Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 114.013 | EURUSD 1.06231 | AUDUSD 0.75959 | NZDUSD 0.70464 | USDCAD 1.33762 | USDCHF 1.00758 | GBPUSD 1.22967 |

 

LMAX Ranges 6am London time

Highs    Lows

EURUSD               1.06216 | 1.05999

USDJPY                 114.134 | 113.724

GBPUSD               1.23013 | 1.22813

AUDUSD              0.75951 | 0.75704

USDCHF               1.00905 | 1.00787

USDCAD               1.33977 | 1.33773

NZDUSD               0.70370 | 0.70076

EURGBP               0.86371 | 0.86267

EURCHF                1.07074 | 1.06954

EURJPY                 121.147 | 120.682

For today

• EUR: Another quiet session for the Euro in Asia with the market opening a touch lower close to the 1.0600 level and then slowly filling the gap through to the Tokyo session and then drifting back to the opening levels over the course of the session, Topside offers into the 1.0620 areas are likely to be light with weak stops on a move through the level with stronger offers reappearing into the 1.0650 areas with those offers likely to be building into the 1.0680-1.0700 area, with limited news for the day the market is likely to be limited, a break through the 1.0710-20 areas will likely see stronger stops if we can get there. Downside bids light through to the 1.0520 areas and stronger bids then start to appear with limited congestion then through the level with some weak stops appearing on a break of the 1.0480 level.
• GBP: Opening just below the close the pre-Tokyo session saw the market testing to the 1.2300 levels before drifting through the session to trade in the 1.2285 areas for the bulk of the session with limited volume. Topside weak offers through the 1.2300 level with weak stops likely through the level and then increasing into the 1.2350 levels, a push through that level will likely see stronger offers again into the 1.2400 level with congestion over the following big figure, Downside bids light through to the 1.2220-00 areas with increasing bids on a move through the level with congestion likely to be strong around the 1.2150 and into the level, a breakthrough of that level will see limited congestion and the possibility of a spike lower with some interest into the 1.2100 areas.
• JPY: A very quiet session for the USDJPY with the opening in line with the close on Friday, the market slipped a little lower through to the Tokyo session testing into the low 113.70 areas before ranging around the 113.80 levels, Topside offers weak too the 114.60 areas with the offers then starting to increase on a move through the 114.80-115.00 through the level there is a possibility of weak stops and the market seeing limited ability to move too far for the moment, Downside bids light through to the 113.50 areas congestion around the area and the bids increasing into the 113.20 areas and likely through to the 112.80 areas before weakness appears but still congestive as the market moves lower.
• AUD: Retail sale hit the market as expected with a decent rise over the previous month however, the market into the Tokyo session saw the market move from the highs around the 0.7595 levels and testing to the 0.7570 areas where the market held through the session until the final hour saw the market rising into the grey hours, Topside offers strong into the 76 cent levels with weak stops through the level and then congestive bids likely through the 0.7640-60 and further congestive offers through to the stronger 77 cent levels and the offers extending to the 0.7720 areas. Downside bids into the 0.7540 levels with possibly some weak stops through the level quickly absorbed by bids into the 75 cent areas and possibly the base for the day.

Overnight News                                                                  

KRW/JPY:

North Korea Fires Multiple Missiles That Fall Into Japan EEZ

JPY:

Japan Says N. Korea Threats at a New Level After Missiles Fired

CNY:

PBOC’s Yi Says Yuan to Remain Relatively Strong: Sec. Journal

KRW:

South Korea Says “Low Chance” N. Korea Fired ICBM

EUR:

Fillon Says He’s Staying in French Presidential Race

France’s Juppe to Decline to Replace Fillon as Candidate: L’Obs

NZD:

New Zealand Approvals for Houses Fall to 19-Month Low

N.Z. Consumption Growth May Have Missed Forecast in 4Q: Treasury

N.Z. to Raise Pension Age to 67 From 65 Within 20 Years: TVNZ

AUD:

Australia Feb. Melbourne Inst. Inflation Gauge Falls 0.3% M/m

Australia Jan. Retail Sales Rise 0.4% M/M; Est. 0.4% Gain

Australia ANZ Feb. Job Advertisements Fall 0.7% M/m

JPY/PHP:

Japan Companies May Invest 199b Pesos in Philippines, Star Says

Today’s data

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

AUD       TD Securities Inflation M/M Feb A -0.30% | P 0.60%

AUD       Retail Sales M/M Jan A 0.40% | C 0.40% | P -0.10%

09:10     EUR        Eurozone Retail PMI Feb P 50.1

09:30     EUR        Eurozone Sentix Investor Confidence Mar C 18.5 | P 17.4

15:00     USD       Factory Orders Jan C 1.00% | P 1.30%

Weekend News

CNY:

China Changes Wording on Yuan Exchange Rate in 2017 Work Report
PBOC’s Yi Says China Won’t Depreciate Yuan for Exports: Xinhua
PBOC’s Yi Says Monetary Policy Won’t Be Too Loose, Tight: News
PBOC’s Pan Says China Has Ample Forex Reserves: Securities Times
China Sets 2017 GDP Target at About 6.5% or Higher If Possible
China to Adopt More Proactive, Effective Fiscal Policy in 2017
China 2017 Defense Spending to Rise About 7%: NPC Spokeswoman
China Has No Plan to Draft Property Tax Law in 2017: NPC’s Fu
China’s Foreign-Exchange Payments Have Solid Basis: PBOC’s Pan
U.S. Protectionism Poses Pressures on China Outflows: Li Daokui
China’s CIC Fund Expects Close to 6% Gain on Overseas Assets
CNY/HKD:

Chinese Premier Li Criticizes Hong Kong Independence in Report
KRW/CNY:

South Korea ‘Concerned’ About China’s Recent Acts Against Cos.
CNY/USD:

China Ready to Meet Challenges From Trump White House, Fu Says
China Wants to Solve Trade Deficit Issue With U.S., Fu Says
EUR:

Fillon Asks Supporters to Stay With Him in ‘Strange Fight’
French Republicans Hold Committee Monday to Review Fillon: AFP
France’s Macron Gains in BVA Poll as Le Pen Support Declines
Juncker Doesn’t Want EU Reduced to a Free Trade Area: Expresso
EU Threatens to Enforce Fine for Spain on Port Rules, ABC Says
Italy Govt. Considering Measures to Boost Economy: Corriere
JPY:

Japan’s LDP Changes Rules Paving Way to Possible Abe Third Term
Japan’s LDP Should Lead Debate on Constitutional Reform: Abe
USD/JPY/KRW/CNY:

U.S. Secretary of State to Visit Japan, South Korea, China: NHK
CHF:

Rising Political Risks Put SNB in `Delicate’ Spot, Jordan Says
NZD:

N.Z.’s English Signals Immigration Change, Sees Trump Trade Risk

 

Harry Hindsight

• EUR: A quiet Asian session with the market moving off the 1.0505 areas to trade through to the London session around the 1.0520 levels with very little volume, PMI numbers did very little for the market and weaker German retail sales was the same story, the market moved into the midmorning session pushing to the 1.0540 areas and the move through to the opening in NYK led to further Euro buying with the market testing to 1.0570 areas, ranging between those two levels through to the end of London, a final push through the highs saw some limited stops triggered and the market making a last gasp move to the 1.0600 areas testing to the 1.0620 areas into the close. Euro strength is possibly more to do with the effect of inflation in Germany and so pressure builds on the ECB to taper at least.
• GBP: Cable did very little in Asia with early Tokyo making early highs above the 1.2280 areas before drifting back to the 1.2260 levels and then ranging through to the London opening, quick selling saw the market dip back and the weaker than expected service PMI number saw the market dropping back to the 1.2220 areas, the market then rose quietly through to the NYK session and a push through the 1.2250 level saw weak stops and a quick spike to the highs before returning to the 1.2250 level, with London out of the way and the end of session USD selling the Cable put in a final push trading to the 1.2300 areas before settling a little lower.
• JPY: A little stronger day for the JPY originally with the USDJPY slipping from the early 114.45 areas to test the 114.10 areas on the run to the grey hours, London were quiet buyers through to the NYK session with the market pushing through the 114.50 levels and then ranging through to the end of London around that level. While Yellen puts a rate hike on the table for this month while Evans wants interest rate hikes rolled out at a slow pace, the market gyrated before starting a steady move down through the 114.00 levels testing the 113.80 before settling back above the 114.00 area.
• AUD: Oz ranged through the day, with the early market testing through the 0.7550 levels and holding several times around the 0.7545 areas, NYK saw the market testing to the 0.7585 areas and then the high was increased on the latter comments from Fed’s Evans leaving the market close to the 76 cent lever into the close.

Yesterday’s premiership results

JPY         Jobless Rate Jan A 3.00% | C 3.00% | P 3.10%

JPY         Household Spending Y/Y Jan A -1.20% | C -0.30% | P -0.30%

JPY         National CPI Core Y/Y Jan A 0.10% | C 0.00% | P -0.20%

JPY         Tokyo CPI Core Y/Y Feb A -0.30% | C -0.20% | P -0.30%

CNY        Caixin PMI Services Feb A 52.6 | P 53.1

JPY         Consumer Confidence Feb A 43.1 | C 43.5 | P 43.2

EUR        German Retail Sales M/M Jan A -0.80% | C 0.30% | P -0.90%

EUR        Italy Services PMI Feb A 54.1 | C 52.8 | P 52.4

EUR        France Services PMI Feb (F) A 56.4 | C 56.7 | P 56.7

EUR        Germany Services PMI Feb (F) A 54.4 | C 54.4 | P 54.4

EUR        Eurozone Services PMI Feb (F) A 55.5 | C 55.6 | P 55.6

GBP       Services PMI Feb A 53.3 | C 54 | P 54.5

EUR        Eurozone Retail Sales M/M Jan A -0.10% | C 0.30% | P -0.30% | R -0.50%

USD       ISM Non-Manufacturing Composite Feb A 57.6 | C 56.5 | P 56.5

Stay lucky

Andy

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