Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 111.935 | EURUSD 1.06982 | AUDUSD 0.76442 | NZDUSD 0.73172 | USDCAD 1.31447 | USDCHF 0.99462 | GBPUSD 1.2541 |

LMAX Highs and Lows 6am GMT

                                High | Low

EURUSD               1.06993 | 1.06765

USDJPY                 112.343 | 111.733

GBPUSD               1.25449 | 1.24976

USDCHF               0.99655 | 0.99439

AUDUSD              0.76462 | 0.76106

USDCAD               1.31657 | 1.31405

NZDUSD               0.72607 | 0.71924

EURCHF                1.06444 | 1.06387

EURGBP               0.85473 | 0.85293

EURJPY                 119.993 | 119.531

For Today

• EUR: Opening around the 1.0698 areas the market drifted from the opening in the Tokyo saw the market slip through the 1.0680 areas on a limited test before holding around the 1.0685 areas into the grey hours, Topside limited offers through the 1.0700 areas with possible weak stops on a move through the 1.0720 areas and then stronger offers appearing into the 1.0740-60 area, with congestive offers following to the 1.0780-1.0810 better offers, Downside bids light to the 1.0650 areas and then possible strong congestive bids through the level and continuing into the strong 1.0600 levels, a break through the 1.0580 areas will likely see some weak stops however, the downside will likely see congestive bids all the way through to the 1.0500 levels.
• GBP: Cable opened on its highs around the 1.2540 areas and on the move into the Tokyo session slowly drifting to the 1.2500 areas in midsession and then slowly rising towards the 1.2520 areas through to the grey hours, Topside offers into the 1.2550 with limited congestive offers through to that level, a push through will likely see weak stops and then the market opens to possibly stronger offers into the 1.2600 areas, and then congestive offers from the 1.2630 areas onwards. Downside bids light through to the 1.2450 areas weak stops likely on a push through the level however, we do seem to have settled into a more economic movement than the nervous Brexit talk, however any push through the 1.2400 levels is likely to find strong support into the 1.2350 level.
• JPY: The USDJPY dipped from the opening trading down to test towards the 111.70 levels before early Tokyo traders moved in and a steady rise in a tight channel through to the 112.35 areas before running out of steam, the market then ranged around the 112.10-112.20 levels through into the grey hours in very light trading for the day. Topside offers into the 112.50 level likely to be light with stronger offers possibly forming into the 113.00 and likely to see weak stops through the 113.20 areas and congestions to soak up those stops, 113.50 areas is likely to see stronger congestive offers through into the 113.80 areas and then a reasonably strong trend line protecting the 114.00 levels. Downside bids into the 111.60-50 areas forming the base at the moment with stops likely on a move through the 111.50 levels with possibly limited bids into the 111.00 areas and the market opening for a move through limited congestion to the 110.50 areas.
• AUD: A small USD resurgence on a limited volume day saw the market drift from the 0.7645 levels and pushing into the Tokyo session pushing the 0.7620 areas, the market eventually pushed off a weak push towards the 0.7610 areas to hold the 0.7625-30 areas into the grey hours. Downside bids into the 76 cent levels with plenty of congestion likely through onto the 75 cent levels, only a solid push through that level on the downside is likely to do anything meaningful and the Oz remains mired in the upper half of the 75-77 cent range, Topside offers into the 77 cent levels will likely see stops appearing on a push through and while there may be some offers into the 0.7740-60 areas stronger offers are likely on a move towards the 0.7770-0.7780 levels with limited stops through that area.

Overnight News

USD/CNY:

Trump, in letter to China’s Xi, seeks ‘constructive relationship’

JPY/USD:

Abe Said to Propose Trump Discuss Currency Issues at G-20, G-7

Abe to Ask Trump to Understand Japan’s Monetary Policy: Kyodo

Abe-Trump Meeting Could Start New Economic Talks: Nikkei

JPY:

PM Abe to propose U.S.-Japan cabinet level talks to Trump -govt source

BOJ’s Nakaso: Pursuing Powerful Easing Is Utmost Importance

Japan Dec. Core Machine Orders Rise 6.7% M/m; est. +3%

Japanese Sold Net 126.6 Billion Yen Overseas Debt Last Week

NZD:

RBNZ wants to be Sure of 2% Inflation Before Hiking: McDermott

RBNZ Keeps Key Rate at 1.75% as Forecast by Surveyed Economists

New Zealand Dec. Home-Building Approvals Fall 7.2% M/M

CNY:

China’s Outbound Investment to Slow Down in 2017, Ministry Says

China Shouldn’t Put Forex Reserves Ahead of Yuan: Daily

SGD:

Singapore Unveils Strategies as Mood on Globalization Darkens

GBP:

U.K. Jan. RICS House Price Index at 25 vs Est. 22

AUD:

Australia’s Dec. Private New Home Sales Rise 0.2% M/m

Today’s data

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

NZD       RBNZ Rate Decision A 1.75% | C 1.75% | P 1.75%

NZD       Building Permits M/M Dec A -7.20% | P -9.20% | R -9.60%

JPY         Japan Money Stock M2+CD Y/Y Jan A 4.10% | C 4.00% | P 4.00%

JPY         Machine Orders M/M Dec A 6.70% | C 3.10% | P -5.10%

GBP       RICS House Price Balance Jan A 25% | C 22% | P 24%

AUD       NAB Business Confidence Q4 A 5 | P 5 | R 6

JPY         Machine Tool Orders Y/Y Jan (P) A 3.50% | P 4.40%

06:45     CHF        Unemployment Rate Jan C 3.30% | P 3.30%

07:00     EUR        German Trade Balance (EUR) Dec C 23.2B | P 21.7B

13:30     CAD       New Housing Price Index M/M Dec C 0.20% | P 0.20%

13:30     USD       Initial Jobless Claims (FEB 04) C 250K | P 246K

15:30     USD       Natural Gas Storage P -87B

Harry Hindsight

• EUR: A limited day with the market opening around the 1.0680 levels and slipping into the Tokyo session testing only a little lower only to see the market rising for the Tokyo fix and limited buying to the 1.0690 areas, the market held the highs for a good portion of the session before drifting back to the opening levels as the market moved towards the grey hours, European selling was quickly joined by London with the market dropping back towards the 1.0640 areas holding the level through to the NYK session, the opening in NYK saw a steady day of USD selling moving in pushing through on limited news to trigger weak stops on the move back through the opening level and again on the break above the 1.0680 areas to test to the 1.0710 levels and holding above the level for a couple of hours, London closed the market dipped back a little to test the opening area again before finishing the day just short of the 1.0700 area.
• GBP: With the second vote on delivering Article 50 voted through and the last gasp chance of a second referendum gone albeit a slim chance the market opened around the 1.2505 and traded through the Asian session holding around the 1.2500 levels, the move into the London session saw very little difference with the 1.2480 area holding through the session and only once the market moved into the NYK session was there a limited rise testing through towards the 1.2550 areas before ranging to the close between 1.2520-40.
• JPY: Limited choppy trading through the day with the early part of Tokyo seeing the high of the day as the market moved off the 112.40 opening to test lightly above the 112.50 areas before quickly dropping back and holding through midsession around the 112.10 areas, the move towards the London session saw the market moving steadily back to the opening levels and then bouncing around in an attempt to push to new highs, it failed twice into London and dropped back again to the 112.10 areas as the weak buyers cut out quickly, the move to the NYK session saw the sellers reappear and the USDJPY dropped into the opening testing the 112.00 areas, the market continued to fall however, the bids slowed the market and only once the 111.80 areas broke did the market probe quickly through the 111.70 level before bouncing the lows towards the 111.60 level was repeated a few hours later before the market bounced off the lows pushing back above the 112.00 areas before finishing the day around that level.
• AUD: Opening around the 0.7625 levels early sellers pushed the market to its lows just above the 0.7610 areas before the Tokyo market started to see some USD weakness moving in and the Oz climbed to the 0.7635 areas to trade through to NYK session holding around the 0.7630 level, NYK saw the Oz rise to the highs testing to the 0.7665 areas on USD weakness again before returning to the 0.7630 level as the London session ended and rose just slightly to the close.

Yesterday’s premiership results

JPY         BOJ Summary of Opinions

JPY         Current Account (JPY) Dec A 1.67T | C 1.71T | P 1.80T

JPY         Eco Watchers Survey Current Jan A 49.8 | C 51.8 | P 51.4

CAD       Housing Starts Jan C 200.0K | P 207.0K

USD       Crude Oil Inventories A 1.4M | C 2.7M | P 6.5M

NZD       RBNZ Rate Decision A 1.75% | C 1.75% | P 1.75%

Good Luck,

Andy

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