Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 106.823 | EURUSD 1.23055 | AUDUSD 0.7847 | NZDUSD 0.72838 | USDCAD 1.28114 | USDCHF 0.95135 | GBPUSD 1.38502 |

 

LMAX Ranges 6am London time

Highs    Lows

EURUSD               1.23259 | 1.23061

USDJPY                 106.973 | 106.354

GBPUSD               1.38649 | 1.38508

AUDUSD              0.78741 | 0.78511

USDCHF               0.95146 | 0.94928

USDCAD               1.28185 | 1.28035

NZDUSD               0.73234 | 0.72914

EURGBP               0.88922 | 0.8882

EURCHF                1.17117 | 1.16996

EURJPY                 131.697 | 131.086

For today

• EUR: Opening a touch higher the market drifted around the 1.2310 levels basing along the 1.2308 areas deep into the Tokyo session, the market was initially unable to push above the 1.2315 levels until late in the session and the document scandal in Japan started to run, the Euro pushed through the 1.2320 levels and struggled just above the level for a run to the grey hours, Congestion around the 1.2300 areas will likely see weak stops on a move through the 1.2270 areas and the market then running into light bids through to the 1.2240 areas, weak stops then through the level and a slow grind to the stronger bids into the 1.2200-1.2160 areas, Topside offers light through the 1.2340 level but with congestion likely to continue through to the 1.2360 and stronger offers then increasing into the 1.2400 levels and likely to continue into the 1.2440 before stops appear, through and opening stronger offers from the 1.2480-1.2500 areas.
• GBP: Cable saw a slow rise through the session opening around the 1.3850 levels and rising into the midsession testing the 1.3865 levels before holding around the 1.3860 level through to the grey hours, Downside bids light through to the 1.3750 levels with bids thickening into and through the level on an approach to the 1.3700 level weak stops through the level and the market then opening to the 1.3600 level and weak bids more sentimental than anything substantial with stronger congestion thereafter and through the 1.3550 level. Topside offers through the 1.3900 levels area likely to start off limited but increasing as the market moves higher with those offers likely through to the 1.3950 levels before showing some lighter offers until closer to the 1.4000 areas.
• JPY: USDJPY started the day with a low opening and then regaining to the 106.80 areas from lows around the 106.70 level to push through to the 106.95 level before holding steady for several hours before the start of the Moritomo land sale documents started to filter through with the market dropping quickly back to the 106.65 areas holding through to the commentary from the FinMin Aso making apologies for the incident, this again caused the market to drop and hold just off the 106.35 levels before rising back quickly to the 106.65 areas for the move into the grey hours, light bids back through the 106.00 areas with stronger bids then starting appear on any move through the 105.50 areas and with weak stops likely to appear on a dip through the 105.20 level and increasing in momentum through to the 104.80’s to open up a large fall with the 103 handle becoming vulnerable, topside offers into the 107.00 much thinned and very vulnerable to any test through the level with increased risk of weak stops appearing, a push through could see the market squeezing through the 107.60 areas quickly and then finding stronger offers sufficient to curb further gains on a move to the 108.00 areas.
• AUD: Oz rose slowly through the session pushing from the 0.7850 and very little different from the close on Friday, the market pushed through to the 0.7875 levels into the grey hours with very light trading and unaffected by the Tokyo news. Topside offers into the 79 cent areas with some weak stops likely on a move through the 0.7920 areas however, stronger offers then start to move in with congestion through the 0.7940-60 areas and better offers from 0.7980-0.8000 levels with the level likely to be protecting strong stops above the level. Downside bids light through to the 0.7780 areas with bids then starting to increase into a very congestive area any push through to the 0.7720 level which is likely to take time in this market will be met with stronger bids again and strong stops on a push through the 77 cent levels.

Overnight News

NZD:

RBNZ’s Spencer to speak Tuesday on Macro-Prudential policy

NZ inflation gauge falls on free tertiary education plan – ANZ

JPY:

Japan MoF to admit to altering Moritomo land sale documents – Kyodo

School scandal threatens Abe’s political clout

Japan lawmaker says he was briefed MoF papers were altered

MoF official investigation found 14 items had been altered in documents related to suspected cronyism scandal

Finance ministry division instructed changes to document to match testimony in parliament

FinMin Aso says no intention to resign

FinMin says several officials at finance ministry’s division in charge of land sale were involved in altering of land sale document

Aso apologises for alterations

KRW:

1. Korea Kim wants peace treaty, build relations with US

Today’s data

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

JPY         BSI Large Manufacturing Q/Q Q1 A 2.9 | C 10.3 | P 9.7

JPY         Machine Tool Orders Y/Y Feb (P) A 39.50% | P 48.80%

18:00     USD       Federal Budget Balance Feb C -222.3B | P 49.2B

23:50     JPY         Domestic CGPI Y/Y Feb C 2.50% | P 2.70%

Weekend News

USD:

