Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 112.554 | EURUSD 1.07397 | AUDUSD 0.7730 | NZDUSD 0.70509 | USDCAD 1.33510 | USDCHF 0.99863 | GBPUSD 1.23575 |

LMAX Highs and Lows 6am GMT

                                High | Low

EURUSD               1.07699 | 1.07192

USDJPY                 112.859 | 112.259

GBPUSD               1.23811 | 1.2349

USDCHF               1.00026 | 0.99673

AUDUSD              0.77371 | 0.76992

USDCAD               1.33646 | 1.33237

NZDUSD               0.70627 | 0.70327

EURCHF                1.07478 | 1.07163

EURGBP               0.87176 | 0.8676

EURJPY                 121.436 | 120.664

For Today

• EUR: A mixed for the USD with Euro benefitting in the EURJPY cross and helping Euro’s test yesterday’s highs early in the session, opening around the 1.0740 areas the market saw early Tokyo sellers taking the market down to the 1.0720 areas before beginning a steady reversal with the Euro initially benefitting from early USD weakness then a switch to EURJPY buying and driving quickly to the 1.0750 areas to trigger some weak stops and the market moving to test the 1.0770 before the movement stopped, French election debate saw Macron looking the more convincing and underpinned that move also, the market then drifted through the session testing back into the 1.0750 levels and holding through to the grey hours on quiet trading, Topside offers into the 1.0780-1.0800 with limited congestion beyond and weak stops around the 1.0820 areas for a move into the 1.0840-60 areas and possibly strong offers, a push through the level is likely to see some stronger stops appearing and the market opening to a stronger push with only sentimental levels of not until the 1.0980 areas with slightly stronger offers appearing. Downside bids light through to the 1.0700 areas with limited bids from the 1.0720 areas and limited bids into the 1.0650 areas, a push through the 1.0640 areas could see some limited stops in a push to the 1.0600 and strong bids with congestion running below the level and into the 1.0580 areas, and possibly some weak stops however, they are likely to be absorbed in the congestion ranging through the 1.05 handle with any move lower dominated by the 1.0520 areas.
• GBP: A reasonably quiet day for the Cable with the market opening just below the 1.2360 levels and being dragged higher into the Tokyo session by the Euro to test the 1.2380 areas before drifting back to test into the 1.2350’s and unchanged as it moves into the grey hours, Topside offers through the 1.2400 levels with plenty of congestion through the level and on its way to the 1.2500 stronger offers, even a break here is likely to see similar congestion but limited to the 1.2550 areas and the market then opening through the 1.2600 levels before a stronger set of offers make an appearance around the 1.2630 areas. Downside bids light through to the 1.2300 areas with some limited bids likely on a push at the level and stronger congestive bids then move in below and into the 1.2250 areas, stops may make an appearance around the level however congestive bids are likely over the next 100 pips or so with the 1.2200 and 1.2150 areas acting as strong supportive areas.
• JPY: USDJPY moved quietly into the Tokyo session opening around the 112.55 levels and then ranging through around that level and holding generally in a 10 pip range. Strong selling moved in and the USDJPY slipped to its lows almost reaching the 112.25 areas before holding and starting a steady rise back to the opening levels, EURJPY buying was seen impacting the market and the USDJPY staggered higher with the market eventually pushing to the 112.85 levels before holding around the 112.80 areas into the grey hours, Topside offers through to the 113.00 levels with possible congestion continuing until the 113.30 areas before the market open a little with weak stops likely to push through the 113.50 areas and the 113.90-114.00 becoming vulnerable to a strong test, further weak stops are likely to appear above the level with limited offers until the 114.50-60 areas and strong congestion from then on into the 115.00 areas. Downside bids into the 112.50 areas are likely to be weak with the better bids from the 112.00 areas and into the 111.80 before weakness appears and the market opens to stops, with the market then opening to the 110.50 areas with sentimental levels the only weak supportive areas.
• AUD: The Oz moved into the Tokyo session holding its opening levels around the 0.7730 areas with light AUDJPY buying initially before RBA minutes saw the market turning lower, although there was very little new in the minutes the main concerns now seem to be around the current housing market and as such saw the Oz drift from its opening levels to test to the 77 cent level with a limited base appearing and the market moving into the grey hours quietly. Topside offers continue through the 0.7750 areas and likely to struggle for the moment, a push through the 0.7760-80 area is likely to see stops appearing beyond and possibly a serious attempt through the 78 cent level if it could find the momentum, with a breakthrough of the 0.7840 areas likely to see a much larger rise open for exploitation over the coming weeks, downside bids light through the 77 cent areas and congestive on any move through the 76 cent handle to the 0.7620 areas where there could be stronger bids appearing on any test.

