Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 112.57 | EURUSD 1.13804 | AUDUSD 0.76578 | NZDUSD 0.69116 | USDCAD 1.30047 | USDCHF 0.96181 | GBPUSD 1.4363 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.13885 | 1.13670

USDJPY                 112.588 | 112.058

GBPUSD               1.43715 | 1.43287

AUDUSD              0.77012 | 0.76462

USDCHF               0.96212 | 0.96022

USDCAD               1.30504 | 1.29700

NZDUSD               0.69341 | 0.68907

EURGBP               0.79400 | 0.79187

EURJPY                 128.128 | 127.443

EURCHF                1.09414 | 1.09246

 

For Today

• EUR: Another quiet session as you’d expect for a NFP day, with the Euro holding the 1.1370 levels late in the session having briefly pushed to the 1.1390 levels early in Tokyo, Topside offers likely to continue through to the 1.1420-30 areas before weak stops make and appearance, the market then opening to the 1.1480 levels and then offers moving in through the 1.1500 level with the market likely to be sufficiently weakened to allow a larger move towards 1.1600. Downside bids light into the 1.1320-00 areas and stops likely on any move through the 1.1270 levels and the market opening to the 1.1100 levels.
• GBP: A steady drift lower from the opening 1.4370 areas as the Tokyo session again saw GBPJPY selling dominating the Cable, and the market sinking back towards the lows of yesterday around 1.4330 and holding the levels into the grey hours, Topside is likely to see congestion around the 1.4370 levels and into the 1.4400 areas however, stronger offers are likely to be more centred around the 1.4450 area with the 1.4500 levels likely to be more key to a larger move back towards the 1.46-1.48 range from the beginning of the year, for the moment though although quiet the Brexit commentary is likely to continue to dominate the market and cause further weakness until June, Downside bids are likely to be very mixed with 1.4300 holding little in the way of surprises and 1.4200 areas likely to be a stronger point on a deeper move, a push through again sees sentimental levels the best buying areas with 1.4100 likely to be stronger.
• JPY: The opening around the 112.55-60 levels held into the Tokyo session before the market dropped quickly back as the GBPJPY cross JPY selling again move in, a weaker Tankan report was largely ignored with expectations for further easing by the BoJ did little to stop the JPY rising against most of the other currencies and the USDJPY dropping back again to the 112.10 levels to broadly match yesterday’s weakness, Topside offers again building into the 112.80 areas and through the 113.00 levels however, these offers are likely to be weaker than normal given the ranges we’ve had over the past weak and weak stops likely through the 113.20-30 areas and opening to better offers above 113.50 and into 114.00 areas.
• AUD: A wider range for the Oz so far for the Asian session however, the initial test through to the 77 cent level was quickly defeated and the market returned quickly towards the opening 0.7660 areas in the move to the grey hours, Topside offers are likely to be still congregated above the 77 cent level and while there maybe a little weakness on a break through the 0.7720 areas the market is likely to see those offers generally continuing into the 0.7740-60 areas and the ranges from this time last year technically congestive and standing in the way of a larger rise, Downside bids are likely light into the 75 cent levels with possibly medium term shorts looking for some opportunity to lighten there shorts however the market is likely to see better bids into the 0.7440-60 areas if the NFP have any significant impact.

 

