Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 106.098 | EURUSD 1.23355 | AUDUSD 0.77184 | NZDUSD 0.72443 | USDCAD 1.30778 | USDCHF 0.95106 | GBPUSD 1.40242 |

LMAX Highs and Lows 6am GMT

                                High | Low

EURUSD               1.23504 | 1.23328

USDJPY                 106.352 | 105.93

GBPUSD               1.40490 | 1.40195

USDCHF               0.95234 | 0.95064

AUDUSD              0.77171 | 0.76971

USDCAD               1.30867 | 1.30622

NZDUSD               0.72488 | 0.72157

EURCHF                1.17489 | 1.17306

EURGBP               0.87992 | 0.87907

EURJPY                 131.282 | 130.733

For today

• EUR: Light buying from the opening took the market from the opening levels to test to the 1.2350 areas before starting a slow drift back to the opening levels on the move to the grey hours with only Mersch talking overnight, downside bids light back through the 1.2300 levels with small weak stops on a dip back through the 1.2280 level before again running into bids into the 1.2260-40 areas and stronger bids through to the 1.2200 areas, topside offers on any push through the 1.2360 level are likely to increase on a rise to the 1.2400 level with very limited chance of stops appearing until a strong push through the 1.2460 levels and an attempt at the possibly stronger 1.2500 areas.
• GBP: Cable made a small run towards the 1.4050 levels before drifting back to the opening levels around the 1.4025 areas in a very limited day for the Cable, early buying saw some cross buying particularly against the GBPJPY but even that was limited to some extent. Topside offers light through the 1.4050 areas and a strong push through will see limited stops appearing however, as the market approaches the 1.4100 level the market is likely to see stronger offers appearing, a push beyond the 1.4115 areas will possibly see stops appearing and the market quickly challenging the 1.4150 sentimental level any break here will see some weakness appearing and the market opening a little up to the 1.4200 level with again sentimental defences only. Downside bids light through to the 1.3950 levels with some bids likely in the area, congestion from there into the 1.3900 levels and possibly stronger bids appearing with weak stops through the level and the market opening to the 1.3850 levels
• JPY: USDJPY found its legs in limited trading with the market opening around the 106.05 areas and drifting in early trading to push a low around the 105.95 areas before starting a slow but steady rise through to the 106.30 levels initially and then finally pushing the 106.35 levels into the grey hours, plenty of chatter on the land scandal did very little for the moment with pure speculation from the media. Downside bids into the 105.80 levels and congestion continuing through to the 105.50 where stronger bids are likely to appear, a push through the 105.40-30 areas will see some strong stops appearing and the downside is then open to sentimental bids only with the possibility of yield players entering the market, but the 103.50 level will rapidly become the target for the medium term. Topside offers light through to the 106.50 area with some offers hanging around from exporters who at this point have likely revised their forecasts for the year however, a push through the level will see the 107.00 challenged quickly and the market then congested on any attempt to push through.
• AUD: Very limited and nothing from the RBA that we were not aware of, opening around the 0.7710 levels the market generally remained in the area with minor dips to the 77 cent a couple of times but rising back to the opening levels with the market unable to find any impetus to push much further than the 0.7715 area, still becalmed the topside through to the 78 cent levels likely to be fairly weak and a test through the 78 cent level could catch the market by surprise however the market remains fairly congested through that area and possibly limited to the 0.7850 areas, downside bids remain with bids into the 0.7660 areas, some weak stops on a move through yesterday’s lows could see the level tested but congested bids through the level are likely to be strong enough for the moment to contain any move lower.

Overnight News

USD:

Trump enthusiastic about reaching NAFTA deal, says Canada’s PM

Yellen says gradual Fed rate hikes needed to prevent overheating

Trump prepared to hit China with $60B in annual tariffs Washington post

AUD:

Australian rates unlikely to move anytime soon says Morrison

Ozzie bonds discount to treasuries the largest since 1984

RBA: GDP growth expected to exceed potential growth over 2018

RBA: Overall conditions in global economy continued to improve

EUR:

ECB can slowly reduce QE and keep easy policy stance Mersch

Mersch: all conditions for ECB inflation goal are in place

Mersch: wage dynamics seem to have turned a corner

Mersch: economic recovery is doing better than expected

GBP:

Brexit transition deal give Theresa May some breathing space

Major collision over Ireland is imminent

JPY:

Japanese PMK has been accused of helping a school operator secure a cut price land deal

Cronyism allegations chip away at support for Japan’s Abe

Abe haemorrhages support over renewed school scandal

Abe takes blame for document tampering scandal

MoF official: No bilateral talks with US on tariffs

Asia:

Asian central banks face white knuckle steering as Fed tightens

CNY:

China urges US to correct abuse of trade measures MoFCOM

Premier Li says China to lower import tariffs

China to ease foreign owned equity limit some sectors

Li says China to adjust negative lists to widen market access

Li says China to open up its manufacturing sector no forced technology transfer

Li says China will further open up its services sector

Li says will lower tariffs for cancer related products

Today’s data

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

AUD       House Price Index Q/Q Q4 A 0.00% | P -0.20%

AUD       RBA March Meeting Minutes

06:45     CHF        SECO Economic Forecasts March

07:00     EUR        German PPI M/M Feb C 0.10% | P 0.50%

07:00     EUR        German PPI Y/Y Feb C 2.00% | P 2.10%

07:00     CHF        Trade Balance (CHF) Feb C 1.87B | P 1.32B

09:30     GBP       CPI M/M Feb C 0.50% | P -0.50%

09:30     GBP       CPI Y/Y Feb C 2.80% | P 3.00%

09:30     GBP       Core CPI Y/Y Feb C 2.50% | P 2.70%

09:30     GBP       RPI M/M Feb C 0.80% | P -0.80%

09:30     GBP       PPI Input M/M Feb C -0.90% | P 0.70%

09:30     GBP       PPI Input Y/Y Feb C 3.80% | P 4.70%

09:30     GBP       PPI Output M/M Feb C 0.10% | P 0.10%

09:30     GBP       PPI Output Y/Y Feb C 2.70% | P 2.80%

09:30     GBP       PPI Output Core M/M Feb C 0.20% | P 0.30%

09:30     GBP       PPI Output Core Y/Y Feb C 2.40% | P 2.20%

09:30     GBP       House Price Index Y/Y Jan C 5.00% | P 5.20%

10:00     EUR        German ZEW (Economic Sentiment) Mar C 13 | P 17.8

10:00     EUR        German ZEW Current Situation Mar C 90 | P 92.3

10:00     EUR        Eurozone ZEW (Economic Sentiment) Mar C 28.1 | P 29.3

12:30     CAD       Wholesale Trade Sales M/M Jan C 0.40% | P -0.50%

15:00     EUR        Eurozone Consumer Confidence Mar (A) C 0 | P 0.1

 

Harry Hindsight

• EUR: Asia was slow going with the market moving into the new session holding the opening levels around the 1.2290 level before drifting into the Tokyo session and testing slowly to the 1.2265 levels and holding through towards the grey hours, the move into the grey hours saw the market testing the lows and pushing slightly through the 1.2260 level before starting a slow rise into the London session, with a deal on the transition period for the UK the Euro saw a slow rise through into mid-morning in London pushing the 1.2300 levels, dipping a little lower then rallying quickly as the Euro played catch up and the early NYK guys moved in on the news, testing to the 1.2325 areas and rising slowly through the balance of the session to test to the 1.2360 areas before dipping a little into the close.
• GBP: Cable drifted through the Asian session with the market opening around the 1.3945 level and slowly moved through to the 1.3215 areas for the move into the grey hours, the move into London was little different however, the news that the UK and EU had produced a deal that during the transitionary period the UK would be able to negotiate trade deals produced a boost for the GBP and the market quickly rallied through the early morening part to test to the 1.4050 areas before holding into the NYK session and producing a smaller rally through the congestion to fail into the 1.4090 level and then slowly drift back through the NYK session to hold the 1.4020 level through to the close
• JPY: A limited day for the USDJPY with the market still absorbing tale after tale on the subject of land deals drifting from the opening and then lifting to above the 106.10 levels in early Tokyo only to drop back just as quick and trigger weak stops on a move through to the 105.80 levels, holding quietly through to the grey hours the market extended the downside to the 105.70-65 levels before moving into the London session and GBPJPY buying helped the market to bounce higher and start a slow but steady rise through to the 106.30 areas and the highs for the day as the market moved into the NYK session, moving into the NYK session the market dropped back again to the 105.80 levels in a steady move and then held and rose back to the 106 levels.
• AUD: A very quiet session for the Oz with the market holding around the 0.7715 levels through to the Tokyo session before dropping back a little to test the 77 cent levels for a few hours before renewing the downside on the move through to the grey hours, the market held around the 0.7690 levels through the early morning in London and only started to rise a little through to the 0.7710 as the market progressed into the NYK session with the market ranging between the lows and 0.7715 through to a final push into the close to test the 0.7725 levels and finish the day unchanged

Yesterday’s premiership results

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%

EUR        Eurozone Trade Balance (EUR) Jan A 19.9B | C 22.6B | P 23.8B | R 23.2B

Any opinions, news, research, analyses, prices or other information contained on this Blog, whether by LMAX, its employees, partners or contributors, does not constitute investment advice nor has it been prepared in accordance with legal requirements designed to promote the independence of investment research. Further, the material contained within this Blog does not contain (and should not be construed as containing) investment advice or an investment recommendation, or an offer of, or solicitation for, a transaction in any financial instrument. Whilst information provided on this Blog may help with your investment research you must consider carefully whether you should make (or refrain from making) investment or other decisions based on what you see without doing further research on the investments you are interested in. Participating in this Blog cannot be a substitute for obtaining advice from an appropriate expert independent adviser who takes into account your circumstances and specific investment needs in selected investments that are appropriate for you. LMAX has not verified the accuracy or basis-in-fact of any claim or statement made by any third parties as comments for every Blog entry.

LMAX will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. No representation or warranty is given as to the accuracy or completeness of the above information. While the material produced in this Blog was obtained from sources deemed to be reliable, LMAX does not provide any guarantees about the reliability of such sources.

Consequently any person acting on it does so entirely at his or her own risk.

If you currently hold an account with LMAX for the purposes of trading FX and CFD’s, you are encouraged to use a different Username and Password to access the Blog or any other online systems. The Blog is a place to learn, discuss and share information and ideas with Blog followers. It is not a place to slander, use unacceptable language or to promote LMAX or any other FX, Spread Betting and CFD provider and any such postings, excessive or unjust comments and attacks will not be allowed and will be removed from the site immediately.