Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 105.977 | EURUSD 1.2290 | AUDUSD 0.77128 | NZDUSD 0.72168 | USDCAD 1.30976 | USDCHF 0.9523 | GBPUSD 1.39456 |

 

LMAX Ranges 6am London time

Highs    Lows

EURUSD               1.22920 | 1.2258

USDJPY                 106.152 | 105.679

GBPUSD               1.39492 | 1.39136

AUDUSD              0.77195 | 0.76869

USDCHF               0.95405 | 0.9522

USDCAD               1.31219 | 1.30912

NZDUSD               0.72283 | 0.71961

EURGBP               0.88168 | 0.8805

EURCHF                1.17056 | 1.16934

EURJPY                 130.306 | 129.632

For today

• EUR: A quiet move through into the Tokyo session before the market picked up on the European news over the weekend and the Euro drifted from the 1.2290 opening levels through to the 1.2265 level through to the grey hours, downside light congestion through the 1.2250 levels with the market then possibly seeing stronger bids into the 1.2200-20 areas with limited stops likely through the 1.2180 level before running into some stronger bids on a move towards the lows of the month around the 1.2160 area. A move below the level is likely to see stronger bids into the 1.2120-00 levels with stronger stops likely through the level. Topside offers light through to the 1.2300 level with the market likely to see some weak stops on a move through the level before hitting congestive offers around the 1.2320-40 areas and limited weakness until closer to the 1.2400 levels.
• GBP: Opening around the 1.3945 levels and then rising towards the 1.3950 area but it was a limited move and the market started to drift through the session pushing initially to the 1.3925 levels and holding quietly, the 1.3925 level eventually broke and some weak stops saw the market dip to the 1.3915 level before holding into the grey hours, Bids into the 1.3900 level are likely to be more congestive than anything with some weakness through to the 1.3850 levels where bids start to increase from there to the 1.3800 level, downside remains congestive to a lesser extent with the 1.3750 level likely to be the key level to any further loses. Topside offers into the 1.4000 levels are likely to be strong and congestion through the level onwards, 1.4050 then sees limited congestion and the market starts to increase on a push towards the 1.4100 levels.
• JPY: Opening around the 105.98 levels with a little gyration on the opening saw the market moving around the 106.00 levels, early Tokyo saw the market touch towards the 105.90 levels before bouncing quickly to make the highs of the day pushing the 106.15 level before reversing quickly as the Moritomo scandal reappeared again and the market dipped through to the 105.80 levels holding through to late in the session to move towards the grey hours testing through the 105.70 levels and holding quietly into the grey hours, Downside bids remain through to the 105.20 areas from early in the month, possible stops on a dip through the level will likely see stops appear and open a deeper move through to the 103 handle with sentimental bids protecting the downside only and stronger bids not suspected until deep into that level. Topside offer light through to the 106.50 areas with a little bit of congestion into the area and the market then free to push back to the 107.00 levels again, stronger congestion through the 107.30 level with those offers likely to be building through the 107.50 level with particular resistance into 107.80-108.00 levels.
• AUD: Opening a little above Fridays close and then holding quietly around the 0.7715 areas through to the Tokyo session then dropping a little to hold the 77 cent areas, the market eventually dipped lower again and struggled with the 0.7690 level through to the grey hours. Downside bids into the 0.7680 level with weak stops on a test through the level likely to be limited however strong congestion is likely to appear on any push through the 0.7660 areas and continue through to the stronger 76 cent level, even a push through this level while giving an indication of a move into a lower band will still continue to see congestion from the long periods we remained in the 75-77 cent areas and possibly slow movement until that bottom side of the band is broken. Weak topside for the moment with limited offers through the 0.7750 areas and then stronger into the 78 cent level, weak stops likely through the 0.7820 level and the market then running into congestion through the 0.7840-60 areas to limit the topside potential in the short term.

