Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 110.664 | EURUSD 1.08636 | AUDUSD 0.76166 | NZDUSD 0.70438 | USDCAD 1.33774 | USDCHF 0.98558 | GBPUSD 1.25586 |

LMAX Highs and Lows 6am GMT

                                High | Low

EURUSD               1.08718 | 1.07558

USDJPY                 110.828 | 110.524

GBPUSD               1.25718 | 1.25561

USDCHF               0.98630 | 0.98490

AUDUSD              0.76345 | 0.76085

USDCAD               1.33901 | 1.33783

NZDUSD               0.70495 | 0.70359

EURCHF                1.07091 | 1.07041

EURGBP               0.86512 | 0.86405

EURJPY                 120.385 | 120.089

For Today

• EUR: A quiet session through Asia with the market pausing and for the most part trading in a narrow 1.0860-70 areas through to the grey hours, with no real expectations of European data the market is likely to hold quietly into the NYK session with the trade balance and inventories likely to be of import, Topside offers through the 1.0900 level with some limited congestion on the way towards the 1.0980 areas where the market is likely to see stronger offers moving into the 1.1000 levels and through to 1.1020 areas and possibly weak stops as the market probes to the 1.1040 areas with the likelihood of further offers, and those offers possibly continuing through to the 1.1100 and more depth than strength involved. Downside bids light through to the 1.0800 areas with those limited bids likely to be protecting the weak stops and the market opening to a quick probe lower.
• GBP: Cable opened around the 1.2560 levels and slowly pushed through into the Tokyo session testing the 1.2570 levels with very little interest in the market. Topside offers through the 1.2600 levels and possibly extending through to the 1.2630 with weak stops likely on a push through the level and opening the market to a quick test through the 1.2650 areas, and then opening the weak offers in front of the 1.2700 level, however, given we are on the eve of Article 50 the topside is likely to be beset with sufficient offers for the time being to temper any moves, downside bids light into the 1.2500 levels with more congestive bids through the level and into the stronger 1.2450 areas, a push through the level will see 1.2400 challenged with possibly stronger stops on a move through the level and into the mid 1.23’s.
• JPY: A quiet start saw the USDJPY rising into the Tokyo session to test the 110.80 levels for a few hours before drifting back to the opening levels and holding the 110.55 areas through to the grey hour, Topside offers into the 111.00 areas likely to be a little more formidable with the Gap on the charts from yesterday’s opening acting maybe as a draw on the market, however, even a push through the level will meet with stronger offers as the market pushes through to the 111.30-50 areas with weak stops, a move to the 111.80-112.00 levels will see stronger offers again appearing. Downside bids into the 110.00 areas are more sentimental than particularly strong and the move through will likely see strong stops appearing on the break below the 109.80 areas and the market open to a larger move lower and onto the 108 handle with little interference.
• AUD: The Oz traded around the opening 0.7620 areas through the session with the market ebbing a little from the opening to test below the 0.7615 areas to set the low before Tokyo opened and the market steadily rose through to trade to the 0.7635 levels and make the highs, the market then traded back to the opening levels with little volume moving through on the Oz to hold around the opening levels, the move to the grey hour saw the Oz drift off the range and test quietly to the 0.7610 areas again to make the lows just below. Topside offers into the 0.7640-60 areas possibly light but beyond is likely to see offers building into the 77 cent levels again and any move through that level is likely again to be bogged down and possibly unable to push through to test into the 0.7750 areas. Downside bids into the 76 level will likely see some weak stops on a move through the level and the market then running into steadily increasing bids as it tests towards the 0.7560 levels and congestion likely to continue through the 74 cent handle.

