Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 110.161 | EURUSD 1.24563 | AUDUSD 0.79218 | NZDUSD 0.73039 | USDCAD 1.24273 | USDCHF 0.93136 | GBPUSD 1.41203 |

LMAX Highs and Lows 6am GMT

                                High | Low

EURUSD               1.24668 | 1.24243

USDJPY                 110.294 | 109.796

GBPUSD               1.41290 | 1.40827

USDCHF               0.93354 | 0.92967

AUDUSD              0.79395 | 0.78904

USDCAD               1.24511 | 1.24088

NZDUSD               0.73064 | 0.72786

EURCHF                1.16057 | 1.15846

EURGBP               0.88290 | 0.88141

EURJPY                 137.219 | 136.698

For today

• EUR: Opening a touch lower the market dipped through in early trading to the 1.2425 levels before the Euro started to recover over several hours and pushing back through the 1.2450 area slowly and test to the 1.2465 to hold quietly through the grey hours, Topside offers congested through the 1.2460 levels and into the 1.2500 area where stronger offers increase through to the 1.2530-40 areas where stronger stops are likely to appear opening the market to the next sentimental areas, downside bids light through to the 1.2400 level with some stronger bids likely with weak stops on a move through the 1.2380 levels with further bids moving into the market on a test towards the 1.2330 level with those bids increasing into the 1.2300 level.
• GBP: A quiet slip through the 1.4100 levels testing through to the 1.4085 levels with weekend news being reversed into the Tokyo session heading back the opening levels and ranging the 1.4115 level through to the grey hours, unable to push beyond the 1.4130 level, Topside offers light through to the 1.4200 level where offers then start to increase on any test through to the 1.4250 levels, possibly light stops on a move through before the market can again push to test the stronger offers into and through the 1.4300-40 levels. Downside bids into the 1.4100 areas with weak stops possibly on a dip below the 1.4080 level with stronger bids likely to appear on a move towards the 1.4000 level.
• JPY: A quiet session opening and moving to the 110.30 before slipping slowly lower through the session testing initially to the 110.10 levels before slipping through 110.00 to test the 109.80 areas and slowly rising through to the 110.00 area for the move into the grey hours, Topside offers through the 110.40 levels and likely to continue through to the 110.60 levels with weak stops likely through the area with congestive offers then into the 111.00 areas and likely to increase on move through the level. Downside bids light through the 109.80 levels and increasing on any dips back to the 109.00 level, weak stops likely below the level however, stronger bids are likely to appear beyond and into the 108.50 levels.
• AUD: Early selling was quickly reversed and the market moved weakly off the 79 cent levels to push quietly through to the 0.7930 areas testing towards the 0.7940 into the grey hours, Downside bids likely into the 0.7880 levels before weak stops are likely to appear, the market is likely to find limited congestion through to the 0.7820-40 areas with stronger bids likely into the figure area before stronger stops appear on a dip through the 0.7780 level. Topside offers light through the 81 cent levels with stronger offers likely to appear around that level and strong into the 0.8140 levels with weak stops on a move through.

Overnight News

CAD/NAFTA:

Trudeau threatens to leave NAFTA rather than take any old deal

EUR:

Merkel heads toward overtime in German talks on next government

German parties say coalition deal in reach

USD:

Yellen says prices high for stocks, commercial real estate

Fed’s Williams: Three or Four hikes in 2018 depends on data

Fed’s Kaplan says he feels more conviction in three 2018 hikes

With a Monday vote expected, Democrats urge release of their own memo

Lindsey withdraws from FED vice chair consideration

GBP:

May under attack over Brexit with Momentum behind Rees-Mogg

May rules out staying in customs union after Brexit

AUD:

RBA stranded as reflation skips ex star economy

NZD:

