Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 112.700 | EURUSD 1.05864 | AUDUSD 0.76736 | NZDUSD 0.72089 | USDCAD 1.31800 | USDCHF 1.00917 | GBPUSD 1.24434 |

LMAX Highs and Lows 6am GMT

                                High | Low

EURUSD               1.05955 | 1.05669

USDJPY                 112.808 | 112.435

GBPUSD               1.24443 | 1.24214

USDCHF               1.01010 | 1.00708

AUDUSD              0.76901 | 0.76675

USDCAD               1.31962 | 1.31701

NZDUSD               0.71998 | 0.7177

EURCHF                1.06859 | 1.06685

EURGBP               0.85194 | 0.85062

EURJPY                 119.369 | 118.847

For Today

• EUR: A very quiet session overall for the Euro with the market making one brief move lower to the 1.0570 areas before returning to the opening levels and slowly pushing from the 1.0585 areas to test briefly above the 1.0590 areas, Topside offers into the 1.0640-50 areas and the market then opening up for a quick test to the 1.0700 levels and possibly a similar round of selling in the area with congestion slowing the move above the level and then stronger offers on the approach to the 1.0800 level. Downside bids light through the 1.0550 areas with stronger bids into the 1.0500 level, a push through the 1.0480 will likely open the market for a strong test lower with the 1.0400 likely to provide only limited support.
• GBP: As with the rest of the market the Cable ranged for most of the session with the Cable opening around the 1.2440 areas and then slipping to trade around the 1.2430 levels dipping into the low 20’s before moving towards the grey hours and recovering to test above the opening levels, offers into the 1.2500 levels with some weak stops running into congestion and the market possibly testing to the stronger 1.2550 areas, lighter congestion above the level with the 1.2600-30 areas likely to be very strong for the moment however, a push through leaves a weak 1.2700 area exposed, downside bids congestive through the 1.2400 handle with strong bids likely to increase into the figure area, a push through the 1.2380 areas is likely to see weak stops appearing and possibly joined by stronger break out stops for a move into a limited sentimental 1.2350 area.
• JPY: Opening quietly around the 112.70 areas the market eased into the Tokyo session testing a little higher and through 112.80 levels, fixing supply caught the market by surprise and the market dipped to the 112.45 level and then pushed back to range around the 112.60 areas and then slipped slowly to the 112.50 areas into the grey hours, Topside offers through the 112.80 areas, offers likely to continue through the level in lighter form before running into stronger offers from the 113.80 level. Downside bids into the 112.00 areas through to the 111.80 area likely to be strong with weak stops below and the market with sentimental levels likely to be the stopping points with possible larger stops in the mix on a move lower with a possible larger move available on the day into the 110.50 areas before stronger bids appear.
• AUD: Still range bound however, having opening around the 0.7675 areas the market slipped only to just below the 0.7670 before rising with a better than expected current account numbers and testing through to the 0.7690 eventually in a dull session, Topside offers into and through the 77 cent levels still remain with the offers likely to continue through to the stronger 0.7740 areas, a push through the 0.7760 areas is likely to see stronger stops appearing however, the 0.7780-0.7800 levels is likely to be as strong as the previous levels, with plenty of offers likely to around above the 78 cent level. Downside bids congestive and sentimental levels are likely to be the strong point with only a push through the 74 cent level opening any strong moves.

Overnight News

AUD:

Australia Jan. Credit to Business, Consumers Rose 0.2% M/M

Australian Net Exports Add 0.2% Pts to GDP in 4Q; Est. +0.2

Australia’s Jan. Private New Home Sales Fall 2.2% M/m

Foreigners Cut Australian Bond Ownership to Lowest Since 2007

USD:

Trump to Talk Foreign Policy, Security in Speech: White House

Billionaire Ross Confirmed as U.S. Commerce Chief in Senate Vote

U.S. Considers Designating N. Korea as Terror Sponsor: Yonhap

NZD:

New Zealand Posts Wider-Than-Forecast Trade Deficit in January

New Zealand Business Confidence Wanes as Price Expectations Gain

JPY:

Kuroda: Easing Affects BOJ Finances But Needed for Inflation

Japan Jan. Industrial Production Falls 0.8% M/m; Est. +0.4%

Japan Jan. Retail Sales Rise 0.5% M/m; Est. +0.3%

CNY:

China Said to Eye 12% Broad Money Supply Rise in 2017: Reuters

CNY/USD:

China, U.S. to Broaden Bilateral Cooperation on Regional Issues

GBP:

