Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 106.29 | EURUSD 1.24109 | AUDUSD 0.7910 | NZDUSD 0.73911 | USDCAD 1.2556 | USDCHF 0.92744 | GBPUSD 1.40342 |

 

LMAX Ranges 6am London time

Highs    Lows

EURUSD               1.24350 | 1.24023

USDJPY                 106.515 | 106.099

GBPUSD               1.40495 | 1.4013

AUDUSD              0.79353 | 0.79085

USDCHF               0.92888 | 0.92631

USDCAD               1.25678 | 1.25278

NZDUSD               0.74094 | 0.73791

EURGBP               0.88539 | 0.88459

EURCHF                1.15268 | 1.15072

EURJPY                 132.199 | 131.808

For today

• EUR: A very light day with bank holidays around Asia and in the US, Light trading saw the market moving off the opening 1.2405 areas and testing through the 1.2430, having touched the levels the market started to drift through the balance of the day back towards the 1.2410 areas and into the grey hours, Topside offers light through the 1.2450 areas with possible weak stops on a test through the 1.2460 level with possibly better offers into the 1.2500 level however, even there the market is likely to see some weakness and not until the market pushes to the 1.2550 level could we expect stronger offers with stops increasing on a move through the 1.2560 levels. Downside bids into the 1.2380 level with weak stops on a move through the level and the market quickly opening to a test to the 1.2340 areas with stronger bids likely into the 1.2300 areas and congestion below.
• GBP: Light bids into the 1.4000 level with some limited congestion on a move through the level with weak stops likely on a push through the 1.3950 areas with some bids in the area the market remains lightly congested with very little in the way of stops until breaking out to the range from mid-month. Topside offers through the 1.4050 levels with possible weak stops on a break through the level but facing further congestion on a move through to the 1.4100 level and likely to continue through the 1.4115 areas before opening a little to the 1.4150 areas.
• JPY: Limited range with the market limping along through the bulk of the session and trading in the 106.10-35 range for the most part before gradually pushing through the high and attempting a light test towards the 106.50 areas into the grey hours and limited volume. Topside orders weak through to the 107.00 level and only likely to be light before the market tests towards the 107.50 areas and better offers likely in the areas. Downside bids through to the 105.50 areas are likely to be light initially before increasing into that level with stronger bids the deeper you go,
• AUD: A slow rise through to the 0.7935 areas before meeting light offers sufficient to hold the market and a steady drift through to the 0.7915 levels and into the grey hours, Downside bids light through the 79 cent level and then increasing into the 0.7880 level before weak stops appear on a test through the 0.7860 levels with the market limited until the 0.7820 areas and stronger bids appearing. Topside offers into the 80 cent areas with stronger congestion in the area with weak stops on a test through the 0.8020 levels opening the market to further congestion into the 0.8040-60 areas.

Overnight News

JPY:

Japan manufacturers mood worsens as Yen rises

EUR:

EU single currency reform won’t be perfect – Moscovici

Today’s data

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

JPY         Trade Balance Jan A 0.37T | C 0.14T | P 0.09T

GBP       Rightmove House Prices M/M Feb A 0.80% | P 0.70%

09:00     EUR        Eurozone Current Account (EUR) Dec C 30.5B | P 32.5B

21:45     NZD       PPI Input Q/Q Q4 C 0.30% | P 1.00%

21:45     NZD       PPI Output Q/Q Q4 C 0.40% | P 1.00%

Weekend News

USD:

3 days of Bond Auctions totalling $250B

Monetary policy specialists Jon Faust and Antulio Bomfim will serve as senior advisers

Fed Chairman Jerome Powell’s focus on continuity suggests gradual increases for the year

Republicans face first test of tax cuts power to sway votes

China flooded US with solar panels before Trumps tariffs

Trump says Russians laughing their asses off by sowing chaos

USD/RUB:

Russian foreign min Lavrov, until we see the facts on US election reports are just blather,

JPY:

Japan’s cheap money addiction set to deepen under Kuroda’s second term

BoJ watchers see risk of stronger Yen pushing taper further away

AUD:

Auctions up buy Sydney, Melbourne house prices still falling

USD/CNY:

China warns it may retaliate if US imposes metal tariffs BBG

Harry Hindsight

• EUR: Early Asia saw the market moving up from the opening around the 1.2505 areas with a reasonably quick move through to the 1.2540 levels and the move then through to the grey hours pushing through lightly to the 1.2555 level before heading into the London session slipping slowly lower over the, with a lack of news and the EU backing of on some of its rhetoric over the transition period the market slipped by mid-morning the Euro was giving ground quickly with the market soon testing through to the 1.2475 areas and continuing through into the NYK session dipping and holding around the 1.2450 levels, the market held for the bulk of the NYK session around that level before dropping late in the session to push lightly through the 1.2400 levels as the USD recovered some of its composure after a week of coming under strong pressure.
• GBP: The move through the Asian session saw Cable buyers pushing the market above the 1.4115 and pushing quickly up to the 1.4140 areas before running out of steam and drifting lower through to the London session, very little news and the market reacting to a thinner market the move into the London session saw solid selling moving in and the move in a tight channel down to the 1.4005 levels through into the NYK session, the market saw a small bounce off the level with the market managing to push to the 1.4075 level before again starting to drift but dropping quickly back to test the 1.4000 level and then struggling to finish the day around the 1.4020 areas on weak trading.
• JPY: The move into the Asian session saw the market holding around the 106.15 levels, with the USD again coming under pressure as the market moved to the lows for the day testing quickly through to the 105.55 areas with comments from Aso giving an adverse effect, the market moved slowly off the lows and the recovery saw the market move back above the 106.00 levels through into the London session, some minor gyrations before renewing the mote and the move into the NYK session saw the market testing the highs again around the 106.35 levels and eventually testing through to the 106.40 level several times, the movement in EUR and GBP was replicated in the USD and possibly all JPY related however, the market again recovered and made its way back towards the highs finishing the day off from the level.
• AUD: Opening around the 0.7940 level the market initially dipped a little through to the 0.7935 level before starting a slow and steady climb through to the 0.7990 areas and into the London session, the market was unable to push through to the 80 cent areas and started to drift through the session and deep into the NYK session to test to the 0.7900 areas before attempting a small recovery, the market did manage a weak move through to the 0.7940 level before the market again tested lower and testing lightly through to the 0.7895 areas before recovering a little into the close.

Yesterday’s premiership results

NZD       Business NZ Manufacturing PMI Jan A 55.6 | P 51.2

GBP       Retail Sales M/M Jan A 0.10% | C 0.60% | P -1.50% | R -1.40%

CAD       Manufacturing Sales M/M Dec A -0.30% | C 0.30% | P 3.40%

CAD       International Securities Transactions (CAD) Dec A -1.97B | C 19.18B | P 19.56B | R 19.2B

USD       Import Price Index M/M Jan A 1.00% | C 0.60% | P 0.10% | R 0.20%

USD       Housing Starts Jan A 1.33M | C 1.23M | P 1.19M | R 1.21M

USD       Building Permits Jan A 1.40M | C 1.31M | P 1.30M

USD       U. of Mich. Sentiment Feb (P) A 99.9 | C 95.5 | P 95.7

Stay lucky

Andy

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