NZ treasury says annual inflation will fall to around 1% in 1Q

Today’s data

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

AUD       CBA Australia PMI Services Jan A 53.8 | P 55.1

AUD       TD Securities Inflation M/M Jan A 0.30% | P 0.10%

CNY        Caixin China PMI Services Jan A 54.7 | C 53.5 | P 53.9

08:45     EUR        Italy Services PMI Jan C 55.9 | P 55.4

08:50     EUR        France Services PMI Jan (F) C 59.3 | P 59.3

08:55     EUR        Germany Services PMI Jan (F) C 57 | P 57

09:00     EUR        Eurozone Services PMI Jan (F) C 57.6 | P 57.6

09:30     GBP       Services PMI Jan C 54.1 | P 54.2

09:30     EUR        Eurozone Sentix Investor Confidence Feb C 33.2 | P 32.9

10:00     EUR        Eurozone Retail Sales M/M Dec C -1.00% | P 1.50%

14:45     USD       US Services PMI Jan (F) C 53.3 | P 53.3

15:00     USD       ISM Non-Manufacturing/Services Composite Jan C 56.6 | P 55.9

 

Harry Hindsight

• EUR: A quiet Asian session with the market slowly drifting from the opening 1.2510 levels and unable to push above the 1.2515 level and drifting into the grey hours with early London pushing the market back to test the highs, the move into London saw the market dropping back again and through this time to the 1.2475 levels and further quiet movement until the NYK opening, US NFP saw the USD rallying with a slightly stronger number and Euro’s testing quickly to the 1.2440 level and then after a brief pause another step down to make the lows for the day around the 1.2410 level before recovering mush of the losses but eventually holding just above the 1.2450 to the close.
• GBP: Opening around the 1.4270 levels the market traded quietly through the Asian session ranging around the 1.2460 level, the move into the grey hours saw the market falling slowly lower to test towards the 1.4200 levels into early morning in London, holding around the 1.4225 areas through to the NYK session and falling back quickly on the NFP release to test to the 1.4150 levels and then dipping a second time to the 1.4100 levels, a limited bounce into the late part of the session recovering to the 1.4170 areas before dropping back to hold around the 1.4120 areas to the close.
• JPY: A steady climb through the first half of the day with the Asian session opening around the 109.45 levels moving into the Tokyo session testing to the 109.65 level before dropping back a little to the 109.30 areas, before slowly climbing through to the NYK session testing the 109.90 level, NFP release saw the USDJPY jump to the 110.40 areas before holding through to the end of London before relinquishing some of the gains and dipping through to the 110.00 levels and then holding to the close above the level.
• AUD: Opening towards its highs with the market drifting lower as the USD gained strength through the session with the market moving to the 0.8000 levels into the grey hours and then dipping through the level into the London session, the move through to the NYK session saw the market ranging around the 0.7985 levels until the NFP number and a dip to the 0.7950 levels with the market dipping to the 0.7920 levels before struggling over the course of the end of the session to finish on its lows.

Yesterday’s premiership results

NZD       Building Permits M/M Dec A -9.60% | P 10.80% | R 9.60%

JPY         Monetary Base Y/Y Jan A 9.70% | C 11.00% | P 11.20%

AUD       PPI Q/Q Q4 A 0.60% | C 0.40% | P 0.20%

AUD       PPI Y/Y Q4 A 1.70% | C 1.20% | P 1.60%

GBP       Construction PMI Jan A 50.2 | C 52 | P 52.2

EUR        Eurozone PPI M/M Dec A 0.20% | C 0.20% | P 0.60%

EUR        Eurozone PPI Y/Y Dec A 2.20% | C 2.30% | P 2.80%

USD       Change in Non-farm Payrolls Jan A 200K | C 180K | P 148K | R 160K

USD       Unemployment Rate Jan A 4.10% | C 4.10% | P 4.10%

USD       Average Hourly Earnings M/M Jan A 0.30% | C 0.30% | P 0.30% | R 0.40%

USD       Factory Orders Dec A 1.70% | C 0.90% | P 1.30% | R 1.70%

USD       U. of Mich. Sentiment Jan (F) A 95.7 | C 95 | P 94.4

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