Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close Wellington open

USDJPY 108.064 108.03-38 | EURUSD 1.13968 1.1390-1.1410 | AUDUSD 0.75537 0.7539-64 | NZDUSD 0.68099 0.6791-0.6828 | USDCAD 1.29892 1.2971-1.3000 | USDCHF 0.95364 0.9512-48 | GBPUSD 1.41247 1.4095-1.4158 |

 

LMAX Ranges 6am London time

Highs    Lows

EURUSD               1.14262 | 1.14148

USDJPY                 108.327 | 107.637

GBPUSD               1.41449 | 1.41043

USDCHF               0.95361 | 0.95184

AUDUSD              0.75713 | 0.75283
USDCAD               1.30121 | 1.29723

NZDUSD               0.68196 | 0.67926

EURCHF                1.08750 | 1.08654

EURGBP               0.80924 | 0.80703

EURJPY                 123.536 | 122.857

For today

• EUR: USD opened a little weaker across the board, with the Euro opening around the 1.1410 levels on the official opening and then slowly drifting through into the Tokyo session to briefly make its way to below the figure, the move back was a little sharper but apart from some very weak stops above the 1.1420 levels the market has been contained within a tight range with the market moving towards the grey hours holding around the opening level, Topside is likely to still see offers into the 1.1420-30 areas with weak stops leading into the 1.1440 areas and although there is likely offers to the 1.1460 levels they are likely to be light and the better offers appearing into the 1.1480-1.1500 areas, Downside bids light through the 1.1400 areas and a test to the 1.1370 is likely see some stops appearing in the market and then opening to the 1.1320-00 areas with congestion appearing from there and onto the 1.1200 handle.
• GBP: Cable the odd one out, opening lower around the 1.4120 levels before slowly moving back to the closing levels on Friday, Tokyo did very little in early trading however, EURGBP selling dominated the GBP in early trading and once that was finished with saw the Cable dip to the 1.4110 levels before recovering through the later part of the session and regaining the Friday closing areas, Downside bids likely to be weak into the 1.4100 areas and then increasing into the 1.4050 levels and possible weak stops through the 1.4040-30 areas and the 1.4000 levels becoming vulnerable, topside offers into the 1.4150 areas are likely to be light and a strong move through the level will possibly see the 1.4200 tested quickly and opening the market to the next sentimental 1.4250 areas.
• JPY: After early gains into the Tokyo session and the highs around the 108.30 levels the market chatter of Japanese Life insurers thinking of expanding their currency hedges saw the USDJPY slipping lower again to test through the 107.70 levels into the mid-session before finding sufficient support however, although the market did again rally to the opening 108.00 areas it remained under pressure into the grey hours again dipping back to the 107.80 levels, Downside bids likely to be a little more spaced with bargain hunters and intervention theorists attempting to push in possibly down through the 107.00 levels and onto the 106. Handle however, 2014 ranges around the 102.00 are possibly to close for the market to ignore and any move through 106.00 will leave those levels vulnerable and possibly a stronger possibility of resting BoJ bids in the market. Topside offers into the light through the 109.00 levels and having come 5 big figures in a short time may see whatever, is in the market quickly reviewing their orders and moving away and allowing the market to quickly test back above the 110.00 and a small short squeeze, however, there is a distinct possibility of spikes higher if the usual spoofing within the market turns up, spoofing is where a large ticket moves into the market and triggers frantic action as the market jumps higher and everyone believes that It could be the BoJ however, this is not how the BoJ have reacted for many years and then to leave orders with agent banks to protect certain levels.
• AUD: A wider range than much of the market and the Oz buffeted by the both News and the movement in the Yen, the market moving from an opening just below 0.7550 levels and gaining the 0.7570 areas into early Tokyo before USDJPY selling tipped into the AUDJPY and the carry saw sellers appear and chase the market to the 0.7530 levels however, with the CNY data and investment by China in Australia rising 32.9% in 2015 the Oz was helped back to the highs to range quietly through to the grey hours, Downside bids light through to the 0.7520 areas where the market is likely to be only slightly stronger, through to 75 cents, a move through the level will likely see some weak stops however, any move through the 0.7440 level is likely to see stronger stops appearing and the 74 cent vulnerable to a strong test, Topside offers into the 76 cent levels are not so strong this time and the market is likely to start to see stronger offers moving in above the 0.7650-60 areas and into 77 cent levels, possibility of break out stops through the 0.7720 areas with the level cleared to some degree and option barriers likely to be weak however, congestion from that point and the 0.7770-0.7800 level is likely to be strong.

Overnight News

JPY:

Japan’s Feb. Core Machine Orders Fall Most Since November

Suga Says Japan Will Take Necessary Action on Currency If Needed

Japanese Household Inflation Expectations Unchanged From Jan.

