Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 113.174 | EURUSD 1.11085 | AUDUSD 0.74577 | NZDUSD 0.66004 | USDCAD 1.3354 | USDCHF 0.98716 | GBPUSD 1.41513 |

LMAX Highs and Lows 6am

                                High | Low

EURUSD               1.11121 | 1.10949

USDJPY                 113.560 | 113.027

GBPUSD               1.41579 | 1.41217

AUDUSD              0.74723 | 0.74398

USDCHF               0.98813 | 0.98662

USDCAD               1.33747 | 1.33490

NZDUSD               0.66163 | 0.65769

EURGBP               0.78581 | 0.78449

EURJPY                 126.016 | 125.561

EURCHF                1.09680 | 1.09594

 

For Today

• EUR: A quiet range for the Euro as you’d expect with the FOMC later to come. Opening around the 1.1107 areas the market held through into the Tokyo session in the 1.1105-10 areas with some early fluctuations in Tokyo increasing the meagre ranges before dipping to the lows in the mid 1.0990’s and although the market moved back above the figure has tested that downside levels several times and heads into the grey hours holding that level. Topside offers through to the 1.1120 areas with light stops likely through that area, and then further offers into the 1.1140-60 areas and then increasing as the market moves towards the 1.1200 levels, a strong push through the 1.1220-30 areas will see stops appearing and the possibility of a quick move towards the 1.1300 level late in the day. Downside bids limited on a push through the 1.1070 levels and possibly weak stops appearing and opening the market to stronger bids into the 1.1050 area which could quickly melt away with any encouragement from the FOMC, and the market testing into the 1.1000 areas with bids likely to continue into the 1.0950 areas before the market opens to fresh potential to test the 1.0800 areas.
• GBP: Opening around the 1.4150 levels the market moved through to the Tokyo session with very little movement as with the Euro however, with the opening in Tokyo saw some reasonable selling moving in tempered only by GBPJPY rising once the initial selling was completed with the Cable touching the 1.4125 levels before finding sufficient interest to hold the market, the market although moved a little higher remained mired into the 1.4130 level though through to the grey hours. Topside offers light through to the 1.4180 where the market is likely to see weak offers building into the 1.4200 areas then the possibility of weak stops through the level and running back to the 1.4280 areas and stronger offers through to the 1.4300, a strong push through the level will likely open the 1.4440 levels for a further test however, that is likely to be tempered by the Budget release and any talk of Brexit along the way, downside bids into the 1.4100 levels with the potential on a break at this level to quickly push to the 1.4000 levels with downside target opening to test last month’s lows if the budget disappoints to some degree however, I’d be more concerned with the FOMC for the moment.
• JPY: USDJPY has had 24hrs to get over the travails of yesterday’s move lower and while the volumes have been reasonable for a day with the word FOMC attached to it the movement higher into the Tokyo session saw the market move away from the 113.00 lows to push steadily back to the 113.50 areas in the first couple of hours of Tokyo before ranging then through the session, Topside light offers moving through the 113.50 before running into stronger offers into the 113.80-114.00 levels, light offers continue through the level however, for the moment the market to the 114.40 areas seems to be increasing in offers and likely to be limiting the topside movement on a normal day however, a push through the 114.40 will likely see stops appearing and a quick stab at the 115.00 levels and possibly key to further movement with the 115.00-117.00 levels becoming vulnerable, downside bids through the 113.00 levels are a likely again extend down towards the 112.50-60 areas before the limited bids into the 112.20-00 come under pressure, and once the market breaks here the market could spike lower towards the 111.00 levels as it did a couple of times last month, at which point it’s a question of how strong the resting bids are from possibly the importers.
• AUD: A very limited day for the Oz with the market opening around the 0.7455 areas and trading quietly through into the Tokyo session to the 0.7470 areas before a weakening JPY saw the USD buyers appear in the Asian market and the Oz dipped back to the 0.7440 and then a steady recovery through the balance of the session, Topside offers light through the 75 cent levels and then seeing stronger offers appearing as the market pushes higher and into the 0.7540 areas and then likely to continue through to the 0.7580 areas where those offers increase with the possibility of option barriers making an appearance to protect the level, a break above the level could see stops triggered and the market then running into a patchy market with congestion limited but present through to the 77 cent levels. Downside bids into the 0.7400 levels once the market can push through the 0.7440 convincingly, a test through the 74 cent level opens up a lot more weakness and the market is likely to be trading in line with commodities in general.

