Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 106.575 | EURUSD 1.23903 | AUDUSD 0.7860 | NZDUSD 0.73353 | USDCAD 1.2965 | USDCHF 0.94404 | GBPUSD 1.3962 |

LMAX Highs and Lows 6am GMT

                                High | Low

EURUSD               1.24127 | 1.23886

USDJPY                 106.749 | 106.383

GBPUSD               1.39961 | 1.39635

USDCHF               0.94403 | 0.94248

AUDUSD              0.78787 | 0.7852

USDCAD               1.29635 | 1.29377

NZDUSD               0.73541 | 0.73233

EURCHF                1.17010 | 1.16928

EURGBP               0.88776 | 0.88637

EURJPY                 132.281 | 131.864

For today

• EUR: A quiet move through into the Tokyo session with the market holding around the opening 1.2395 areas, the news on the Pennsylvania special election saw the USD dipping slightly as reports varied however, exit polls seemed to suggest that Lamb was likely to win the election and the market made its way towards the 1.2410 levels and tested through on stronger confirmation of the news. Holding into the grey hours around the level, Topside offers through to the 1.2440 levels with a possibility of weak stops through the level however, congestion is likely to continue through to the 1.2460 areas with only minor weakness through that level and stronger offers reappearing on a test through the 1.2480 level and into the 1.2500 area, beyond that level the market is likely to be similar in make up as the 1.24 handle. Downside bids light through to the 1.2380 level with weak stops likely on a push through the level and the weakness continuing through to the 1.2300 level were better bids are likely to appear, a test through to the 1.2280 will find continuing support before a move through opening weak stops and a test through to the 1.2240-60 level with congestive bids in the area, with stronger bids likely to appear on any test through to the 1.2200 level.
• GBP: Cable rose slowly through the Asian session moving into the Tokyo session only 5 pips above the opening level but continuing to push through to the 1.3995 levels before drifting in the 1.3980-90 areas through to the grey hours, light bids through the 1.3950 level will likely see some weak stops and the market possibly quickly dipping back to the 1.3900 level however, even here the market is likely to be limited and weak stops through the level will see the market then opening the market back through the 1.3850 levels and possible stronger bids on an approach to the 1.3800 levels.
• JPY: USDJPY rallied into the Tokyo session testing through to the 106.75 areas before slipping back to trade around the opening 106.50 areas in quiet trading through to the grey hours with the market testing to its lows on the Pennsylvania results. Downside bids light through to the 106.20-00 areas with the market likely to see only limited stops on a move through the 105.80 areas and then stronger bids start to move into the market and increasing on any move through the 105.50 levels, a push through the 105.20 will likely see some bids however, the 104.80 support areas is likely to become vulnerable and opening a larger move lower, Topside offers into the 107.00 level are lighter however, a push through into the 107.20 levels will likely see stronger offers moving in with weak stops on a push through the 107.30 areas and limited potential with congestive offers on a push through the 107.50 areas and increasing into the 107.80-108.00 level.
• AUD: Rallying from the opening around the 0.7855 opening lows the market ran quickly through to test steadily to the 0.7875 areas and holding quietly around the 0.7870 levels the move to the grey hours saw the market again testing to the highs and extending them as the market pushed towards the 0.7880 levels in quiet trading for the Oz. Topside offers through the 79 cent level with weak stops on a move through the 0.7920 levels a possibility however, congestion through the 0.7940 levels is likely to absorb any weak stops and the market then struggles to the 0.7980 level with stronger offers in that area, downside bids light through the 78 cent areas and increasing a little into the 0.7780 level, weak stops on a move through are likely to be misplaced and the market starts to see stronger support moving in around the 0.7750 levels and through to 0.7720 and only a strong push through the 77 cent areas is likely to open any further weakness.

Overnight News

NZD:

February home sales rise 1.2% from year ago RBNZ

World:

Inflation misses across the world and fuels central bank debates

USD:

Lighthizer said to meet Freeland as Trump seeks quick Nafta deal

Trump demands aides pump up anti-China tariffs

US eyes tariffs to punish China for intellectual property theft

Mike Pompeo could succeed where Rex Tillerson failed

Economists united: Trump tariffs won’t help the economy

Democrat Conor Lamb takes early lead in Pennsylvania special election

Later news alert suggests Pennsylvania is too close to call

US unemployment headed below 3% unless Fed acts to slow growth

GBP:

The rise of EU’s monster Martin Selmayr shows why its days are numbered UKT

May’s Brexit committee agrees to open borders until 2021

London house prices are falling at the quickest rate since the financial crisis

JPY:

Fears send chill through Tokyo as Finance ministry scandal leading to concerns for the future of Abe

KRW:

Moon, Kim may discuss declaring end of Korean war Chosun

CNY:

China faces retail sales hangover after lunar New Year

Today’s data

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

NZD       Current Account (NZD) Q4 A -2.77B | C -2.45B | P -4.68B | R -4.83B

AUD       Westpac Consumer Confidence Mar A 0.20% | P -2.30%

JPY         BOJ Minutes of Policy Meeting

JPY         Machine Orders M/M Jan A 8.20% | C 5.20% | P -11.90% | R -9.30%

CNY        Retail Sales Y/Y Feb A 9.70% | C 10.00% | P 9.40%

CNY        Industrial Production Y/Y Feb A 7.20% | C 6.30% | P 6.20%

CNY        Fixed Assets Ex Rural Y/Y Feb A 7.90% | C 7.00% | P 7.20%

07:00     EUR        German CPI M/M Feb (F) C 0.50% | P 0.50%

07:00     EUR        German CPI Y/Y Feb (F) C 1.40% | P 1.40%

10:00     EUR        Eurozone Industrial Production M/M Jan C -0.40% | P 0.40%

10:00     EUR        Eurozone Employment Q/Q Q4 C 0.30% | P 0.40%

12:30     USD       Retail Sales Advance M/M Feb C 0.30% | P -0.30%

12:30     USD       Retail Sales Ex Auto M/M Feb C 0.40% | P 0.00%

12:30     USD       PPI M/M Feb C 0.10% | P 0.40%

12:30     USD       PPI Y/Y Feb C 2.80% | P 2.70%

12:30     USD       PPI Core M/M Feb C 0.20% | P 0.40%

12:30     USD       PPI Core Y/Y Feb C 2.60% | P 2.20%

14:00     USD       Business Inventories Jan C 0.60% | P 0.40%

14:30     USD       Crude Oil Inventories P 2.4M

 

Harry Hindsight

• EUR: The move through Asia was quiet with the market pushing just above the 1.2345 levels before starting a steady drift back through the opening 1.2335 levels and into the grey hours holding the 1.2325 area, early London saw the market drift off to make the lows around the 1.2315 level, the move through into the full London session saw the market starting to rise slowly and push back to the opening levels, some early movement saw a spike through to the 1.2350 level and possibly an early precursor to the news on the opening in the NYK session with the news that Tillerson was forced out by Trump and the market quickly pushed through to the 1.2385 levels, dipping back a little to the opening level again and then rising quickly through to the 1.2400 levels and remaining in that area for several hours and drifting back to the 1.2390 level into the close in a quiet run to the end.
• GBP: Cable drifted through the Asian session opening around the 1.3905 levels and unable to push beyond the 1.3915 areas before drifting through the session to the 1.3890 level into the grey hours, London saw a slight dip to the 1.3875 areas before pushing back to the 1.3900 level and holding through to the NYK session, the Tillerson firing saw the Cable shoot quickly to the 1.3950 levels and the market held broadly above the level but struggled in the 1.3970 areas, the move through to the end of London saw the market start to rise steadily through to the 1.3995 areas before running out of steam and slipping back to the 1.3960 areas
• JPY: USDJPY opened around the 106.45 areas and slipped a little lower testing to the 106.25 areas to make the lows for the day before moving slowly through to mid-session holding around the 106.35 areas, the market eventually started to rise slowly but steadily through to the grey hours testing the 106.80 level, the move into the London session saw the market again rising and struggling into 107.00 level and once it broke quickly moved through to the 107.20 level and then struggling again pushing a little to the 106.25-30 levels before dropping off from the highs in a quick move as USD sellers moved in on the market to test quickly to 106.70 and then ebbing over the session to the 106.50 level to trade quietly around the level to the close.
• AUD: Opening around the 0.7870 levels the market moved quietly through the Asian session pushing a little higher to test above the 0.7880 levels before drifting back into the grey hours to hold around the opening levels, London eased back a little testing to the 0.7860 areas, the move through to the NYK session was quiet with the market moving around the opening levels, until the Tillerson news and the market quickly pushed up to challenge towards the 79 cent levels, once the initial shock was over the market started to drift lower through the session and the move through to the opening levels and weak stops dropping back to the 0.7846 levels before finding some support and the market finishing just off the lows.

Yesterday’s premiership results

JPY         Domestic CGPI Y/Y Feb A 2.50% | C 2.50% | P 2.70%

AUD       Home Loans M/M Jan A -1.10% | C -0.20% | P -2.30%

AUD       NAB Business Conditions Feb A 21 | P 18

AUD       NAB Business Confidence Feb A 9 | P 12

JPY         Tertiary Industry Index M/M Jan A -0.60% | C -0.30% | P -0.20% | R 0.00%

USD       CPI M/M Feb A 0.20% | C 0.20% | P 0.50%

USD       CPI Y/Y Feb A 2.20% | C 2.20% | P 2.10%

USD       CPI Core M/M Feb A 0.20% | C 0.20% | P 0.30%

USD       CPI Core Y/Y Feb A 1.80% | C 1.80% | P 1.80%

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