Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 104.743 | EURUSD 1.23538 | AUDUSD 0.76966 | NZDUSD 0.7238 | USDCAD 1.28958 | USDCHF 0.9474 | GBPUSD 1.41327 |

 

LMAX Ranges 6am GMT

Highs    Lows

EURUSD               1.23868 | 1.23536

USDJPY                 105.054 | 104.711

GBPUSD               1.41717 | 1.41468

AUDUSD              0.77307 | 0.77049

USDCHF               0.94748 | 0.94614

USDCAD               1.28854 | 1.28604

NZDUSD               0.72779 | 0.72346

EURGBP               0.87463 | 0.87321

EURCHF                1.17184 | 1.16973

EURJPY                 129.933 | 129.473

For today

• EUR: Opening unchanged from Friday weekend news fairly muted apart from another flare up of the Spain/Catalonia situation with Barcelona seeing large demonstrations, light buying took the markets to the 1.2365 levels into early Tokyo before the market slipped back to the opening levels with fixing demand in Tokyo seeing light demand, the market then recaptured the buyers and moved slowly through to the 1.2370 levels with a quick stab above the 1.2380 levels in what looked like a single large ticket triggering some weak stops before dropping back to the 1.2370 levels and testing the level again in a more sedate manner, Downside bids into the 1.2300 levels with congestion on a move through the area, a dip below the 1.2280 level could see some weak stops however, this is likely to be absorbed on any move into the 1.2250 areas and some further supportive bids through to the 1.2240 area before any weakness is likely to be seen, a test to the 1.2200 areas will likely see stronger bids appearing and market is limited through to the 1.2150 levels. Topside offers is likely to see stronger offers through to the 1.2420 areas with congestion just through that level and possibly stronger offers again from the 1.2440 level onwards.
• GBP: The market moved up just before the Tokyo opening to push above the 1.4150 levels and then start a slower rise through to the latter part of the session testing above 1.4170 area before drifting into the grey hours around the 1.4160 level. Weekend comments from MPC member Vlieghe helped underpin the GBP overall. Topside offers through the 1.4200 levels are likely to be week with some sentimental offers into the 1.4250 level however, these are likely to be limited profit taking and the market is not likely to see anything strong until pushing towards the 1.4280 areas. Downside bids light through to the 1.4100 level with some limited bids and then quick weak stops on a move through before running into congestive bids into the 1.4050 levels, a push will see further bids into 1.4000 however, it depends on the impetus with the better bids not appearing until closer to the 1.3950 levels.
• JPY: Opening on its lows the early part of the session saw the market struggling with the level before starting a slow rise through the morning session in Tokyo to test through to the 105.00 levels before holding quietly through the session in the 104.90 areas. Weak offers above the 105.20-30 area, a break above could see a small short squeeze with the market quickly rising through to the stronger 105.80-106.00 levels a push through is likely to find congestive offers continuing through to the 106.50 areas and increasing as the market pushes for the 106.80 levels. Downside bids into the 104.60 levels held through last week however, with a push through the 104.50 level weak stops are likely to quickly push the market to the 104.00 level and possibly the last vestiges of bids until closer to the 103.50 areas.
• AUD: Opening on its lows the Oz started a slow steady rise through the session to test to the 0.7730 levels into mid-session holding in that area for a few hours before dropping away into the grey hours and through the 0.7720 level. Topside offers light through the 0.7740-60 levels with some congestion then through the 0.7780-0.7840 areas before some weakness appears and the market opening to the 79 cent levels, downside bids congested around the 0.7700 areas but likely to be light until a test through the 0.7680 areas where limited stops run into stronger bids, a dip through opens the market to the 0.7620 level however, there is likely to be substantial congestion on any move through to that level.