Overnight News

USD:

Fed’s Kaplan Says Growth to Continue Removing Labour Market Slack

Kaplan: Fed Making Slow, Gradual Progress Toward Inflation Goal

White House Mulling Infrastructure, Tax Reform Package: Axios

Trump to Kill Suite of Obama-era Climate Change Policies

KRW:

1. Korea Said to Have Conducted Another Missile Engine Test: CNN

CNY:

China Asks for Increased Lending to Manufacturing Sector

PBOC May Keep Liquidity ‘Relatively Tight’: Securities Journal

China to Blacklist Dishonest Importers, Exporters: Customs

EUR:

France’s Macron Seen Most Likely to Make Good President in Poll

Le Pen 25%, Macron 24%, Fillon 18% in 1st Round: Ipsos Poll

GBP:

Scottish Parliament to Back Independence Vote in Brexit Defiance

AUD:

Australia ANZ Weekly Consumer Confidence Rises 1.6% to 113.8

Today’s data

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

12:30     USD       Advance Goods Trade Balance Feb C -66.6B | P -69.2B

12:30     USD       Wholesale Inventories Feb (P) C 0.20% | P -0.20%

13:00     USD       S&P/Case-Shiller Composite-20 Y/Y Jan C 5.60% | P 5.60%

14:00     USD       Consumer Confidence Mar C 113.7 | P 114.8

Harry Hindsight

• EUR: Having opened above the close on Friday the market continued the rise although Asia was only able to push to the 1.0850 levels from the 1.0830 opening, the market kept to a tight range through the Asian session and only the move into the London session trading up through the 1.0860 level to range around the 1.0870 levels through into the NYK session, no data for the US saw the early buying subside as the market pushed briefly through the 1.0900 areas and then drifting back slowly through the balance of the session to trade along the 1.0860 area.
• GBP: Cable opened just below the 1.2500 areas and started a steady rise through to the NYK session, trading up on the Tokyo opening to test the 1.2520 areas and then ease through to the grey hours eventually breaking through the level and grinding to the 1.2530 level into the London session, the break through the 1.2550 levels saw weak stops opening the market to the 1.2580 levels and a pause into the early NYK period and the market eventually ran to the 1.2590 levels before again pausing before a quick move above the 1.2600 and although the market managed to push to above the 1.2610 level and hold there for an hour or so the market was unable to capitalize on the move and the market dropped back to trade around the 1.2570 levels slowly slipping back through the evening session to hold the 1.2560 areas.
• JPY: Questioning of the Trump trade as the market calls it saw the market open lower around the 111.00 from the close some 30 pips higher, the market then ran steadily lower through into the Tokyo session, the market eventually settled around the 110.30 levels for the run into the London session and a gradual push to the 110.10 levels and although the market seemed determined the level held broadly through into the NYK session, the market eventually rejected the level and started a steady climb back through the 110.50 areas and although the market was very quiet through to the close was able to rise to trade into the 110.65 areas.
• AUD: Very quiet session again with the Oz remaining range bound, the opening was slightly higher than the Friday close however the move from the 0.7635 areas saw the market eventually drop with the AUDJPY after finding some support from the stronger JPY, the move through to the NYK session saw the Oz’s low maintained around the 0.7615 made in the initial selling in Tokyo and although the market did attempt to rally several times but struggled each time it moved back to the opening levels and so it remained into the NYK session where initial early buying saw the market top just below the 0.7650 areas and then drop back just as quick and extending the lows to the 0.7610 areas as the weak longs for the day quickly exited the market, the range then settled again around the 0.7615-20 areas to finish the day.

Yesterday’s premiership results

JPY         BoJ Summary of Opinions at March 15-16 Meeting

JPY         Corporate Service Price Y/Y Feb A 0.80% | C 0.50% | P 0.50%

EUR        Eurozone M3 Y/Y Feb A 4.70% | C 4.90% | P 4.90%

EUR        German IFO – Business Climate Mar A 112.3 | C 111.1 | P 111

EUR        German IFO – Expectations Mar A 105.7 | C 104.3 | P 104

EUR       German IFO – Current Assessment Mar A 119.3 | C 118.3 | P 118.4

Good Luck,

Andy

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