US officials defend Trump-Kim meeting

Trump says N. Korea talks could fail or bring greatest deal

Fed official warns of interest rate risk to recovery

EU, Japan press for waivers on Trump’s tariffs as US weighs criteria WSJ

FED’s Bullard reiterated 4 interest rate hikes in 2018 could slow the economy – Ft

USD/CNY:

US asks China for $100B plan to cut trade deficit FT

China warns of strong measures to counter Trump tariffs BBG

China says trade war with US will only bring disaster to global economy – Reuters

CNY:

China votes to allow Xi Jinping to rule for life FT

Harry Hindsight

• EUR: Opening around the 1.2310 levels the market overall did very little, early trading remained around the level with a minor push early through the 1.2300 levels only to recover and push slowly into the grey hours to the 1.2320 level, the move into the London session saw the market dipping back as German industrial figures fell back for the month of Jan, with the market again testing through the 1.2300 levels again, the move through to the NYK session saw the market dropping away and into the release of the NFP, a rise in unemployment saw a spike through the opening levels and then a drop back to test into the 1.2270 levels on the NFP again before balancing back to the starting levels, before rising quickly through to the 1.2330 level on the release of building inventory levels and ranging through to the close eventually dipping to the 1.2305 areas.
• GBP: A slow steady start to the day with the market dropping from the opening 1.3815 levels to test to the lows of the day around the 1.3790 area, the move through the balance of the Asian session saw the market holding around the 1.3800 level through to the grey hours, the market continued to slowly rise through the day testing to the 1.3830 levels into the London opening before relaxing back to the 1.3815 opening areas, UK numbers uninspiring but limited in impact with the market slowly rising through to the 1.3835 levels into the NYK session, limited gyrations around the NFP numbers before pushing higher from the US inventory numbers to test to the 1.3890 levels, the move to the London close saw day traders cutting their positions into the close and the market drifting off to the close.
• JPY: opening on its lows around the 106.15 areas the market pushed quickly through into the Tokyo opening testing towards the 106.50 areas with the BoJ monetary policy coming in a little dovish to send the market up into the 106.95 levels before being turned away by some strong offers and the market dropping back into the midsession period to hold around the 106.65 levels, the market moved into the London session holding the 106.75 areas after a long slow rise, the market continued to slowly rise through into the NYK session with a minor push above the 107.05 areas and continuing to push at the level for several hours, the move to the London close saw the market falling back to the 106.75 areas and a slow move through to the close with some minor spikes both higher and lower.
• AUD: A quiet movement through the Asian session with the market drifting from the opening around the 0.7780 areas testing into the 0.7770’s but limited deep into the session, the move through the grey hours saw the market rising slowly through into the London session pushing above the 78 cent levels but unable to push beyond the 0.7810 areas, through London and into the NYK holding around the 78 cent level, the US figures gave the Oz the impetus to move higher and testing over a period of hours to the 0.7850 levels before holding through to the close.

Yesterday’s premiership results

JPY         BOJ Monetary Policy Statement

JPY         Overall Household Spending Y/Y Jan A 2.00% | C -0.80% | P -0.10%

JPY         Japan Money Stock M2+CD Y/Y Feb A 3.30% | C 3.30% | P 3.40%

JPY         Labour Cash Earnings Y/Y Jan A 0.70% | C 0.60% | P 0.70%

CNY        CPI Y/Y Feb A 2.90% | C 2.40% | P 1.50%

CNY        PPI Y/Y Feb A 3.70% | C 3.80% | P 4.30%

EUR        German Trade Balance Jan A 21.3B | C 21.1B | P 21.4B

EUR        German Industrial Production M/M Jan A -0.10% | C 0.60% | P -0.60%

GBP       Visible Trade Balance (GBP) Jan A -12.3B | C -12.0B | P -13.6B

GBP       Industrial Production M/M Jan A 1.30% | C 1.50% | P -1.30%

GBP       Industrial Production Y/Y Jan A 1.60% | C 1.80% | P 0.00%

GBP       Manufacturing Production M/M Jan A 0.10% | C 0.20% | P 0.30%

GBP       Manufacturing Production Y/Y Jan A 2.70% | C 2.80% | P 1.40%

GBP       Construction Output M/M Jan A -3.40% | C -0.50% | P 1.60%

GBP       NIESR GDP Estimate Feb A 0.30% | C 0.40% | P 0.50% | R 0.40%

CAD       Net Change in Employment Feb A 15.4K | C 21.0K | P -88.0K

CAD       Unemployment Rate Feb A 5.80% | C 5.90% | P 5.90%

USD       Change in Non-farm Payrolls Feb A 313K | C 205K | P 200K | P 239K

USD       Unemployment Rate Feb A 4.10% | C 4.00% | P 4.10%

USD       Average Hourly Earnings M/M Feb A 0.10% | C 0.20% | P 0.30%

USD       Wholesale Inventories M/M (JAN F) A 0.80% | C 0.70% | P 0.70%

Stay lucky

Andy

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