Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 114.954 | EURUSD 1.05769 | AUDUSD 0.75049 | NZDUSD 0.68968 | USDCAD 1.35110 | USDCHF 1.01223 | GBPUSD 1.21648 |

LMAX Highs and Lows 6am GMT

                                High | Low

EURUSD               1.06028 | 1.05722

USDJPY                 115.431 | 114.988

GBPUSD               1.21650 | 1.21504

USDCHF               1.01318 | 1.01143

AUDUSD              0.75266 | 0.74989

USDCAD               1.35145 | 1.34958

NZDUSD               0.69168 | 0.68923

EURCHF                1.07305 | 1.07062

EURGBP               0.87204 | 0.86936

EURJPY                 122.322 | 121.649

For Today

• EUR: A quiet session again, with the market in NFP mode and until that point the market is likely to remain a little quiet, opening around the 1.0575 area and slowly rising through the session to push above the 1.0600 levels through to the grey hours, Topside offers likely into the 1.0620 areas with limited weak stops through the level and increasing offers from the 1.0640 area, a break above the 1.0660 area will likely not see the offers disappear with the 1.0700 area likely to see strong offers showing however, given the ADP number in the US earlier in the week NFP could see a significant rise above expectations, downside bids into the 1.0550 levels likely to be weak with stronger bids into the 1.0520 areas and likely down to the 1.0490-80 areas before stops appear.
• GBP: Cable ranged quietly through to the grey hours, with the market moving into the Tokyo session testing to the 1.2150 and the lows before pushing slowly above the opening and slipping back into the grey hours from the 1.2163 area unchanged on the day, Topside offers into the 1.2190 levels and through to the 1.2200 levels and possible weakness through to the 1.2250 area with limited offers likely. A push through the level will likely see further weak offers and then increasing into the 1.2300 levels. Downside bids continue through to the 1.2100 areas and seem to be stronger than expected for the moment with the downside bids likely to be patchy on a drop through the level and only improving as the market slips lower.
• JPY: USDJPY opened around the 115.00 levels with the market steadily rising through the session, grinding through the offers into the 115.20 areas and eventually pushing to the 115.40 into the grey hours. Downside bids light back through the 115.00 areas with increasing bids into the 114.60 levels a push through the 114.40 levels is likely to see weak stops appearing and the market likely to see a reversal back through the 114.00 levels with congestion through that level, topside offers into the 115.50 areas with weak stops on a move through the level and limited congestion to the 116.00 levels with those offers likely to be weak to the 116.50 levels.
• AUD: opening around the 0.7505 areas and initially testing the 75 cent levels before a better home loan number saw the market slowly moving into Tokyo testing high through to the 0.7525 areas, the market then ranged around the 0.7520 levels through to the grey hours. Topside offers through the 0.7530 levels will likely see some light stops but further offers light through to the 0.7560 possibly the strongest point until the 76 cent areas, with strong offers likely through to the 0.7620 areas before weak stops and 0.7640 offers appearing, Downside bids into the 75 cent levels and through to the 0.7490 area with weak stops likely to appear on a move through and the market opening to a larger drop back towards the 0.7420 areas.

Overnight News

CNY:

Yuan FX Rate Should Be Relatively Stable in 2017: PBOC’s Zhou

China Forex Reserves Grew ‘Too Fast’ Since 2002: PBOC’s Zhou

China’s Capital Flows Will Be Balanced, Healthy: PBOC Governor

China to Promote Bond Market Opening in Steady Way: PBOC’s Pan

PBOC Has Many Tools to Choose for Monetary Policy: PBOC’s Zhou

PBOC Governor Sees Relatively Fast Growth in Mortgage Loans

SGD:

Singapore to Cut Property Stamp Duties, Ease Debt Ratio Rules

Singapore January Retail Sales +2% Y/y; Est. +0.8%

JPY/USD:

Aso: Will Listen Carefully to What the U.S. Says at G-20 Meeting

JPY/EUR:

Japan’s Abe to Meet With EU’s Tusk, Juncker in Brussels March 21

EUR:

Greek Opposition Will Vote Against Fiscal Measures: Mitsotakis

AUD:

Australia Jan. Home-Loan Approvals Rise 0.5% M/M; Est. 1% Fall

NZD:

New Zealand Card Spending Falls For The First Time in Six Months

Today’s data

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

JPY         BSI Large Manufacturing Q/Q Q1 A 1.1 | C 8.4 | P 7.5

AUD       Home Loans Jan A 0.50% | C -1.00% | P 0.40% | R 0.20%

07:00     EUR        German Trade Balance (EUR) Jan C 18.0B | P 18.4B

09:30     GBP       Industrial Production M/M Jan C -0.50% | P 1.10%

09:30     GBP       Industrial Production Y/Y Jan C 3.20% | P 4.30%

09:30     GBP       Manufacturing Production M/M Jan C -0.70% | P 2.10%

09:30     GBP       Manufacturing Production Y/Y Jan C 2.90% | P 4.00%

09:30     GBP       Construction Output M/M Jan C -0.40% | P 1.80%

09:30     GBP       Visible Trade Balance (GBP) Jan C -11.1B | P -10.9B

13:30     CAD       Net Change in Employment Feb C -15.5K | P 48.3K

13:30     CAD       Unemployment Rate Feb C 6.80% | P 6.80%

13:30     USD       Change in Non-farm Payrolls Feb C 190K | P 227K

13:30     USD       Unemployment Rate Feb C 4.70% | P 4.80%

13:30     USD       Average Hourly Earnings M/M Feb C 0.30% | P 0.10%

15:00     GBP       NIESR GDP Estimate Feb C 0.60% | P 0.70%

Harry Hindsight

• EUR: A quiet Asian session with the market opening around the 1.0540 levels and slowly slipping to trade along the 1.0530 level through into the grey hours, early London tested through the 1.0530 levels to set the lows before moving back through the opening level and too the 1.0550 areas, the move through the early London session continued rising to the 1.0570 level before holding around the 1.0550-70 into the ECB rate decision, as expected the rate was left unchanged however, a softer tone from Draghi on QE left the Euro moving quickly higher testing to the 1.0615 areas before running into some offers, and drifting back to the 1.0570 levels into the NYK session and holding that level, the move through to the close saw the market again testing weakly above the 1.0590 area and then drifting through to the close.
• GBP: A limited range for Cable with the market drifting from the opening and testing towards the 1.2150 areas through into the London session, London were quick sellers with the market testing through to the 1.2140 areas and a steady climb higher with the drag of the Euro helping Cable through to the 1.2195 levels to make the highs, the market dropped hard from the highs testing to the 1.2135 levels again holding the area with some weak stops triggered and as the London session came to a close the market again ran higher pushing to the opening levels and then another push through eventually to test the highs again, the market started to fade the level and the market returned to the opening levels through to the close with little direct movement and all Euro related.
• JPY: Limited movement through the Asian session and the market moved in a 114.40-60 area through to the London session quickly triggering weak stops on a push through the top of the range before holding the 114.90 areas and the stronger offerings, the highs were extended but only just with the market ranging back to the opening areas pushing back to the highs through the session and eventually in the last hour or so pushing towards the 115.00 levels as the market ground through those offers.
• AUD: Very tight range through the day for the Oz, with the market opening around the 0.7525 level and trending through into the Tokyo to the 0.7535 areas before starting a steady slide lower as CNY numbers impacted the market falling back through to the 0.7505 areas into the grey hours, early London saw the market gyrating a little with the early sellers quickly seeing London testing the 0.7490 areas through early London, the ECB news saw the Oz pulled a little higher however, it struggled into the opening levels and then ranged through to the close basing on the 75 cent area.

Yesterday’s premiership results

JPY         Labour Cash Earnings Y/Y Jan A 0.50% | C 0.30% | P 0.10% | R 0.50%

GBP       RICS House Price Balance Feb A 24% | C 23% | P 25% | R 24%

CNY        CPI Y/Y Feb A 0.80% | C 1.80% | P 2.50%

CNY        PPI Y/Y Feb A 7.80% | C 7.50% | P 6.90%

JPY         Machine Tool Orders Y/Y Feb (P) A 9.10% | P 3.50%

CHF        Unemployment Rate Feb A 3.30% | C 3.30% | P 3.30%

USD       Challenger Job Cuts Y/Y Feb A -40.00% | P -38.80%

EUR        ECB Rate Decision A 0.00% | C 0.00% | P 0.00%

CAD       Capacity Utilization Rate Q4 A 82.20% | C 82.60% | P 81.90%

CAD       New Housing Price Index M/M Jan A 0.10% | C 0.10% | P 0.10%

USD       Import Price Index M/M Feb A 0.20% | C 0.10% | P 0.40%

USD       Initial Jobless Claims (MAR 04) A 243K | C 237K | P 223K

USD       Natural Gas Storage A -68B | C -59B | P 7B

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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