U.K. Economic Momentum at Risk as Consumer Confidence Wanes

Today’s data

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

NZD       Trade Balance (NZD) Jan A -285M | C -3M | P -41M | R -36M

JPY         Industrial Production M/M Jan (P) A -0.80% | C 0.40% | P 0.70%

JPY         Retail Trade Y/Y Jan A 1.00% | C 1.00% | P 0.60% | R 0.70%

NZD       NBNZ Business Confidence Feb A 16.6 | P 21.7

GBP       GfK Consumer Confidence Feb A -6 | C -6 | P -5

AUD       Current Account (AUD) Q4 A -3.9B | C -4.1B | P -11.4B | R -10.2B

JPY         Housing Starts Y/Y Jan A 12.80% | C 3.30% | P 3.90%

07:45     EUR        French GDP Q/Q Q4 (P) C 0.40% | P 0.40%

08:00     CHF        KOF Leading Indicator Feb C 102.1 | P 101.7

13:30     USD       GDP (Annualized) Q4 (S) C 2.10% | P 1.90%

13:30     USD       GDP Price Index Q4 (S) C 2.10% | P 2.10%

13:30     USD       Advance Goods Trade Balance Jan C -66.0B | P -64.4B

13:30     CAD       Industrial Product Price M/M Jan P 0.40%

13:30     CAD       Raw Materials Price Index M/M Jan P 6.50%

13:30     USD       Wholesale Inventories Jan (P) C 0.40% | P 1.00%

14:00     USD       S&P/Case-Shiller Composite-20 Y/Y Dec C 5.40% | P 5.30%

14:45     USD       Chicago PMI Feb C 53 | P 50.3

15:00     USD       Consumer Confidence Feb C 111 | P 111.8

Harry Hindsight

• EUR: After opening a touch higher the Euro was dragged to its lows as the Cable dipped and the market moved into the Tokyo session trading below the 1.0555 levels then testing back through to the 1.0565 opening level to push steadily to the 1.0575 areas, the move through the grey hours saw the market trading back to the opening levels and holding through to the London open with the market testing higher as early buyers moved in to test the 1.0585 areas, the market then held the levels through to the NYK session with limited reaction to confidence numbers, disappointing revision and lower than expected durable goods numbers in the US saw the Euro push higher as a general round of USD selling saw the market test through to the 1.0630 level before the market started to drift back on a general slide as sentiment for the USD improved trending back to the 1.0585-90 levels to the close.
• GBP: Cable opened around the 1.2470 areas and once the Times released the story of another referendum calling for Scotland hit Cable dropped back quickly in a thin market testing through the 1.2400 areas, Tokyo opening saw the market bounce a little pushing to the 1.2420 areas and then slowly ranging through to the grey hours pushing through the 1.2430 areas, early Europeans and London players sold on the same news and the market again dipped to set the lows for the day on the move into London touching into the 1.2380’s before bouncing back to 1.2400 and pushing through weak stops on a move back to 1.2430, the market ranged a little into the NYK session and the belated recovery eventually saw the market pushing to the 1.2480 areas through to the end of London before drifting into the close dipping below the 1.2450 levels and holding quietly around the 1.2440 areas.
• JPY: A fairly quiet and narrow range through most of the day with the market opening around the 112.20 areas testing to 112.30 in light buying before catching part of the fallout of Cable with cross selling of the GBP taking USDJPY to just below the 112.00 areas, the market tested the lows repeatedly through the early part of Tokyo before rising back to the opening areas and holding in a tight range through to the end of London, talk from Fed’s Kaplan saw the USD move with the USDJPY lifting from the 112.00 areas in a steady rise through to the 112.70 areas, slowly testing the 112.80 areas before dipping back to 112.70 to finish the day.
• AUD: The drag of GBP saw the Oz dip from the opening to make the lows around the 0.7665 the move into the Tokyo session saw the market slowly pushing back higher and a push through the 0.7690 areas late into the Tokyo session saw the market spike through towards the 0.7710 areas before drifting back to the 0.7690 areas, and the move into the London session saw a slow drift back to the 0.7670 levels, the market ranged for the rest of the day between the 0.7690-70 areas before settling down to trade out on the low side.

Yesterday’s premiership results

AUD       Company Operating Profit Q/Q Q4 A 20.10% | C 8.00% | P 1.00% | R 1.50%

EUR        Eurozone M3 Y/Y Jan A 4.90% | C 4.80% | P 5.00%

EUR        Eurozone Business Climate Indicator Feb A 0.82 | C 0.79 | P 0.77 | R 0.76

EUR        Eurozone Economic Confidence Feb A 108 | C 108.1 | P 107.9

EUR        Eurozone Industrial Confidence Feb A 1.3 | C 1 | P 0.8

EUR        Eurozone Services Confidence Feb A 13.8 | C 13.3 | P 12.9 | R 12.8

EUR        Eurozone Consumer Confidence Feb (F) A -6.2 | C -6.2 | P -6.2

USD       Durable Goods Orders Jan (P) A 1.80% | C 1.90% | P -0.50% | R -0.80%

USD       Durables Ex Transportation Jan (P) A -0.20% | C 0.50% | P 0.50% | R -0.90%

USD       Pending Home Sales M/M Jan A -2.80% | C 0.90% | P 1.60% | R 0.80%

Good Luck,

Andy

Last one for a week with the fish trembling at the approaching torment or that could be me just thinking about how cold it will be on the bankside.

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