Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 106.853 | EURUSD 1.23086 | AUDUSD 0.76632 | NZDUSD 0.72124 | USDCAD 1.29227 | USDCHF 0.95653 | GBPUSD 1.4077 |

LMAX Highs and Lows 6am GMT

                                High | Low

EURUSD               1.23352 | 1.23018

USDJPY                 106.934 | 106.389

GBPUSD               1.40964 | 1.40603

USDCHF               0.95737 | 0.95534

AUDUSD              0.76784 | 0.76431

USDCAD               1.29310 | 1.29095

NZDUSD               0.72121 | 0.71879

EURCHF                1.17866 | 1.17755

EURGBP               0.87588 | 0.87415

EURJPY                 131.608 | 131.143

For today

• EUR: Initially a struggle off the opening levels the market eventually started to get its legs and pushed slowly through to the 1.2330 areas for the move into the grey hours, Bids into the 1.2300 levels beginning to thin out a little and a move through the 1.2280 level is likely to see weak stops contending with the congestive bids through the level and into the 1.2260-40 areas, a push here will allow the market to test through to the 1.2200 levels however, with the bank holidays in Europe and other English speaking countries starting tomorrow there would need to be some drastic movement in numbers or news. Topside offers into the 1.2340-60 levels are likely to be very thin and only a move towards the 1.2400 level is likely to see any build-up of offers and those are likely to be a little thin with better offers only once the market pushes into the 1.2450 areas and a struggle from there to 1.2600.
• GBP: Opening around the 1.4080 levels the market struggled once it moved into the Tokyo session dipping back to the 1.4060 areas before starting a slow rise through to the 1.4085 levels into the grey hour, Topside offers weak through the 1.4100 levels and then minor congestion on a move to the 1.4150 areas leaving the 1.4200 level exposed and possibly limited and potential for a short squeeze however, beyond that level the market starts to thicken and particularly into the 1.4250 with possibly stronger offers continuing through to the 1.4300 levels, downside bids into the 1.4050 level are possibly a stronger level than you’d expect however, any push through exposes the 1.3950 level as the stronger levels for the day.
• JPY: USD weakened through a quiet session, with the USDJPY holding into the Tokyo session around the 106.90 levels and unable to move towards the 107.00 level and then slipping slowly lower through the session to hold into the grey hour around the 106.50 level, a small short squeeze yesterday on the back of better GDP numbers in the US has underpinned the market for the moment however, the 107.00 level remains roughly intact and whether the exporters have revised their levels again remains to be seen however, a push through the level opens up to congestive offers through to the 107.50 levels and likely little in the way of stops for the moment, a push through that level will likely see limited offers on a run to the 108.00 areas where the stronger offers will appear in the market and all dependent on US numbers one suspects. Downside bids light through to the 105.50 areas and light through the level with 105.00-104.50 levels likely to be very strong.
• AUD: The Oz saw limited movement but at least moved with the market moving off the initial 0.7660 levels through to dipping through to the 0.7640 areas in cross JPY selling before recovering as the USD continued to dip through the session and pushing through the opening levels to trigger some light stops for a test to the 0.7670 level and into the grey hour just off those highs. Downside bids congested around the 76 cent levels with possibly strong bids through that level and then struggling into congestion dating back nearly 2 years, however, a push into the 75 cent level would see that congestion continuing with some weak stops but the market having to a do a lot more work to move lower towards 0.7540-60 or even 0.7500. Topside offers light through to the 77 cent levels with some light congestion continuing through the level before running into stronger offers into the 0.7750 areas, possibly some weak stops however, any attempt towards the 78 cent level would be a long drawn out fight.

Overnight News

GBP:

Brexit boost for Theresa May as Labour front bencher says party will probably vote in favour UKT

JPY/CHF:

Japan’s Softbank is said to eye $9.6B stake in Swiss Re ag

JPY:

Takeda bid for Shire could be worth $50B

Japan retail sales rise in Feb. suggest growing consumer confidence

RUB/USD:

Russia may close US consulate in St. Petersburg

CNY:

China does not want a trade war with the US China commerce ministry

USD:

US court rules Trump illegal payments suit can proceed

Today’s data

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

NZD       Building Permits M/M Feb A 5.70% | P 0.20% | R 0.00%

GBP       GfK Consumer Confidence Mar A -7 | C -10 | P -10

JPY         Retail Trade Y/Y Feb A 1.60% | C 1.70% | P 1.60% | R 1.50%

07:00     CHF        KOF Leading Indicator Mar C 107.2 | P 108

07:55     EUR        German Unemployment Mar C -15K | P -22K

07:55     EUR        German Unemployment Claims Rate Mar C 5.30% | P 5.40%

08:30     GBP       Mortgage Approvals Feb C 66K | P 67K

08:30     GBP       Money Supply M4 M/M Feb C 1.30% | P 1.50%

08:30     GBP       Current Account Balance Q4 C -23.7B | P -22.8B

08:30     GBP       Index of Services 3M/3M Jan C 0.60% | P 0.60%

08:30     GBP       GDP Q/Q Q4 (F) C 0.40% | P 0.40%

12:00     EUR        German CPI M/M Mar (P) C 0.50% | P 0.50%

12:00     EUR        German CPI Y/Y Mar (P) C 1.70% | P 1.40%

12:30     CAD       GDP M/M Jan C 0.10% | P 0.10%

12:30     CAD       Industrial Product Price M/M Feb P 0.30%

12:30     CAD       Raw Materials Price Index M/M Feb P 3.30%

12:30     USD       Personal Income Feb C 0.40% | P 0.40%

12:30     USD       Personal Spending Feb C 0.20% | P 0.20%

12:30     USD       Real Personal Spending Feb C 0.10% | P -0.10%

12:30     USD       PCE Deflator M/M Feb C 0.20% | P 0.40%

12:30     USD       PCE Deflator Y/Y Feb C1.70% | P 1.70%

12:30     USD       PCE Core M/M Feb C 0.20% | P 0.30%

12:30     USD       PCE Core Y/Y Feb C 1.60% | P 1.50%

12:30     USD       Initial Jobless Claims (MAR 24) C 231K | P 229K

13:45     USD       Chicago PMI Mar C 62 | P 61.9

14:00     USD       U. of Mich. Sentiment Mar (F) C 102 | P 102

14:30     USD       Natural Gas Storage P -86B

 

Harry Hindsight

• EUR: Opening just above the 1.2400 levels the Asian session pushed slowly through to the 1.2420 areas before drifting through the grey hour and testing into the London session almost back to the opening levels, London sold into the opening and the market based along the 1.2390 areas through to the NYK session ranging from the level through to the opening areas to the GDP numbers in US, another strong number coming in 0.2% above expectations and USD rallied quickly, the Euro initially tested through to the 1.2340 level and held through into the later part of the session before dipping again to push to the 1.2300 level and a quiet range through to the close.
• GBP: Cable saw early buying with a run to the end of the final quarter seeing some GBP buying into the Tokyo session to push quickly up to the 1.4185 areas and then slowly pushing through to test the 1.4200 level into the London opening before starting a slow drift and a quick drop through to the 1.4135 levels, the market held around the 1.4150 areas through to the NYK session and dropped back on the US GDP numbers testing to the 1.4100 area and ranging for a short period, the second dip saw only a limited drop and the market trading to a close in a tight range around the 1.4075 levels.
• JPY: A quiet rise from the opening to test through to the 105.65 levels and a steady range through to deep into the London morning holding a tight 105.50-65 range for the most part and then starting a steady rise into the NYK session, pushing through to the 106.35 level on the GDP release, not so much as a meteoric rise the market pushed late into the session testing the 107.00 levels before the close with a small drift back and the end of the quarter buying was complete.
• AUD: Early Tokyo buying saw the market rising from the opening to push above the 0.7690 level and into some offers, the market then had to grind through the congestion and pushed eventually into the grey hour testing through the 77 cent levels. London saw some strong selling moving in and the market was unable to maintain the late highs and the market then collapsed through to the 0.7660 on the dip through the opening levels, if collapse is the correct term for the limited movement, the market based along that low through to the close with minor dips below to the low 0.7650’s and testing towards the 0.7690 level around the US GDP numbers and then an ever decreasing range through to the close.

Yesterday’s premiership results

NZD       ANZ Business Confidence Mar A -20 | P -19

EUR        German GfK Consumer Confidence Apr A 10.9 | C 10.7 | P 10.8

GBP       CBI Reported Sales Mar A -8 | C 7 | P 8

USD       Advance Goods Trade Balance Feb A -75.4B | C -74.1B | P -75.3B

USD       Wholesale Inventories M/M Feb (P) A 1.10% | C 0.50% | P 0.80%

USD       GDP Annualized Q/Q Q4 (T) A 2.90% | C 2.70% | P 2.50%

USD       GDP Price Index Q4 (T) A 2.30% | C 2.30% | P 2.30%

USD       Pending Home Sales M/M Feb A 3.10% | C 2.00% | P -4.70% | R -5.00%

USD       Crude Oil Inventories A 1.6M | C 0.5M | P -2.6M

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