Overnight News

CNY:

China Premier Says Nation to Convert Debt to Equity

Financial Sector Should Support Real Economy: Li Keqiang

Premier Li Says He Doesn’t Agree China Will Miss Economic Target

China to Avoid Massive Job Losses in Overcapacity Cut, Li Says

China Still Has Room to Ease Monetary Policy: Sec. Journal

CNY/USD:

U.S. Election Result Won’t Change China-U.S. Ties: Li Keqiang

CNY/JPY:

China, Japan Relation Still Fragile Despite Improvement: Premier

CNY/HKD:

China Aims to Start Shenzhen-H.K. Stock Connect This Year: Li

China Premier Vows Support for Measures to Benefit Hong Kong

CNY/TWD:

China Plans More Measures to Boost Trade With Taiwan: Premier

JPY:

Kuroda: Theoretically, Is Room to Cut Rate to Minus 0.5%

Japan Govt. to Use Big Data to Compile Consumption Stats: Reuters

Stiglitz Tells Abe Now Is Wrong Time to Raise Japan’s Sales Tax

Honda: Management, Union Agree to 1,100 Yen Monthly Base Pay Increase

Nissan Will Agree to 3,000 Yen Monthly Pay Rise: Kyodo (Yesterday)

USD/EUR/CNY:

Ishihara: Stiglitz Says Growth in U.S., Europe, China Declined

SGD:

Singapore GDP to Rise 1.9% in ‘16 vs Dec. Est. 2.2% : MAS Survey

NZD:

RBNZ Says Stress Test Shows Banks Can Cope With Dairy Downturn

N.Z. Annual Current Account Deficit Narrows on Tourism

USD:

Trump Wins Florida, Illinois as Kasich Blocks Him in Ohio

Today’s data

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

NZD       Current Account Balance (NZD) Q4 A -2.61B | C -2.90B | P -4.75B | R -4.74B

