedom to the topside and only once it pushes towards the 1.4400 levels is the market likely to see any real resistance to the move with a push to the 1.4450 levels likely to require strong impetus with no data today limited at best. Downside bids into the 1.4250 areas are likely to be light and better bids appearing on a move through the level and into the 1.4200 areas however, with nothing specific for the day one will have to pay attention to the US numbers due later in the day with a push through the 1.4200 level likely only to see token support over the coming 2 big figures until the 1.4000 levels.
• JPY: Moving quietly through from the opening 113.80 areas the market dipped a little in the early part of Tokyo as the longs removed themselves before the announcement, headline rates were left unchanged as the market expected and only limited changes to the reserve funds which are exempt negative rates saw the market initially bounce through the 114.00 levels before dropping quickly off as the market settled onto the fact that there was no real impact to the current easing policy, USDJPY touched into the 113.20 levels before finding sufficient bids however, the market has continued to trade heavy from that point and remains around the 113.40 levels moving into the grey hours, Topside offers light through the 114.00 levels with increasing offers into the 114.20 levels and possibly through to the 114.50 area, a push there will see some weak stops however, the move towards the 115.00 levels is likely to see stronger offers appearing before the 115.00-117.00 range opens up. Downside bids light through the 113.00 levels with the bids likely to continue through to the 112.80 areas, weak stops a possibility on a break through the 112.50 levels before better bids move to cover the market attempting the 112.00 areas,
• AUD: Moving quietly higher through into early Tokyo the movement after the Monetary policy in Japan did more to the Oz than the RBA minutes one suspects however, low inflation was suggested as further scope for easing policies to continue however, other than minor changes the RBA minutes seem not to have changed that much from the last couple and the market tested back to trade through the 75 cent levels and into the 0.7480 areas before fining light bids sufficient to hold the market and the Oz benefitting a little as the USDJPY lost ground, holding below the 75 cent levels into the grey hours, Topside offers light through the 75 cent level with those light offers continuing through to the 0.7550 levels before stronger offers start to materialize in the market, a strong push through the levels is still limited and the 76 level remains and likely to curtail further moves higher and into the ranges from last summer, downside bids light through to the 0.7420 areas with the market likely to see its strongest point on a move lower, through the 0.7400 areas the market is likely to see weak stops appearing and only token bids into the 0.7360-40 areas before opening the stronger 0.7250 areas.

Overnight News

JPY:

BOJ Votes 7-2 to Keep Negative Rates Unchanged

BOJ Sets Rules for ‘Physical and Human Capital’ ETF Program

Abe Adviser Hamada Warns Against Sales Tax Hike: Nikkei

CNY:

China Said to Draft Rules for Tobin Tax on Currency Trading

China SAFE Inquires QDII Participants’ Quota Use: Bus. News

China Weakens Yuan Fixing by 0.26%, Most Since Jan. 7

China Property Sales Start to Stabilize, Rebound: Minister

China to Further Restructure Central SOEs: Bus. Herald

CNY/SGD:

PBOC, MAS Renew Bilateral Currency Swap for Another 3 Years

GBP:

U.K. EU Ref Poll Shows Leave 49%, Remain 47%: ORB/Telegraph

AUD:

RBA Repeats Scope to Ease; Watching Jobs Data, Global Outlook

Australia ANZ Weekly Consumer Confidence Rises 1.4% to 116.4

Today’s data

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

JPY         BOJ Monetary Policy Statement

AUD       RBA March Meeting Minutes

JPY         Industrial Production M/M Jan A 3.70% | C 3.70% | P 3.70%

JPY         Tertiary Industry Index M/M Jan A 1.50% | C 0.40% | P -0.60%

10:00     EUR        Eurozone Employment Q/Q Q4 C 0.20% | P 0.30%

12:30     USD       Advance Retail Sales M/M Feb C -0.10% | P 0.20%

12:30     USD       Retail Sales Less Autos M/M Feb C -0.10% | P 0.10%

12:30     USD       PPI M/M Feb C -0.10% | P 0.10%

12:30     USD       PPI Y/Y Feb C 0.10% | P -0.20%

12:30     USD       PPI Core M/M Feb C 0.10% | P 0.40%

12:30     USD       PPI Core Y/Y Feb C 1.10% | P 0.60%

12:30     USD       Empire State Manufacturing Index Mar C -11 | P -16.64

14:00     USD       NAHB Housing Market Index Mar C 59 | P 58

14:00     USD       Business Inventories Jan C -0.10% | P 0.10%

20:00     USD       Net Long-term TIC Flows Jan P -$29.4B

Harry Hindsight              

• EUR: Opening a little lower than Friday’s close the market moved off the 1.1140 levels and gradually traded to the highs around the 1.1175 areas into the early part of Tokyo before slowly slipping back to trade quietly down into the 1.1150 levels with only slight reversal into the grey hours and the 1.1160 areas, London were steady sellers and by the time the market moved into the official opening the market had moved to the 1.1110 areas and the light bids, a better Eurozone IP number was insufficient to turn the weakness and the market though quiet throughout the day continued to press against the figure area and eventually traded through the level into the NYK session testing to the 1.1080 levels before rising once the London session closed to trade just above the 1.1100 area.
• GBP: No news, no data and the market becoming a little inured to the Brexit question Cable drifted through the day with little drag from any of the other currencies, opening unchanged to Fridays opening the market in Cable hovered in a tight range through the Asian session around the 1.4380 levels and only once the market moved to the grey hours did it start to drift lower testing into the London session to the 1.4340, EURGBP selling moved into the market and the cross moved away from its highs around the 0.7770 areas to test to the 0.7735 levels in early London and the Cable managed to push back to the opening levels before ranging in the areas again through to the NYK opening, a push through the 1.4340 levels saw the market again start to give ground however it was a steady drift over the course of the day and the market held the 1.4300 levels into the close.
• JPY: Overall a tight range throughout the day with the market opening a little higher around the 113.95 areas before dropping back for the move into the Tokyo session, Tokyo were steady buyers with the initially rally testing the 114.00 levels before starting a slow drift through a very quiet session and holding around the 113.80 levels for the most part into London, the official opening saw the market taking the USDJPY to the 113.50 levels however, it was a lacklustre move at best and the market then centred around the 113.70 levels through into the NYK session before again pushing back to the 113.80 areas once the London market closed up shop for the day, the market then traded quietly to the close.
• AUD: The Oz opened lower around the 0.7550 levels before rising steadily into the early Tokyo period and continuing through the session to test towards the 76 cent levels, however, the move took so long that by the time it moved into striking distance of the level Tokyo Lunch was upon the market and it dropped back quickly with carry trade AUDJPY selling figuring in the fall, the move into the grey hours saw the selling increase a little with weak stops through the opening levels sending the market to eventually trade against the 0.7520 levels before the selling ran out of steam, the bounce if you could call it a bounce was limited to the opening areas and the market didn’t move in any particular direction until NYK moved into the market and the selling again moved in to test the 75 cent levels in early NYK, trading around the 0.7510 levels saw the market holding until the close.

Yesterday’s premiership results

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

EUR        Eurozone Industrial Production M/M Jan A 2.10% | C 1.70% | P -1.00% | R -0.50%

Good Luck,

Andy

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