BOJ’s Shirai Leaves With a Parting Shot on Negative Rate

CNY:

China March Consumer Prices +2.3% Y/y; Est. +2.4%

China PPI Gains M/m for 1st Time Since Jan. 2014: NBS

World Bank Sees Gradual Slowdown in China Economy: Shetty

China’s Economy Won’t See Systemic Risk: People’s Daily

China Adviser Yu Says Govt Should Devalue Currency: Telegraph

CNY/AUD:

Chinese Investment in Australia Rose 32.9% in 2015, KPMG Says

MYR/CNY:

Malaysia Says China’s Bond Purchase Helps Spur Ringgit: Star

Asia:

World Bank Sees Sustained East Asia Growth despite Global Rout

IMF:

IMF Says Supports Negative Policy Rates by Some Central Banks

AUD:

Australia Feb. Home-Loan Approvals Gain 1.5% M/m; Est. 2% Rise

Today’s data

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

JPY         Machine Orders M/M Feb A -9.20% | C -11.80% | P 15.00%

AUD       Home Loans Feb A 1.50% | C 2.10% | P -3.90%

CNY        CPI Y/Y Mar A 2.30% | C 2.40% | P 2.30%

CNY        PPI Y/Y Mar A -4.30% | C -4.60% | P -4.90%

Weekend News

EUR:

Mersch: Possible Diminishing Returns in Central Bank Instruments
Europe’s Problems Need Joint Solutions, Costa Tells Kathimerini
Germany’s Debt-to-GDP Ratio to Fall Below 60% by 2020: Spiegel
ECB Policies Have Had Strong Impact On Growth, Visco Tells Sole
Katainen: Italy Biggest Gainer From EU Flexibility: Repubblica
Spain May Request 1-Year Extension to Meet Deficit Target: Pais
Paris Suspect Abrini Caught, Linked to Brussels Bombings
JPY:

Suga Says G20 Pact Doesn’t Rule Out Japan Intervention: Reuters
Japan to Increase Fund for Latin Investments to $3 Billion
USD/JPY:

Kerry’s Visit to Hiroshima Nuclear Site Tests Water for Obama
USD: ‘

We Have No Opportunity to Relax’ In Counter Terrorism: Kerry
Sanders Wins Wyoming to Boost Momentum Before New York Duel
USD/CNY:

U.S. to China: Abide by International Ruling on Disputed Islands
GBP:

Cameron Publishes Tax Details in Bid to Move on From Panama
Cameron Will Face Further Questions Over Taxes, Corbyn Tells BBC
CNY:

China 2Q Property Sales May See Downside Risks: State Researcher
G7 Meeting Shouldn’t ‘Hype’ South China Sea Issue: Wang Yi
Nigeria Is Considering Selling Renminbi Bond: Finance Minister
KRW:

North Korea Tests Rocket Engine as U.S. Talks Up Missile Shield
AUD:

Turnbull Says `No Fistful of Dollars’ in Australia’s May Budget
AUD: Turnbull Pledges $370 Million for West Australia Infrastructure
RUB:

Monetary Policy Has Limited Effect on Russian Growth: Nabiullina
Russia Says Syria Cease-Fire Holding, Even with Rebel Violations
ILS:

Shekel Appreciation Pressures Rise; Tools Depleting: Meitav
TRY:

Turkey’s Erdogan Says Reforms Needed at United Nations: CNNTurk

Friday’s premiership results

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

JPY         Current Account (JPY) Feb A 1.73T | C 1.57T | P 1.49T

JPY         Consumer Confidence Mar A 41.7 | C 40.4 | P 40.1

CHF        Unemployment Rate Mar A 3.50% | C 3.50% | P 3.40%

JPY         Eco Watchers Survey: Current Mar A 45.4 | C 46.4 | P 44.6

EUR        German Trade Balance (EUR) Feb A 19.8B | C 19.2B | P 18.9B | R 18.7B

CHF        CPI M/M Mar A 0.30% | C 0.30% | P 0.20%

CHF        CPI Y/Y Mar A -0.90% | C -0.90% | P -0.80%

GBP       Industrial Production M/M Feb A -0.30% | C 0.10% | P 0.30% | R 0.20%

GBP       Industrial Production Y/Y Feb A -0.50% | C -0.10% | P 0.20% | R 0.10%

GBP       Manufacturing Production M/M Feb A -1.10% | C -0.20% | P 0.70% | R 0.50%

GBP       Manufacturing Production Y/Y Feb A -1.80% | C -0.70% | P -0.10% | R -0.30%

GBP       Visible Trade Balance (GBP) Feb A -12.0B | C -10.1B | P -10.3B | R -12.2B

CAD       Housing Starts Mar A 204K | C 215K | P 212.6K | R 219K

CAD       Net Change in Employment Mar A 40.6K | C 10.4K | P -2.3k

CAD       Unemployment Rate Mar A 7.10% | C 7.30% | P 7.30%

GBP       NIESR GDP Estimate Mar A 0.30% | P 0.30% | R 0.20%

USD       Wholesale Inventories Feb A -0.50% | C -0.30% | P 0.30% | R -0.20%

Stay lucky

Andy

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