Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 113.892 | EURUSD 1.05816 | AUDUSD 0.75801 | NZDUSD 0.69936 | USDCAD 1.34113 | USDCHF 1.01209 | GBPUSD 1.22354 |

LMAX Highs and Lows 6am GMT

                                High | Low

EURUSD               1.05934 | 1.05729

USDJPY                 114.077 | 113.852

GBPUSD               1.22510 | 1.22329

USDCHF               1.01266 | 1.01076

AUDUSD              0.76325 | 0.75792

USDCAD               1.34102 | 1.33836

NZDUSD               0.70185 | 0.6983

EURCHF                1.07111 | 1.07053

EURGBP               0.86496 | 0.86398

EURJPY                 120.666 | 120.481

For Today

• EUR: A slow drift from the opening with the market slipping to the 1.0575 areas before starting a steady recovery through to test the 1.0590 areas, with no change in the RBA the EURAUD came under pressure and this took the Euro down slightly on the run to the grey hours with the market holding around the 1.0580 areas, offers into the 1.0640-60 areas is likely to see some weak stops through the level and the market strengthening again as it approaches the 1.0680 level with those offers likely to continue through to the 1.0710 area with limited congestion through to the 1.0750 areas, limited data for the day but Eurozone GDP and US trade balance likely to be of import. Downside bids into the 1.0560-40 areas however, it is likely to be light with a push through the level leaving the 1.0520-00 vulnerable to another test and strong bids likely, a slip through the 1.0490-80 areas will possibly see some strong stops appearing and the market opening for a deeper move to the 1.0400 levels. Question will be, will Germany get its way and a tapering of QE, I think not it took them nearly 8yrs to implement the it in the first place and decision making is not speedy.
• GBP: Cable saw light buying through to test through the 1.2250 levels however as the market moved through the RBA announcement and GBPAUD selling moved into the market with limited volume and the market was back to the opening level, for the moment the market in Cable seems to have found a small range around the 1.2250 areas with possibly strong bids on dips into the 1.2200 areas, with congestion in the area any dip through the 1.2200 level will see some weak stops however, a repeat of previous drops are not as likely with the 1.2150 areas likely to see fresh bidding appear. Topside offers light through to the 1.2300 levels with some stronger offers in the way, a move through the level will likely see weak stops and the market opening quickly to the 1.2350 level with some light congestive offers, with weakness then to the 1.2400 level and a mini squeeze possible, Downside bids into the 1.2200 areas with some depth to the bids from 1.2230, a move through the level is likely to continue seeing bids appearing light as to begin with but likely to become more supportive on any attempt at the 1.2150 areas with a weak 1.2100 level below.
• JPY: The day was dominated by the RBA with nothing special in the USDJPY, early buying from the Tokyo opening saw the market move back above the 114.00 levels but it was only for a short period before drifting back to hold around the opening 113.90 areas, and remaining caught in a tight range, Bids to the downside light until the 113.50 areas where congestive and sentimental bids move in, a push through the level sees possible weak stops however, a push through the 113.20-113.00 is likely to produce stronger stops for a test back to the 112.50 areas and then stronger still as the market moves towards the 112.00 areas. Topside offers through the 114.50 areas are likely to be tempered by some weak stops before the stronger offers into the 115.00 area come into play, with a push through the level likely to see those offers continuing to the 115.20 area and offers increasing into the 115.50 level.
• AUD: With the Oz opening around the 0.7580 levels the market rose quietly into the Tokyo session testing towards the 76 cent levels through to the RBA announcement, as was expected the announcement saw no change and the market reacted on the dissatisfaction with the current supervisory regime for mortgage lending which has seen recent rises and given record lows for the for the cash rate the RBA may becoming frustrated with the current levels and disparity the banks are creating, the Oz pushed eventually to the 0.7630 areas before drifting a little from the highs as the market moves towards the grey hours. Offers into the 0.7640 levels are likely to not be particularly strong and a push through will see a return of offers into the 77 cent levels with those offers likely to increase on a move towards the 0.7730-50 areas with a break here likely to see weakness to the 78 cent level with stronger offers in the area, downside bids light through to the 0.7550 areas and possible congestion on a move through the 0.7540 levels and bids increasing as the market moves towards the 75 cent level and likely to be fairly strong.

