Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 108.653 | EURUSD 1.22918 | AUDUSD 0.78628 | NZDUSD 0.72404 | USDCAD 1.25781 | USDCHF 0.93935 | GBPUSD 1.38379 |

LMAX Highs and Lows 6am GMT

                                High | Low

EURUSD               1.23180 | 1.22846

USDJPY                 108.782 | 108.241

GBPUSD               1.38554 | 1.38326

USDCHF               0.93983 | 0.93738

AUDUSD              0.78742 | 0.78478

USDCAD               1.25934 | 1.25723

NZDUSD               0.72721 | 0.72474

EURCHF                1.15511 | 1.15311

EURGBP               0.88901 | 0.88768

EURJPY                 133.793 | 133.171

For today

• EUR: moving up from the opening to test quickly through to the 1.2305 levels before drifting into the Tokyo session and testing to the 1.2285 areas and basing along the line for several hours before starting a more steady rally eventually testing through the highs to push lightly above 1.2310 before holding the areas through to the grey hours, Topside offers into the 1.2340 levels likely to be light with the market opening only on a push through the 1.2360 levels and further congestion on a run towards the 1.2400 level where offers are likely to be a little thicker with congestion then through to the 1.2450 level and the possibility of stronger offers reappearing on any attempt to push to the 1.2500 levels. Downside bids light through to the 1.2250 areas with some congestion and support a push through to the 1.2200 areas will likely see stronger stops appearing on a move through the level and the market quickly dipping towards the 1.2120 areas with some support through to the 1.2080 levels before stops reappear.
• GBP: A push from the opening saw the market test through to the 1.3855 levels before relaxing back to the opening around the 1.3835 area and holding the level deeper into the session before running for a second time and holding through to the grey hours around the 1.3850 level. Downside bids into and through the 1.3800 levels with limited congestion, possible stronger bids likely into the 1.3750 areas before the market opens to a quick test of the weak 1.3700 level and the market opening to a large fall with stronger bids not expected until the 1.3600 areas. Topside offers congested around the 1.3900 levels with possible weak stops only on a strong break above the 1.4000 and congestion interfering with any run to that level.
• JPY: USDJPY traded quietly through the early part of the session with early trading pushing towards the 108.80 levels but unable to do much once it moved into the Tokyo session holing for much of the session around the 108.70 levels before dropping back steadily with very little news to the 108.25 level before finding a base to move into the grey hours, Downside bids into the 108.20 levels and extending through the 108.00 areas with possibly some weak stops below 107.80 before stronger bids reappear on any attempt of the 107.50 level, a strong push here will likely see stronger stops appearing and the market opening to a larger downside range with the sentimental areas limited and bids only improving on a test to the 106.00 level. Topside offers light through the congestive offers in the 109.50 level and increasing a little but congestion running into the 110.00 level with possibly weak stops and the market facing some congestive areas.
• AUD: JPY strength helped the Oz move ahead a little with the market dipping into the Tokyo session to trade to the 0.7850 level before slowly rising towards the 0.7875 levels in quiet trading for the FX session. Downside bids likely to be strong on any run to the 0.7780-60 areas with weak stops on a move through the level and the market then open to a run at the 77 cent levels with better bids possibly just beyond the level, a push beyond the 79 cent level sees topside offers increasing through to the 0.7940-60 areas before weakness reappears to the 80 cent level and then strong congestion before attempting the 81 cent levels.