Overnight News

EUR:

France’s Macron Was Most Convincing in Debate, Elabe Poll Shows

Fillon Says Merkel’s Immigration Policy Was a Bad Policy

Germany’s SPD Obtains 32% Support in Poll, Tops CDU/CSU: Bild

USD:

Trump Says He’s Preparing Executive Actions to Save Coal Miners

Trump: House Vote on Health Bill ‘Our Long-Awaited Chance’

U.S. Said to Tighten Rules for Flights From Up to 12 Nations

Tillerson to Skip NATO Meeting, Visit Russia in April: Reuters

Ryan: Making ‘Tremendous Progress’ With Consensus on Health Bill

JPY:

Aso: G-20 Shared Understanding of Importance of Free Trade

Japanese Not Convinced of Govt Position on Osaka School: Sankei

JPY/USD:

SoftBank Said to Invest $300m in WeWork, WSJ Reports

KRW:

1. Korea Expanded Uranium-Enrichment Facility, IAEA Says: WSJ

AUD:

RBA Says Data Shows Risk Build-Up in Australia Housing Market

AUD: Australia 4Q House Prices Rise 4.1% Q/Q; Est. 2.5%

CAD/CNY:

CPPIB Looks to Increase Exposure to China: CNBC

CNY:

PBOC Aims to Boost Foreign Green Bond Investment: Sec. Journal

China Says Li’s Australia Visit to Send World Free Trade Message

NZD:

New Zealand Recorded 6,000 Permanent Immigration in February

RBNZ Should Keep OCR at 1.75% With Tightening Bias: Shadow Board

Today’s data

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

AUD       House Price Index Q/Q Q4 A 4.10% | C 2.50% | P 1.50%

AUD       RBA Minutes

06:45     CHF        SECO March 2017 Economic Forecasts

07:00     CHF        Trade Balance (CHF) Feb C 3.85B | P 4.73B

09:30     GBP       CPI M/M Feb C 0.50% | P -0.50%

09:30     GBP       CPI Y/Y Feb C 2.10% | P 1.80%

09:30     GBP       Core CPI Y/Y Feb C 1.70% | P 1.60%

09:30     GBP       RPI M/M Feb C 0.80% | P -0.60%

09:30     GBP       RPI Y/Y Feb C 2.90% | P 2.60%

09:30     GBP       PPI Input M/M Feb C 0.10% | P 1.70%

09:30     GBP       PPI Input Y/Y Feb C 20.10% | P 20.50%

09:30     GBP       PPI Output M/M Feb C 0.30% | P 0.60%

09:30     GBP       PPI Output Y/Y Feb C 3.70% | P 3.50%

09:30     GBP       PPI Output Core M/M Feb C 0.20% | P 0.50%

09:30     GBP       PPI Output Core Y/Y Feb C 2.50% | P 2.40%

09:30     GBP       House Price Index Y/Y Jan C 6.30% | P 7.20%

09:30     GBP       Public Sector Net Borrowing (GBP) Feb C 2.9B | P -9.8B

11:00     GBP       CBI Trends Total Orders Mar C 5 | P 8

12:30     CAD       Retail Sales M/M Jan C 1.30% | P -0.50%

12:30     CAD       Retail Sales Less Autos M/M Jan C 1.30% | P -0.30%

12:30     USD       Current Account (USD) Q4 C -129B | P 113B

Harry Hindsight

• EUR: Post G20 and the Euro rose from the opening pushing from the opening 1.0740 areas moving into the Tokyo session testing above the 1.0750 levels, the move through the session was a gradual rise testing to the 1.0765 levels and struggling at the level, the move into the grey hours saw some initial selling from early Europe however, it was short lived as Eastern Europeans quickly took the market above the 1.0775 area to hold into the official opening, the move back was a similar affair as the rise a steady drift and the market moving into the NYK session holding the 1.0750 levels and a quiet move through into the evening session with London selling the market into the close and the Euro testing to the 1.0725 area to define the range for the day, a limited recovery to the opening levels into the close finishing off a limited day.
• GBP: Very quiet through the Asian session with the market opening around the 1.2390 levels and ranging around the level through to the grey hours, early London took the market up to above the 1.2430 levels before moving into the London session and a steady slip back towards the 1.2400 level, early NYK sol the market back from above the 1.2400 level as the news that 29^th March is agreed on as the day for Article 50 with the market slipping to the 1.2370 level, the move through to the London close saw further selling and the market pushed back through the 1.2350 levels before finding a base around the 1.2340 levels with minor dips below the level. The market recovered into the close to the 1.2360 levels.
• JPY: A very quiet session for the USDJPY overall, with the market opening around the 112.70 levels with a quiet move through to the Tokyo session, selling from the opening in Tokyo saw the market test to the 112.50 areas and the market ran through to the grey hours holding that level, the return from Lunch saw the market push back to the opening levels only for the London session to sell it lower again testing through the 112.50 levels and the low for the day, the move into the official London session saw the market rising from the lows and a steady climb through to the NYK opening with the market testing the 112.90 levels and the range was defined, the NYK session slipped slowly lower through the day with the market again pushing to the 112.50 areas for the close.
• AUD: Opening a little lower the market moved off the lows below the 77 cent areas with a quiet rise through to the 0.7710 and into the Tokyo session, the market moved steadily through to the 0.7725 areas, grey hours buying saw early London quickly pushing through towards the 0.7750 areas with technical buying failing to push through the level and the market settling back to range around the 0.7725 levels through to the close.

Yesterday’s premiership results

NZD       Westpac Consumer Confidence Q1 A 111.9 | P 113.1

GBP       Rightmove House Prices M/M Mar A 1.30% | P 2.00%

EUR        German PPI M/M Feb A 0.20% | C 0.40% | P 0.70%

EUR        German PPI Y/Y Feb A 3.10% | C 3.20% | P 2.40%

CAD        Wholesale Sales M/M Jan A 3.30% | C 0.40% | P 0.70% | R 0.30%

Good Luck,

Andy

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