Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 112.36 | EURUSD 1.1217 | AUDUSD 0.76216 | NZDUSD 0.6745 | USDCAD 1.30471 | USDCHF 0.97269 | GBPUSD 1.4209 |

LMAX Highs and Lows 6am

                                High | Low

EURUSD               1.12238 | 1.12036

USDJPY                 112.437 | 112.142

GBPUSD               1.42279 | 1.41817

AUDUSD              0.76493 | 0.76061

USDCHF               0.97471 | 0.97251

USDCAD               1.30949 | 1.09393

NZDUSD               0.67702 | 0.67267

EURGBP               0.79018 | 0.78818

EURJPY                 126.072 | 125.784

EURCHF                1.09221 | 1.09122

 

For Today

• EUR: A very quiet session, Euro’s opened around the 1.1220 levels and struggled through to the Tokyo session before slipping back to the 1.1210 areas, and a steady drift through the session to test towards the 1.1200 levels, Topside offers are possibly back in play through the 1.1250 levels with only light offers and stops through the level as the market approaches the 1.1280 levels is likely to see offers starting to strengthen and increasing through the 1.1300 levels, possible stops however, unlikely to be a major factor until the market breaks through the 1.1350 with a possible strong mixture until 1.1380 with the likelihood of the offers dominating the market, Downside bids light through the 1.1200 levels however, light bids are likely to continue with weak stops likely on a break through the 1.1140 and weak congestion into the 1.1100, little data for the day and the market in Europe is likely to remain focused on yesterday’s events in Belgium.
• GBP: With only limited improvement to the Inflationary data the market has slipped slightly lower opening around 1.4210 the market tested initially through the 1.4220 levels in a limited movement before moving deeper into the Tokyo session retracing its steps and trading along the 1.4200 level dipping occasionally through. Light congestion around the current levels are likely to see weak stops not far from here with only token bids into the 1.4150 levels and the market opening for another test lower and the 1.4050 areas opening. Topside offers are a little patchy after yesterday’s moves so any attempt through the 1.4300 levels could see a small squeeze higher however, as the market approaches the 1.4400 levels strong offers are likely to move into the market.
• JPY: Very little movement and after opening around the 112.35 level the market slipped a little lower into the Tokyo opening before ranging through the session testing into the mid-teens around the 112.15 level before finally risking to test into the 112.45 late in the session, Topside offers are likely to be light through the 113.00 with those light offers likely to continue through the 113.20 with a possibility of weak stops, from there though the market is likely to see increasing offers which the market is likely to have to grind through to get to the 114.00 levels and any chance of a breakout to the topside. Downside has light bids through the 112.00 levels and likely extending now into the 111.60 areas, light possibility of stops however, the market starts to stiffen and better bids are likely through the 111.20 levels.
• AUD: A slow start to the day with the market moving around the initial opening levels, renewed AUDJPY carry trade buying helped the Oz higher into the Tokyo session and test towards the 0.7650 before running into stronger offers, a strong possibility of weak stops through the levels however, there is a distinct possibility of option barriers into the 77 cent levels. Downside has limited bids into the 76 cent levels with better bids likely to move into the 0.7440-60 areas and light stops on a move below that area, with 75 cent then looming the market is again likely to be contained by congestive bids.

Overnight News

USD:

Harker Says Every Fed Meeting Ought to Be ‘Live’ for Rate Hike

Harker Says U.S. Economic Growth May Remain Slow for Some Time

Fed’s Harker Sees ‘Strong Case’ for Fed to Raise Rates

Trump Wins Arizona Republican Primary

Clinton Wins Arizona Democratic Primary

KRW:

1. Korea Threatens Strike on S. Korea Presidential House

JPY:

BOJ’s Kuroda Says He Expects Small Impact from 2017 Tax Hike

Japan manufacturers’ mood weighed by yen gains, emerging mkt slowdown – Reuters Tankan

Funo: BOJ Will Use All 3 Easing Types to Achieve Price Target

BOJ Deputy Governor Iwata Hospitalized for Back Surgery: Jiji

Makoto Sakurai Approved by Diet as Bank of Japan Board Member

CNY:

Ex-PBOC Adviser Backs Loose Money Policy for Fiscal Boost: News

NZD:

Fonterra Speeds Dividends to Support Farmers as Profit Soars

Today’s data

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

10:00     CHF        ZEW (Expectations) Mar P -5.9

14:00     USD       New Home Sales Feb C 500K | P 494K

14:30     USD       Crude Oil Inventories P 1.3M

Harry Hindsight              

• EUR: Opening around the 1.1240 levels the market slowly edged higher into the Tokyo session pushing through to the 1.1260 and light offers that were unwilling to break in the quiet market, the move through to the grey hours saw little change, as new filtered through of the Bombings in Bruxelles the market dipped back quickly and into the London session pushed through to the 1.1190 areas as a reaction, mixed PMI numbers helped the market start to move higher with better IFO numbers signalling a steady buy for the market however, with constant news items on the Belgium terrorist assault the market struggled to form any strong moves and pushed steadily back above the 1.1200 levels and to towards the opening levels. NYK reacted in a similar fashion with the market again pushing back to the 1.1200 levels but with the data now over with the market traded a quiet range to the close ranging around the 1.1215 levels and unable
• GBP: The market moved quietly through the Asian session with the market having opened around the 1.4375 areas it pushed through to trade to the highs just short of the 1.4400 levels into the grey hours, the Bruxelles Bombing saw the first move lower catching the market by surprise and possibly triggering stops placed for the coming numbers, the release of the numbers disappointed however, the previous move had the market subdued after the shock and the market held into the NYK session ignoring the numbers for the most part which incidentally were worse than expected but better than the previous reading, NYK took the market down through the 1.4200 levels leaving the Cable basing on that area through the day to a quiet close. EURGBP saw the market moving off the static Asian session with PMI numbers generally better overall and EURGBP moving through to the 0.7850 areas and into the NYK session with strong buyers pushing the market to test above the 0.7900 levels and holding just below the level into the close, with the differing sets of numbers the difference on the day.
• JPY: USDJJPY opened around the 111.95 areas and made a little headway before the Tokyo session testing through the 112.00 areas and into offers around 112.00 the market then ranged comfortable into the grey hours between the opening and highs, again the news from Bruxelles saw movement appear and safe haven flows saw the USDJPY drop quickly back into the London open testing the 111.40 levels, London opening saw very little with no bounce to speak to and the market trading a quiet range around the 111.60-70 areas into NYK, eventually the USD took over as the rest of the market became subdued and USDJPY climbed steadily back through the opening levels and through those light 112.20 levels triggering weak stops through towards the 112.50 levels and a quiet close.
• AUD: The Oz remained fairly quiet with light gains through the session, opening around the 0.7580 areas the market dipped into Tokyo but only slightly before rallying steadily through to the grey hours nudging above the 76 cent levels and stopping only because of the news in Europe, with JPY buying a main focus of the run into the London session the Oz dropped back quickly as the JPY move impacted the AUDJPY carry dragging the Oz lower with the move and testing to the 0.7550 levels before rebounding back to 76 cent, the move through to the NYK session saw steady buying in the market and although London was unable to do that much for the market NYK picked up the OZ and the market made an attempt to push through the topside offers and managed briefly to push through 0.7640 before settling back to a quiet range around the 0.7620 area.

Yesterday’s premiership results

AUD       House Price Index Q/Q Q4 A 0.20% | C 0.10% | P 2.00%

JPY         PMI Manufacturing Mar (P) A 49.1 | C 50.6 | P 50.1

JPY         All Industry Activity Index M/M Jan A 2.00% | C 1.90% | P -0.90%

CHF        Trade Balance (CHF) Feb A 4.07B | C 2.88B | P 3.51B

EUR        France Manufacturing PMI Mar (P) A 49.6 | C 50.2 | P 50.2

EUR        France Services PMI Mar (P) A 51.2 | C 49.5 | P 49.2

EUR        Germany Manufacturing PMI Mar (P) A 50.4 | C 50.9 | P 50.5

EUR        Germany Services PMI Mar (P) A 55.5 | C 55.1 | P 55.3

EUR        Eurozone Manufacturing PMI Mar (P) A 51.4 | C 51.4 | P 51.2

EUR        Eurozone Services PMI Mar (P) A 54 | C 53.5 | P 53.3

EUR        German IFO – Business Climate Mar A 106.7 | C 105.9 | P 105.7

EUR        German IFO – Current Assessment Mar A 113.8 | C 112.6 | P 112.9

EUR        German IFO – Expectations Mar A 100 | C 99.5 | P 98.8 | R 98.9

GBP       CPI M/M Feb A 0.20% | C 0.40% | P -0.80%

GBP       CPI Y/Y Feb A 0.30% | C 0.30% | P 0.30%

GBP       Core CPI Y/Y Feb A 1.20% | C 1.20% | P 1.20%

GBP       RPI M/M Feb A 0.50% | C 0.40% | P -0.70%

GBP       RPI Y/Y Feb A 1.30% | C 1.30% | P 1.30%

GBP       PPI Input M/M Feb A 0.10% | C 0.40% | P -0.70% | R -1.10%

GBP       PPI Input Y/Y Feb A -8.10% | C -7.40% | P -7.60% | R -8.00%

GBP       PPI Output M/M Feb A 0.10% | C 0.00% | P -0.10%

GBP       PPI Output Y/Y Feb A -1.10% | C -1.20% | P -1.00%

GBP       PPI Output Core M/M Feb A 0.20% | C 0.10% | P 0.10%

GBP       PPI Output Core Y/Y Feb A 0.20% | C 0.10% | P 0.00%

GBP       Public Sector Net Borrowing (GBP) Feb A 6.5B | C 5.4B | P -11.8B

EUR        German ZEW (Economic Sentiment) Mar A 4.3 | C 5.9 | P 1

EUR        German ZEW (Current Situation) Mar A 50.7 | C 53 | P 52.3

EUR        Eurozone ZEW (Economic Sentiment) Mar A 10.6 | C 8.6 | P 13.6

USD        House Price Index M/M Jan A 0.50% | C 0.50% | P 0.40%

Good Luck,

Andy

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