Overnight News

CNY:

Beijing tightens offshore funding curbs on insurers in widening crackdown

China Jan new loans surge to record 2.9t Yuan, blow past forecasts

China small caps vanishing profit growth adds to bear case

JPY:

Japan eyes tighter leverage cap on FX trading

Kuroda says cryptocurrency won’t threaten yen, largely speculative

EUR:

Chaos in Berlin, as negotiations leave a sour taste

EU antitrust regulators to fine NYK, Wilhelmsen, other car shipping firms

USD:

Trump says he plans reciprocal tax on some US trading partners

Tillerson says too early for direct talks with N. Korea

ZAR:

Zuma said to be given 48hrs to resign

1. Africa’s ruling ANC party to recall Zuma

AUD:

Interest only property investor cash flow crunch sparks fears of fire sales

Oz business conditions boom in Jan, as sales and profits surge

RBA’s Ellis wage growth to pick up only gradually, not immediately

Ellis: retail competition to work against wage pressures

Today’s data

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

23:50     JPY         Domestic CGPI Y/Y Jan A 2.70% | C 2.70% | P 3.10% | 3.00%

00:30     AUD       NAB Business Conditions Jan A 10 | R 12 | P 13

00:30     AUD       NAB Business Confidence Jan A 12 | C 10 | P 11

06:00     JPY         Machine Tool Orders Y/Y Jan (P) A | P 48.30%

08:15     CHF        PPI M/M Jan C 0.20% | P 0.20%

08:15     CHF        PPI Y/Y Jan C 0.90% | P 1.80%

09:30     GBP       CPI M/M Jan C -0.60% | P 0.40%

09:30     GBP       CPI Y/Y Jan C 2.90% | P 3.00%

09:30     GBP       Core CPI Y/Y Jan C 2.60% | P 2.50%

09:30     GBP       RPI M/M Jan C -0.70% | P 0.80%

09:30     GBP       RPI Y/Y Jan C 4.10% | P 4.10%

09:30     GBP       PPI Input M/M Jan C 0.60% | P 0.10%

09:30     GBP       PPI Input Y/Y Jan C 4.10% | P 4.90%

09:30     GBP       PPI Output M/M Jan C 0.20% | P 0.40%

09:30     GBP       PPI Output Y/Y Jan C 3.00% | P 3.30%

09:30     GBP       PPI Output Core M/M Jan C 0.20% | P 0.30%

09:30     GBP       PPI Output Core Y/Y Jan C 2.30% | P 2.50%

09:30     GBP       House Price Index Y/Y Dec C 4.90% | P 5.10%

 

Harry Hindsight

• EUR: Asia opened a little weaker before edging slightly higher to fill the gap, with a Tokyo bank holiday volumes were initially a little thin but the Euro headed steadily higher from that opening below the 1.2250 levels and pushing steadily through to mid-session testing the 1.2295 levels, the market then struggled through the balance of the session without stepping too far away from those highs and dropping back in the grey hours as early London sold the Euro back to the 1.2260 level. the move through London and into the NYK session saw a quiet range with the market holding the 1.2260-80 areas only to dip on the NYK opening to make the lows around the 1.2235 level, the market started a steady recovery through the NYK session to push back to the highs through the course of the session only to stops again around the highs.
• GBP: Opening a little lower the Cable moved off the opening 1.3810 levels and tested slowly through to the 1.3840 levels as USD weakened eventually pushing through the level and heading to the 1.3870 level before drifting into the grey hours to test back to 1.3825 levels, the market moved through the London session chopping from the 1.3825 level to the 1.3875 areas into the NYK session and the market tested through the opening to lightly touch through 1.3800 before slowly climbing back above the 1.3840 into the close.
• JPY: With a bank holiday the market struggled for direction throughout the day with the market remaining in a reasonably quiet range of 108.50-80 for the most part with the market struggling at either end and unable to push through.
• AUD: Opening around the 0.7810 levels the Asian session saw meagre gains through the session to the 0.7840 level with the market correcting to the opening on a move into the grey hours, with JPY static the gains in the Oz were gradual with the market moving up quietly through into the NYK session to the 0.7845 and then pausing on a small dip again before renewing the move and gradually easing up to the 0.7860 level into the close.

Yesterday’s premiership results

8:15        CHF        CPI M/M Jan A -0.10% | C -0.20% | P 0.00%

8:15        CHF        CPI Y/Y Jan A 0.70% | C 0.80% | P 0.80%

19:00     USD       Federal Budget Balance Jan A 49.2B | C 50.2B | P -23.2B

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