Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 105.739 | EURUSD 1.23197 | AUDUSD 0.77636 | NZDUSD 0.72422 | USDCAD 1.2885 | USDCHF 0.93786 | GBPUSD 1.3800 |

 

LMAX Ranges 6am London time

Highs    Lows

EURUSD               1.23695 | 1.22994

USDJPY                 105.680 | 105.419

GBPUSD               1.38155 | 1.37782

AUDUSD              0.77700 | 0.77403

USDCHF               0.93817 | 0.93454

USDCAD               1.29021 | 1.28716

NZDUSD               0.72436 | 0.72063

EURGBP               0.89504 | 0.89235

EURCHF                1.15707 | 1.15321

EURJPY                 130.565 | 129.773

For today

• EUR: Opening around the 1.2335 level the market immediately ran to the 1.2365 areas on the back of the weekend news that SPD had agreed to the coalition with CDU to form a government however, the initial run higher was then tempered by the early polls from Italy, with the right coalition showing gains and dropping quickly back into the Tokyo session to test the 1.2300 level before bouncing a little and returning to the opening levels, the market drifted through the session into the grey hours holding the 1.2315 levels. Topside offers through the 1.2350 areas, with a break through the 1.2360 level likely to see weak stops and a quick test to the 1.2380-1.2400 areas with possibly decent offers appearing in the level, congestive offers likely to continue through to the 1.2440 levels with the market finding some stiff resistance then through to the 1.2500 levels. Downside bids light through the 1.2300 levels with light stops through the 1.2280 areas, and light congestion then through into the 1.2240 levels before the market opens a little and into stronger bids through into the 1.2200-1.2180 level, a dip through the level and any push through the 1.2150 areas will see the market quickly trading through to the 1.2100 levels and sentimental bids only in that area.
• GBP: Cable ranged through the session opening around the 1.3800 levels and making a small push to the 1.3815 areas before dropping back with the Euro to make the lows from those highs, the market did make it above the 1.3800 level again before dropping back and holding around the 1.3790 areas through to the grey hours, topside offers light through to the 1.3850 levels with only sentimental offers in the areas and stiff resistance then appearing through the 1.3900 level with congestion through the level, Downside bids light through to the 1.3750 areas with stronger congestion through the level and only a push through the 1.3700 level opening up a greater loss with very little through to the 1.3600 areas and stronger bids around that level.
• JPY: Opening weaker than Fridays close the market traded weakly around the 105.60 areas and had limited pushes towards the 105.65 areas before slipping slowly and trading around the 105.50 level with the occasional dip to the 105.45 areas before edging back to the opening level. Topside offers light through to the 105.90-106.00 levels where light offers are building for the moment with the market likely to test quickly through to the 106.50 areas before stronger congestion starts to appear on a move through to the 107.00 level, possibly stronger offers into the level with congestion through to the 107.40-60 and stronger levels on a move to 108.00 figure, downside bids light now through to the 105.20 level with congestion likely continuing through 104.80 level however, a push here opens up a deeper move to the 103.50 handle with limited bids along the way.
• AUD: Another quiet range for the Oz with the market opening broadly unchanged on the day and rising a little towards the 0.7770 areas before dipping back to the 0.7745 area and bouncing back again, the market was unable to push through the 0.7770 areas and then eventually dropping back quickly on the failure to test to the 0.7740 level and set the range for the day, and held around the 0.7750 areas through to the grey hours, Topside offers building above the 0.7780 areas and through to the 78 cent level before weak stops through to the 0.7850 areas and stronger congestion, downside bids light through to the 0.7720 where the support starts to increase, a dip through the 0.7680 levels with stronger stops likely to be limited and strong bids likely into the 0.7650 levels.

Overnight News

EUR:

Italy’s election appears to have yielded a hung parliament exit polls

Deputy 5 Star Di Battista says if data confirmed, election is triumph for 5 star

Centre right coalition wins 36% of popular vote for lower house

5 Star movement wins 32.5% of popular vote for lower house first projection

Centre right coalition 36.94%, 5 Star movement 30.94%, Centre left 24.39%

EU plans to tax 2-6% of tech giants sales French economy minister

CNY:

China state planner says will strike balance between need to cut overcapacity and guarantee supply

China state planner says will cut steel production capacity by 30M tonnes

China sets 2018 GDP growth target at about 6.5%

China targets lower 2018 budget deficit at 2.6% of GDP

Today’s data

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

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

AUD       Building Approvals M/M Jan A 17.10% | C 5.00% | P -20.00% | R -20.60%

CNY        Caixin PMI Services Feb A 54.2 | C 54.3 | P 54.7

08:45     EUR        Italy Services PMI Feb C 57 | P 57.7

08:50     EUR        France Services PMI Feb (F) C 57.9 | P 57.9

08:55     EUR        Germany Services PMI Feb (F) C 55.3 | P 55.3

09:00     EUR        Eurozone Services PMI Feb (F) C 56.7 | P 56.7

09:30     GBP       Services PMI Feb C 53.3 | P 53

09:30     EUR        Eurozone Sentix Investor Confidence Mar C 30.9 | P 31.9

10:00     EUR        Eurozone Retail Sales M/M Jan C -0.10% | P -1.10%

14:45     USD       US Services PMI Feb (F) C 55.9 | P 55.9

15:00     USD       ISM Non-Manufacturing/Services Composite Feb C 59 | P 59.9

Weekend News

EUR:

Five star gets 28.8-30.8% in Italy lower house LA7 poll

Five star gets 29-32% in Italian senate RAI Exit poll

Democratic party at 20.5-23.5% in Italy senate Exit poll

Forza Italia at 13-16% in Italy senate Exit poll

League gets 12.5-15.5% in Italian lower house Exit poll

German SPD members voted overwhelmingly for a coalition and Merkel’s 4^th Term

Macron hails German coalition as good news for Europe

USD:

Trump trade adviser sees business exemptions for new tariffs

EUR/USD:

EU threatens iconic US brands after Trump opens door to trade war

Trump threatens to tax European auto parts

CNY:

China says lifting term limits is about protecting authority of party

China presents economic plan, US trade spat raises new risks

China says must control money supply to combat financial risk

JPY:

BoJ’s Kuroda joins queue of central banks looking towards exit BBG

Japan trade minister says strong concern about trump tariffs Kyodo bbg

GBP/EUR:

Brexit vision, PM May appeals to EU to show flexibility

Harry Hindsight

• EUR: Mixed through the Asian session with the market pushing slowly through the 1.2285 levels having opened around the 1.2270 areas and then drifting into the grey hours to make the lows just before the opening trading around the 1.2250 level and starting a steady rise through towards the highs again with German retail sales doing the most damage, the move higher was a steady affair once the PPI numbers were released for the Eurozone with limited movement from the expected and the market then moving higher as UK’s PM speech came to an end and the market holding around the 1.2320 levels through into the NYK session rising to the 1.2330 levels and trading back to hold around the 1.2320 area through to late in the session and rising to the close to make slightly higher numbers before slipping slowly back to the 1.2320 levels for the close.
• GBP: A limited session with the speech from May doing very little for the market, opening around the 1.3775 levels the market rose slowly through the Asian session to test a few times through the 1.3785 level but with limited conviction, the market dipped through the grey hours to test the 1.3760 level with remained the low through the day the move through May’s speech saw the market pushing through the 1.3800 levels for the first time dipping back to hold the 1.3785 levels before moving into the NYK session pushing above the 1.3800 level testing to the 1.3815 levels this time to make the highs for the day, the market dipped quickly back towards the lows and chopped around for several hours between the lows and 1.3800 areas holding quietly around the 1.3770 area before starting a slow rise through the session to the close around 1.3800.
• JPY: Opening around its highs the USDJPY moved into the Tokyo session around the 106.30 level before dropping away once the numbers and fix were out of the way, the market held around the 106.00 levels for much of the session with comments from Kuroda seeming to suggest rate hikes and tapering to come along the way, the market dipped into the grey hours pushing through to the 105.80 areas and holding for a brief while before slipping slowly through to the 105.70 area and another quick drop to the 105.30 level and the market basing along that level deep into the NYK session rising slowly into the London close and then testing the 105.70 levels, holding around the 105.50 levels for the run to the close before rising through to the 105.70 area for the close.
• AUD: A narrow range for the most part with the market eventually dipping a little lower through the day, opening around the 0.7755 levels the market rising to the 0.7770 levels in early Tokyo before returning to the opening levels and trading around that area deep into the London morning the move into the NYK session saw the market sliding a little lower to make the lows around the 0.7740 areas before holding around the opening levels through too late in the session before testing a little higher into the close.

Yesterday’s premiership results

NZD       Building Permits M/M Jan A 0.20% | P -9.60% | R -9.50%

JPY         Jobless Rate Jan A 2.40% | C 2.80% | P 2.80%

JPY         Tokyo CPI Core Y/Y Feb A 0.90% | C 0.80% | P 0.70%

JPY         Monetary Base Y/Y Feb A 9.40% | C 9.20% | P 9.70%

EUR        German Retail Sales M/M Jan A -0.70% | C 0.70% | P -1.90% | R -1.10%

EUR        German Import Price Index M/M Jan A 0.50% | C 0.40% | P 0.30%

GBP       Construction PMI Feb A 51.4 | C 50.5 | P 50.2

EUR        Eurozone PPI M/M Jan A 0.40% | C 0.40% | P 0.20%

EUR        Eurozone PPI Y/Y Jan A 1.50% | C 1.60% | P 2.20%

CAD       GDP M/M Dec A 0.10% | C 0.10% | P 0.40%

USD       U. of Mich. Sentiment Feb (F) A 99.7 | C 99.5 | P 99.9

Stay lucky

Andy

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