Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 113.444 | EURUSD 1.1195 | AUDUSD 0.75439 | NZDUSD 0.67178 | USDCAD 1.3187 | USDCHF 0.97395 | GBPUSD 1.42538 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.12023 | 1.11840

USDJPY                 113.739 | 113.231

GBPUSD               1.42649 | 1.42311

AUDUSD              0.75699 | 0.75403

USDCHF               0.97468 | 0.97349

USDCAD               1.31983 | 1.31751

NZDUSD               0.67607 | 0.67187

EURGBP               0.78643 | 0.78454

EURJPY                 127.233 | 126.824

EURCHF                1.09087 | 1.09022

 

For Today

• EUR: A quiet session over all with the market attempting to push through the 1.1200 levels in early trading but having insufficient impetus to penetrate too far and drifting back into the 1.1180’s on each attempt, light offers into the 1.1220 areas are likely to be of little trouble if the market can get moving however, the market is likely to see slightly stronger offers on a move through the 1.1240 levels before the better offers from 1.1280-1.1350, stops likely on a push above the 1.1350-60 areas and the market then struggling for space to move higher. Downside bids light through the 1.1150 levels with better bids probably into the 1.1120 areas with only a little weakness on a good push through the 1.1080 areas before better bids appear.
• GBP: Cable lost a little ground over the quiet session, drifting through the 1.4250 level and holding around the 1.4250 levels for a great portion of the session, downside bids are likely to be very light through the 1.4230 levels and the market is likely to continue like that until the 1.4200 level breaks opening the market to weak stops on the move through and the 1.4150 areas weak bids. Better bids are likely to be around the 1.4100, 1.4050 areas with the lower end possibly the strongest area for the day. Topside offers through the 1.4280 levels and into the 1.4300 however, this depends today more on the EURUSD movement with EURGBP a dominant feature.
• JPY: Early weakness into the Tokyo session having opened around the 113.40 areas, Tokyo opened with steady selling of the USDJPY to the 113.20 levels before stronger buying appeared with better AUDJPY cross buying probably the contributory factor on the day, and the USDJPY again testing towards the 113.70 areas, Topside offers from the highs and likely to continue through the 114.00 and stops appearing as the market opens to test the 115.00 with this level likely to be key for a return to the 120.00 ranges from earlier in the year. Downside bids more sentimental than anything else with better bids not likely to appear until below the 112.00 levels, with the possibility of stronger bids moving in, 111.00-110.80 levels likely to be particularly strong however, a push through the level is likely to see the market making a quick move lower before the buyers reappear in the market.
• AUD: A quiet session for the Oz with the market rising from the closing levels to briefly test above the 0.7570 levels with the carry trade AUDJPY doing most of the work, Topside offers again into the 76 cent levels and as long as the carry trade balances the USD movement the market is likely to remain in the current areas, a push through will possibly see stronger offers appearing from the short term traders and this will produce weak stops on a push through 0.7660 areas and then possible option interest protecting 77 cents, Downside has limited bids however, these are likely to be spread evenly so any move lower will see sentimental levels slowing any strong selling with the 0.7450 areas likely to be congested.

 

Overnight News

JPY:

Abe: Will Raise Sales Tax Unless Event Like Lehman Shock, Quake

Japan PM Abe to Hold Press Conference at 6:20pm Japan Time

LDP’s Yamamoto to Restart Study Sessions on Japan Sales-Tax Hike

Japan Feb. Unemployment Rate at 3.3%; Est. 3.2%

Japan Feb. Retail Sales Fall 2.3% M/m; Est. -0.9%

Tepco Seeks to Cut Costs by 5.9t Yen Over 10 Years, NHK Says

Yen around 100 Is Desirable for Japan, Ex-Finance Minister Says

JPY/INR:

Japan, India PMs to Hold Meeting in U.S. on April 1: Kyodo

USD/KRW/JPY:

Obama to Meet with Korea’s Park, Japan’s Abe to Discuss N. Korea

CNY:

China Pension Fund’s Annual Investment Return Is 8.82%: Xinhua

Today’s data

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

JPY         Unemployment Rate Feb A 3.30% | C 3.20% | P 3.20%

JPY         Household Spending Y/Y Feb A 1.20% | C -1.80% | P -3.10%

JPY         Retail Trade Y/Y Feb A 0.50% | C 1.60% | P -0.10% | R -0.20%

08:00     EUR        Eurozone M3 Y/Y Feb C 5.00% | P 5.00%

12:30     CAD       Industrial Product Price M/M Feb C -0.20% | P 0.50%

12:30     CAD       Raw Materials Price Index M/M Feb C -0.80% | P -0.40%

13:00     USD       S&P/Case-Shiller Composite-20 Y/Y Jan C 5.70% | P 5.70%

14:00     USD       Consumer Confidence Mar C 93.9 | P 92.2

Harry Hindsight              

• EUR: A quiet session through Asia and into a still holidaying Europe with the market drifting initially from the opening 1.1165 levels to to test into the 1.1150 levels to recover into the London session, and pushing back through the highs, the move into the NYK session saw the release of weaker numbers and the USD moving steadily lower in the early part of the session and Euro’s able to test above the 1.1220 levels briefly before drifting to the close just below the 1.1200 area.
• GBP: A patchy start to the day with the Cable opening around the 1.4130 levels and drifting into the 1.4120 area, the move into the London session saw the market steadily rise to test to the 1.4180 areas and hold through to the NYK session, weak numbers saw the Cable rising to test to the 1.4280 levels and GBP improving against the Euro with the cross EURGBP dipping from the 0.7880 levels into the 0.7840, Cable moved back from the highs however, generally held above the 1.4250 level to the close.
• JPY: With the market struggling for liquidity outside of the Asian market the USDJPY steadily rose moving from the opening 113.15 areas and pushing through the session to test towards the 113.70 level however, once Asia was closed the market started to drift a little and spent much of the session holding around the 113.50 levels until the US releases with the market dropping back to the opening levels, the session ended quietly with the market making steady gains back towards the 113.50 areas.
• AUD: After the quiet start to the day in Asia with the market opening around the 0.7505 areas the market moved steadily higher into from the grey hours and pushed through to the NYK session testing towards the 0.7560 levels once the US data was released and ranging quietly to the close drifting a little from those highs.

Yesterday’s premiership results

USD       Trade Balance Feb A -62.9B | C -62.3B | P -62.2B | R -62.4B

USD       Personal Income Feb A 0.20% | C 0.10% | P 0.50%

USD       Personal Spending Feb A 0.10% | C 0.20% | P 0.50% | R 0.10%

USD       PCE Core M/M Feb A 0.10% | C 0.20% | P 0.30%

USD       PCE Core Y/Y Feb A 1.70% | P 1.70%

USD       Pending Home Sales M/M Feb A 3.50% | C 1.20% | P -2.50% | R -3.00%

Good Luck,

Andy

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