Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 112.696 | EURUSD 1.12923 | AUDUSD 0.76287 | NZDUSD 0.68576 | USDCAD 1.30747 | USDCHF 0.96667 | GBPUSD 1.43846 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.13006 | 1.12829

USDJPY                 112.801 | 112.391

GBPUSD               1.43989 | 1.43688

AUDUSD              0.76483 | 0.76156

USDCHF               0.96693 | 0.96606

USDCAD               1.30789 | 1.30512

NZDUSD               0.68840 | 0.68419

EURGBP               0.78610 | 0.78434

EURJPY                 127.338 | 126.964

EURCHF                1.09183 | 1.09162

 

For Today

• EUR: Another quiet session with the Euro testing towards the 1.1300 levels but struggling with the level, a lack of data and news impeding its rise, moving in a quiet 1.1290-1.1300 range for the most part, offers likely to continue through the level with a mixture of weak stops possibly through the 1.1320 levels however, the 1.1340-60 level is likely to hold stronger offers in any run at the 1.1400 levels and a break of the Feb highs, a push through to the 1.1420 levels though is likely to see offers thinning a little and the potential for a larger move with confidence numbers likely to trigger any strong moves. Downside bids are likely to be weak through to the 1.1220 levels and the market then starting to show stronger bids on a push into the 1.1150 areas and the levels from last week a push through the level is likely to open up renewed tests into the 1.1040-60 areas with lighter bids likely to be holding 1.1100 areas.
• GBP: A brief flirtation with the 1.4400 level into the early part of Tokyo saw the Cable settling back to trade around the 1.4380 levels with little interest showing in the pair. Topside offers into the 1.4400 levels are likely to be short term interest with that interest likely to continue to for a short distance before weak stops appear through the 1.4450 areas and the opening for fresh tests of the 1.4500 levels and possibly stronger offers. Downside bids are likely to be few and far between with the levels to the 1.4100 areas cleared repeatedly over the course of this month and sentimental bids likely only.
• JPY: USDJPY edged higher into the Tokyo session before the sellers appeared in early trading moving off the 112.80 level highs to push to 112.40 as the late comers including exporters reacted to the Yellen comments, having hit the level though the market died and continued to trade around the 112.50 areas through to the grey hours. Topside offers into the 112.80 levels likely to be weak and the topside open to further tests towards the 113.80 areas if the market see’s any strength in the USD and a strong ADP number has possibilities. Downside bids light into the 112.00 levels and likely to show weakness on a move through the level, stronger bids possibly building below the 111.50 areas and into the 111.00 level with particular strength when approaching the month’s lows.
• AUD: The Oz as with the others flirted in the Tokyo session with its highs of the month however, it failed to push through the 0.7650 levels and drifted back through the session to move through the opening 0.7630 to test slowly to the 0.7620 areas, Topside offers continue through the 0.7650 levels and while there is likely to be some weak stops appearing above the 0.7660 areas there is a strong possibility of option related interest into the 77 cent levels and only a strong break here will open the topside for further gains for the Oz, Downside bids are likely to appear on a move through the 0.7600 areas with light bids gradually improving on a push through the 0.7570 levels with weak stops likely to be quickly cleared the market will probably only find stronger bids as it moves towards the 75 cent levels.

 

Overnight News

EUR:

ECB’s negative rates not main policy instrument – Coeure

USD:

Lew Says It Would Be Hard for New President to Undo Iran Accord

JPY:

Japan Feb. Industrial Production Falls 6.2% M/m; Est. -5.9%

Some Japan Trust Banks Said to Start Negative Rates: Reuters

CNY:

ADB Forecasts China Growth Slowing to 6.5% in 2016, 6.3% in 2017

AUD:

Australia ANZ Weekly Consumer Confidence Falls 1.3% to 114.5

NZD:

New Zealand February Home-Building Approvals Rise 10.8% M/M

Today’s data

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

21:45     NZD       Building Permits M/M Feb A 10.80% | P -8.20% | R -7.80%

23:50     JPY         Industrial Production M/M Feb (P) A -6.20% | C -5.80% | P 3.70%

