Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 112.772 | EURUSD 1.05763 | AUDUSD 0.7657 | NZDUSD 0.72269 | USDCAD 1.33008 | USDCHF 1.00587 | GBPUSD 1.23806 |

LMAX Highs and Lows 6am GMT

                                High | Low

EURUSD               1.05894 | 1.05508

USDJPY                 113.626 | 112.778

GBPUSD               1.24054 | 1.23628

USDCHF               1.00879 | 1.00533

AUDUSD              0.76999 | 0.76374

USDCAD               1.33247 | 1.32851

NZDUSD               0.71909 | 0.71321

EURCHF                1.06494 | 1.06387

EURGBP               0.85456 | 0.85285

EURJPY                 119.885 | 119.297

For Today

• EUR: The market moved off the 1.0580 levels drifting through to the start of Pres. Trumps speech, with very little in detail the speech was generally on the subject of targets and things to do and really nothing we have not heard before however, the conviction and sincerity did come over well and the market having reversed its losses started to see stronger USD buying move through and the market dropping back from the 1.0590 areas and then dipping back down through the 1.0560 level to run along the 1.0550 areas through to the grey hours. Topside offers through the 1.0630 areas with the market likely to remain offered through to the 1.0660 areas with congestion mixed with light stops through to the 1.0700 areas and stronger offers, a push through the level will likely see weak stops on a move above the 1.0710-20 areas with light congestion before stronger offers through to the 1.0800 areas. Downside bids into the 1.0560 areas with a move through to the 1.0540 levels could see weak stops appearing and the 1.0500 level likely to see stronger bids through to the 1.0490-80 areas and the market opening for a deeper move through the 1.0300 sentimental level.
• GBP: Limited selling through to the Tokyo session saw the market dip into the mid 1.2360’s before bouncing back higher as the first part of the Pres. Trump speech seemed a little weak however, as the market reached above the 1.2400 levels the use of examples in his speech impacted sentiment the market and turned the USD higher again with the Cable dipping back to the 1.2370 areas to move into the grey hours. Bids into the 1.2350 levels with possibly strong bids before the market opens to the 1.2250 areas with weak stops on an initial move through the 1.2300 areas, while there is congestion between 1.2300-1.2250 the market is likely to not be that strong until the low end with weakness through the level. Topside offers light through the 1.2400 areas with congestion from there too the 1.2500 areas with limited congestion through the level and into the 1.2550 areas and a return to stronger offers.
• JPY: USDJPY rose from the opening testing through the 113.20 areas before dipping back into the speech, as the speech moved on and the sentiment and a steady rise through to the 113.60 levels before slipping and holding the 113.40 levels into the grey hours, Having cleared some of the offers into the 113.50 levels the market was unable to push beyond the level with limited offers through to the 113.90 areas the market could still see a squeeze through to the mid 114 handle before seeing some limited offers moving in, downside bids light through the 113.00 areas with the market seeing limited bids on a move lower with 112.50 areas seeing stubborn congestion before the stronger 112.00-111.80 levels and weak stops on a move through.
• AUD: With the Pres. Trump speech and the release for the GDP number the Oz started slowly drifting into the Tokyo session, the numbers was better than expected and the market moved off the lows and traded quickly through to the 0.7670 areas, the market then followed through on early weakness in the USD and pushed to the 77 cent level before the tone of the speech took hold and the market moved back to the opening levels for the move into the grey hours, with GDP confirming a better economy over the past 6 months or so the market finds offers still remaining around the 77 cent levels with congestion likely to continue through to the 0.7750 areas with weak stops possibly above the level and the 0.7775-0.7800 of more import with stronger offers likely and those offers possibly stronger too the 0.7840 areas. Downside bids congestive more than strong however, the sentimental levels are likely strong and the market struggles to the 76 cent levels with weak stops likely on a break through the level and then the pattern repeated.

Overnight News

USD:

Trump Speech Revives Campaign Themes But Details Remain Scarce

Ross Pledges to Fix Nafta, Get Tough With China on Trade Rules

Fed’s Williams Says He Doesn’t See Need to Delay Next Rate Hike

Bullard: Fed Should Be Allowing Balance Sheet to Normalize

Fed’s Bullard: No Reason to Be Especially Aggressive on Hiking

Mnuchin: U.S. Must Simplify Tax Code and Cut Business Tax Rates

JPY:

Japan’s Abe Says He’s Not ‘Primary Balance Supremacist’

BOJ’s Sato: Most Appropriate Yield Curve Would Be a Bit Steeper

Japan 4Q Capital Spending Rose 3.8% Y/y; Est. +0.8%

Nikkei Japan Feb. Manufacturing PMI 53.3 vs 52.7 in Jan.

JPY/USD:

Abe Aide Says Japan to Tell U.S. to Respect WTO Rules: Reuters

AUD:

Australia 4Q GDP Expands 1.1% Q/Q; Est. 0.8% Gain

Australia Feb. Manufacturing Index Rises 8.1 Pts M/m to 59.3

CNY:

China Feb. Manufacturing PMI at 51.6; Est. 51.2

Caixin China Feb. Manufacturing PMI 51.7; Est. 50.8

China to Study Policies to Encourage ‘Sharing Economy’: NDRC

NZD:

N.Z. Terms of Trade Rose Most Since 2013 on Dairy Price Gains

Today’s data

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

NZD       Terms of Trade Index Q/Q Q4 A 5.70% | C 4.00% | P -1.80% | R -1.10%

JPY         Capital Spending Q4 A 3.80% | C 0.60% | P -1.30%

GBP       BRC Shop Price Index Y/Y Feb A -1.00% | C -1.40% | P -1.70%

AUD       GDP Q/Q Q4 A 1.10% | C 0.70% | P -0.50%

CNY        Manufacturing PMI Feb A 51.6 | C 51.2 | P 51.3

CNY        Non-manufacturing PMI Feb A 54.2 | P 54.6

CNY        Caixin PMI Manufacturing Feb A 51.7 | C 50.8 | P 51

07:00     CHF        UBS Consumption Indicator Jan C 1.5 | P 1.5

08:30     CHF        SVME PMI Feb C 55.5 | P 54.6

08:45     EUR        Italy Manufacturing PMI Feb C 53.5 | P 53

08:50     EUR        France Manufacturing PMI Feb (F) C 52.3 | P 52.3

08:55     EUR        Germany Manufacturing PMI Feb (F) C 57 | P 57

08:55     EUR        German Unemployment Change Feb C -10K | P -26K

08:55     EUR        German Unemployment Rate Feb C 5.90% | P 5.90%

09:00     EUR        Eurozone Manufacturing PMI Feb (F) C 55.5 | P 55.5

09:30     GBP       PMI Manufacturing Feb C 55.7 | P 55.9

09:30     GBP       Mortgage Approvals Jan C 68.5K | P 67.9K

09:30     GBP       M4 Money Supply M/M Jan P -0.50%

13:00     EUR        German CPI M/M Feb (P) C 0.60% | P -0.60%

13:00     EUR        German CPI Y/Y Feb (P) C 2.10% | P 1.90%

13:30     USD       Personal Income Jan C 0.30% | P 0.30%

13:30     USD       Personal Spending Jan C 0.30% | P 0.50%

13:30     USD       PCE Deflator M/M Jan C 0.50% | P 0.20%

13:30     USD       PCE Deflator Y/Y Jan C 2.00% | P 1.60%

13:30     USD       PCE Core M/M Jan C 0.30% | P 0.10%

13:30     USD       PCE Core Y/Y Jan C 1.80% | P 1.70%

15:00     CAD       BoC Rate Decision C 0.50% | P 0.50%

15:00     USD       ISM Manufacturing Feb C 56 | P 56

15:00     USD       ISM Prices Paid Feb C 68 | P 69

15:00     USD       Construction Spending M/M Jan C 0.60% | P -0.20%

15:30     USD       Crude Oil Inventories P 0.6M

19:00     USD       Fed Beige Book

Harry Hindsight

• EUR: Opening around d the 1.0590 areas the market traded quietly with one small spike lower to test through the 1.0570 level before recovering and starting a steady rise through into the grey hours pushing gradually through the 1.0600 levels on a quiet session, the day didn’t really improve with the market holding the 1.0580-1.0600 generally into the NYK session with volumes very light through the day, mixed US numbers did little to excite the market and early NYK saw the Euro pushing to the 1.0630 areas before slipping back through the rest of the session to finish just below the opening areas.
• GBP: If Euro had a quiet day Cable was even worse, opening around the 1.2440 levels the movement through to the grey hours was dominated by the 1.2430 area with the market only pushing away from the level once it moved to the grey hours testing the 1.2450 areas before dropping back as early London sat at their desks, while the range improved a little through the London session it remained centred around the 1.2430 level until the move into the NYK session with the market lifting towards the 1.2470 levels as weak USD longs cut out some of their positions before Pres. Trumps address into the next day, Cable saw a few weak stops above the 1.2450 areas before dropping back from the highs and slipping to the close testing through the 1.2400 level and triggering weak stops on the downside to finish the day around the 1.2380.
• JPY: With the upcoming Pres. Trump address the USD slipped steadily lower through the day, moving from the opening 112.70 levels, touching through the 112.80 levels in early trading and then seeing a slow drift through to the 111.70 level, the move through Asia saw the market testing through to the 112.40 level and then the move through London pushing gradually to the 112.00 areas into the NYK opening, the market tried a dip through the 111.80 areas into the close of London however, from there the market seemed to be overdone and the rise back to the 112.40 level was a little quicker but the push through in the last hour saw the market push back to the 112.80 level to the close as the market rebalanced for the coming event.
• AUD: A very tight range through the bulk of the session with the market opening around the 0.7675 level and then basing along that level after an initial dip into the Tokyo session, the market continued moving in the same range of 0.7675-90 for the bulk of the session briefly testing to the 0.7695 levels towards the end of London before slipping back through to trigger some light stops through the 0.7665 areas and bouncing off the 0.7650 areas into the close.

Yesterday’s premiership results

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%

EUR        French GDP Q/Q Q4 (P) A 0.40% | C 0.40% | P 0.40%

CHF        KOF Leading Indicator Feb A 107.2 | C 102.1 | P 101.7 | R 102

USD       GDP (Annualized) Q4 (S) A 1.90% | C 2.10% | P 1.90%

USD       GDP Price Index Q4 (S) A 2.00% | C 2.10% | P 2.10%

USD       Advance Goods Trade Balance Jan A -69.2B | C -66.0B | P -64.4B

CAD       Industrial Product Price M/M Jan A 0.40% | C 0.50% | P 0.40% | R 0.30%

CAD       Raw Materials Price Index M/M Jan A 1.90% | C 2.10% | P 6.50%

USD       Wholesale Inventories Jan (P) A -0.10% | C 0.40% | P 1.00%

USD       S&P/Case-Shiller Composite-20 Y/Y Dec A 5.60% | C 5.40% | P 5.30% | R 5.20%

USD       Chicago PMI Feb A 57.4 | C 53 | P 50.3

USD       Consumer Confidence Feb A 114.8 | C 111 | P 111.8 | R 111.8

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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