Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 110.806 | EURUSD 1.06438 | AUDUSD 0.75454 | NZDUSD 0.69714 | USDCAD 1.34133 | USDCHF 1.00498 | GBPUSD 1.24694 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.06603 | 1.06384

USDJPY                 110.997 | 110.132

GBPUSD               1.24758 | 1.24537

USDCHF               1.00599 | 1.00305

AUDUSD              0.75440 | 0.75168

USDCAD               1.34314 | 1.33965

NZDUSD               0.69753 | 0.6961

EURCHF                1.07041 | 1.0692

EURGBP               0.85514 | 0.8532

EURJPY                 118.164 | 117.318

For Today

• EUR: The market held quietly around the 1.0645 levels until the news was released of a strategic strike against Syria by the US in response to the use of Chemical weapons, Euro’s rose quickly to the 1.0660 levels before reversing back to hold around the opening levels again, topside offers into the 1.0680 areas are likely to be light with only slightly stronger levels into the 1.0700 area, weak stops a possibility on a move through the 1.0720 areas with congestion on a move through the to the 1.0750 areas with stronger offers then appearing as the market moves towards the 1.0800 areas. Downside bids into the 1.0600 levels now becoming stronger as the market remains in the current levels however, with that in mind a push through the 1.0600 area will likely see weak stops forming through the 1.0580 areas, congestive bids through to the 1.0550 areas are likely to be tested and the stronger bids then start to appear into the 1.0500 areas.
• GBP: Cable slipped a little lower testing to the 1.2455 levels before the news of the US air strike hit the wires, with the market recovering back to the opening levels into the late session and drifting a little from the high 1.2475 area, Topside offers into and through the 1.2500 levels with congestive offers likely to continue through to the 1.2550 areas and stronger offers appearing before the topside opens to fresh attempts through the 1.2600 level. Downside bids light through to the 1.2400 levels with weak bids likely through the 1.2450 areas and becoming stronger from there, weak stops are likely on a break through the 1.2400 levels however, 1.2350 is likely to be a stiff support level before the market opens to the downside again.
• JPY: The USDJPY moved off the 110.80 opening levels to trade quietly higher into the Tokyo session and pushing the 111.00 areas before the release of the US news, USDJPY instantly saw safe haven flows and the USDJPY dropped quickly through to the 110.40 levels before finding support, with high volumes moving through the market the market did eventually test through to the 110.10 areas before bouncing steadily back to the 110.60 areas and holding through to the grey hours around the 110.50 level, Topside offers into the 111.20 areas with congestion continuing through to the 111.50 level and possible weak stops and the market open to a test towards the 112.00 areas. Downside bids as we have seen into the 110.00 areas with stops likely to be fairly large and sentimental levels the only support and the market open towards the 1.0750 areas.
• AUD: Drifting from the opening levels the market held for the early part of the session around the 0.7540 areas as the JPY strengthened so the Oz pushed lower breaking through to below the 0.7520 areas before finding sufficient support to halt the slide, the move back higher was slow and the market holds around the 0.7530 areas into the grey hour, Downside bids into the 75 cent levels with weak stops on a move through the level and limited congestion into the 0.7450 areas before the market opens to a weaker range through to the 73 cent area. Topside offers into the 76 cent level are likely to be light at best with some weak stops on a move through however, from there on its about congestive offers with the market seeing offers likely from 0.7650-0.7750 likely to be problematic on any move higher.

Overnight News

USD:

US employment growth seen slowing as warm weather boost fades

US launches missile strike against Syria

Trump adviser from Wall street backs US bank breakup law

Trump, Xi at Mar-a-Lago for high stakes summit

US confident it can thwart North Korea missiles: US General

RUB:

Russian police find explosives similar to device used by suicide bomber

JPY:

Japan overtime pay up for first time in 9 months, real wages flat

IMF:

Sees progress on Greece loan talks

Commodities:

Gold and Oil surge on US missile strike

EUR:

ECB calls for tougher regulation for foreign bank branches

Today’s data

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

JPY         Labour Cash Earnings Y/Y Feb A 0.40% | C 0.50% | P 0.50% | R 0.30%

JPY         Leading Index Feb (P) A 104.4 | C 104.6 | P 104.9

05:45     CHF        Unemployment Rate Mar C 3.30% | P 3.30%

06:00     EUR        German Industrial Production M/M Feb C -0.20% | P 2.80%

06:00     EUR        German Trade Balance (EUR) Feb C 19.4B | P 18.5B

07:00     CHF        Foreign Currency Reserves Mar C 674.0B | P 668.2B

08:30     GBP       Industrial Production M/M Feb C 0.20% | P -0.40%

08:30     GBP       Industrial Production Y/Y Feb C 3.70% | P 3.20%

08:30     GBP       Manufacturing Production M/M Feb C 0.30% | P -0.90%

08:30     GBP       Manufacturing Production Y/Y Feb C 3.90% | P 2.70%

08:30     GBP       Construction Output M/M Feb C 0.00% | P -0.40%

08:30     GBP       Visible Trade Balance (GBP) Feb C -10.9B | P -10.8B

12:00     GBP       NIESR GDP Estimate Mar C 0.60% | P 0.60%

12:30     CAD       Net Change in Employment Mar C 5.7K | P 15.3K

12:30     CAD       Unemployment Rate Mar C 6.70% | P 6.60%

12:30     USD       Change in Non-farm Payrolls Mar C 177K | P 235K

12:30     USD       Unemployment Rate Mar C 4.70% | P 4.70%

12:30     USD       Average Hourly Earnings M/M Mar C 0.30% | P 0.20%

14:00     CAD       Ivey PMI Mar C 56.3 | P 55

 

Harry Hindsight

• EUR: Opening around the 1.0665 level the market moved slowly higher through the early part of the Tokyo session testing the 1.0680 areas, the move through the balance of the Tokyo session saw the market holding around the 1.0680 areas and into the London session the release of weaker than expected Retail PMI numbers saw the Euro quickly drop to the 1.0630 areas before bouncing a little and then trading back to the opening areas for the move through into NYK, better than expected initial jobless numbers in the US saw the Euro giving ground through the remainder of the day to settle into a tight range around the 1.0645 level on what was a quiet session overall.
• GBP: A very limited range with the market unable to push through the 1.2500 levels firmly and therefore drifting away from the level through the day, Tokyo took the Cable from the opening around 1.2480 for the first probe higher and having failed drifted through into the London session testing through the opening, a weaker number in the Eurozone PMI numbers saw the Cable rising a little in early London before the drag took the market to its lows holding the 1.2450 level and making the low for the day, the move through into the NYK session saw the market slowly rising from the lows and for the second time lightly breaching the 1.2500 area before reversing to settle down to range around the 1.2470 level to the close.
• JPY: A quiet USDJPY with the market dropping from the opening 110.70 levels to the 110.50 areas and into the Tokyo session, the lows were extended through the session with the market testing to the 110.30 levels however, the bulk of the session ranged around the 110.50 levels for the move through into the London session, the market lifted from the lows and traded steadily higher pushing to the 111.00 areas finally pushing through the level into the London close making the highs above the 111.10 area and then drifting back to close around the 110.80 levels.
• AUD: Opening quietly around the 0.7570 levels the market tested slightly higher before moving into the Tokyo session and slipping lower through the early part of the session with news that the Oz banks will likely need to raise Billions as APRA attempts to resolve the way banks allocate capital to the home loans market, the market dropped to the 0.7535 levels and traded around the 0.7540 areas through into the London session before rising steadily through to the NYK session to test just below the opening levels, the market dipped with US numbers and the market again moved slowly to trade around the 0.7540 areas to the close.

Yesterday’s premiership results

CNY        Caixin PMI Services Mar A 52.2 | C 53.2 | P 52.6

JPY         Consumer Confidence Index Mar A 43.9 | C 43.4 | P 43.1 | R 43.2

EUR        German Factory Orders M/M Feb A 3.40% | C 3.50% | P -7.40% | R 6.80%

CHF        CPI M/M Mar A 0.20% | C 0.20% | P 0.50%

CHF        CPI Y/Y Mar A 0.60% | C 0.50% | P 0.60%

EUR        Eurozone Retail PMI Mar A 49.5 | P 49.9

EUR        ECB Monetary Policy Meeting Accounts

USD       Challenger Job Cuts Y/Y Mar A -2.00% | P -40.00%

CAD       Building Permits M/M Feb A -2.50% | C 1.40% | P 5.40% | R 5.80%

USD       Initial Jobless Claims (APR 01) A 234K | C 250K | P 258K | R 259K

USD       Natural Gas Storage A 2B | C 10B | P -43B

Good Luck,

Andy

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