Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 113.732 | EURUSD 1.05469 | AUDUSD 0.76766 | NZDUSD 0.71382 | USDCAD 1.33256 | USDCHF 1.00892 | GBPUSD 1.22926 |

LMAX Highs and Lows 6am GMT

                                High | Low

EURUSD               1.05518 | 1.05282

USDJPY                 114.149 | 113.745

GBPUSD               1.23015 | 1.22697

USDCHF               1.01064 | 1.00857

AUDUSD              0.76819 | 0.76442

USDCAD               1.33604 | 1.33252

NZDUSD               0.71455 | 0.71123

EURCHF                1.06445 | 1.06401

EURGBP               0.85884 | 0.85739

EURJPY                 120.283 | 119.981

For Today

• EUR: A quiet session overall with the market drifting from the opening 1.0550 levels into early Tokyo to test along the 1.0530 levels and holding that level in a quiet move to the grey hours, Topside offers light through the 1.0550 areas with some weak stops possibly through the 1.0560 areas and some limited offers through the 1.0580 areas, a push through the 1.0600 levels will likely see stronger stops appearing and the market limited into the 1.0650 areas with some congestion in the area and the need for some decent numbers. Downside bids into the 1.0500-20 areas with bids likely to be a little through the level however, a push through the 1.0480 areas will likely see some stops appearing and the market open to the 1.0450 areas before stronger bids appear.
• GBP: Early trading saw the market pushing at the 1.2300 levels before the market dipped back into the Tokyo session testing through to the 1.2260 areas, the recovery was limited and the market then spent most of the session floating around the 1.2280 areas to the grey hours. Topside offers light through the 1.2300-20 areas with possible weak stops on a move through the area and stronger offers likely to the 1.2400 areas, even here though the market remains fairly weak and congestion limited with limited protection from a squeeze back to the ranges from the beginning of the week, Downside bids into the 1.2250 areas possibly strong however, the level is pivotal and the risk on a break through the level opens up the market to a deeper move to the lows from earlier in the year, limited congestion around the 1.2200 areas.
• JPY: Opening around the 113.75 areas saw the market move quickly to the 114.00 levels as the early Tokyo moved into the market the market then ranged around the figure level through to the grey hours with the market unable to test above the 114.20 areas and holding around the 113.90 area. Topside offers through to the 114.20 areas with the chances of limited stops with the market open to the 114.50 areas and stronger offers continuing through the 114.80-115.00 level, Downside bids light through the congestive 113.50 areas with weak stops on a break back below the 112.80 level with stronger bids likely through the 112.50 areas.
• AUD: Opening around the 0.7680 areas the market was unable to climb with offers holding the market in place, early Tokyo moved in and sold the Oz back to the 0.7665 and the move into the official opening testing the 0.7655 area, a weaker Trade balance than expected saw the market drop through the 0.7645 level on a knee jerk reaction before holding steady between 0.7650-65 through to the grey hours, Topside offers continue to hold around the 77 cent levels with possible weak stops growing above the 0.7710-20 areas and then opening the 0.7740-60 sentimental level and a stronger offering around the 0.7775-0.7800 area. Downside bids light through to the 0.7640 with bids extending to the 76 cent level, a dip through the level will likely see some sellers appear either with stops or limited balancing however, the downside is likely to be as calm and range bound as the current level.

Overnight News

USD:

Fed’s Brainard Says Rate Hike ‘Will Likely Be Appropriate Soon’

Fed’s Brainard: We Don’t Know How Much Fiscal Policy Is Coming

JPY:

Abe Says Japan Doesn’t Have Defense Spending Cap of 1% 0f GDP

BOJ Lent 3.9t Yen in Japan Government Bonds Last Month: Nikkei

Japan Plans to Maintain Tepco Control Over Long Term, NHK Says

AUD:

Australia January Trade Surplus A$1.3 Bln; Est. A$3.8 Bln

KRW/USD:

1. Korea Yoo, U.S. Mnuchin Discuss Bilateral Relations on Phone

CNY/KRW:

China Still Values Economic Cooperation with S.Korea: Mofcom

USD/KRW:

U.S. Said to Explore Use of Military Force Against N.Korea: WSJ

SGD:

China’s Capital Outflow Slowdown Not a Risk for Singapore: Ong

Today’s data

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

JPY         Monetary Base Y/Y Feb A 21.40% | C 23.20% | P 22.60%

AUD       Trade Balance (AUD) Jan A 1.30B | C 3.82B | P 3.51B | R 3.33B

AUD       Building Approvals M/M Jan A 1.80% | C -0.50% | P -1.20% | R -2.50%

06:45     CHF        GDP Q/Q Q4 C 0.40% | P 0.00%

07:00     EUR        German Import Price Index M/M Jan C 0.50% | P 1.90%

08:15     CHF        Retail Sales (Real) Y/Y Jan P -3.50%

09:30     GBP       Construction PMI Feb C 52 | P 52.2

10:00     EUR        Eurozone PPI M/M Jan C 0.60% | P 0.70%

10:00     EUR        Eurozone PPI Y/Y Jan C 3.20% | P 1.60%

10:00     EUR        Eurozone Unemployment Rate Jan C 9.60% | P 9.60%

10:00     EUR        Eurozone CPI Estimate Y/Y Feb C 1.90% | P 1.80%

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

12:30     USD       Challenger Job Cuts Y/Y Feb P -38.80%

13:30     CAD       GDP M/M Dec C 0.30% | P 0.40%

13:30     USD       Initial Jobless Claims (FEB 25) C 245K | P 244K

15:30     USD       Natural Gas Storage P -89B

Harry Hindsight

• EUR: The day was built up on the back of the Speech by Pres. Trump to Congress, with mixed reviews from the press however, the run to the speech was a steady drift from the opening around the 1.0575 areas testing to the 1.0555 level as early USD buyers moved in, early Tokyo saw the moves reversed as the market gyrated before the speech started and the Euro pushed to the 1.0590 levels, once the speech started the USD again started to rally with the market dropping through the speech and the Euro testing to the 1.0550 levels and holding through to the grey hours, early London dumped the Euro further to the 1.0540 levels and the opening in London dropped back to the 1.0525 areas before ranging through early London and then drifting into the NYK session testing the support levels, German CPI numbers showed an increase for the year adding to pressure to be borne by the ECB over the coming weeks and US numbers were in line generally and the Euro pushed back towards the opening levels into the London close, the run to the close saw the market dipping quickly back to the 1.0550 levels in limited liquidity and then holding around the level to the close.
• GBP: Limited reaction for the Cable through the speech with the market drifting through to the speech around the 1.2380 opening areas, the market bounced to the 1.2400 areas before dipping back again and holding around the opening levels through deep into the London morning, a dip in the PMI saw the market drop quickly back to test to the 1.2300 levels however, it’s worth noting that the number was the 7^th consecutive positive number, the Cable moved into the NYK session trading back to the 1.2320 levels but the market was fairly quiet from then to the close with the market slipping gradually back through the 1.2300 areas.
• JPY: As with the other pairs USD buying early in the session with the market pushing from the 112.80 opening levels to test to the 113.40 areas before drifting back again into the early part of the speech, the market then started a steady period of USD buying and the move back through the 113.30 areas saw some limited weak stops triggered and the market pushing to the grey hours above the 113.60 area, the market ranged through grey hours and deep into London generally holding the highs and only as the market approached the NYK session pushing through into the NYK session testing 114.00, indifferent US numbers saw the market drifting back and ranging to the close between the 113.50-75 levels in a quiet evening.
• AUD: Range bound Oz saw some choppy movements through the day, the move from the opening saw the same USD buying before the release of the GDP number and a quick reversal for the Oz with the market trading off the 0.7635 areas to test back through the opening level to 0.7665, as the lead into the speech the Oz renewed its climb but the 77 cent level held and the start of the speech saw the USD reverse its move and the Oz moving back to the opening 0.7555 levels, early London saw a quick selloff triggering some weak stops and the lows again tested before the official opening tested back to the opening areas, the move through to London saw limited drift with the market holding around the 0.7650 and once London left the arena the Oz rose again to the 0.7675 in what looked more like and option play and a quiet range through to the close.

Yesterday’s premiership results

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

CHF        UBS Consumption Indicator Jan A 1.43 | C 1.5 | P 1.5 | R 1.38

CHF        SVME PMI Feb A 57.8 | C 55.5 | P 54.6

EUR        Italy Manufacturing PMI Feb A 55 | C 53.5 | R 53

EUR        France Manufacturing PMI Feb (F) A 52.2 | C 52.3 | P 52.3

EUR        Germany Manufacturing PMI Feb (F) A 56.8 | C 57 | P 57

EUR        German Unemployment Change Feb A -14K | C -10K | P -26K

EUR        German Unemployment Rate Feb A 5.90% | C 5.90% | P 5.90%

EUR        Eurozone Manufacturing PMI Feb (F) A 55.4 | C 55.5 | P 55.5

GBP       PMI Manufacturing Feb A 54.6 | C 55.7 | P 55.9 | R 55.7

GBP       Mortgage Approvals Jan A 69.9K | C 68.5K | P 67.9K | R 68.3K

GBP       M4 Money Supply M/M Jan A 0.90% | C -0.10% | P -0.50%

EUR        German CPI M/M Feb (P) A 0.60% | C 0.60% | P -0.60%

EUR       German CPI Y/Y Feb (P) A 2.20% | C 2.10% | P 1.90%

USD       Personal Income Jan A 0.40% | C 0.30% | P 0.30%

USD       Personal Spending Jan A 0.20% | C 0.30% | P 0.50%

USD       PCE Deflator M/M Jan A 0.40% | C 0.50% | P 0.20%

USD       PCE Deflator Y/Y Jan A 1.90% | C 2.00% | P 1.60%

USD       PCE Core M/M Jan A 0.30% | C 0.30% | P 0.10%

USD       PCE Core Y/Y Jan A 1.70% | C 1.80% | P 1.70%

CAD       BoC Rate Decision A 0.50% | C 0.50% | P 0.50%

USD       ISM Manufacturing Feb A 57.7 | C 56 | P 56

USD       ISM Prices Paid Feb A 68 | C 68 | P 69

USD       Construction Spending M/M Jan A -0.10% | C 0.60% | P -0.20%

USD       Crude Oil Inventories A 1.5M | C 1.5M | P 0.6M

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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