Today’s data

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

JPY         Tankan Large Manufacturers Index Q1 A 6 | C 8 | P 12

JPY         Tankan Large Manufacturers Outlook Q1 A 3 | C 6 | P 7

JPY         Tankan Non-Manufacturing Index Q1 A 22 | C 24 | P 25

JPY         Tankan Non-Manufacturing Outlook Q1 A 17 | C 21 | P 18

JPY         Tankan Large All Industry Capex Q1 A -0.90% | C -0.70% | P 10.80%

CNY        Manufacturing PMI Mar A 50.2 | C 49.3 | P 49

CNY        Non-manufacturing PMI Mar A 53.8 | P 52.7

CNY        Caixin China PMI Manufacturing Mar A 49.7 | C 48.3 | P 48

07:15     CHF        Retail Sales (Real) Y/Y Feb C 0.50% | P 0.20%

07:30     CHF        SVME-PMI Mar P 51.6

07:45     EUR        Italy Manufacturing PMI Mar C 52.6 | P 52.2

07:50     EUR        France Manufacturing PMI Mar (F) C 49.6 | P 49.6

07:55     EUR        Germany Manufacturing PMI Mar (F) C 50.4 | P 50.4

08:00     EUR        Eurozone Manufacturing PMI Mar (F) C 51.4 | P 51.4

08:30     GBP       PMI Manufacturing Mar C 51.3 | P 50.8

09:00     EUR        Eurozone Unemployment Rate Feb C 11.50% | P 10.30%

12:30     USD       Change in Non-farm Payrolls Mar C 208K | P 242K

12:30     USD       Unemployment Rate Mar C 4.90% | P 4.90%

12:30     USD       Average Hourly Earnings M/M Mar C 0.30% | P -0.10%

14:00     USD       ISM Manufacturing Mar C 50.8 | P 49.5

14:00     USD       ISM Prices Paid Mar C 44.5 | P 38.5

14:00     USD       Construction Spending M/M Feb C 0.20% | P 1.50%

14:00     USD       U. of Michigan Confidence Mar (F) C 90.6 | P 90

Harry Hindsight              

• EUR: opening around the 1.1330 levels the move through the Asian session was limited with a brief attempt higher through 1.1340 quickly pushed lower and the market the testing to the 1.1310 levels, and into the grey hours, steady buying with the German unemployment figures a little worse than expected seeing the market starting a steady rise through the day, and CPI Eurozone numbers in line with expectations that rally continued into the 1.1390 levels before finding stronger offers to slow the market, the market eventually tested through the 1.1400 levels briefly touching above 1.1410 however, with the US numbers being mostly ignored the market limped to a close holding the 1.1380 areas with some decent volumes going through on the rally but remaining contained to a degree.
• GBP: A mixed day for Cable with the Asian session particularly bearish on the GBP and the market dropping from the opening around the 1.4380 levels into the Tokyo session to test the 1.4330 areas, while the low was extended into London it was a matter of a few pips only and the market held in a tight range for the early part of the London session, slightly better GDP figures and better Eurozone CPI numbers saw the Cable rise quickly back to the opening levels and then dragged with the Euro to test above the 1.4420 levels into the NYK session, the remainder of the session saw Cable trading in an ever tighter range through to the close but generally holding those opening levels at the start of the day, EURGBP saw light gains as the Euro slowly ground higher and left the GBP behind with the cross pushing about 0.7940 and closing just off those levels.
• JPY: A reasonably tight range throughout the session with the market opening around the 112.45 levels, and dropping back with some selling in the cross JPY, USDJPY was forced into the 112.20 areas before some limited bids halted the slide and the market then recovered with weak stops triggered on the back of Kuroda comments about the BoJ being unrestricted in its abilities to react to any pressures, USDJPY tested through the opening and made the highs for the day above the 112.65 level and then drifted through the balance of the Tokyo session pushing into the grey hours to test through the 112.20 and into those bids, through the London session the market was particularly calm with a steady rise then drifting back as the NYK session opened, weak stops on a push above the 112.30 levels into the NYK session saw the market again to push away from the day’s lows around the 112.10 level and the market jumped to the 112.50 and although it continued to rise it was a very limited action and was unable to improve on the early highs in Tokyo.
• AUD: Quiet through the Asian sessio0n the market drifted from the opening 0.7670 levels to test to the 0.7640 levels a move that was repeated through into the London session, the steady weakening of the USD through the London session saw the Oz steadily moving towards the 77 cent levels and having tested it in the previous day’s session the move to the level into the NYK session saw some strong buying testing the level until the move saw weak stops triggered and a quick stab above the 0.7720 levels leaving some traders caught in the market, this of course saw the Oz move steadily lower as the market reacted to the renewed level of selling and settling back to finish the day very little different to the opening.

Yesterday’s premiership results

GBP       GfK Consumer Sentiment Mar A 0 | C -1 | P 0

NZD       NBNZ Business Confidence Mar A 3.2 | P 7.1

JPY         Housing Starts Y/Y Feb A 7.80% | C -2.20% | P 0.20%

EUR        German Unemployment Change Mar A 0K | C -5K | P -10K | R -9K

EUR        German Unemployment Rate Mar A 6.20% | C 6.20% | P 6.20%

GBP       Mortgage Approvals Feb A 74K | C 74K | P 74.6k

GBP       M4 Money Supply M/M Feb A 0.90% | C 0.10% | P 0.00% | R 0.10%

GBP       GDP Q/Q Q4 (F) A 0.60% | C 0.50% | P 0.50%

GBP       Current Account (GBP) Q4 A -32.7B | C -21.8B | P -17.5B | R -20.1B

GBP       Index of Services 3M/3M Jan A 0.90% | C 0.80% | P 0.70% | R 0.80%

EUR        Eurozone CPI Estimate Y/Y Mar A -0.10% | C -0.10% | P -0.20%

EUR        Eurozone CPI – Core Y/Y Mar A 1.00% | C 0.90% | P 0.80%

USD       Challenger Job Cuts Y/Y Mar A 31.70% | P 21.80%

CAD       GDP M/M Jan A 0.60% | C 0.30% | P 0.20%

USD       Initial Jobless Claims (MAR 26) A 276K | C 269K | P 265K

USD       Chicago PMI Mar A 53.6 | C 50.6 | P 47.6

A weeks holiday from Monday and will be back for the 11^th April

Good Luck,

Andy

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