Overnight News

USD:

White house memo: newly emboldened, Trump says what he really feels

NZD:

NZ Services industry expands at slowest pace in 10 Months

JPY:

Asahi article detailing 2 pages of waste problem in the Moritomo dodgy land deal

MoF said to have asked transport Minister to alter Moritomo papers

BMI research says Moritomo scandal imperils Abe’s chance to stay past 2018

Abe hits back over scandal as support plunges

Today’s data

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

JPY         BOJ Summary of Opinions

JPY         Trade Balance (JPY) Feb A -0.20T | C -0.10T | P 0.37T | R 0.35T

GBP       Rightmove House Prices M/M Mar A 1.50% | P 0.80%

10:00     EUR        Eurozone Trade Balance (EUR) Jan C 22.6B | P 23.8B

Weekend News

USD:

Trump escalates rift with China ahead of tense G-20 meeting

US tariffs to be in spotlight G-20 summit

Jeff Sessions fires former FBI deputy director McCabe

Trump rails against Mueller investigation, and dismisses McCabe notes as fake memoires

RUB:

Putin on tract for commanding win as Russians head to polls

EUR:

France hails progress on plans to strengthen Eurozone

Villeroy: Alignment of stars between markets, ECB exit

Villeroy: Protectionism a major threat to synchronized growth

Villeroy: Very significant degree of clarity on ECB path

Villeroy: Euro area is making progress on inflation

Villeroy: Monetary policy on path toward normalisation

Villeroy: Euro area experiencing robust expansion

CNY:

Yi Gang to become China’s Central bank governor WSJ

AUD:

Oz left exposed to iron ore tumble as hedge funds jump ship

Harry Hindsight

• EUR: A quiet opening around the 1.2305 levels and then dipping into the Tokyo session to the 1.2295 areas for a short period and then starting a slow steady climb through the session and pushing through into the London session holding around the 1.2320 areas before breaking too the 1.2335, the move into the NYK session saw the market holding the 1.2320-30 areas, an increased industrial production number saw the market drop back quickly as the USD rallied with the Euro testing back to the 1.2280 level before holding briefly for a short period and then dropping to its lows on the 1.2260 level, the market eventually reversed a little to the 1.2290 level and ranged tightly through to the close.
• GBP: Cable dipped into the Tokyo session to test the 1.3910 levels before gradually moving through to the grey hours regaining the opening around 1.3950, London opening saw the market moving off the 1.3935 areas and rallying quickly through to the 1.3980 areas before ranging through to the NYK session holding the 1.3960 levels before dropping quickly once the IP numbers hit the market, the market testing through to the 1.3890 level and then rallying back to the 1.3935 level into the London close and rising slowly through to the close to finish.
• JPY: Opening around the 106.35 levels and then dropping back into the Tokyo session to run along the 106.00 level for several hours, the move towards the grey hours saw the market drifting a little lower and holding the 105.85 areas ranging to the 106.00 level, the move into London saw the market again dipping to the 105.65 level this time and then ranging through the London session basing along that level touching to 105.60, the market opened in NYK and the numbers helped the USDJPY push quickly back through the 106.00 level and struggle through towards the 106.25 areas before drifting for a long period through to the close.
• AUD: Asian trading saw some selling of the carry trade AUDJPY with the Oz struggling through to the 0.7770 levels before starting a slow climb through into the London session extending the highs to just above the 78 cent level and holding around the level in early London morning, the market eventually started a slow decline through the session and into the NYK session testing the 0.7755 areas and holding briefly after the US numbers before falling slowly away again to test the 0.7715 level and pausing for a short period and slipping only a little to the close.

Yesterday’s premiership results

NZD       Business NZ Manufacturing PMI Feb A 53.4 | P 55.6 | R 54.4

JPY         Industrial Production M/M Jan (F) A -6.80% | C -6.60% | P -6.60%

EUR        Eurozone CPI M/M Feb A -0.30% | C 0.20% | P -0.90%

EUR        Eurozone CPI Y/Y Feb (F) A 1.10% | C 1.20% | P 1.30%

EUR        Eurozone CPI Core Y/Y Feb (F) A 1.00% | C 1.00% | P 1.00%

CAD       Manufacturing Sales M/M Jan A -1.00% | C -0.90% | P -0.30% | R -0.10%

CAD       International Securities Transactions (CAD) Jan A 5.68B | C 9.11B | P -1.97B | R -1.54B

USD       Housing Starts Feb A 1.24M | C 1.30M | P 1.33M

USD       Building Permits Feb A 1.30M | C 1.33M | P 1.38M

USD       Industrial Production M/M Feb A 1.10% | C 0.30% | P -0.10% | R -0.30%

USD       Capacity Utilization Feb A 78.10% | C 77.70% | P 77.50% | R 77.40%

USD       U. of Mich. Sentiment (Mar P) A 102 | C 99.3 | P 99.7

Stay lucky

Andy

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