Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 105.403 | EURUSD 1.24466 | AUDUSD 0.7749 | NZDUSD 0.72963 | USDCAD 1.28427 | USDCHF 0.9455 | GBPUSD 1.42297 |

LMAX Highs and Lows 6am GMT

                                High | Low

EURUSD               1.24579 | 1.24422

USDJPY                 105.753 | 105.424

GBPUSD               1.42390 | 1.42231

USDCHF               0.94624 | 0.94469

AUDUSD              0.77575 | 0.77281

USDCAD               1.28541 | 1.28291

NZDUSD               0.73037 | 0.7282

EURCHF                1.17737 | 1.17633

EURGBP               0.87498 | 0.87465

EURJPY                 131.603 | 131.257

For today

• EUR: A quiet range through the session, with the market holding around the 1.2450 levels with minor tests above the 1.2455 and 1.2445 on the downside and into the grey hours, Topside offers likely to be strong through the 1.2480 levels and extending through to the 1.2520 areas, weak stops likely on a move through however, there is a possibility of offers continuing through the 1.2540-60 level before significant stops start to appear on a push through the years highs with stronger offers then reappearing as the market stretches towards the 1.2580-1.2600 levels, possible option barriers involved with the area, downside bids light through to the 1.2340 levels with the market then struggling with congestive bids only and the market open to the 1.2300 stronger bid areas. While the bids maybe stronger they are more congestive than fresh ideas and the market could see weak stops on a push back through the 1.2280 level to open a test into the sentimental 1.2250 areas.
• GBP: A slightly larger range than the Euro the early move into the Tokyo session saw the market pushing towards the 1.4240 levels before drifting through to the lows around the 1.4225 areas before regaining the 1.4230 level and holding just above through to the grey hours, overall a similar picture to the Euro, as in there where some early attempts in the year to push higher however, unlike those rallies this has been a sustained rally through the month, topside offers into the 1.4280-1.4300 levels and unlike the Euro options are not likely to feature, a push through the 1.4300 levels still sees congestive offers appearing through to the 1.4330-40 level with a mix of weak stops likely and a push deeper into the pre general election levels from last year, downside bids possibly a little bit more sustainable than the Euro with bids likely down into the 1.4150 levels and limited congestion through to 1.4100 where one would suspect fresh bids are building. Stops through the level will likely expose the 1.4000 area for a quick move lower.
• JPY: Opening around the 105.40 areas the market rose steadily through to the 105.75 levels into mid-session before slipping back and holding around the 105.60 areas through to the grey hours in very quiet trading, downside bids seemed to have formed through to the 104.50 levels for the moment and limiting the attempts last week to push for the stronger bids into the 103.50 levels however, the market still remains soggy with the current government mired in the land sale scandal and just waiting for the next little snippet to upset the market again. Any push through the 104.50 level is likely to see week stops and the market quickly testing through to the 104.00 levels and only the yield players could have the ability of turning the market. Asian concerns about USD interest rates and the impact on Uridashi yields could impact not only in Japan, topside offers lightly congestive through the 106.00 levels and the market then opening to weakness through to the 106.80 areas where sentimental offers and short term profit taking is likely to appear with only slightly stronger offers through the 107 level however, above there is likely to see stronger offers reappearing as exporters are likely to have moved down too.
• AUD: With the property bubble bursting RBA trying to restrict mortgage lending the Ozzies early gains were wiped out on a limited day, the move from the opening saw the market pushing towards the 0.7760 levels before falling back to the opening levels and slipping then through to the 0.7730 to make the lows and then ranging through to the grey hours unable to regain the open and just holding above that low. Topside offers through the 0.7780 levels and likely to continue through to the 0.7830 levels before some weakness appears however, a false dawn with increasing offers then likely to appear around the 0.7850 level and onwards. Downside bids light back through the 77 cent level with increasing bids into the 0.7660 level and the market likely to be slowed significantly by a very congestive market.

Overnight News

AUD:

RBA hits back on housing load speed limits

Libor-OIS blowout lifts Oz bank funding costs as RBA holds rates

USD:

Repatriation tax problems piling up for Americans abroad

Cleveland Ted’s Mester remarks in text of speech at Princeton

Mester: we want to give inflation time to move back to 2% goal

Mester: Tariffs add uncertainty, no cause yet to alter outlook

Mester says further gradual rate hikes appropriate

Mester: FED must also avoid build-up of macro, financial risks

Mester: Inflation to rise to 2% over next one or two years

Mester: Lowers her estimate for long-term jobless rate to 4.5%

CNY:

USDCNH prints new low of 6.2400 in Asia

USD/KRW:

Killing the Iran deal makes Trump’s N. Korean talks much more difficult

Today’s data

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

JPY         Corporate Service Price Y/Y Feb A 0.60% | C 0.70% | P 0.70%

06:00     EUR        German Import Price Index M/M Feb C -0.30% | P 0.50%

08:00     EUR        Eurozone M3 Money Supply Y/Y Feb C 4.60% | P 4.60%

09:00     EUR        Eurozone Economic Confidence Mar C 113.3 | P 114.1

09:00     EUR        Eurozone Business Climate Indicator Mar C 1.36 | P 1.48

09:00     EUR        Eurozone Industrial Confidence Mar C 6.9 | P 8

09:00     EUR        Eurozone Services Confidence Mar C 16.5 | P 17.5

09:00     EUR        Eurozone Consumer Confidence Mar (F) C 0.1 | P 0.1

13:00     USD       S&P/Case-Shiller Composite-20 Y/Y Jan C 6.10% | P 6.30%

14:00     USD       Consumer Confidence Mar C 131 | P 130.8

 

Harry Hindsight

• EUR: A quiet Asian session with the market basing on the opening around the 1.2355 level and rising into the later part of the run to the grey hours testing the 1.2380 level and then drifting a little through into the grey hours, London saw limited buying on a grind through to the 1.2395 level and then drifting a little before taking a second run at the 1.2400 levels, pushing through the level in early London the market pushed through to the 1.2415 level and ranging through to the Tokyo session holding the 1.2400-15 levels, NYK saw some further Euro buying as the market tried to catch the GBP rally however, once the market moved into the 1.2440-60 range it struggled with the congestion and held through to the close.
• GBP: Cable opened quietly and tested the 1.4130 levels in early trading before rising through the 1.4150 area to hold in the area for a few hours before pushing slowly through the session to test the 1.4170 levels, the market drifted through to the London session holding onto half the gains before rallying strongly through to test quickly above the 1.4230 levels and slowing for the move into the NYK session, the market dipped off through early trading and sneaked back through the 1.4200 level before rallying a couple of hours later and this time testing to the 1.4245 levels to make the highs of the day and drifting marginally into a 1.4225-35 range to the close.
• JPY: Opening on its lows the USDJPY eventually started to push off the 104.65 levels to trade through into the Tokyo session pushing the 104.85 areas, the push through the 104.90 level eventually saw the market pop to the 105.00 level and then drift through to the London session holding the 104.85 area, early London took the market steadily through to the 105.15 levels and ranging quietly through too late in the NYK session pushing through the highs to rally through to the 105.40 levels into the close.
• AUD: Opening around the 77 cent level the market moved slowly higher through the Asian session testing through to the 0.7730 levels and stalling until the move into the London session with buyers reappearing and rising to just short of the 0.7750 levels for several hours, the move into the NYK session saw the market slip a little back to the 0.7720 level, with a slow rise through to the previous highs to nudge the 0.7750 level into the close.

Yesterday’s premiership results

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

GBP       BBA Loans for House Purchase Feb A 38.1K | C 39.2K | P 40.1K | R 40.0K

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