6:00        CHF        UBS Consumption Indicator Feb P 1.66

7:00        CHF        KOF Leading Indicator Mar C 102.1 | P 102.4

9:00        EUR        Eurozone Business Climate Indicator Mar P 0.07

9:00        EUR        Eurozone Economic Confidence Mar C 103.8 | P 103.8

9:00        EUR        Eurozone Industrial Confidence Mar C -4.1 | P -4.4

9:00        EUR        Eurozone Services Confidence Mar C 10.5 | P 10.6

9:00        EUR        Eurozone Consumer Confidence Mar (F) C -9.7 | P -9.7

12:00     EUR        German CPI M/M Mar (P) C 0.60% | P 0.40%

12:00     EUR        German CPI Y/Y Mar (P) C 0.20% | P 0.00%

12:15     USD       ADP Employment Change Mar C 194K | P 214k

14:30     USD       Crude Oil Inventories P 9.4M

Harry Hindsight              

• EUR: Opening just below the 1.1200 levels the market drifted through the Asian session with little movement in the markets and tight ranges for the most part, with the Euros drifting into the 1.1180’s but barely scraping though the 1.1200 level, the move into London was little different and with little data the London opening saw only a brief move towards 1.1170 areas before recovering a few hours later, NYK started with little difference overall with a slight level of buying running the Euro above the 1.1220 levels briefly before settling to trade around the 1.1200 deep into the session, once London exited the market place, comments from Yellen soon changed the markets sleepy repose and the Euro moved quickly from the dovish comments testing through the highs to the 1.1250 before running into some resistance however, without the stronger London market the movement continued through the session in a slower but stronger move as the offers were slowly eroded and the market made a brief move through the 1.1300 levels before drifting a little to the close.
• GBP: The Cable drifted through the early parts of the session with Asia moving from the opening 1.4260 areas to test into the London opening pushing towards the 1.4200 level before starting a slow recovery through to the NYK session and testing the 1.4300 levels, Yellen’s dovish comments saw the USD dropping back quickly and the Cable quickly pushed quickly through the highs with weak stops being triggered and test quickly through the 1.4350 levels and then slowing but continuing to rally and test the 1.4400 levels,. EURGBP cross drifted from the Highs in Early London above the 0.7870 levels dropping back to trade around the 0.7840 areas with a choppy session through into NYK, initially the Yellen comments saw the GBP gaining against the Euro however, the move to the close saw the losses reversed and although the market never reached the highs it closed around the opening 0.7850 areas.
• JPY: USDJPY made initial gains through the Asian session pushing from the 113.50 areas to trade into London testing the offers into the 113.80 areas, however, the market struggled for several hour for the break and eventually was forced away and moved into the NYK session drifting steadily until the Yellen comments, the market reacted quickly and the weak longs were quickly squeezed out as the market dropped quickly to the 113.00 areas and steadily to the 112.80 levels, the move continued however, a combination of decent bids and the market running out of time saw the market only lightly pushing into the 112.60 levels to the close.
• AUD: Gains in Asia were limited moving from the 0.7540 levels to test towards the London session pushing to the 0.7570 areas however, as lunch in Asia moved in the Oz started to slip slowly back and test back to the opening levels into the London opening, London were light sellers with very little movement and only a brief attempt towards the 0.7500 areas as the NYK session opened, the release of the Yellen comments saw the market already back towards the highs and pushing quickly through the 76 cent levels with little trouble, slowing as the market started to look as if it could break the 0.7650 areas we’ve tested a few times however, time and offers defeated the push and the market leaving the market above the 0.7600 level but lightly off the highs.

Yesterday’s premiership results

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%

EUR        Eurozone M3 Y/Y Feb A 5.00% | C 5.00% | P 5.00%

CAD       Industrial Product Price M/M Feb A -1.10% | C -0.20% | P 0.50%

CAD       Raw Materials Price Index M/M Feb A -2.60% | C -0.80% | P -0.40%

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

USD       Consumer Confidence Mar A 96.2 | C 93.9 | P 92.2 | R 94.0

Good Luck,

Andy

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