Overnight News

USD/JPY/KRW:

Trump Emphasizes U.S. Commitment to Japan, S.Korea in Calls

JPY/USD:

Abe Says Trump Assured U.S. Is ‘100%’ Behind Japan on N. Korea

KRW/CNY:

1. Korea to Respond to China Trade Steps Based on FTA, WTO Rules

CNY:

China Able to Control Local Debt Levels: Finance Minister

CNY/KRW:

China Suspends New Approvals for South Korean Games: Daily

KRW/USD:

1. Korea, U.S. Begin Process of Thaad Deployment, Yonhap Says

KRW:

1. Korea Says Missiles Fired by N. Korea Were Upgraded Scuds

AUD:

RBA Leaves Key Rate at 1.5% as Seen by All Economists Surveyed

Australia’s Feb. Construction Index Rises 5.4 Pts M/m to 53.1

NZD:

IMF Says New Zealand Dollar Is Moderately Overvalued

IMF Says N.Z. Needs to Upgrade Financial System Oversight

RBNZ Should Be Given Debt-To-Income Tool for Housing, IMF Says

RBNZ Says Bank Capital Requirements Need to Reflect N.Z. Risks

RBNZ Says Bank Capital Review Will Enhance System Efficiency

GBP:

U.K. LFL Feb. Retail Sales Fall 0.4% Y/y, BRC Says

Today’s data

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

GBP       BRC Retail Sales Monitor Y/Y Feb A -0.40% | C -0.50% | P -0.60%

AUD       RBA Rate Decision A 1.50% | C 1.50% | P 1.50%

07:00     EUR        German Factory Orders M/M Jan C -2.50% | P 5.20%

08:00     CHF        Foreign Currency Reserves Feb P 643.7B

10:00     EUR        Eurozone GDP Q/Q Q4 (F) C 0.40% | P 0.40%

13:30     USD       Trade Balance Jan C -47.0B | P -44.3B

13:30     CAD       International Merchandise Trade (CAD) Jan C 0.75B | P 0.92B

15:00     CAD       Ivey PMI Feb C 58.9 | P 57.2

21:45     NZD       Manufacturing Activity Q4 P 0.40%

Harry Hindsight

• EUR: A quiet session start with the Euro testing to the early highs around the 1.0620 areas into the Tokyo opening, from there though the market drifted back to the 1.0600 levels into the London session, London opening saw the market trade quickly higher running to the 1.0640 levels before dropping quickly back on a poor Eurozone Retail number, the market tripped through the 1.0600 levels and held around the 1.0580 areas and slowly returned to the 1.0600 areas for the move into the NYK session, NYK saw limited movement with the market dropping a little as US factory orders improved and the Euro dropped back to the 1.0580 levels again to trade to the close in a quiet market over the course of the day.
• GBP: Initial rise into the Tokyo opening saw the market move from the 1.2290 areas to test briefly around the 1.2300 levels, Tokyo sold from the opening but it was a limited reaction with the market dipping into the 1.2280’s and then drifting through to the London opening, the market continued its slow slide lower with early sellers pushing to the 1.2270 area before slowly moving through to mid-morning testing the 1.2250 areas, the market held the level through into the NYK session with some profit taking the market a little bit higher before the selling started to increase through the run to the London close, and a steady grind to the 1.2225 level, light trading through to the close of the day with the market rising a little to the 1.2240 levels.
• JPY: Opening around the 114.00 levels the market struggled through the day to find any direction with the market making early highs above the 114.10 areas and then slipping to the mid 113.70 on the move through to the Tokyo opening, while the market did test a little lower the market was very limited with the move into the London session saw the lows with the market briefly testing through the 113.60 level before slowly rising through the to the NYK session, NYK did test the highs but limited through to the close.
• AUD: The Oz remained limited in range through the whole day with the market opening shy of the Friday close to dip on the Tokyo opening to make the lows for the day just above the 0.7570 level and trading off that base through towards the grey hours, the market saw a recovery late in Tokyo with limited movement on the London opening before creating the highs on EUR/AUD selling, with the Oz moving above the 0.7600 areas to test the 0.7610 level, the market dipped and then repeated the move into the NYK session before sliding lower into the London close and settling to trade around the 0.7580 levels to the close.

Yesterday’s premiership results

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%

EUR        Eurozone Retail PMI Feb A 49.9 | P 50.1

EUR        Eurozone Sentix Investor Confidence Mar A 20.7 | C 18.5 | P 17.4

USD       Factory Orders Jan A 1.20% | C 1.00% | P 1.30%

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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