AUD       Westpac Leading Index M/M Feb A -0.20% | P -0.04% | R 0.10%

09:30     GBP       Jobless Claims Change Feb C -9.0K | P -14.8k

09:30     GBP       Claimant Count Rate Feb P 2.20%

09:30     GBP       ILO Unemployment Rate (3M) Jan C 5.10% | P 5.10%

09:30     GBP       Average Weekly Earnings 3M/Y Jan C 2.00% | P 1.90%

12:30     GBP       Annual Budget Release

12:30     CAD       Manufacturing Shipments M/M Jan P 1.20%

12:30     USD       Housing Starts Feb C 1.15M | P 1.10M

12:30     USD       Building Permits Feb C 1.20M | P 1.20M

12:30     USD       CPI M/M Feb C -0.20% | P 0.00%

12:30     USD       CPI Y/Y Feb P 1.40%

12:30     USD       CPI Core M/M Feb C 0.20% | P 0.30%

12:30     USD       CPI Core Y/Y Feb P 2.20%

12:30     CAD       International Securities Transactions (CAD) Jan P -1.41B

13:15     USD       Industrial Production Feb C -0.30% | P 0.90%

13:15     USD       Capacity Utilization Feb C 76.80% | P 77.10%

14:30     USD       Crude Oil Inventories P 3.9M

18:00     USD       FOMC Rate Decision C 0.50% | P 0.50%

18:30     USD       FOMC Press Conference

Harry Hindsight              

• EUR: A quiet session through Asia with the market opening around the 1.1105 and drifting into the Tokyo session to lift steadily as the JPY strengthened after the BoJ Monetary Policy statement and pushing to just above the 1.1115 areas and then holding through to the London session and early quick sellers in the grey hours, the move into the official opening saw the Euro start a quick rise from the 1.1085 levels and into the 1.1120 levels as the market remained pinned between the two levels throughout the day with only brief breaks of the levels, the downside tested into the run to the employment numbers with the market with limited expectations and then rising into the NYK session to test through the topside before again settling back to trade in an ever tightening range to the close little changed on the day.
• GBP: If the Euro was quiet through Asia then doubly so for the Cable with the market dipping from the opening 1.4300 level into the Tokyo session and then holding the 1.4280 levels through into the grey hours before dropping steadily lower and into the official London open around the 1.4240, the selling increased through the early part of London and a strong initial move to the 1.4160 levels was enough to set the levels for the day, with the market drifting around the level for the balance of the session with only a steady drift through the day to test the 1.4140 levels and never recovering much above the initial breakdown low. EURGBP cross made steady headway through the day and pushed back through the 0.7800 levels into the London session and finished the day just short of the highs trading around the 0.7850 levels to the close.
• JPY: Early trading was quiet running into the BoJ Monetary policy statement, the market held steadily around the 113.80 levels before bouncing a little higher as the Oz began to come off after the RBA meeting minutes were released, however, there was a flurry of activity before the BoJ and the market traded to the 114.00 levels before dropping back as single ticket orders moved through, then on the release the market rose quickly through the 114.10 levels before the details became transparent and with little to shout about the market quickly reversed and started a quick move back through the previous levels and tested quickly to the 113.50 levels, continuing a steadier decent to the 113.20 levels the market then held through the grey hours with the market unable to push through and only once the added weight of the London session moved in did the market break lower again to test to the 113.00 levels, even so the impetus was not really behind the move and although the pattern was repeated into the NYK opening the markets push lower saw only limited action as the weak stops through the 112.80 levels were quickly absorbed into the move into the 112.60 areas and a steady rise once those stops had been cleared, the market ended the day again above the 113.00 levels in quiet trading to the close.
• AUD: The Oz rose quietly into the Tokyo session from the 0.7510 levels and as the RBA minutes were released pushed through the 0.7520 levels for the second time, however, with the broadly unchanged commentary the one note that caught the market was the relentless banter of the possibility of rate cuts possible and this set the market into a sell off into the 0.7480 areas this then added to the AUDJPY selling pressure from the BoJ statement and although the market held its levels was under pressure through the Asian session and unable to breech the 75 cent, the move towards the London session saw the early players selling the market lower again and the market then traded steadily to the 0.7450 areas into the NYK session where one would have expected a repeat performance from the NYK market however, that didn’t happen and the market pushed again towards the 0.7480 areas however, the market remained pinned with the market dipping repeatedly back to just through the 0.7450 levels into the close just off the lows.

Yesterday’s premiership results

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%

EUR        Eurozone Employment Q/Q Q4 A 0.30% | C 0.20% | P 0.30%

USD       Advance Retail Sales M/M Feb A -0.10% | C -0.10% | P 0.20%

USD       Retail Sales Less Autos M/M Feb A -0.10% | C -0.10% | P 0.10%

USD       PPI M/M Feb A -0.20% | C -0.10% | P 0.10%

USD       PPI Y/Y Feb A 0.00% | C 0.10% | P -0.20%

USD       PPI Core M/M Feb A 0.00% | C 0.10% | P 0.40%

USD       PPI Core Y/Y Feb A 1.20% | C 1.10% | P 0.60%

USD       Empire State Manufacturing Index Mar A 0.62 | C -11 | P -16.64

USD       NAHB Housing Market Index Mar A 58 | C 59 | P 58

USD       Business Inventories Jan A 0.10% | C -0.10% | P 0.10%

USD       Net Long-term TIC Flows Jan A -$12B | P -$29.4B

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.