Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 113.783 | EURUSD 1.0695 | AUDUSD 0.75546 | NZDUSD 0.72873 | USDCAD 1.31177 | USDCHF 0.99522 | GBPUSD 1.24859 |

LMAX Highs and Lows 6am GMT

                                High | Low

EURUSD               1.07129 | 1.06911

USDJPY                 113.841 | 113.242

GBPUSD               1.25195 | 1.24844

USDCHF               0.99573 | 0.99383

AUDUSD              0.75720 | 0.75538

USDCAD               1.31201 | 1.30908

NZDUSD               0.72982 | 0.72785

EURCHF                1.06482 | 1.06427

EURGBP               0.85667 | 0.85479

EURJPY                 121.851 | 121.30

For Today

• EUR: A rather flat day with the market in Euro’s holding around the 1.0700 levels with one attempt to push above the 1.0710 highs before continuing a narrow range around the 1.0700 levels, Topside offers through the 1.0740 level an into the 1.0760 areas even though the 1.0760 level there is likely to be resistance through the 1.0780 areas and into the 1.0800 level, with Stops then likely to appear on a push through the figure, offers then reappear into the 1.0860 areas and stops through that level are likely to open up a larger move. Downside bids light but congestive down through to the 1.0640 levels with weaker bids likely below that level, congestive bids through the 1.0600 areas into the 1.0580 areas and then likely weak stops on a move through to test 1.0550 areas with light bids possible and the stronger bids on a move through to the 1.0520 areas.
• GBP: The Cable moved off the opening 1.2485 areas and pushed through to the 1.2500 area into the Tokyo opening in quiet trading, the move into the Tokyo session saw the market holding around the 1.2490 level before suddenly finding enough strength to push to the 1.2510 level and then ranging around the level through to the grey hours, the market tried the 1.2520 levels a couple of times but was unable to find the momentum. Topside offers light through the 1.2550 areas with stronger offers into the 1.2600 levels, with possibly limited stops on the move through and the 1.2630 areas likely to be the key areas for a move to the highs in Dec and offers into the 1.2665-70 levels, Downside bids scattered over the 1.2400 handle with sentimental levels possibly the stronger areas however, a push through the handle will see the 1.2350 areas the stronger point before opening up the downside to a deeper move.
• JPY: Opening around the 113.80 areas the market drifted to the BoJ meeting holding the 113.60-80 areas, an unchanged result saw the market slip down to the 113.20 supportive line before bouncing back however, the fact they didn’t mention any tapering of QE saw the market back a little higher, while the market did initially move lower the bounce back saw the market holding through the session around the 113.50 areas in a little choppy action before running into the grey hours. Downside bids into the 113.20-00 areas with weak stops likely on a move through the 112.80 areas however, for the moment the 112.50 level is the base line that is possibly strongly protected with a break there likely to see stronger stops and possibly opening some panic selling from the early repatriation players, and the market open to the 112.00-111.80 levels. Topside offers light through the 113.90-114.00 areas with the market likely sto see congestive type offers on a move above 114.20-60 areas with stronger offers then appearing on any move towards the 115.00 levels.
• AUD: The past couple of weeks have remained in a 75-76 cent range and the market has been very static, today the market opened around the 0.7555 levels and topped out just above the 0.7570 levels before drifting off a bit to move into the London session just above the 0.7560 areas so still stuck with very little movement for the Oz, topside offers obviously into the 0.7570-0.7600 areas with possible stops building through the level for a move towards the 77 cent areas with some congestion around the 0.7640-60 areas before reaching weak offers through 77 cents. Downside bids into the 75 cent levels with limited stops on a push through with congestion on a move through the next big figure however, as stated for the moment the Oz seems to be stuck and looking for inspiration.

Overnight News

USD:

Trump Fires Yates as Acting AG, Appoints Dana Boente to Role

JPY/USD:

Aso Sees Yen Weakness, Dollar Strength Persisting for Some Time

Abe Seeks Trump to Affirm U.S. Treaty Obligation to Defend Japan

JPY:

BOJ Maintains 10-Year JGB Yield Target at About 0.000%

Aso: FX Policy Should Be Discussed in International Context

Japan Minister Says Fiscal Policy Should Be More Aggressive: FT

Japan Dec. Unemployment Rate at 3.1%, Matching Est.

Japan Dec. Industrial Production Rises 0.5% M/m; Est. +0.3%

AUD:

Australia Dec. Credit to Business, Consumers Rose 0.7 % M/M

Australia Loan Balances Rise 0.9% M/m to A$2.4t, APRA Says

Australia Dec. Business Confidence Unchanged M/m at 6

Australia ANZ Weekly Consumer Confidence Rises 0.9% to 118.1

NZD:

New Zealand Annual Immigration Rose to Fresh Record in December

New Zealand Household Lending Growth Quickened in December

GBP:

U.K. Jan. GfK Consumer Confidence -5 vs Est. -8

U.K. Finance Group Sees Brexit ‘Opportunity’ in Shift of Policy

Today’s data

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

JPY         BOJ Monetary Policy Statement

JPY         Jobless Rate Dec A 3.10% | C 3.10% | P 3.10%

JPY         Household Spending Y/Y Dec A -0.30% | C -0.90% | P -1.50%

JPY         Industrial Production M/M Dec (P) A 0.50% | C 0.30% | P 1.50%

GBP       GfK Consumer Confidence Jan A -5 | C -8 | P -7

AUD       NAB Business Confidence Dec A 6 | P 5 | R 6

JPY         Housing Starts Y/Y Dec A 3.90% | C 8.40% | P 6.70%

06:30     EUR        French GDP Q/Q Q4 (A) C 0.40% | P 0.20%

07:00     EUR        German Retail Sales M/M Dec C 0.60% | P -1.80%

08:55     EUR        German Unemployment Change Jan C -5K | P -17K

08:55     EUR        German Unemployment Rate Jan C 6.00% | P 6.00%

09:30     GBP       Mortgage Approvals Dec C 69K | P 68K

09:30     GBP       M4 Money Supply M/M Dec C 0.30% | P 0.40%

10:00     EUR        Eurozone Unemployment Rate Dec C 9.80% | P 9.80%

10:00     EUR        Eurozone GDP Q/Q Q4 (A) C 0.40% | P 0.30%

10:00     EUR        Eurozone CPI Estimate Y/Y Jan C 1.50% | P 1.10%

10:00     EUR        Eurozone CPI – Core Y/Y Jan (A) C 0.90% | P 0.90%

13:30     CAD       GDP M/M Nov C 0.30% | P -0.30%

13:30     CAD       Industrial Product Price M/M Dec C 0.60% | P 0.30%

13:30     CAD       Raw Materials Price Index M/M Dec C 2.80% | P -2.00%

13:30     USD       Employment Cost Index Q4 C 0.60% | P 0.60%

14:00     USD       S&P/Case-Shiller Composite-20 Y/Y Nov C 5.00% | P 5.10%

14:45     USD       Chicago PMI Jan C 55 | P 54.6

15:00     USD       Consumer Confidence Jan C 112.9 | P 113.7

Harry Hindsight

• EUR: US news saw the Euro opening higher around the 1.0720 levels and once it moved into the Tokyo session pushing through to test the 1.0740 areas in steady buying, the remainder of the session into the grey hours saw the market slipping back to hold the 1.0720 areas, grey hours selling saw the market filling the gap on the charts and pushing back below the 1.0700 areas and then holding through the Eurozone numbers before dipping on the run towards the NYK session, the market pushed quickly through the 1.0660 areas triggering weak stops on a run to the 1.0620 levels before recovering its composure, with news that France’s borrowing costs increase in line with uncertainty of the election, the move into the NYK session saw a light recovery with the market pushing up to the closing levels from Friday before finishing the day around the 1.0700 levels.
• GBP: As with everything not USD the market opened stronger for the Cable trading around the 1.2570 areas and lifting to the 1.2600 level in the early period testing the level into the Tokyo session before starting a steady slide lower through to the grey hours, holding around the 1.2560 areas the market moved quickly lower on the opening in London, steady EURGBP selling through the London session dragged a little on both currencies and Cable pushed to 1.2510 areas in early trading before bouncing a little however, the markets rally was short lived and the choppy move through to the London close saw the market moving through the 1.2500 areas and testing the 1.2470 areas, the end of the day saw a moderate rise to the 1.2490 levels on limited news.
• JPY: While the USD opened weakly against all currencies the move through the day would suggest a small amount of repatriation going through for the year end already, the market opened around the 114.80 areas topping around the 114.90 as the market attempted to fill the gap before the early sellers moved in and the market dropped through to the 114.30 areas, the move to the grey hours saw some movement back to the 114.60 areas and London were buyers however the attempt to push back to the 115.00 levels was met with resistance and once the attempt had failed the market moved quietly into the NYK session slipping slowly lower to test to the 113.80 in the first few hours of NYK, the move through to the close though saw the market holding around the 113.60 areas and unable to push convincingly through the 113.80 areas.
• AUD: A strong start for the Oz was steadily ground away through the Asian session and the market held around the 0.7555 levels for the bulk of the Asian session, the move into London saw the market slipping into the 0.7540’s before pushing back towards the opening levels before dipping back quickly to test to the 0.7530 areas into the NYK session, the market eventually recovered as the USD again came under pressure with the Oz making its highs just before the London close around the 0.7565 areas and just beyond the opening levels, the market ran to the close holding the opening areas.

Yesterday’s premiership results

NZD       Trade Balance (NZD) Dec A -41M | C -95M | P -705M | R -746M

JPY         Retail Trade Y/Y Dec A 0.60% | C 1.60% | P 1.70%

CHF        KOF Leading Indicator Jan A 101.7 | C 102.9 | P 102.2 | R 102.1

EUR        Eurozone Business Climate Indicator Jan A 0.77 | C 0.8 | P 0.79

EUR        Eurozone Economic Confidence Jan A 108.2 | C 107.8 | P 107.8

EUR        Eurozone Industrial Confidence Jan A 0.8 | C 0.2 | P 0.1

EUR        Eurozone Services Confidence Jan A 13.5 | C 12.7 | P 12.9

EUR        Eurozone Consumer Confidence Jan (F) A -4.7 | C -4.9 | P -4.9

EUR        German CPI M/M Jan (P) A -0.60% | C -0.50% | P 0.70%

EUR       German CPI Y/Y Jan (P) A 1.90% | C 2.00% | P 1.70%

USD       Personal Income Dec A 0.30% | C 0.40% | P 0.00%

USD       Personal Spending Dec A 0.50% | C 0.50% | P 0.20%

USD       PCE Deflator M/M Dec A 0.20% | C 0.20% | P 0.00%

USD       PCE Deflator Y/Y Dec A 1.60% | C 1.70% | P 1.40%

USD       PCE Core M/M Dec A 0.10% | C 0.10% | P 0.00%

USD       PCE Core Y/Y Dec A 1.70% | C 1.70% | P 1.60%

USD       Pending Home Sales M/M Dec A 1.60% | C 1.10% | P -2.50%

Good Luck,

Andy

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