Overnight News

JPY:

Scandal clouds Japan premier’s chances of changing constitution

Abe’s approval rating plunges to 42% as scandal takes toll

EUR:

Merkel’s conservatives divided and discordant Spiegel

USD/CNY:

US and China quietly seek trade solutions after days of loud threats

AUD:

The Australian bubble has burst and it looks historic

USD/KRW:

US exempts S. Korea from steel tariffs, but imposes import quota

NZD:

RBNZ Policy target agreement adds employment goal

RBNZ agreement keeps 1-3% inflation goal

RBNZ inflation focus on 2%

RBNZ aimed at supporting maximum level of sustainable employment

RBNZ to have 5 to 7 voting members for monetary policy committee for decision making

RBNZ says majority of members will be reserve bank internal staff, and a minority will be external members

RBNZ says the MPC is expected to begin operation in 2019

Orr: Price stability offers significant benefits to all

Orr: In general terms, dual mandate won’t change money policy

Today’s data

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

NZD       Trade Balance Feb A 217M | C -100M | P -566M | R -655M

08:30     GBP       BBA Loans for House Purchase Feb C 39.2K | P 40.1K

23:50     JPY         Corporate Service Price Y/Y Feb C 0.70% | P 0.70%

Weekend News

EUR:

25 Catalan leaders arrested for rebellion and embezzlement

Former leader Puigdemont detained in Germany

Protests and riots in Catalan over the arrests

USD:

Mnuchin says cautiously hopeful a China trade deal can be reached BBG

Mnuchin says US not afraid of a trade war with China over intellectual property (IP)

US, S. Korea trade agreement could lead to weaker USD

GBP:

Vlieghe sees one or two interest rate hikes a year

Harry Hindsight

• EUR: A quiet day for the Euro with the market Slowly rising from the low opening around the 1.2305 areas and pushing into the Tokyo session testing through the 1.2340 levels and struggling thereafter through to the grey hours, the market dipped in the grey hours, to test back to the 1.2320 levels before pushing back to the 1.2340 areas again just after London opened, the move through to the NYK session saw the market slowly move up to test the 123.60 levels before drifting back again for a short period the market then slowly moved through to the close rising through to finish the day pushing towards the 1.2375 levels before slipping back a little on the close.
• GBP: A quiet rise through into the Tokyo session testing through to the 1.4120 levels from the opening just above the 1.4105 areas and then holding around the level through to the grey hours, with a very narrow range around the 1.4110-25 levels, grey hours selling was continued through the London opening and the market moved into early morning slipping through the 1.4100 levels and testing to the 1.4085 area before early NYK stepped in and the market reversed the fall and the market quickly pushed back to the opening levels and the rally while a little slower was in a tight channel and a climb up through to the 1.4170 levels before drifting to the close.
• JPY: USDJPY dropped from the opening falling quickly through to the 104.65 level and that remained the basing area throughout the day with the market making minor moves away from the level testing into the Tokyo session to the 105.10 levels before trading through to the grey hours holding quietly around the 104.80 areas, early London took the market through into London testing to the 105.10 areas again before quietly drifting through to the NYK session, as with London NYK slowly pushed through to the topside to extend the highs to the 105.30 area before limping through the balance of the session slipping eventually back to the close just off the lows.
• AUD: Not a big day for the Oz however, the bulk of the day was spent slowly moving higher, with the Asian session moving off the lows to test through into early Tokyo pushing the 0.7720 areas from the 0.7690 open, the move through to the grey hours saw the market holding the 0.7710 level and rising through into the London opening testing the highs and eventually pushing the 0.7730 area, the market saw a light range through to the NYK session and another lift through to the 0.7740 levels to make the highs for the day and then drifting through to the last hour holding the 0.7720 area, the final hour though saw the days longs trying to cover in a limited market and the result was a drift back to the figure area for the close.

Yesterday’s premiership results

JPY         National CPI Core Y/Y Feb A 1.00% | C 1.00% | P 0.90%

GBP       BoE Quarterly Bulletin

CAD       CPI M/M Feb C 0.60% | P 0.50% | R 0.70%

CAD       CPI Y/Y Feb A 2.20% | C 2.00% | P 1.70%

CAD       CPI Core – Common Y/Y Feb A 1.90% | C 1.90% | P 1.80%

CAD       CPI Core – Median Y/Y Feb A 2.10% | P 1.90%

CAD       CPI Core – Trimmed Y/Y Feb A 2.10% | P 1.80%

CAD       Retail Sales M/M Jan A 0.30% | C 1.20% | P -0.80% | R -0.70%

CAD       Retail Sales Ex Auto M/M Jan A 0.90% | C 0.90% | P -1.80% | R -1.70%

USD       Durable Goods Orders Feb (P) A 3.10% | C 1.70% | P -3.60%

USD       Durables Ex Transportation Feb (P) A 1.20% | C 0.50% | P -0.30%

USD       New Home Sales Feb A 618K | C 621K | P 593K | R 622K

Stay lucky

Andy

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