Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 113.252 | EURUSD 1.06554 | AUDUSD 0.76252 | NZDUSD 0.71846 | USDCAD 1.31467 | USDCHF 1.0017 | GBPUSD 1.24968 |

LMAX Highs and Lows 6am GMT

                                High | Low

EURUSD               1.06679 | 1.06496

USDJPY                 113.800 | 113.239

GBPUSD               1.25218 | 1.2491

USDCHF               1.00238 | 1.00058

AUDUSD              0.76572 | 0.76184

USDCAD               1.31474 | 1.31215

NZDUSD               0.72059 | 0.71805

EURCHF                1.06798 | 1.06622

EURGBP               0.85322 | 0.85106

EURJPY                 121.323 | 120.691

For Today

• EUR: A quiet session again through Asia with the Euro trading into the Tokyo session dipping to the 1.0650 areas before pushing back to the opening levels and ranging around the level through to the grey hours unable to push very far beyond the 1.0665 levels, Topside offers light through the 1.0680 areas with weak stops on a push back through the 1.0715 areas with limited offers into the 1.0720 areas and congestive then on through to the 1.0760-70 areas with stronger offers likely above and into the 1.0800 areas. Downside bids into and through the 1.0650 areas with possible weakness through the 1.0640 areas but quickly strengthening on a move towards the 1.0600 level and through to the 1.0580 with congestive bids likely to continue through to the 1.0520 area and further strong bids.
• GBP: Cable drifted into the Tokyo session testing the 1.2490 levels before entering the Tokyo session and a push back to the 1.2520 levels and moving sideways through till late in the session before dipping back to the 1.2500 levels for the move into the grey hours, Topside offers light through to the 1.2580 areas with the market likely to see reasonable offers into 1.2600 and weak stops through to open up a test towards the high 1.26 handle and into the 1.2700 area and strong offers appearing again. Downside bids light through to the 1.2450 areas with some support possibly building however, the 1.24 handle is likely to be congestive for the most part and a push through bids around the 1.2400 will see stronger support below to the 1.2350 areas. Decent run of numbers for Cable today and if the GBP is to find support these need to be at least in line.
• JPY: The market seems to be on hold for the moment until we see Abe meet Trump and the result from that, pushing from the opening around the 113.25 areas the market slowly climbed to test the 113.80 levels before ranging through the session between the high and the 113.60 areas to move into the grey hours just off the highs, Topside offers through to the 114.00 level with a push through the level finding offers through the 114.50 areas likely to be limited but possibly slowing any strong move through the 115.00 level with offers light around that level. Downside bids light through to the congestive 112.00 areas with stronger bids waiting through the level and into the 111.50 area.
• AUD: Limited day, dare I say again with the market moving from the 0.7620 level steadily higher once we entered the Tokyo session to test through the 0.7655 area before drifting back to hold the 0.7640 level through to the Grey hours, the RBA statement had only a limited effect on the market, First half growth forecasts were downgraded before returning to the 3% level for the second half, and pretty much in line with most expectations. Topside offers through the 77 cent levels likely to hold the quiet movements we’ve seen with a push through the level possibly triggering stops and a quick push to the 0.7740-60 offers. Downside bids into the 76 cent levels opens the market to nothing but congestive bids on a move back to the 75 cent handle and limited movement around the 0.7550 areas.

Overnight News

USD/CNY:

Trump Reaffirms U.S. ‘One-China’ Stance in First Call with Xi

USD:

Appeals Court Keeps U.S. Doors Open during Immigration Fight

JPY:

BOJ Boosts Purchases of Govt. Bonds Due in More Than 10 Years

Japan National Debt Was 1,066.4t Yen at End-December, MOF Says

CNY:

China Said to Assess Impact from Possible Punitive U.S. Tariffs

China Jan. Exports Rise 15.9% Y/y in Yuan Terms; Est. 5.2%

Chinese Banks Delay Draw-Downs of Mortgages, SCMP Reports

Chinese Researchers Say China Should Join TPP: China Daily

AUD:

RBA Trims Near-Term GDP Forecasts; CPI Outlook Little Changed

Australia Dec. Home-Loan Approvals Rise 0.4% M/M; Est 1% Gain

Australia Needs to Lure More Foreign Investment, Morrison Says

SGD:

U.S. Withdrawal from TPP Changes Equation: Singapore’s Iswaran

Today’s data

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

JPY         Domestic CGPI Y/Y Jan A 0.50% | C 0.00% | P -1.20%

AUD       Home Loans Dec A 0.40% | C 1.00% | P 0.90% | R 1.30%

AUD       RBA Statements on Monetary Policy

CNY        Trade Balance (USD) Jan A 51.4B | C 48.8B | P 40.8B

CNY        Trade Balance (CNY) Jan A 354.5B | C 295.3B | P 275.4B

JPY         Tertiary Industry Index M/M Dec A -0.40% | C -0.20% | P 0.20% | R 0.30%

09:30     GBP       Visible Trade Balance (GBP) Dec C -11.5B | P -12.1B

09:30     GBP       Industrial Production M/M Dec C 0.20% | P 2.10%

09:30     GBP       Industrial Production Y/Y Dec C 3.20% | P 2.00%

09:30     GBP       Manufacturing Production M/M Dec C 0.50% | P 1.30%

09:30     GBP       Manufacturing Production Y/Y Dec C 1.70% | P 1.20%

09:30     GBP       Construction Output M/M Dec C 1.00% | P -0.20%

13:30     CAD       Net Change in Employment Jan C 0.0K | P 53.7K

13:30     CAD       Unemployment Rate Jan C 6.90% | P 6.90%

13:30     USD       Import Price Index M/M Jan C 0.20% | P 0.40%

15:00     GBP       NIESR GDP Estimate Jan P 0.50%

15:00     USD       U. of Michigan Confidence Feb (P) C 97.8 | P 98.5

Harry Hindsight

• EUR: The market drifted through the Asian session dropping from the 9opening 1.0695 to test through to the 1.0680 in limited trading, the move into the grey hours saw an extension of those lows with the market just holding the 1.0670 level into the London open, German trade balance helped the market higher into the new session and quickly back to the opening and pushing gradually through to the 1.0710 area, with the news out of the way and the arguments beginning to escalate between the Trump administration and the EU the market dropped quickly through towards the lows again, easing into the NYK session ranging between the opening levels and the lows, another drop on the initial claims number saw the Euro drop back quickly testing into the 1.0650 areas and the market then based along that area through to a quiet close.
• GBP: Asia saw a steady drop back to the 1.2500 areas before running along the level into the grey hours, the opening in London saw the Cable rise quickly through the opening 1.2540 areas and push through to the 1.2570 and then ranging around the 1.2560 levels into the NYK session with the peak being just above the 1.2580 level, the move through into the NYK session saw what is becoming a daily event of accusations from the Trump administration this time aimed at Germany in particular, talk of coming taxation shake ups in the US saw the USD rally a little with the Cable forced back to the 1.2500 levels again for the run into the close.
• JPY: Abe/Trump to come the market was becalmed through the Asian session rising from the opening 111.80 level through to the 112.30 area the market then stalled and held around the area into the London session tentatively pushing the 112.40 area before ranging around the 112.30-45 levels into the NYK session, Fed’s Evans mention 3 rate hikes this year not being unreasonable and the USD moved testing through the 113.00 levels and pushing around the 113.25 areas through to the close.
• AUD: Choppy could be a word for the day however, the range was not particularly awesome and the Oz remains range bound, with the early market4 dropping back from the 0.7645 levels with a hold on NZD rates dragging a little on the Oz, the market moved through into the Tokyo session holding the 0.7610areas and then ranging around the 0.7625 levels to the London session, the weak USD against Euro and GBP saw the Oz quickly pushing through the opening 0.7645 areas and the market topping above the 0.7660 with limited offers through mid-range, the market moved into the NYK session holding around the levels before dropping quickly down to the 0.7620 areas and then nothing the market drifted through to the close holding around the 0.7625 areas.

Yesterday’s premiership results

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%

CHF        Unemployment Rate Jan A 3.30% | C 3.30% | P 3.30%

EUR        German Trade Balance (EUR) Dec A 18.4B | C 23.2B | P 21.7B | R 21.8B

CAD       New Housing Price Index M/M Dec A 0.10% | C 0.20% | P 0.20%

USD       Initial Jobless Claims (FEB 04) A 234K | C 250K | P 246K

USD       Natural Gas Storage A -152B | C -155B | P -87B

Good Luck,

Andy

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